CA

1. Corporate Actions
A "corporate action" is an event initiated by a publicly listed company that may affect their securities and
shareholders.
Examples : a dividend payment, a share split or share consolidation, a bonus issue or a rights issue.
Why are corporate actions necessary?
• To return company profit to shareholders
• To have an effect on the share price
• To raise extra money
• To increase profit levels by restructuring
Where can a shareholder find out more about a corporate action?
By calling the relevant share registry for the company you own shares in, or by speaking to the
NZ Scrip Settlements team at ANZ Securities.
Computershare Investor Services 09 488 8700
Link Market Services 09 375 5999
ANZ Securities NZ Scrip Settlements 0800 805 777
HINT : You can find the appropriate share registry by looking at the "Transfer Agent" under the Quick
Quote, Detailed screen.
Dividends
The most common corporate action is a dividend payment - a company may issue a dividend as a
way of returning some of the profit to shareholders.
Companies that choose to pay a dividend may do so once a year, twice a year or four times a
year, depending on their dividend policy.
NOTE: not all companies pay a dividend.
Below is a fictional example of the effect that a dividend payment may have on a (New Zealand)
company's share price.
Company: XYZ
Current share
price:
$1.50 NZD
Dividend amount:
$0.10 NZD per
share

2. If you own 10,000 XYZ shares then your total dividend payment is $1,000.00
NZD
Day 1 Stock is quoted as "CD" or "Cum Dividend" XYZ = $1.50 per share
Day 8 Stock is quoted as "XD" or "Ex Dividend" XYZ = $1.40 per share
Day 10 "Record" or "Books Close" date XYZ = $1.40 per share
1-2 weeks later
(or longer)
Payment Date Dividend = $0.10 per share
These prices and dates are only used as examples.
NOTE: For New Zealand (NZX) and Australian (ASX) listed shares, the "Record" or "Books Close" date
occurs AFTER the "XD" date. If a shareholder buys NZX or ASX shares on a "CD" basis and holds until
the "XD" date, they are eligible for the dividend.
CD - Cum Dividend
The word "Cum" is Latin for "with".
If you purchase XYZ shares when they are quoted CD you are eligible for the dividend on the next
payment date, provided that you are still a shareholder on the Record/Books Close date.
XD - Ex Dividend
"Ex" is simply the opposite of "Cum" - "without".
If you purchase XYZ shares when they are quoted XD you are not eligible for the dividend on the next
payment date. The XD share price often decreases by an amount equivalent to the amount of the
dividend per share. The shares remain XD until the next dividend is announced to the market, after such
time the shares will be quoted as CD again.
Record/Books Close Date
This is the day the registry determines which shareholders were on the register when the shares were
trading CD.
Note: shares bought between the Ex Date and Record Date do not entitle the buyer to the dividend.
Payment date
Dividends are usually paid out 1-2 weeks (or longer) after the first day that they were quoted XD. Unless
they have been advised otherwise, the Share Registry will send your dividend payment to you by cheque.
If you wish to have the dividend payment paid directly into your bank account, please contact the
appropriate Share Registry.
DRP - Dividend Reinvestment Plan
Some Companies allow shareholders the choice of receiving the equivalent amount of shares instead of a
cash dividend to increase their holding in the company. A DRP needs to be organised directly through the
issuing company.
Share Split
If a publicly listed company feels that the market price of their stock is too high and that
shareholders may not be able to afford to buy shares, they can adjust the price by splitting the
number of shares on issue.

3. Company: XYZ
Share split ratio: 2 shares for every 1 (2:1)
Share price: $2.00 $1.00*
Shares on issue: 1,000,000 - After - 2,000,000
Market Cap: $2,000,000 $2,000,000
(Market Cap = current share price x shares on
issue)
These prices are only used as examples.
* Due to a dilution factor of 1/2 ($2.00 x 1/2 = $1.00)
In the example above, the share price has been adjusted because each shareholder now holds twice as
many shares as they did previously.
Thus, the shares are cheaper and may become more frequently traded if shareholders can now afford to
purchase the shares.
Even though the price quoted in the market has decreased, the value of a holding remains the same
because the amount of shares owned has been altered to reflect the new price.
You own more shares but they are now at a lower price.
Share Consolidation
Likewise, if a publicly listed company considers the share price to be too low and that in turn,
shareholders may have a low opinion of the company's reputation, they can adjust the price by
consolidating the number of shares on issue.
Company: LMN
Share consolidation
ratio:
1 share for every 4 (1:4)
Share price: $1.00 $4.00*
Shares on issue: 1,000,000 - After - 250,000
Market Cap: $1,000,000 $1,000,000
(Market Cap = current share price x shares on
issue)
These prices are only used as examples.
* Due to a dilution factor of 4/1 ($1.00 x 4/1 = $4.00)
In the example above, the share price has been adjusted because each shareholder now holds
one quarter of the amount of shares as they did previously.
Thus, the shares are worth more and may become more frequently traded if shareholders may begin to
associate a higher price with a "better" company.

