SCF Annual Report, Year Ended June 30, 2009

SOUTH CANTERBURY FINANCE LTD
(Established 1926)
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2009

INDEX
PAGE NUMBER
1 :: COMPANY DIRECTORY
2 AUDITORS REPORT
3 INCOME STATEMENT
4 :: STATEMENT OF CHANGES IN EQUITY
5 :: BALANCE SHEET
6 :: CASH FLOW STATEMENT
7 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

COMPANY DIRECTORY
DIRECTORS
Allan James Hubbard (Chairman)
Edward Oral Sullivan
Robert Alexander White (Resigned 27 August 2009)
Stuart John Nattrass (Resigned 27 August 2009)
CHIEF EXECUTIVE OFFICER

Lachie John McLeod
REGISTERED OFFICE
39 George Street
Timaru
BANKERS
Bank of New Zealand
Timaru
SOLICITORS
Bradley, West
Timaru
Raymond Sullivan McGlashan
Timaru
AUDITORS
Woodnorth Myers
Chartered Accountants
Timaru/Ashburton
SHAREHOLDERS
Southbury Group Ltd 130,000,000
Total Ordinary Shares 130,000,000
Perpetual Preference Shares 120,000,000
Total Shares Issued 250,000,000
COMPANY INCORPORATION NUMBER IRD NUMBER

121022 11-554-288
Page 1
\ M WOODNORTH MYERS & Co
AUDITORS' REPORT TO THE SHAREHOLDERS OF
SOUTH CANTERBURY FINANCE LIMITED AND SUBSIDIARIES [THE GROUP)
We have audited the financial report on pages 3 to 32 for the year ended 30 June 2009. The financial report provides information
about the past financial performance and financial position of the group as at 30 June 2009. This information is stated in accordance
with the accounting policies set out on pages 7 to 10.
Board of Directors ' Responsibilities

The Board of Directors is responsible for the preparation of a financial report which gives a true and fair view of the financial
position of the company as at 30 June 2009 and the results of operations and cash flows for the year ended on that date.
Auditor's Responsibilities
It is our responsibility to express to you an independent opinion on the financial report presented by the directors.
Basis of Opinion
An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial report. It also
includes assessing:
• the significant estimates and judgments made by the directors in the preparation of the financial report; and
• whether the accounting policies are appropriate to the group's circumstances, consistently applied and adequately
disclosed.
We conducted our audit in accordance with New Zealand Auditing Standards. We planned and performed our audit so as to obtain
all the information and explanations which we considered necessary in order to provide us with sufficient evidence to obtain
reasonable assurance that the financial report is free from material misstatements, whether caused by fraud or error.
In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial report.
Associates of the auditors receive other income from South Canterbury Finance Limited on normal terms within the ordinary course
of trading activities. The firm has no other interests in the company or any of its subsidiaries.
Fundamental uncertainty - Going concern

In forming our unqualified opinion we have considered the adequacy of the disclosures made in note 2 B concerning the
downgrading of South Canterbury Finance's credit rating and the related impact on the USPP funding stated at $153m in note 16.
Future debenture funding also depends on the group successfully registering a new prospectus. As set out in note 2 B, the Directors
believe that the group has a range of options available to it, and consider that these matters will be satisfactorily resolved. The
validity of the going concern assumption on which the financial statements are prepared may depend on the successful conclusion
of these matters. If the matters were unable to be satisfactorily resolved, this could have a significant impact on the liquidity of the
group, and the recoverable amount of certain assets.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
• proper accounting records have been kept by the company as far as appears from our examination of those records; and
• the financial report on pages 3 to 32
- comply with generally accepted accounting practice in New Zealand;
- comply with International Financial Reporting Standards; and
- gives a true and fair view of the financial position of the group as at 30 June 2009 and the results of its operations
and cash flows for the year ended on that date.
Our audit was completed on 30 September 2009 and our unqualified opinion is expressed as at that date.
C) c ,
Woodnorth Myers & Co.

Chartered Accountants
Timaru
2
100-104 Sophia Street - PO 8ox 329 - Timaru - Phone 03 684 3079 - Facsimile 03 688 4623
INCOME STATEMENT
12 Months to 12 Months to
30 June 30 June
2009 2008
$000's $000's
Note
Interest Received 4 220,202 199,086
Fee Income 10,500 12,454
Leased Asset Charges 18,230 20,298
Dividends Received 2,266 1,820
Net Gain on Sales of Investments 7,471 44,551
Depreciation Recovery: Lease Receivables 1,800 3,894
Depreciation Recovery: Property Plant and Equipmen 8 189
Fair value gain (loss) on financial assets held for trading 39,679
Forex gain (loss) - 1,008
Other income 5,342 1,776
Total Income 305,678 284,887
Less Expenses
Interest Paid 180,281 135,200
Audit Fee 517 495
Bad Debts Written Off 7 9,783 10,355
Allowance for Impairment: Advances 7 57,655 8,595
Impairment on Investments 11,438 3,074
Property Revaluation Joint Venture 3,246
Fair value gain (loss) on financial assets held for trading 9,046
Forex gain (loss) 19,548
Directors Fees and Expenses 27 308 315
Donations 15 300
Brokerage and Debenture Expenses 4,772
Rent Paid 924 1,065
Depreciation: Lease Receivables 4,496
Depreciation: Property Plant and Equipment 8 5,508 11,751
Loss on Disposal: Property Plant and Equipment (Recognised) 563 317
Loss on Investments (Recognised) 13 35,000
Loss on Property Held for Resale (Recognised) 464
Write Off Intangible Assets 12 5,807
Other Expenses 27,817 30,699
368,142 211,212
Share of Profit in Associates (998)
369,140 211,212
Net Profit Before Taxation (63,462) 73,675
Subvention Payment 35 (4,008)
Provision for Taxation 35 13,893 (8,884)
Net Profit After Taxation (49,569) 60,783
Share of Profit Attributed to Minority Interests 860 983
Net Profit Attributed to Parent Company Shareholders $(50,429) $ 59,799
Page 3
STATEMENT OF CHANGES IN EQUITY
30 June 30 June
2009 2008
$000's $000's
Note
Equity at Beginning of the Period 243,569 204,516
Net Profit After Taxation (50,429) 59,799

