Ann: Claim against BRL, page-21

(b) Details on deferred consideration – Canterbury Coal Limited The acquisition of Canterbury Coal Limited in November 2013 contained a royalty agreement. The amounts that are payable in the future under this royalty agreement are required, to be recognised as part of the consideration paid for Canterbury Coal Limited. The fair value of the future royalty payments is estimated using a discount rate based upon the latest New Zealand 10 year government bond rate, production profile, and forecasted domestic coal prices. A reasonable change in discount rate does not have a material impact on the deferred consideration. (c) Details on deferred consideration – New Brighton Collieries Limited The Company completed the acquisition of New Brighton Collieries Limited on 10 March 2015. The balance due on settlement is to be satisfied by an ongoing royalty based on mine gate sales revenue. The fair value of the future royalty payments is estimated using a discount rate based upon a risk adjusted New Zealand 10 year government bond rate of 8.37% (2015: 6.63%), projected production profile, and forecast domestic coal prices. A 1% increase or decrease in the discount rate used would decrease or increase the deferred consideration balance by $0.4m and $0.5m, respectively (2015: $0.5m and $0.6m respectively). Security Pursuant to a deed of guarantee and security the deferred consideration is secured by way of a first-ranking security interest in all of New Brighton Collieries Limited’s present and future assets (and present and future rights, title and interest in any assets). Deferred consideration liabilities have been categorised as level 3 under the fair value hierarchy.