GENERAL: ALF: ALLIED FARMERS COMPLETES ASSET VALUATIONS AND PROVISIONS

12 Aug 2010 9:52 am

ALF 12/08/2010 GENERAL

REL: 0952 HRS Allied Farmers Limited

GENERAL: ALF: ALLIED FARMERS COMPLETES ASSET VALUATIONS AND PROVISIONS

12 August 2010

ALLIED FARMERS COMPLETES ASSET VALUATIONS AND PROVISIONS

Allied Farmers advised on 28 May 2010 that it had, based on information known at that time, assessed the net value of the property and loan assets acquired from Hanover Finance and United Finance in December 2009 at $124 million, and that the remaining work required to complete this assessment would result in further impairments. This assessment has now been completed.

The unaudited fair value assessment of the net assets acquired from Hanover Finance and United Finance has been determined at $94.3 million, compared to $175.5 million disclosed in the interim financial statements for the period ended 31 December 2009.

The unaudited additional impairment provisions and fair value adjustments to be reflected in the 30 June 2010 year-end financial statements are as follows:

Property assets $24.5 million Loan assets $57.8 million

These amounts are subject to any adjustments that may arise from the completion of Allied Farmers' 30 June 2010 year-end audit.

Property Assets: On 7 May 2010 Allied Famers announced an aggregate net decrease in value of $17.9 million. In addition to this amount there have been realised losses, restructuring expenses and IFRS interest adjustments recognised on properties of $6.6 million, taking the total additional impairments and fair value adjustments since 31 December 2009 to $24.5 million.

Loan Assets: The total loan impairment provisions of $57.8 million includes the impairment provisioning of $33.6 million (on approximately 65% of the loan assets) as detailed in our 28 May 2010 announcement. The impairment provisioning on the remaining portfolio has been determined at $23.0 million. In addition to these amounts there have been loan recovery expenses and IFRS interest adjustments totaling $1.2 million which take the total additional impairments and fair value adjustments recorded on the loan assets since 31 December 2009 to $57.8 million.

The aggregate of all the impairment provisions and fair value adjustments, together with interest earned on loans and the holding costs of properties, values the net assets acquired from Hanover Finance and United Finance at $94.3 million.

For further information please contact:

Rob Alloway?Managing Director?Phone 021 376642 Email: rob.alloway@alliedfarmers.co.nz End CA:00198272 For:ALF Type:GENERAL Time:2010-08-12:09:52:42

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