Minority Interests Share of Equity 500
Minority Interests Share of Profit 860 983
Movement in Revaluation Taken to Income 2,471
Fair Value Adjustment 3,844 (7,035)
(45,725) 56,719
Contribution from Owners
Ordinary Shares Issued 60,000 25,000
Distribution to Owners:
Preference Share Dividends Paid 19 (7,894) (8,666)
Ordinary Share Dividends Paid 19 (24,027) (34,000)
Movements in Equity for the Period (17,647) 39,052
Equity at End of the Period 17 $225 ,922 $243,569
Comprising:
Parent Company Interest 222,170 240,677
Minority Interest 3,752 2,891
$225,922 $243,569
Page 4
BALANCE SHEET
AS AT 30 JUNE 2009
30 June 30 June
2009 2008
$000's $000's
Assets Note
Cash and Cash Equivalents 5 123,276 402,771
Other Short Term Deposits 5 287 253
Receivables 5 25,061 9,698
Property Held for Resale 5 52,381 5,920
Taxation 35 38,416 34,567
Deferred Taxation 35 24,326 8,231
Advances 5,7 1,631,786 1,458,241
Financial assets at fair value through
profit and loss held for trading 20 36,833
Property, Plant and Equipment 8 104,577 45,092
NZ Government Stock 5 1,018 1,009
Shares in Associated Companies 15 83,525 18,484
Shares and investments 13 233,405 41,629
Goodwill on Consolidation 12 3,476
Total Assets 2,354, 890 2,029,371
Liabilities
Creditors 6 21,465 22,831
Financial assets at fair value through
profit and loss held for trading 20 4,491
Borrowings 6,16 2,107,503 1,758,480
Total Liabilities 2,128 , 968 1 ,785,802
Total Net Assets $225,922 $243569
Equity
Total Shareholders Equity 17 $225,922 $243,569
Signed this 30th day of September 2009 for and on behalf of the Directors
C--L tl yk
Director
11
ALLAN J AMES HUBBARD
Director
EDWARD ORAL SULLIVAN
Page 5
CASH FLOW STATEMENT
30.06 .09 30.06.08
Cashf[ows from Operating Activities $000's $000's
Cash was received from:
Interest Received 177,799 150,058
Leased Asset Charges 18,751 21,567
Dividends Received 3,169 917
Other Receipts 16,932 18,392
216,650 190,935
Cash was applied to:
Interest Paid 136,665 93,108
Operating Expenses & Overheads 58,639 61,726
Taxation Paid 8,653 29,659
203,957 184,493
Net Cashflow from ( used in) Operating Activities (Note 3) 12,694 6,441
Cashflows from Investing Activities

Cash was Received from:
Sale of Shares and Investments 46,127 127,599
Property Held for Resale 5,456
Sale of Lease Assets 8,597 9,279
Sale of Fixed Assets 2,195 11,975
62,375 148,853
Increase in Advances 213,726 121,688
Purchase of Shares and Investments 331,918 43,574
Property Held for Resale 52,381 5,920
Purchase of Lease Assets 34 1,343
Purchase of Fixed Assets 69,901 605
Increase in Goodwill 228
667,960 173,358
Net Cashflow from ( used in) Investing Activities (605,585) (24,506)
Cashflows from Financing Activities

