Correspondence

This exchange of correspondence has been received from a member and, in view of the subject matter, might be of interest to viewers.  We are advised that the Company concerned is happy for the exchange to be viewed by a wider audience.

[copy of letter sent by NZSA member Oliver Saint to New Zealand Refining Company]

 31 March 2009

The Company Secretary

The New Zealand Refining Company Ltd

Port Marsden Highway

Marsden Point

Whangarei

There are two reasons for writing to you this year. The first is to congratulate you and your team for presenting to shareholders an excellent annual report. I found the contents and explanations to be helpful and with the exception of the point mentioned below, the Company has been very open with disclosures. It did occur to me that perhaps a greater amount could be set aside for those Board members who are given the responsibility of being on the audit committee. The sum of $10,000 seems light in relation to the work involved and the continuing literature and rules that are promulgated from the Chartered Accountants Institute, the Stock Exchange and government. However in these recessionary times this matter might be noted for future reference.

The only area I noticed that would have benefited from further explanation was the provision set aside for the Defined Benefit Pension Obligations in the Balance Sheet. I have to acknowledge that this Fund ceased accepting new members in 2002 and the foresight of the Board in closing the Fund to new members should be recognised by shareholders. Having said that, the world financial problems have not ceased and in fact an American economist has estimated that around one third of the toxic assets have been dealt with to date. In this context I believe shareholders would welcome some further comment from the Chairman at the AGM. I am no expert in this area but I am sure there will have been institutional shareholders who have asked the questions below and many more, which will also be of interest to the small shareholder. If we are to be the object of further provisions on the scale of the current one then I will be concerned about the quantum of future dividends. You may feel that this is a sensitive subject to be exposing at an AGM but I believe it is important that shareholders are given more facts than are presently offered in the accounts. The following matters are initially my thoughts as to further information required.

I am sure I have missed some critical questions but I thought the Board would want to know about my concerns.

It is currently my intention to attend the AGM in Whangarei and look forward to meeting you then.

Kind regards,

OLIVER SAINT
Director

For the attention of Mr Dennis B Martin

Annual Report