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Retrieving Data

Note 33

For The Year Ended 31 March 2012


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. Inland Revenue has now issued assessments for the 2006, 2007 and 2008 financial years. These assessments are based on the adjudication report previously issued by Inland Revenue and now allow a deduction for certain categories of expenditure which were previously disputed by Inland Revenue but contend that the costs of obtaining resource consents should have been capitalised. The assessments are based on Inland Revenue’s determination of what should be considered resource consent costs. The Group does not agree with the basis of the assessments. It continues to believe the tax treatment it has adopted is correct and continues to defend its position.

Should Inland Revenue be completely successful in its claim for all three years, the resulting liability would give rise to an additional tax payment of $5,924,000 and interest expense of $2,756,000. Based on the principle of the assessments, the Group would need to revise its policy for capitalising the costs of resource consents for tax purposes in the 2009 and future years. This would give rise to a further estimated tax payment of $4,117,000 and interest expense of $787,000 in respect of the 2009, 2010, 2011 and 2012 years. This would primarily result in a balance sheet adjustment in the financial statements as most resource consents are depreciable intangible property. The impact of these adjustments on the tax expense in the income statement is difficult to estimate but is unlikely to exceed $3,300,000 for all years up to 2012.

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 (2011: $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 (2011: nil).

Other than disclosed in note 6 the Group is not party to any material operating leases at balance date (2011: nil).

On 2nd May 2012 the Group announced that it had negotiated conditional contracts with Siemens for turbine supply and with Origin Energy for long term off take in relation to the construction of the 270MW Stage 2 of its Snowtown wind farm in South Australia. The Group proposes to retain ownership of 144MW and to sell down the rights to develop the remaining 126MW to a co-investor. These contracts are primarily conditional on the Group identifying a suitable co-investor.

The Group is not aware of any significant events occurring subsequent to balance date that have not been disclosed.