Cash was received from:
Increase in Capital 60,000 25,000
Increase in Borrowings 285,318 299,369
345,318 324,369
Dividends Paid 31,921 42,666
Decrease in Prior Charges - 454
31,921 43,120
Net Cashflow from Financing Activities 313,396 281,249
Net Increase ( Decrease) in Cash Held (279 , 495) $263 , 185
Reconciliation
Cash Held at Start of Period 402,771 139,586
Exchange Gain (Loss)
Cash Held at End of Period 123,276 402,771
Net Increase ( Decrease ) in Cash Held $(279,495) $263,185
Page 6
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1 COMPANY ACTIVITY
South Canterbury Finance Ltd (the company) is a profit orientated entity incorporated in New Zealand and registered
under the Companies Act 1993.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A REPORTING ENTITY
South Canterbury Finance Ltd is registered under the Companies Act 1993. The consolidated financial statements
report on the groups activities and have been prepared in accordance with the requirements of the Companies Act
1993, the Securities Regulations 1983 and the Financial Reporting Act 1993.
B BASIS OF PREPARATION
The financial statements have been prepared in accordance with New Zealand generally accepted accounting
practice (NZGAAP). They comply with the New Zealand Equivalents to International Financial Reporting Standards
(NZ IFRS) and other interpretations as appropriate for profit orientated entities. The financial statements comply
with the International Financial Reporting Standards (IFRS). Reliance is placed on the company continuing as a
going concern.
The financial information is presented in New Zealand dollars and unless stated otherwise amounts have been
rounded to the nearest thousand dollars.
Going Concern
The financial statements have been prepared on a going concern basis. The Company has considered its funding
and liquidity position, including the following events.
Following the credit rating downgrade all new investments and existing depositors reinvestments have been placed
in a trust account under the control of Trustees Executors Ltd pending a registration of a Memorandum of
Amendments to the registered prospectus which would reflect the above events. On 17 September the company
elected to withdraw its prospectus pending registration of a new prospectus incorporating the June 2009 audited
accounts. A delay in the registration of the prospectus could have a significant impact on the company's liquidity.
On 13 August 2009 the company's credit rating was downgraded by Standard and Poors to BB+ and on 19
September this was placed on negative watch. The downgrade gives rise of an event of review for both the banking
facility and the USPP funding. The banking facility has been placed on a stop draw. This facility may be withdrawn if
events leading to the review cannot be addressed satisfactorily. US investors may request repayment of funds and
the company is currently in discussion with those investors.
The company is currently looking at a major restructuring. This would see new capital being introduced and the
appointment of new independent directors. An announcement is expected in relation to this in mid October.
C SPECIFIC ACCOUNTING POLICIES
Basis of Consolidation
The subsidiary companies, both charging and non-charging, as detailed in note 23 have been consolidated within
these financial statements.
The associated companies detailed in note 23 have been equity accounted within these financial statements. The
associated company accounts are unaudited
The joint ventures detailed in note 23 have been accounted for on a proportionate basis. The joint venture financial
statements are unaudited.
The normal principles of consolidation as required by the New Zealand International Financial Reporting Standards
have been adhered to.
Interest Income and Expense
Interest income and expense are recognised in the income statement as they accrue using the effective interest
rate method.
The effective interest rate method calculates the amortised cost of a financial asset or financial liability and allocates
the interest income or expense, including any fees and directly related transaction costs that are an integral part of
the effective interest rate, over the expected life of the financial asset or liability. The application of the method has
the effect of recognising income and expense on the financial asset or liability evenly in proportion to the amount
outstanding over the period of maturity or repayment.
Page 7
Operating Leases
Income from operating leases is apportioned over the term of the lease on a straight line basis.
Other Income
Dividend income is recognised in the income statement when the shareholder's right to receive payment becomes
unconditional.
Fee income integral to the effective yield of the financial asset is accrued over the term of the loan using the
effective interest method. Other fee income is recognised on an accruals basis when the service has been provided.
Income Tax
The income tax expense recognised in the accounts is based on the accounting surplus adjusted for certain
temporary differences between accounting and taxation rules. Following the liability method for tax calculation, the
Company has adopted the comprehensive basis for the calculation of deferred tax. Future income tax benefits
attributable to temporary differences are recognised in the financial statements to the extent that it is probable there
will be future taxable profit to utilise these differences.
Goods and Service Tax (GST)
All revenue and expenditure amounts are shown in the Financial Statements net of GST. GST paid, net of any
refunds collected or due, is shown as a separate expense item.
Property Held for Resale
Properties intended for resale are recognised at the lower of cost or estimated net realisable value. Depreciation is
not charged on these properties.
Financial Instruments
Financial instruments are initially recognised at fair value on the date they originated. These instruments are
classified in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-
to-maturity investments and assets available for resale. The classification depends on the purpose for which the
financial instruments were acquired. Management determines the classification of its instruments at initial
recognition and re-evaluates this designation at each reporting date.
Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading, and those designated at fair value through
profit or loss on initial recognition. A financial instrument is classified in this category if acquired principally for the
purpose of selling in the short term or if so designated by management due to accounting mismatches or
assets/liabilities are managed at fair value. Derivatives are also categorised as held for trading unless they are
designated as hedges.
Assets Available for resale
Assets available for resale are other financial instruments not included above. These may include shares held in
other companies for which an active market exists (note 13). Such investments are valued in accordance with the
above policy "Valuation of Shares and Investments"
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial instruments with fixed or determinable payments and fixed
maturities that management has the positive intention and ability to hold to maturity. Held to maturity investments
can include NZ Government Stock and investments not being shares in other companies (note 13). Held to maturity
investments are valued at amortised cost using the effective interest method.
Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They arise when money, goods or services are provided directly to a debtor with no intention of
trading the receivable. Advances as shown on the face of the balance sheet meet this definition. Advances are
shown at amortised cost after making due allowance for impairment.
Property, Plant and Equipment
Property, Plant and Equipment has been shown at cost less depreciation less any impairment loss. Depreciation
has been provided for on a straight fine basis as follows: Buildings 2.5%; Leasehold Improvements 6.5% to 28.8%;
Plant and Equipment 6.5% to 60%; Motor Vehicles 10% to 36%. Operating lease assets are depreciated on a
straight line basis to the residual value over the term of the contract.
Page 8
If an asset's carrying amount is greater than its estimated recoverable amount its carrying amount is written down
immediately to its recoverable amount by recording an impairment loss in the income statement.
Intangible Assets
Goodwill on consolidation represents the excess of the costs of investments in subsidiaries and associates over the
book value of the equity acquired. Goodwill is tested annually for impairment.
Valuation of Shares and Investments
Investments that are listed on the New Zealand Stock Exchange (NZX) or otherwise have a readily determinable
market value are recorded at fair value to reflect the listed price or determinable value that prevails at balance date.
The fair value of such shares and investments are reviewed for any gains or impairment. Adjustments to fair value
are taken to an equity reserve. If the fair value adjustment is significant or prolonged an impairment is recognised
and taken to the Income Statement. Subsequent disposals of investments are recognised in the Income Statement.
Shares in unlisted companies and other investments for which an active market does not exist are recorded at their
initial fair value. Initial fair value, has been determined using trade date accounting. At reporting date these
investments are assessed for impairment or change in fair value. The movement in valuation from initial fair value is
treated in the same manner as listed equities.
Foreign Currency Transactions
Transactions in foreign currencies, not subject to a hedging arrangement, are converted into New Zealand dollars
using the exchange rate ruling at the date of the transaction. At balance date, foreign monetary assets and liabilities
are translated at the exchange rate prevailing at balance date, and exchange variations arising from these
translations are recognised in the Income Statement.
Derivatives
The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and
foreign exchange rate risk, including forward foreign exchange contracts, cross currency interest rate swaps and
interest rate swaptions. Further details of derivative financial instruments are disclosed in note 20.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each balance sheet date. The resulting gain or loss is recognised in the income
statement immediately
Bad Debts and Impairments
Bad Debt Write Offs
All known losses are written off against income in the period in which they become evident. Any subsequent
recovery of an amount previously written off is taken to the income statement.
Allowance for Impairment
The allowance for impairment is deducted from net advances in the balance sheet and the movement in the
allowance is reflected in the income statement as "Allowance for Impairment".
Credit Assessment
Restructured Assets: Assets on which original terms have been changed due to borrowers' difficulty in complying,
and on which interest continues to be accrued at a rate of interest which is equal to or greater than the average
cost of funds at the date of restructuring. The revised terms are not comparable with the terms of new facilities with
comparable risks.
Assets acquired through enforcement of securi : These are assets acquired through the enforcement of securities
which satisfy part or full repayment of the loan due. Generally the company will not take legal ownership of these
assets. The company will appoint an agent to recover the secured asset and arrange for its disposal. Proceeds from
the sale of these assets are applied to the repayment of the outstanding debt. Any surplus remaining is returned to
the borrower. Any shortfall is written off as a bad debt. Where the company takes legal ownership of an asset
acquired through enforcement the asset is classed as property held for resale at its fair value. The loan secured by
that property is reduced by the amount of the fair value attributed to the asset and any remaining balance is written
off as a bad debt.
Other Impaired Assets: An asset for which an impairment loss is required in accordance with NZ IAS 39 paragraphs
58 to 62, but is not a restructured asset or an asset acquired through the enforcement of security.
Page 9
Past Due Assets: A financial asset is past due when a counterparty has failed to make a payment when
contractually due. Past due assets are not impaired assets.
Impairment of Non -financial Assets
Assets that have indefinite useful lives or are not yet available for use are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets
carrying amount exceeds its recoverable amount. The recoverable amount of an asset is the higher of its fair value
less costs to sell and value in use.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred
financial assets that is created or retained by the Company is recognised as a separate asset or liability. The
company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Borrowings
Borrowings are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method.
Cashflow Statement
The Cashflow Statement has been prepared using the direct approach. Cash comprises cash on hand and demand
deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of change in value. Cashflows relating to advances and
borrowings have been shown on a net basis in order to show a more meaningful disclosure. The high volume of
transactions involved reflects the activities of customers rather than those of the company.
Standards , interpretations and amendments to published standards that are not yet effective
Certain new standards, amendments and interpretations to existing standards have been published that are
mandatory for the Company's accounting periods beginning on or after 1 January 2008 or later periods but which
the Company has not early adopted:
NZ IAS 1 (revised) and NZ IFRS 8 are new or amended standards that have been issued but are not yet effective,
that may have a material disclosure impact on future financial statements.
NZ [AS 1 requires changes to the presentation of income in the primary statements.
NZ IFRS 8, Operating Segments (effective from annual periods beginning on or after 1 January 2009). NZ IFRS 8
requires segments to be identified on the basis of reporting to the chief decision maker of the organisation and
requires information provided to the chief decision makers to be presented in the financial statements. NZ IFRS 8 is
not expected to have a material impact on the Company.
D CHANGES IN ACCOUNTING POLICIES
All policies have been applied on basis consistent with those used in the previous year. When necessary the
comparative figures have been reclassified so the information corresponds to the classification presented in the
current period. Investments at note 13 have been reclassified in line with the definitions provided in the reporting
standards. On initial adoption of NZ IFRS certain held for resale investments were incorrectly classified as held to
maturity. The total value of investments has not been affected.
E CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires the use of management judgements, estimates and
assumptions that affect the reported amounts and the application of policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Page 10
Impairment Losses on Loans and Advances

