3 JULY

NEW ZEALAND GAZETTE

1569

and the Issuer respectively (comprising of the Cash Interest Component together with the Increment)

Year ending | | | |
31 March | Nil | 16,300,000 | Nil | Nil | Nil |
1997 | | | |
31 March | 2,624,400 | 16,880,800 | 580,000 | 1,815,400 | 4,439,800 |
1998 | | | |
31 March | 2,797,200 | 17,460,000 | 580,000 | 1,815,400 | 4,612,600 |
1999 | | | |
31 March | 3,078,000 | 36,080,000 | 1,160,000 | 1,815,400 | 4,893,400 |
2000 | | | |
31 March | 3,294,000 | 37,240,000 | 1,160,000 | 1,815,400 | 5,109,400 |
2001 | | | |
31 March | 3,456,000 | 38,400,000 | 1,160,000 | 1,815,400 | 5,271,400 |
2002 | | | |

(3) After the subdivision (ie, for the years 31 March 2000 onwards) the price adjustment calculation is applied. The price adjustment formula takes into account the increased Increment as a result of the subdivision and adjusts the share price for purposes of calculating the aggregate expenditure or income with the intent that the aggregate amount is the same as if the subdivision had not occurred. The yearly Increments increase to $1,160,000 and the amount attributed to each share comprised in the Increments is decreased to $1.565, in terms of the formula set out in subclause 6 (4), as follows:

Amount attributed
to each share = $3.13 ×

580,000

1,160,000

= $1.565

(4) The aggregate amount, if the MCNs run full term, attributable to the debt component of the MCNs, and therefore to be taken into account under the Accruals Rules is $24,326,600 (4,439,800 + 4,612,600 + 4,893,400 + 5,109,400 + 5,271,400), comprised of the Cash Interest Component together with the Increments. This amount constitutes aggregate expenditure/income, in terms of the Accruals Rules. All other fluctuations in value of the Underlying Shares relate to the equity component of the MCNs and should not be taken into account in calculating the aggregate expenditure or income.

(5) It should be noted that the example only deals with the amounts attributable to the debt and equity components of the MCNs. It does not deal with the attribution or spreading, under the Accruals Rules, of income or expenditure to particular income years.

Example C

(1) This example proceeds on the basis that the Holder will continue to hold all MCNs until 31 March 2002. However, following its 31 March 1999 year end, the Issuer undertakes a consolidation on a one for two basis.

(2) The following table sets out:

(a) The Cash Interest Component;

(b) The number of shares in the Issuer into which the MCNs would convert (following a 1 January allotment of Increments) in a particular year, if the election was made to convert them;

(c) The Increment;

(d) The amount of the Increment;

(e) The aggregate expenditure (comprised of the Cash Interest Component together with the Increment).

Year ending | | | |
31 March | Nil | 16,300,000 | Nil | Nil | Nil |
1997 | | | |
31 March | 2,624,400 | 16,880,800 | 580,000 | 1,815,400 | 4,439,800 |
1998 | | | |
31 March | 2,797,200 | 17,460,000 | 580,000 | 1,815,400 | 4,612,600 |
1999 | | | |
31 March | 3,078,000 | 9,020,000 | 290,000 | 1,815,400 | 4,893,400 |
2000 | | | |
31 March | 3,294,000 | 9,310,000 | 290,000 | 1,815,400 | 5,109,400 |
2001 | | | |
31 March | 3,456,000 | 9,600,000 | 290,000 | 1,815,400 | 5,271,400 |
2002 | | | |

(3) After the consolidation (ie, for the years 31 March 2000 on) the price adjustment calculation is applied. The price adjustment formula takes into account the decreased Increment as a result of the consolidation, and adjusts the share price for purposes of calculating aggregate expenditure with the intent that aggregate expenditure is the same as if the consolidation had not occurred. The yearly Increments following the consolidation are calculated according to the definition of “Increments” in the Determination which results in yearly Increments decreasing to 290,000. In the case of the 2000 year, for example, the yearly increment will be 290,000. The amount attributed to each share comprised in the Increments is increased to $6.26 in terms of the formula set out in subclause 6 (4) as follows:

Amount attributed
to each share = $3.13 ×

580,000

290,000

= $6.26

(4) The aggregate amount, if the MCNs run full term, attributable to the debt component of the MCNs, and therefore to be taken into account under the Accruals Rules is $24,326,600 (4,439,800 + 4,612,600 + 4,893,400 + 5,109,400 + 5,271,400), comprised of the Cash Interest Component together with the Increments. This amount constitutes aggregate income/expenditure, in terms of the Accruals Rules. All other fluctuations in value of the Underlying Shares relate to the equity component of the MCNs and should not be taken into account in calculating expenditure.\n
(5) It should be noted that the example only deals with the amounts attributable to the debt and equity components of the MCNs. It does not deal with the attribution or spreading, under the Accruals Rules, of income or expenditure to particular income years.

This Determination is signed by me on the 24th day of June 1997.

MARTIN SMITH, General Manager (Adjudication & Rulings)

go4422