WAV/RULE: ALF: NZX Market Supervision Decision -ALF -Waiver Rule 10.4.1(a)

30 Aug 2010 1:48 pm

ALF 30/08/2010 WAV/RULE

REL: 1347 HRS Allied Farmers Limited

WAV/RULE: ALF: NZX Market Supervision Decision -ALF -Waiver Rule 10.4.1(a)

27 August 2010 NZX Market Supervision Decision Allied Farmers Limited Application for Waivers from NZSX Listing Rules 10.4.1(a)

Background 1. Allied Famers Limited ("ALF") is a Listed Issuer ("Issuer") with Securities Quoted on the NZSX and NZDX Markets. 2. ALF's 2010 financial year ended on 30 June 2010. 3. NZSX Listing Rule ("Rule") 10.4.1(a) requires that an Issuer make an announcement containing the information required by Rule 10.4.2, before the release of each annual report, and in any event, not later than 60 days after the end of each of its financial years ("Preliminary Announcement"). 4. Accordingly, ALF is required to release its Preliminary Announcement to the market for the financial year end 30 June 2010 not later than Monday 30 August 2010. 5. On 20 August 2010, receivers were appointed to Allied Nationwide Finance Limited ("ANF"), a wholly owned subsidiary of ALF.

Application 6. ALF has approached NZX Market Supervision ("NZXMS") seeking a waiver from Rule 10.4.1(a), so that it may defer the provision of the information required by that Rule until 10 September 2010. In support of its application, ALF submits that: (a) On Friday 20 August 2010, ALF's wholly owned subsidiary, ANF was placed into receivership by NZ Guardian Trust, as Trustee for its debenture holders. This event has severely impacted on ALF's ability to meet the deadline for the provision of ALF's Preliminary Announcement as ANF is a significant and pervasive part of ALF's operations and its receivership is a significant event. (b) There are a number of valuation and accounting matters arising as a result of the receivership which impact the disclosures required to be contained in a Preliminary Announcement. ALF requires time to work through the impact of the receivership of ANF with the relevant parties and to consult with its auditors and advisers to ensure that any information disclosed to the market is meaningful and is as correct as is possible. This includes the impact of the receivership upon: (i) The Consolidation of ANF: ALF is currently in discussions with its auditors on whether it is still appropriate to consolidate ANF at year end. ALF believes that ANF is to remain consolidated into ALF's financial statements, but needs advice as to whether there is likely to be a supplementary note disclosing a balance sheet position excluding ANF with an appropriate reconciliation. (ii) The Valuation of ANF's assets and the liabilities in the ALF group accounts: The ANF accounts and results to date have been prepared on a going concern basis. ALF is currently assessing what the impact is of the ANF receivership on the carrying value of assets. ALF are waiting to have a discussion with the receiver before determining the appropriate carrying values of various assets. (iii) The Carrying Value of ANF in ALF's accounts requires reassesment. (iv) Related Party Arrangements: There are a number of related party arrangements (principally in the way of the obligations due from ALF to ANF) that need to be reassessed. AFL understands that it will get an initial view on this from the receiver by Friday 27 August 2010. (v) Senior Banking Facilities: ALF is currently in discussions with its senior bankers, the result of which may need to be reflected in ALF's financial statements.

(c) ALF expects that by early in the week commencing 30 August that it will have enough information to commence the completion of year end accounts. Time is required to complete this exercise and have the results approved by the ALF Board. (d) The effect of these events means that, notwithstanding the inclusion of full disclaimers and explanations as to the possibility of further revaluations in the Preliminary Announcement, there is a significant possibility that the figures contained in such a Preliminary Announcement could be misleading following further work and discussions with ALF's auditors, bankers and the receivers of ANF. (e) On balance, it is preferable for the market to be provided with accurate and fully informed basis after a short extension, rather than it being based on information that is unable to be fully developed or considered. Rules 7. Rule 10.4.1 provides: Each Issuer shall make an announcement pursuant to Rule 10.4.2 through NZX for public release, in the manner prescribed by Rule 10.2 as soon as the Material Information is available, and in any event; (a) before the release of each annual report, and not later than 60 days after the end of the financial year to which that report relates; and (b) before the release of each half-yearly report and not later than 60 days after the end of the financial half-year to which that report relates.

Decision 8. On the basis that the information provided to NZXMS is full and accurate in all material respects, NZXMS grants ALF a waiver from Rule 10.4.1(a), on the following conditions: (a) ALF provide to the market, within the time that the information required by Rule 10.4.1(a) would have otherwise been provided to the market, a statement regarding why it is that ALF cannot provide its Preliminary Announcement to the market in the timeframe required by the Rules; and (b) ALF provide to the market the information required by Rule 10.4.2 not later than 5.00pm on 10 September 2010.

Reasons 9. In coming to this decision, NZXMS has considered the following matters: (a) The ANF unit represents a significant portion of the ALF group and the ALF business. A receiver was appointed to ANF on Friday 20 August 2010, 6 Business Days before the required filing date for ALF's Preliminary Announcement. ALF needs sufficient time to fully consider the implications of this appointment on the ALF group accounts, as well as the consequent valuation of ALF's other assets that are impacted by this event. (b) ALF has been in discussion with its auditors regarding the appropriate accounting treatment and are still working through the full implications of this. This valuation is not only impacted by the receivership itself but also the approach that the receiver takes and the approach taken by ALF's senior bankers in respect of ALF's banking facilities. All of these parties require time to consider their position, following which ALF can engage and obtain greater clarity as to each of their intentions, so as to finalise its accounts. (c) It is preferable that the Preliminary Announcement be deferred for a short period, so as to provide holders of ALF's Securities with information which has had the benefit of having been fully considered by ALF and its auditors, rather than providing information which may subsequently vary considerably and, as a result of which, could potentially mislead investors. (d) In the event that a waiver is not granted, ALF will be required to either provide information which is incomplete or which has not been fully considered by it and its advisers, or which will be in breach of the Rules. The benefit of Security holders receiving information that more accurately reflects the financial position of ALF outweighs the detriment of a brief delay in receiving this information. (e) Pursuant to section 36ZM of the Securities Markets Act 1988, NZXMS consulted with the Securities Commission when making this determination. The Securities Commission agrees with this determination.

ENDS. End CA:00199058 For:ALF Type:WAV/RULE Time:2010-08-30:13:48:13

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