The Company reviews its loan portfolios to assess impairment on a monthly basis. In determining whether an
impairment loss should be recorded in the income statement, the Company makes judgements as to whether there
is any observable indication that there is a measurable decrease in the estimated future cashflows from individual
loans within a loan portfolio. This evidence may include an adverse change in the payment status of borrowers.
Management uses its knowledge gained from historical loss experience for assets with credit risk characteristics
and objective evidence of impairment when scheduling its future cash flows. The methodology and assumptions
used for estimating both the amount and timing of future cashflows are reviewed regularly to reduce any differences
between loss estimates and actual loss experience. The assessment of the level of impairment could potentially be
understated or overstated if factors affecting the judgements made change.
In compliance with NZ IAS 39 clause 63 the company is required to calculate, for those impaired assets as
described in clause 63, a provision based on the Net Present Value (NPV) of future cashflows net of anticipated
holding and realisation costs. This calculation is based on estimates. The company is required to estimate the value
it anticipates to realise from these assets, when the cashflows will be received and the expected holding and selling
costs. Changes in market conditions could result in an increase or decrease in the estimated NPV provision which
would impact the company's financial results.
Residual Value of Lease Assets
The Company calculates the residual value of lease assets at the start of the lease term based on the estimated
market value at the end of the lease. Management reviews the residual value for each class of asset on a regular
basis. Changes to the second hand vehicle market may impact the gain or loss on the subsequent disposal of these
assets.
Determination of Fair Value of Derivative Financial Instruments
The Group enters into derivative financial instruments to hedge its interest rate risk, foreign exchange risk and other
exposures relating to AUD advances and the USPP debt. The derivative financial instruments used to hedge the
Group's exposures include:
• Forward foreign exchange contracts
• Cross currency interest rate swaps
• Swaptions
All derivative financial instruments are measured at fair value, with any fair value changes recognised in the Income
Statement.
The fair value of derivative financial instruments is based on discounted cash flow models, yield curves and option
pricing models using observable market data.
Determination of fair value of Investments for which do not have a readily determinable market value
The Group assess the value of investments which do not have a readily determinable market value on the basis on
the underlying assets in the investment or on recent off market trades. There is no certainty that future trades will
reflect these valuations and according the fair value of those investments could be materially over or under stated.
F PRIOR PERIOD ADJUSTMENTS

At 30 June 2008 the fair value of the CCIRS was assumed to equal the foreign exchange loss on translating the
USPP into NZD. This did not account for the impact of US and NZ interest rates on the fair value calculation. This
had the effect of overstating the 2008 profit by $9.046m.
30.06 .09 30.06.08
Restated As previously
reported
Balance Sheet
Financial liabilities at fair value through profit and
loss held for trading (2,834) -
Fair value adjustment offset against borrowings 6,213
Borrowings 1,758,480 1,752,267
Advances 1,458,241 1,456,584
Page 11
Income Statement
Fair value loss on financial assets held for trading 9,046 -
Trading Profit $73,675 $82,721
Statement of Changes in Equity

Equity at Beginning of the Period 204,516 204,516
Net Profit After Taxation 59,799 68,845
Minority Interests Share of Profit 500 500
Minority Interests Share of Equity 983 983
Movement in Revaluation Taken to Income 2,471 2,471
Fair Value Adjustment (7,035) (7,035)
56,719 65,764
Contribution from Owners:
Ordinary Shares Issued 25,000 25,000
Distribution to Owners: -
Dividends Paid (42,666) (42,666)
$243,569 $252,614
3 RECONCILIATION OF REPORTED PROFIT WITH CASHFLOWS FROM OPERATING ACTIVITIES

