POSTIE PLUS GROUP LIMITED

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1 POSTIE PLUS GROUP LIMITED NOTICE OF ANNUAL SHAREHOLDERS MEETING 2013 (INCLUDING EXPLANATORY NOTES AND PROXY FORM) Notice is given that the 2013 Annual Meeting of Shareholders of Postie Plus Group Limited will be held at The Air Force Museum, 45 Harvard Avenue, Wigram, Christchurch on Friday 20 December 2013 at 10.00am If you are unable to attend the meeting you are requested to complete the voting/proxy form enclosed with this booklet and return it to Link Market Services, at the address set out below. The voting/proxy form must be received by Link Market Services no later than the time and date set out on page 3 of this notice of meeting. If you attend the meeting please bring the voting/proxy form with you \ \am

2 AGENDA Chairman s Introduction Chairman s address to Shareholders in respect of the financial year ended 4 August Chief Executives Address Chief Executive s address to Shareholders in respect of the financial year ended 4 August 2013 and subsequent events. Shareholders Forum Shareholders questions, discussion and/or comments on performance of the Company. Annual Report (Resolution 1) To receive and consider the Annual Report, including the audited Financial Statements of the Company, for the year ended 4 August 2013 and the Auditor s report, and if thought fit, to pass the following ordinary resolution: Resolution 1 THAT the Annual Report, including the audited Financial Statements of the Company for the year ended 4 August 2013, be received. Appointment and Remuneration of Auditor (Resolution 2) To consider and, if thought fit, to pass the following ordinary resolution: Resolution 2 THAT the meeting record the re-appointment of KPMG as the auditor of the Company for the current financial year ending 3 August 2014 pursuant to section 200 of the Companies Act 1993, and authorise the Board to fix KPMG's remuneration. Director Elections (Resolutions 3-4) To consider and, if thought fit, to pass the following ordinary resolutions: Resolution 3 THAT Murray Lawrence Holdaway, who retires by rotation and is eligible for re-election, be re-elected as a Director of the Company (see Explanatory Notes). Resolution 4 THAT Richard John Binns be elected as a Director by shareholders (see Explanatory Notes). Sale of SchoolTex Business (Resolution 5) To consider and, if thought fit, to pass the following ordinary resolution: Resolution 5 THAT the Shareholders approve under rule of the NZSX Listing Rules the sale of the SchoolTex assets of the Company on terms substantially the same as described in the attached Explanatory Memorandum. General Business To consider any other business properly submitted to the meeting. Light food and refreshments will be served at the conclusion of the meeting. Signed by: Richard Punter Chairman, on behalf of the Board Tuesday 3 rd December 2013

3 Eligibility to Vote For the purposes of voting at the meeting, shares will be taken to be held by the persons who are registered as shareholders at 5.00pm on Thursday 19 December Registered shareholders are entitled to attend the Annual Shareholders Meeting and vote in person or may appoint a proxy or corporate representative (in the case of a corporate shareholder) to attend and vote instead of that shareholder. If you plan to attend the meeting you should bring the enclosed admission card and voting/proxy form with you to the meeting. Proxy or Corporate Representatives If you do not plan to attend the meeting, you can appoint a proxy or corporate representative (if the shareholder is a corporate body) to attend the meeting and vote on your behalf. The voting/proxy form appointing a proxy or corporate representative must be received by the Company s Share Registrar by 10.00am on Wednesday 18 December A proxy/corporate representative need not be a shareholder of the Company. The Chairman and any of the Directors are willing to act as a proxy. The Directors names are Richard Punter, Murray Holdaway, Richard Binns and Kylie Tate. The directors will vote any undirected proxies in favour of the resolutions 1-5 as set out in this notice of meeting. If you do not plan to attend the meeting, and you wish to vote, you should complete the voting/proxy form and return it as soon as possible. Return of voting/proxy form You can appoint your proxy online as per the instructions on the reverse of the enclosed proxy form. Alternative you can return your completed proxy to the Company s Share Registrar at: Link Market Services Limited Level 7, Zurich House 21 Queen Street Auckland 1010 P O Box Auckland 1142 Phone: Fax: meetings@linkmarketservices.co.nz Questions Shareholders are encouraged to send questions they would like addressed at the Annual Shareholders Meeting by 10.00am on Monday, 16 December 2013, to the Chairman by post or by at: The Chairman Postie Plus Group Limited PO Box Penrose Auckland Ordinary resolutions agm@postie.co.nz Resolutions 1-5 to be put to the meeting are ordinary resolutions which will pass if approved by more than 50% of shareholders of the company entitled to vote and voting at that time. Documents A copy of the Constitution of the Company can be viewed on the Companies Office website at or by contacting the Company s registered office at:

