764 NEW ZEALAND GAZETTE, No. 26 1 MARCH 2012

(4) Any income, consideration, gain or loss, or expenditure that is solely attributable to an excepted financial arrangement is not included when calculating income or expenditure under the financial arrangements rules.

(5) This Determination specifies that the amounts that are solely attributable to the excepted financial arrangements are:

(a) the amounts paid under or with respect to the Preference Shares; and

(b) if the Issuer issues Conversion Shares to the Noteholder in lieu of payment in cash, any difference between the market value of the Conversion Shares and the Principal Amount.

(6) This Determination specifies that no part of the Principal Amount, the repayment of the Principal Amount, the Coupon Interest, and any Cash Redemption Premium under the CRNs is solely attributable to an excepted financial arrangement.

5. Interpretation

(1) In this Determination, unless the context otherwise requires, words and expressions which have not been defined elsewhere within the Determination have the same meaning as in section YA1 of the Act.

(2) In this Determination, the following expressions (which have not been defined elsewhere in this Determination) have the following meanings:

Cash Redemption Premium means any amount paid by the Issuer to the Noteholder in excess of the Principal Amount on redemption of the CRNs for cash. If the CRNs are redeemed for cash under clause 4.5(b)(ii) of the Terms and Conditions, the Cash Redemption Premium is 2% if the CRNs are redeemed on or before 31 December 2011, 4% if the CRNs are redeemed from 31 December 2011 but on or before 31 December 2012, 6% if the CRNs are redeemed from 31 December 2012 but on or before 31 December 2013, then it continues to increase by a further 2% for each successive two-yearly Interest Rate reset period (as stated in clause 4.2(b)(ii) of the Terms and Conditions).

Conversion Shares means a fixed number of fully paid ordinary shares in the Issuer issued to the Noteholder pursuant to clause 4.3 of the Terms and Conditions, after making any adjustment required pursuant to clause 5 of the Terms and Conditions. Pursuant to clause 4.3, the $1.00 Principal Amount of each CRN will convert to 2.1 fully paid ordinary shares in the Issuer.

Coupon Interest means quarterly interest payments by the Issuer to the Noteholder pursuant to clause 3 of the Terms and Conditions, and includes any amount of unpaid interest which is subsequently paid pursuant to clause 3.2(b) of the Terms and Conditions.

Interest Rate means 8% until 31 December 2011, and subsequently the rate determined under clause 3.5 of the Terms and Conditions. Under clause 3.5 the interest rate is: From 31 December 2011 until 31 December 2013, a two-year interbank swap rate on 31 December 2011 plus a margin of 550 basis points; from 31 December 2013 until 31 December 2015 a two-year interbank swap rate on 31 December 2013 plus a margin of 650 basis points; and from 31 December 2013 reset at a two-year interbank swap rate plus a margin of 650 basis points every two years (while the CRNs remain on issue).

Preference Shares means preference shares in Company C which the Issuer subscribed for in accordance with clause 2.2 of the Subscription Agreement for Convertible Redeemable Notes between the Issuer and the Noteholder, or any such shares that are reclassified as ordinary shares.

Principal Amount, in relation to each CRN, means $1.00. References to the aggregate Principal Amount are to the aggregate of the Principal Amount of all the CRNs, being an aggregate Principal Amount of approximately NZ$32.5 million.

Terms and Conditions means the CRN terms set out in Schedule 1 to the Subscription Agreement for Convertible Redeemable Notes between the Issuer and the Noteholder.

6. Method

(1) Where the CRNs are converted to Conversion Shares pursuant to clause 4.1 of the Terms and Conditions, any amount by which the value of the Conversion Shares is above or below the aggregate Principal Amount of the CRNs is solely attributable to the Conversion Shares.

(2) The amounts that are solely attributable to the Preference Shares are:

(a) The issue price per Preference Share of $1.00;

(b) Any dividends paid on the Preference Shares by the Issuer;

(c) Any other distributions paid on or with respect to the Preference Shares; and

(d) Proceeds derived by the Issuer from the disposal or redemption of the Preference Shares.

(3) No other income, gain, loss, expenditure or consideration paid under or with respect to the wider financial arrangement is solely attributable to an excepted financial arrangement component of the wider financial arrangement. Consequently, all other amounts in relation to the CRNs (such as the Principal Amount, Coupon Interest and any Cash Redemption Premium) are taken into account under the financial arrangements rules.

7. Examples

Example A: Value of Conversion Shares exceeds the aggregate Principal Amount

(1) This example illustrates the application of the method (set out in this Determination) for determining the amounts attributable to both the debt and equity components of the CRNs to be issued by the Issuer to the Noteholder.

(2) The example assumes the following:

• The CRNs are issued on 16 January 2010 and the Noteholder will continue to hold the CRNs until 31 December 2015.

• The aggregate Principal Amount subscribed for the CRNs is NZ$32.5 million.

• The Issuer uses the aggregate Principal Amount to subscribe for Preference Shares in Company C, and derives dividends from them.

• Coupon Interest payments are not at any time suspended.

• The Issuer exercises its option to convert the CRNs to Conversion Shares on 31 December 2015.

• On conversion, the value of the Conversion Shares is NZ$40 million, ie exceeding the aggregate Principal Amount.