30.06 .09 30.06.08
$000's $000's
Net profit after taxation (50,429) 59,799

Add non cash items
Depreciation 8,578 8,174
Allowance for impairment 57,655 8,595
Loss on Investments 35,000 -
Impairment on Investments 11,438 3,074
Minority shareholders interest 860 983
Property revaluation 3,246
Forex gain (loss) 19,548
Gain on Sale of Shares (7,471) (44,551)
Fair value gain (loss) on financial assets held for trading (39,679) 9,046
Compound Interest in Deposits 39,774 36,077
Capitalised Interest in Loans (43,047) (45,442)
Share of profits in associates 998 -
86,900 (24,044)
36,471 35,756
Movements in Other Working Capital Items:
(increase) Decrease in Operating Debtors (4,042) (9,454)
Increase (Decrease) in Operating Creditors (3,199) (6,359)
(Increase) Decrease in Provision for Taxation (16,537) (13,502)
(23,777) 29,314
Net Cashflow From Operating Activities $12,693 $6,441
Page 12
4 INTEREST RECEIVED 30.06.09 30.06.08

$000's $000's
Advances 171,363 183,356

Impaired Assets:
Restructured Assets 7,327 199
Assets Acquired Through Enforcement - 23
Other Impaired Assets 17,655 699
Bank Deposits and Investments 23,857 14,809
$220,202 $199,086
5 AGGREGATE CURRENT ASSETS 30.06 . 09 30.06.08

$000's $000's
Cash and Cash Equivalents 123,276 402,771

Other Current Assets 78, 746 16,880
Net Advances 943,028 582,449
$1,145,050 $1 . 002.100
The estimated fair value of property held for resale is not significantly different from the cost price. Movements in
property held for resale is set out in the table below.
30.06.09 30.06.08
$000's $000's
Opening balance 5,920 -

Additions 8,008 5,920
Acquired on business combinations 40,534 -
Sales (2,081)___ -
Closing Balance $52,381 $5,920
6 AGGREGATE CURRENT LIABILITIES 30.06.09 30.06.08

$000's $000's
Employee Entitlements 577 693

Other Current Liabilities 20,888 22,138
Creditors 21,465 22,832
Sundry Deposits and Secured Debentures 919,247 830,834
$940,712 $853.665
7 ADVANCES 30.06 .09 30.06.08

$000's $000's
Net Advances
Advances 1,716,559 1,491,219
Provision for unearned interest (8,349) (24,873)
Deferred fee income (3,750) (4,375)
Allowance for impairment (79,151) (21,496)
1,625,309 1,440,475
Lease Receivables 6,477 17,766
$1,631.786 $1,458,241
Page 13
Net advances are summarised as follows:

Neither past due nor impaired 1,270,652 1,405,943
Past due 140,704 23,569
Impaired individually -
Restructured 364 -
Security Enforced 61,343 38
Other Impaired 243,496 61,669
Gross 1,716,559 1,491,219
Less : Allowance for impairment individually (55,949) (21,496)
Allowance for collective impairment (7,625)
NPV Impairment Allowance (15,576) -
Gross Advances less Allowance for Impairment $1,637,409 $1,469,723
Impaired and Past Due Assets ($000's)

The table below shows a reconciliation of the movement in net advances which are individually determined to
be impaired.
Opening Additions Write Offs Deletions Closing
Balance Balance
30 June 2009 $61.707 $276 ,888 $(9,305) $(24,086) $305,204

30 June 2008 $29,860 $85 ,854 $(10,355) $(43,652) $61,707
The table below shows a reconciliation of the movement in net advances which are past due ($ 000's)
Balance Balance
30 June 2009 $23,569 $144,075 $(477) $(26,462) $140,704
30 June 2008 $22,512 $23,466 $- $(22,409) $23,569
Following is an analysis of the age of financial assets that are past due ($000's)
0-30 days 31 -89 days >90 days Total
30 June 2009 $93,072 $34 ,299 $13 ,334 $140,704

30 June 2008 $6,222 $17,347 $23,569
Carrying Value and Estimated Fair Value of Collateral and Security Held by Class of Asset ($ 000's)
Impaired Estimated fair Allowance for
individually at value of impairment
carrying value collateral and
security held
30 June 2009
Assets Acquired Through Enforcement 364 318 46
Restructured Assets 61,343 59,012 2,331
Other Impaired Assets 243,496 189,925 53,572
$305,204 $249,254 $55,949
30 June 2008
Assets Acquired Through Enforcement 1,908 360 1,548
Restructured Assets 226 55 172
Other Impaired Assets 59,573 39,796 19,777
$61,707 $40,211 $21,496
Page 14
Movements of Impairment by Class of Asset ($000's)

Balance Balance
30 June 2009
Specific Impairment
Assets Acquired Through Enforcement 1,548 101 (512) (1,091) 46
Restructured Assets 172 3,198 (984) (54) 2,331
Other Impaired Assets 19,777 51,940 (11,685) (6,460) 53,572
Collective Impairment 7,625 7,625
NPV Impairment Allowance 15,576 15,576
$21,496 $78,441 $(13,181) $(7,605) $79,151
30 June 2008
Specific Impairment
Assets Acquired Through Enforcement 895 2,002 (982) (368) 1,548
Restructured Assets 737 56 (446) (175) 172
Other Impaired Assets 11,269 17,398 (6,349) (2,541) 19,777
$12,901 $19,456 $(7,777) $( 3,084) $21,496
No collective impairment was provided for the 2008 year.
In June 2009 the Group entered into an underwrite deed with an entity controlled by the company's Chairman to
underwrite credit losses on certain of the Group's impaired finance receivables. The underwrite deed is capped at $25m
and the Group's benefit under the underwrite deed was valued at the full amount and offset against impaired loans in
the current financial year.
This includes amounts in arrears. The proportion thereof with repayments in arrears in excess of 3 months at balance
date represents 2.30% of total receivables due (30 June 2008 - 3.00%).
Amounts owing by the six largest borrowers amounted to 13.93% of total amounts receivable (30 June 2008 - 10.06%).
Related Party transactions are disclosed in note 25.
8 PROPERTY, PLANT & EQUIPMENT

Land & Plant & Office Motor Vehicles Leasehold Leased Plant Total
Buildings Equipment Improvements
$000's $000's $000's $000's $000's $000's
1 July 2008
Cost 16,602 4,238 48 985 35,616 57,488
Accumulated Depreciation (1,183) (3,141) (32) (400) (7,543) (12,299)
Carrying Amount $15,419 $1,097 $15 $584 $28,073 $45,189
Period ended 30 June 2009