4. Even though the price quoted in the market has increased, the value of a holding remains the same
because the amount of shares owned has been altered to reflect the new price.
You own fewer shares but they are now at a higher price.
Bonus Issue
A bonus issue is the FREE issue of shares that are issued to shareholders on a pro-rata basis: for
example, 1 bonus share for every 5 existing shares.
A publicly listed company may decide to issue bonus shares in place of a dividend or if their
level of assets has improved.
The market price of a share is likely to drop when a bonus is issued because an increase in the
level of shares in the market means that the company's assets have been broadened over more
shares.
Individual holding: 10,000 shares
Share price: $1.50
Holding value: $15,000
Bonus Issue Ratio: 1 bonus share for every 4 (1:4)
= 2,500 bonus shares (no brokerage charge!)
New individual
holding:
12,500
Share price: $1.20*
New holding value: $15,000
These prices are only used as examples.
* Due to a dilution factor of 4/5 ($1.50 x 4/5 = $1.20)
Rights Issue
A rights issue is a method for a company to raise extra capital.
An offer to buy more shares, usually at a price below the current market price, is distributed to
existing shareholders on a pro rata or equal basis, e.g. the right to buy one new share at a
discounted price (occasionally with options attached) for every five shares held.
Non-Renounceable rights issues only allow entitled shareholders to take up their rights or let
them lapse.

5. Renounceable rights issues allow the entitled shareholder to sell their rights in the secondary
market, to take up their rights or to let them lapse.
The shareholder will receive paper work outlining the rights they have been allocated and the
amount they need to pay (application money) to purchase the securities that the rights entitle
them to.
In the example below, an investor could buy the rights in the secondary market and "take up"
their rights, effectively paying $1.15 for a share that is worth $1.20 on the market.
To sell their shares issued from the rights, they must be allocated so it may not be worth $1.20
after the allocation date - it may be worth greater or less than the combined rights market price
and application money ($1.15)
Key Terms:
Entitlement Ratio 1 new share for every 5 existing shares
Issue Price (application
money)
$1.05
The price that a shareholder pays to take up the rights (no
brokerage charged on application money)
Total New shares 100 million new shares to be issued
Gross Proceeds NZ$105.0 million to be raised
Key Dates: (the dates below are examples only)
Ex Rights Day 1 The head shares will trade on an XR (Ex Rights) basis.
Shares bought on and after this date do not provide the buyer
with an entitlement to the Rights
Rights Quotation Day 1-13 The rights are tradable as a separate security, e.g. XYZR
Record Date Day 3
This is the day the registry determines which shareholders
were entitled to the rights on the Ex Date. Note: shares
bought between the Ex Date and Record Date do not entitle
the buyer to the dividend.
Offer documents sent out Day 5 Documents are sent to eligible shareholders.
Offer closes
Day 17
This is the day on which application money must be received
to take up the rights.
Allotment of new shares
Day 19
This is the day on which the new shares are issued, new XYX
shares are tradable the same day.
Shareholdings:
Individual holding 10,000 XYZ shares
Rights allocated
2,000 XYZ rights (10,000 x 1/5) - no brokerage charged to existing
shareholders.
Application money $2,100 (2,000 x $1.05)
XYZ share price $1.20
XYZR (tradable rights)
price
$0.10
The price that 1 "right" is worth on the market (only applies if
the rights are tradable.)
These prices and dates are only used as examples

6. Updating your Portfolio: Corporate Actions
If you receive new shares via a Rights Issue, Bonus Issue, Dividend Reinvestment Plan (DRP), New
Issue, Stock Split/Consolidation, or your receive income from a Cash Dividend, you may need to adjust
your portfolio to ensure that cost and profit/loss levels are accurately reflected.
Please note: NZSX Rights Issues, NZSX Bonus Issues, NZSX Cash Dividends and NZSX Stock
Splits/Consolidations are automatically recorded in your portfolio.
Step 1
Create a new movement
To create a new movement in your Portfolio, click on the blue button circled below.
Next, select the appropriate movement type
Rights Issue/Share Purchase
Plan
= BUY
Bonus Issue = BONUS_ISSUE
Dividend Reinvestment Plan
(DRP)
= BONUS_ISSUE
New Issue (share float) = NEW_ISSUE
Cash Dividend = DIVIDEND