4 Postie Plus Group Limited Level One Stanway Business Park, Tower 2, 646 Great South Road Ellerslie Auckland 1051 PO Box , Penrose Auckland 1642 Phone: Fax: A copy of the NZSX Listing Rules can be viewed free of charge on the NZX Limited website at Resolution 2: Auditors Explanatory Notes KPMG is automatically reappointed as auditor under section 200 of the Companies Act This resolution authorises the Board of Directors to fix the fees and expenses of the auditor. Resolutions 3-4: Election of Directors Under rule of the NZSX Listing Rules, at the Annual Shareholders Meeting each year at least one third of the Directors must retire from office, but shall be eligible for re-election. Murray Lawrence Holdaway retires by rotation at this Annual Shareholder Meeting, and being eligible, offers himself for re-election. Richard John Binns was appointed by the Board on 30 October In accordance with clause 54.2 of the Company s Constitution, the shareholders are now asked to formally elect Richard Binns as a director. The Board recommends that shareholders vote for the resolutions to re-elect Murray Lawrence Holdaway and elect Richard John Binns. Brief biographical notes on the candidates follow: Murray Holdaway Murray Holdaway B.Com, BSC (Auckland) has extensive experience in information technology with a specialisation in business application software. Mr Holdaway is CEO of Vista Entertainment Solutions, a global leader in entertainment software solutions and one of the leading producers of software for the cinema market worldwide. In 2013 Mr Holdaway was one of five finalists in the Ernst Young Entrepreneur of the Year competition. He brings to PPGL skill sets that complement the board s vision for PPGL s ecommerce strategy. Mr Holdaway is an independent director of PPGL and joined the Board in September 2011 and is eligible for re-election as a Director. Richard Binns Richard Binns is an experienced retail executive who became Chief Executive Officer of PPGL in September Richard s career in the retail sector began in the United Kingdom where he has worked for such notable retail organisations as Marks & Spencer, Sainsbury's (where he held such key roles as Buying and Merchandising Director, (Clothing) and Trading Manager) and the John Lewis Partnership, the third largest privately owned business in the UK and operator of the John Lewis department stores and Waitrose supermarkets. Since migrating to New Zealand in 2007, he has been active in strong domestic retail brands The Warehouse Group Ltd, in General Merchandise, Overland Shoes Ltd, as Chief Operating Officer, and the Hellaby Group subsidiary No 1 Shoes, as General Manager Operations. Resolution 5: Sale of SchoolTex Business The attached Explanatory Memorandum to this notice of meeting sets out detailed information concerning the proposed sale of the SchoolTex assets of the Company. The Board recommends that shareholders vote for the resolution to approve the proposed sale of the SchoolTex business.

