Notes to the financial Statements

8. Events subsequent to balance date

Group borrowings under revolving multi currency cash advance facility

Under the facility agreement dated 16 November 2005, the Group is required to ensure at all times that the ratio of finance debt to EBITDA (Senior Debt Cover Ratio) shall not exceed 3.00.

At the 31 December 2008 testing date this ratio was 3.46 representing a failure to comply and as a consequence all bank debt has been classified as a current liability in the Balance Sheet.

The carrying amount of loans under this facility at 31 December 2008 is NZD371m.

The Company has been in discussions with the banks since 19 December 2008 in order to obtain an amendment to the covenant ratio. The facility agreement requires that all banks must agree to conditions for an amendment.

All banks have indicated a willingness to either amend the Senior Debt Cover Ratio or give a waiver from the failure to comply.

However at the date of signing these Financial Statements, conditions for an amendment or waiver had not been agreed to by all parties.

The Company is reviewing the Group's funding arrangements and the Board is considering the merits of issuing ordinary equity.

Directors have concluded that the going concern principle is appropriate for the preparation of these Financial Statements based on the expectation that the banks and the Company will be able to agree satisfactory conditions for a waiver or amendment to the Senior Debt Cover Ratio.