Opening Carrying Amount 15,419 1,097 15 584 28,073 45,189
Acquisitions through business
combinations
940 12 952
Additions 2,452 301 4 326 66,675 69,758
Disposals (357) (213) (7) (1,618) (2,194)
Revaluations (3,246) (3,246)
Net Depreciation (95) (489) (8) (78) (5,212) (5,882)
Closing Carrying Amount $15,113 $708 $4 $833 $87,918 $104,577
30 June 2009
Cost 16,211 4,213 24 1,175 100,052 121,674
Carrying Amount $15,113 $708 $4 $833 $87,918 $104,577
Page 15
1 July 2007
Cost 14,678 3,641 85 793 45,097 64,294
Accumulated Depreciation (718) (2,899) (69) (270) (6,754) (10,711)
Carrying Amount $13,959 $742 $15 $523 $38,343 $53,583
Period ended 30 June 2008

Opening Carrying Amount 13,959 742 15 523 38,343 53,583
Additions 1,657 732 12 158 5,126 7,685
Disposals (4) (5) (31) (14,729) (14,769)
Net Depreciation (197) (373) (7) (66) (667) (1,310)
Closing Carrying Amount $ 15 ,419 1 097 $15 $584 $28,073 $45,189
30 June 2008
Cost 16,602 4,238 48 985 35,616 57,488
Carrying Amount $15,419 $1,097 $15 $584 $28,073 $45,189
9 VEHICLE LEASE
The Company has entered into lease agreements for the hire of its motor vehicles. These contracts expire between
November 2009 and December 2012 and have no early termination penalties. It is the intention of the Directors to retain
the vehicles for the full term of their lease.
10 BUILDING LEASE
The company, through its wholly owned subsidiary Hornchurch Ltd, owns properties in Timaru, Invercargill, Ashburton
and Hamilton from which the company operates. Offices at other locations are leased from independent third parties.
The lease commitments in respect of those properties are set out below.
LEASE COMMITMENTS 30.06.09 30.06.08

$000's $000's
Due within 1 year 758 708

Due within 2 years 727 684
Due within 2-5 years 1,524 1,548
Due beyond 5 years 439 982
$3,448 $3,923
11 LEASED ASSETS
Income from leased assets is expected on the following basis:
30.06.09 30.06.08
$000's $000's
Due within 1 year 6,066 5,401

Due within 2 years 5,777 5,401
Due within 2-5 years 11,555 1,319
Due beyond 5 years 19,715
$43,113 $12,121
Page 16
12 GOODWILL
Following the amalgamation of the finance companies all acquired goodwill has been eliminated.
Movement in Goodwill 30.06.09 30.06.08
$000's $000's
Opening balance 3,475 3,475

Additions 2,332 -
Deletions (5,807) -
Closing balance $- $3.475
13 SHARES AND INVESTMENTS 30.06.09 30.06.08

$000's $000's
Assets Available for Resale 233,405 41,629

Total Investments $233,405 $41,629
During the year the company wrote off an investment held in an property trust which had interests in New Zealand and
offshore resulting in a $35m loss on investments.
14 JOINT VENTURES 30.06 . 09 30.06.08

$000's $000's
Non Operating Revenue - -

Current Assets 8 6
Long Term Assets 8 ,595 11,487
Current Liabilities (4,269) (3,002)
Long Term Liabilities - -
Joint Venture Investment $4,334 $8,490
15 SHARES IN ASSOCIATED COMPANIES 30.06 . 09 30.06.08

$000's $OO0's
Opening Balance 18,484 19,834

Additions 87,733 150
Impairment (4,010)
Adjustment for share of current period trading results (998) -
Deletions - (1,000)
Sales (17,684) (500)
Shares in associated companies are carried at cost less any allowance for impairment
DETAILS OF ASSOCIATES
30 June 2009 $000's
% held Assets Liabilities Revenue Profit Carrying
Commtest Instruments Ltd 40.20% 14,526 21,363 7,047 (2,482) 6,992
Dairy Holdings Ltd 33.59% 665,614 407,762 56,309 (66,136) 75,733
Financial Synergy Ltd 50% 10,789 9,189 728 - 800
$83.525
30 June 2008 $000's
% held Assets Liabilities Revenue Profit Carrying
NZ Wool Services International 44% 179,707 2,390 17,684
Financial Synergy Ltd 50% 8,951 7,572 1,208 208 800
$18,484
Page 17
At 30 June 2008 shares in the listed company NZ Wool Services International Ltd were trading at $0.40 for a total
market value of $12,236,980. In July 2008, in accordance with the terms agreed with the Takeovers Panel, the shares in
NZ Wool Services International Ltd were sold to Southbury Group Ltd at $17,683,682, the same price South Canterbury
Finance paid to acquire the shares.
16 BORROWINGS 30.06.09 30.06.08

$000's $000's
Secured Debentures 1,552,295 1,338,485

5 Year Secured Bonds (15112112) 125,000 125,000
3 Year Secured Bond Issue (15106111) 125,000 125,000
Secured Bond Issue Maturing 12 October 2010 100,000 -
Deferred Bond and Bond Issue Expenses (9,809) (10,065)
US Private Placement Funds 153,704 131,447
Deferred Issue costs USPP (983) (1,153)
Unsecured Deposits 28,173 38,742
Secured Prior Charges 34,123 11,023
$2,107,503 $1,758,480
Due within 1 year 919,247 830,834

Due after 1 year 1,188,256 927,646
$2,107,503 $1,758,480
NON CURRENT LIABILITIES 30.06 .09 30.06.08

$000's $000's
Debenture Stock 672,536 542,126

USPP 152,722 124,082
Bond Issue 340 ,191 243,748
Prior Charges 13,702 8,023
Secured Liabilities 1,179,151 917,979
Deposits 9 ,106 9,667
Total Unsecured Liabilities 9 ,106 9,667
Total non Current Liabilities $1 .188,256 $927,646
NON CURRENT LIABILITIES MATURITY 30.06 .09 30.06.08