5 Explanatory Memorandum This Explanatory Memorandum sets out more detailed information concerning the proposed sale of the SchoolTex assets. SchoolTex provides schoolwear to schools throughout NZ through PPGL s nationwide network of Postie stores and direct to schools. SchoolTex sales in FY13 were $11.3m. The Transaction Postie Plus Group Limited (the Company or PPGL ) has signed a non-binding indicative offer dated 28 November 2013 (the NBIO ) for the sale of assets currently employed in the SchoolTex business. The buyer under the NBIO (Buyer) is a well known New Zealand company which wishes to keep its identity confidential until the agreement becomes unconditional. The board of PPGL is confident that the Buyer has the means to pay the purchase price and perform all the terms of the agreement. Completion of the transaction is intended for 28 February 2014, although this may be changed if there is a delay in satisfying any of the conditions. The purchase price is to be payable in cash on the completion date and upon completion the Buyer is to take possession of the SchoolTex assets. All SchoolTex sales up to completion will be for the account of PPGL and PPGL will not have any post completion commitments or liabilities other than the usual warranties and obligations for a transaction of this nature. Commercial Drivers for the Transaction PPGL has been exploring options to raise capital for the purpose of reducing debt. The sale of SchoolTex will enable PPGL to significantly reduce debt. At the date of this notice of meeting, PPGL s bank debt is approximately $21.1m. This is forecast to be approximately $20.5m by the completion date. PPGL expects that the net proceeds of the transaction will be approximately $8.3m and that all this will be applied to reduce the bank debt at the time. The final figure for the net proceeds of sale will depend on the value of SchoolTex stock on hand and liabilities assumed by the buyer at the completion date and PPGL expects that following completion its bank debt will be approximately $12.2m. PPGL will then focus on its Postie brand, restructure its operations to reduce operating costs, enhance its core apparel and health and beauty business and investigate complementary lines with low infrastructure cost. It is estimated that an additional $5m in annual sales will enable the core Postie brand to return to a break even position for FY15 and then future profitability. The sale of SchoolTex will not materially affect the nature of PPGL s business. The proposed reduction in bank debt will, together with the restructuring proposals referred to in this memorandum and a continuation of the steps the Company has been taking to improve its financial performance, provide better prospects of obtaining continued support from the Company s bank. The Board believes that this will also increase the likelihood of success of further capital raising options which PPGL will continue to explore. Alternatives to Sale As an alternative to a sale, PPGL can continue to explore alternative capital raising options. The Board believes that the value to shareholders achieved through the proposed transaction is greater than other alternatives or not proceeding with the sale. If the transaction does not proceed the Company will have the benefit of continued revenue from SchoolTex, but will be more dependent on its bank for financial support. PPGL would look to restructure its operations to reduce operating costs if the sale of SchoolTex does not proceed. Why Shareholder Approval is Required NZSX Listing Rule (b) requires the Company to obtain shareholder approval to enter into a transaction or series of linked or related transactions to sell assets in respect of which the gross value is in excess of 50% of the Average Market Capitalisation of the Company. The Average Market Capitalisation of the Company is defined as the volume weighted average market capitalisation of PPGL s equity securities carrying votes (which for PPGL are its ordinary shares) calculated from trades on the NZSX market over the 20 Business Days before the earlier of the day the transaction is entered into or is announced to the market. PPGL s Average Market Capitalisation on 3 December 2013, which was the date this notice of meeting was prepared, was approximately $3.8 million. The transaction value is expected to be over 50% of the Average Market Capitalisation on the date the transaction is announced to the market. What is Being Bought and Sold Under the NBIO the Buyer will acquire the assets of SchoolTex including:

6 Apparel, yarn and fabric stock at all stores, distribution centres and vendors; Website; Goodwill and intellectual property. In addition the Buyer will assume a number of specific liabilities of SchoolTex including: Forward order stock commitments; Employee entitlements for transferring employees; Rebate liabilities; and Vehicle leases. The NBIO does not include debtors or creditors or cash in bank at completion. Purchase Price The purchase price for the assets of SchoolTex is the aggregate of: Total SchoolTex stock at the completion date (currently estimated at $5.0 million) comprising apparel, yarn and fabric stock valued at cost; Goodwill $4.0 million. The goodwill component of the price has been negotiated with the Buyer. PPGL has not obtained a formal valuation of the SchoolTex assets, but the board has taken financial advice from Grant Thornton throughout the sale process and is satisfied that the price is fair, based on the earnings of the SchoolTex business. At the date of this Explanatory Memorandum, PPGL estimates that the total purchase price of the assets sold in the transaction is $9.0 million. In addition forward order stock commitments to be taken over by the Buyer at 28 February 2014 are estimated at $720,000, bringing the total transaction value for consideration under NZX Listing Rule (b) to $9.72 million. An estimated deduction of $330,000 as an adjustment for liabilities assumed by the Buyer (comprising school rebates and employee entitlements) is to be made to the purchase price, resulting in a net amount payable estimated at $8.67million. The NBIO provides for the amount payable to be paid by a single payment upon completion, with subsequent adjustments to take account of final figures for stock and the value of the assumed liabilities. Staff Some SchoolTex support office employees will be offered employment with the Buyer. The remaining SchoolTex support office staff positions will be disestablished. The Manurewa store will close as this is 100% SchoolTex. The staff positions in this store will be disestablished. Should the transaction proceed as planned there will not be a significant cost of disestablishment of employee positions. Store Leases The Manurewa store is on a month to month lease which will be terminated. Conditions In addition to Shareholder Approval, the NBIO is conditional upon the following matters: Completion of due diligence to the satisfaction of the Buyer; Consents of counter parties to key contracts; Negotiation and agreement of sale and purchase documentation; PPGL and Buyer Board approvals; Nominated staff accepting offers of employment. The Company expects to be able to advise shareholders at the shareholders meeting whether the conditions stated above have been satisfied. The NBIO provides for PPGL and the Buyer to enter into formal legally binding agreements to record the transaction. PPGL expects that these agreements will be on usual commercial terms without making any material changes to the terms set out above.

Notice of Annual Meeting of Shareholders 2018

Notice of Annual Meeting of Shareholders 2018 Dear Shareholder On behalf of the Board of Directors I am pleased to invite you to have the ability to grant stock options that are tax-qualified (meaning