7. Step 2
Enter movement details
Rights Issue/Share Purchase Plan
Please note: NZX Rights Issues are automatically recorded in your Portfolio.
Movement Date:
enter the date that the new shares were registered against your
name
Quantity:
enter the quantity of new shares that you have taken up as part of
the Rights Issue
Market price/share: enter the application cost (per share) that you paid
Brokerage: n/a
Other charges: n/a
Trade fee: n/a

8. Bonus Issue
Please note: NZX Bonus Issues are automatically recorded in your Portfolio.
Movement Date:
enter the date that the new shares were registered against your
name
Quantity: enter the quantity of new shares that you received
Market price/share: n/a
Brokerage: n/a
Other charges: n/a
Trade fee: n/a
Dividend Reinvestment Plan (DRP)
Movement Date:
enter the date that the new shares were registered against your
name
Quantity: enter the quantity of new shares that you received
Market price/share:
enter the allotment cost per share as detailed on correspondence
from the share registry
Brokerage: n/a
Other charges: n/a
Trade fee: n/a
New Issue (Share Float)
Movement Date:
enter the date that the new shares were registered against your
name
Quantity: enter the quantity of new shares that you have purchased
Market price/share: enter the cost per share that you paid
Brokerage: n/a

9. Other charges: n/a
Trade fee: n/a
Cash Dividend
Please note: NZX Cash Dividend payments are automatically recorded in your Portfolio.
Movement Date: enter the date that the dividend was paid
Gross dividend: enter the total dividend amount that you received
Withholding tax: enter withholding tax paid**
Imputation credits: if applicable, enter imputation credits paid
Stock Split/Consolidation
Please note: NZX Stock Split/Consolidations are automatically recorded in your Portfolio.
Stock Split = reduced price and increased quantity.
Stock Consolidation = increased price and reduced quantity.
Example - a 5:1 consolidation requires the price to be multiplied by 5 and the quantity to be multiplied by
0.2
The first step is to create a SELL movement for the entire amount of stock at the average cost price.
Movement Date: enter the date that the stock split/consolidation occurred
Quantity: enter the entire quantity of your previous holding
Market price/share: enter the average cost price of your previous holding
Brokerage: n/a
Other charges: n/a
Trade fee: n/a
The second step is to create a BUY movement for the adjusted amount of stock at the adjusted cost
price.
This allows you to accurately reflect the change in your Portfolio while retaining your historical
movements.

10. Movement Date: enter the date that the stock split/consolidation occurred
Quantity: enter the new, adjusted quantity
Market price/share: enter the new, adjusted price
Brokerage: n/a
Other charges: n/a
Trade fee: n/a
After updating your portfolio to reflect new shares and additional income received from a Cash Dividend,
the overall cost and profit/loss levels of your portfolio will be reflected in your online portfolio.*
Updating your Portfolio: Company Name Changes
If a company that you own shares in changes its name, you will need to adjust your portfolio to ensure
that you can accurately record your past and future trading activities in that company.
Featured example:
Glengarry Resources (GGY.ASX) has changed its name to Centaurus Minerals Limited
(CTM.ASX)
Step 1
Take a copy of your old movements
In this example, you would need to copy each GGY.ASX (GGY) movement and replace it with an
identical CTM.ASX (CTM) movement.
But before creating the new movements for CTM, we advise you to take a copy of your GGY movements
by following the steps below.
To view all movements for GGY, click on the [movements] link at the end of the GGY line in your
portfolio, as circled below.
From here, you can take a screen shot of all GGY movements by holding Ctrl + Alt + Print Scrn and then
pasting the resulting image into a Word document. Taking a screen shot is like taking a photo of your
computer screen.

11. Or, you can use your mouse to click, drag and highlight the contents of the movement table for GGY,
copy the selected text and then paste it into a Word document.
Alternatively, just use Ctrl +"P" to print the web page straight from your printer.
Step 2
Create new movements to mirror the old movements
After taking a copy of your old movements, return to the main Portfolio page and create new movements
under the new stock code, CTM.
To create a new movement, click on the red "New Movement" button circled below and follow the steps
from here - referring to your old GGY data as required.
When entering a new movement, ensure that you copy the exact details from the GGY lines into the new
CTM lines - e.g. movement type, - e.g. movement type, movement date, quantity, currency, fees etc.
Please note that you will need to repeat this process for each individual GGY movement.
Step 3
Delete old movements
When the new movements for CTM mirror the old movements for GGY, you can go back to each GGY
movement and remove them from your portfolio by clicking the [delete] button, as circled below.

12. To delete the GGY movements, click on the [movements] link at the end of the GGY line in your main
portfolio view and then click on the corresponding [delete] link for each GGY movement.
When you trade in CTM from this point onwards, your trading activities will be represented in your
portfolio under the correct company name and stock code.*