$000's $000's
1-2 years 609,637 385,108

2-3 years 218,343 126,706
3-4 years 267,586 24,230
4-5 years 46,232 266,079
5+ years 46,458 125,524
$ 1 , 188 , 256 $ 927, 646
Standard and Poors downgrade of the company's credit rating to BB+ in August 2009, has resulted in an event of review
by the US investors. The investors may within three months of this event request an accelerated repayment of the
above USPP funds. The company is in discussion with these investors. The above maturity profile reflects the original
maturity dates for these funds with ultimate maturity dates ranging from 2013 to 2015. However this profile will differ if
early repayment is requested.
Page 18
17 EQUITY 30.06 .09 30.06.08

$000's $000's
Ordinary Shares
Additional Shares Issued 60 ,000 25,000
Closing Balance (130 million ordinary shares) 130,000 70,000
Perpetual Preference Shares 120,000 120,000
Share Issue Expenses (1,979) (1,979)
Asset Revaluation Reserve 2,071 (1,773)
Retained Earnings (27,922) 54,429
222,170 240,677
Equity Attributable to Minority Interests 3,752 2,891
Total Shareholders Equity $225,922 $243, 569
South Canterbury Finance Ltd and certain of its subsidiaries as identified in note 23 have their assets charged under the
Trust Deed entered into between South Canterbury Finance Ltd and its Trustee, Trustees Executors Ltd. The Trust
Deed provides that total liabilities of the charging group shall not exceed 12 times shareholders funds. This equates to
an equity ratio of 7.7%. The Directors of South Canterbury Finance aim to maintain a minimum equity ration of 10%
although in some circumstances the ratio may drop below this level.
Ordinary Shares
All Ordinary Shares have been issued and fully paid. The shares have no par value
The holder of the Ordinary Shares is entitled to receive dividends as declared from time to time.
Shareholders are entitled to vote at the meetings of the Company.
Perpetual Preference Shares
Dividends on Perpetual Preference Shares are set annually using the Benchmark Rate, prescribed in the share issue
prospectus, as at 1 October plus 230 basis points. Current dividend rate is 9.42% inclusive of imputation credits.
Perpetual Preference Shares have no voting rights and no fixed date for redemption.
In a winding up all Perpetual Preference Shares (120million) are redeemable at the issue price of $1.
18 ASSET REVALUATION RESERVE

Financial assets that have an active market have been revalued to reflect the fair value at balance date. The asset
revaluation reserve reflects the movement in value between original fair value and fair value of those financial assets at
the date of this report.
30.06. 09 30.06.08
$000's $000's
Opening Balance (1,773) 2,792

Movement 3,844 (4,564)
Closing Balance $2,071 $(1,773)
19 RETAINED EARNINGS 30.06.09 30.06.08

$000's $000's
Balance at beginning of period 54,429 37,296

Net surplus attributable to company shareholders (50,429) 59,799
Distributions to owners (31,921) (42,666)
Balance at end of period $(27,922) 54 429
Dividend ( cents per share)
Ordinary Shares $0.18 $0.49
Perpetual Preference Shares $0.07 $0.07
Page 19
20 FINANCIAL INSTRUMENTS 30.06 . 09 30.06.08

$000's $000's
Categories of Financial Assets
Loans and Receivables
Cash and Cash Equivalents 123,276 402,771
Other Short Term Deposits 287 253
Debtors and Prepayments 25,061 9,698
Advances 1,631,786 1,458,241
Investments in associates
Shares in Associates 83,525 18,484
Available for Sale Assets
Shares and Investments 233,405 41,629
Held to Maturity
NZ Government Stock 1,018 1,009
Held for Trading
Financial Assets 36,833 -
Categories of Financial Liabilities

Financial Liabilities at Amortised Cost
Creditors 21,465 22,831
Borrowings 2,107,503 1,758,480
Held for Trading
Financial Liabilities - 4,491
FAIR VALUES
The directors consider that the carrying amounts of all financial assets and financial liabilities approximate their fair
values
Fair value of financial instruments
The fair value of financial assets and financial liabilities are determined as follows:
* The fair value of financial assets and financial liabilities with standard terms and conditions and traded in active
liquid markets is determined with reference to quoted market prices;
* The fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in
accordance with generally accepted pricing models based on discounted cashflow analysis using prices from
observable current market transactions and dealer quotes for similar transactions;
* The fair value of derivative instruments is calculated using quoted prices. Where such prices are not available, use
is made of discounted cashflow analysis using the applicable yield curve for the duration of the instruments for non-
optional derivatives, and option pricing models for optional derivatives; and
* The fair value of financial guarantee contracts is determined using option pricing models where the main
assumptions are the probability of default by the specified counterparty extrapolated from the market-based credit
information and the amount of loss, given the default.
Quoted prices
Financial assets in this category include listed equities and capital notes.
Derivatives
Forward foreign exchange contracts are measured using quoted forward exchange rates and yield curves derived from
quoted interest rates matching maturities of the contracts.
Cross currency interest rate swaps and swaptions are measured at the present value of future cashflows estimated and
discounted based on the applicable yield curves derived from quoted interest rates.
Page 20
Management of capital
South Canterbury Finance Ltd, in accordance with the terms and conditions of its Trust Deed raises operating capital by
way of secured debentures and unsecured deposits through the issue of a debt prospectus, by way of bonds issued for
a fixed term and through the US private placement market. The secured debentures, bonds and USPP funds all rank
equally. Trustees Executors Ltd is the Trustee for the company. The Trust Deed provides certain financial covenants
that South Canterbury Finance Ltd and its Charging Subsidiaries must operate within. One of the key covenants
provides that total liabilities of the charging group must not exceed 12 times shareholders funds.
Financial risk management objectives

