Inland Revenue is currently disputing the tax treatment adopted by the Group in relation to feasibility expenditure in the 2006, 2007 and 2008 financial years. The Group believes the tax treatment adopted is correct and is defending its position. Should Inland Revenue be completely successful in its claim, the resulting liability would give rise to an additional tax payment of $6,779,000 and interest expense of $3,145,000. Further the Group would need to revise its policy for claiming tax deductions for feasibility expenditure in the 2009 and future years. This would give rise to a further estimated tax payment of $3,998,000 and interest expense of $477,000 in respect of the 2009, 2010 and 2011 years.
The Group has provided a guarantee to Rangitata Diversion Race Management Limited (RDR) to allow RDR to borrow funds to purchase land. The maximum amount the Group could be liable to pay is $756,000 (2010: $756,000). This maximum liability would only be payable if RDR was unable to service its debt and was unable to sell the land.
The Group is not aware of any other material contingent liabilities at balance date (2010: nil).
Other than disclosed in note 6 the Group is not party to any material operating leases at balance date (2010: nil).
The Group is not aware of any significant events occurring subsequent to balance date that have not been disclosed.