The Company manages the financial risks relating to the operations of the Group through internal risk analysis. These
risks include market risk (including foreign currency exchange risk, fair value interest rate risk, cash flow interest rate
risk and price risk), credit risk and liquidity risk.
The Group seeks to minimise the effects of interest rate and foreign currency exchange risks by using derivative
financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Group's policies
approved by the Board of Directors, which provide written principles on foreign currency exchange risk, interest rate risk,
credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess
liquidity. Compliance with policies and exposure limits is reviewed by management and the Board of Directors on a
continuous basis.
Market risk
The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates. The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate
and foreign currency exchange risk.
Market risk exposures are measured using sensitivity analysis.
There has been no change during the year to the Group's exposure to market risks or the manner in which it manages
and measures the risk.
Foreign currency risk management
Currency risk is the risk that the company may suffer a loss through an adverse movement in the exchange rate. South
Canterbury Finance has an exposure to currency risk through the USPP funding and loans advanced to parties in
Australia.
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign
exchange contracts and cross currency interest rate swaps.
The carrying amounts of the foreign currency denominated monetary assets and monetary liabilities at the reporting
date are as follows:
Assets Liabilities
2009 2008 2009 2008
$000s $000s $000s $000s
US Dollars 153,704 131,447
AU Dollars 50,568 49,762 -
It is the policy of the group to enter into forward foreign exchange contracts to cover specific foreign currency receipts in
relation to advances made in AUD and cross currency interest rate swaps with respect to the USPP foreign currency
interest costs and principal payments to be made in USD on the USPP debt.
Hedge accounting has not been adopted for these derivative financial instruments.
The following forward foreign currency contracts and cross currency interest rate swaps were outstanding at balance
date:
Page 21
Average
Exchange Rate Foreign Currency Contract Value Fair Value
$OOOs $000s $000s
30.06.09
USD Contracts (Buy) 0.7985 70,000 87,664 26,137 Due within 2-5 years
USD Contracts (Buy) 0,7985 30,000 37,570 11,059 Due beyond 5 years
AUD Contracts (Sell) 0.8055 40,783 48,484 (869) Due within 0-6 months
Swaptions (see below) 506
36,833
30.06.08
USD Contracts (Buy) 0.7985 70,000 87,664 (2,006) Due within 2-5 years
USD Contracts (Buy) 0.7985 30,000 37,570 (828) Due beyond 5 years
AUD Contracts (Sell) 0.7900 39,787 45,151 (1,657) Due within 0-6 months
(4,491)
The fair value of the cross currency interest rate swap includes the impact of both foreign exchange rate and interest
rate components
Foreign Currency Sensitivity
A 1% increase or decrease in the exchange rate exposure will not impact on the company's profitability. All foreign
currency assets and liabilities are subject to foreign currency contracts and accordingly any movement in exchange rate
will be offset by an equal and opposite change in the swap instrument.
Interest Rate Risk Management
The Company and Group are exposed to interest rate risk as entities in the Group borrow funds at both fixed and
floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating
rate borrowings and by the use of certain derivative financial instruments (such as swaptions).
Hedge accounting has not been adopted for these.
The Company and Group's exposures to interest rates on non-derivative financial assets and financial liabilities are
detailed in the liquidity tables below.
Cross Currency Interest Rate Swap Contracts (CCIRS)
Under cross currency interest rate swap contracts, the Group agrees to exchange the difference between fixed and
floating rate interest amounts calculated on agreed notional principal amounts. The fair value of cross currency interest
rate swaps at the reporting date is determined by discounting the future cash flows using the curves at reporting date
and the credit risk inherent in the contract.
The interest rate swaps settle on a quarterly basis. The floating rate on the interest rate swaps is the local interbank rate
of New Zealand. The Group will settle the difference between the fixed and floating interest rate on a net basis.
Swaptions
The company has entered into swaptions for the interest payable on NZD30m borrowed on the USPP debt. The
swaptions, entered into in April 2009, allow the company, at its sole discretion, to exercise the swap rate on or before
April 2010. The company has not yet exercised this right. No hedging has been provided in respect of the balance of
funds borrowed on the USPP.
Average contracted fixed interest rate Notional principal amount Fair value
2009 2008 2009 2008 2009 2008

$000s $ 000s $000s $000s $000s $000s
4.9% 30,000 506
Outstanding CCIRS contracts have been disclosed under foreign currency risk management tables above.
Page 22
Interest Rate Sensitivity

By managing interest rate risk the company aims to moderate the impact of short term fluctuations in interest rates. Over
longer periods, due to the ability to influence the rate at which loans are issued, movements in interest rates will have
minimal impact on profit. It is estimated that a one percent increase in average interest rates would increase profits by
$4,987,673 (30 June 2008 $3.39m). Such assumptions are based on the company's ability to adjust its borrowing rate
and variable lending rates. The one percent increase would have an adverse effect only in respect of those loans which
have a fixed interest rate. There would be no material change on the company's reported profit arising from a 1%
decrease in the cost of funds.
A 1 % increase or decrease in the interest rate associated with the USPP funding could have an $1.25m impact on profit.
This assumes a constant NZD/USD exchange rate
Repricing
The company cannot unilaterally amend the interest rate on funds raised through debentures, deposits and bonds.
These rates are fixed for the term of the deposit. Interest rates offered on new issues may vary from those being paid on
the existing funds. A variation in the rates will affect the company's average cost of funds, however it will take time for
any significant impact to be effected. The company does have the option, at its discretion, to alter the interest rate
charged on customers loans. The ability to reprice is not date sensitive. This enables the company to amend the interest
rate for lending to match changes in the average cost funding.
Liquidity Risk Management
Liquidity risk is the risk that the Group will encounter difficulty in meeting commitments associated with its financial
liabilities.
Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate
liquidity risk management framework for the management of the Group's short, medium and long term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities. Note 22 includes details of an undrawn bank facility.
Contractual Maturity Liquidity Profile ( 000,s)
The following tables detail the Company and Group's remaining contractual maturity for its non-derivative financial
assets and liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash
flows.
Weighted 0 to 6 months 7 to 12 1 to 2 years 3 to 5 years Beyond S Total
Average
Interest months years
Rate
30.06.09
Financial Assets
Cash* 4.47% 123,276 123,276
Short Term Deposit 287 287
Receivables 25,061 25,061
Shares in Associates 83,525 83,525
Investments 159,795 1,680 3,360 85,370 250,205
Advances** 11.23% 1,067,338 312,932 432,128 469,244 - 2,281,641
1,375,756 314,612 435,488 554,614 83,525 2,763,994
Financial Liabilities
Liabilities 21,465 21,465
Borrowings 8.92% 442,727 506,933 666,883 617,555 46,990 2,281,087
464,192 506,933 666,883 617,555 46,990 2,302,552
Page 23
30 June 2008
Financial Assets
Cash* 8.58% 402,771 402,771
Short Term Deposit 253 1,009 1,262
Receivables 9,698 9,698
Shares in Associates 17,684 800 18,484
Investments 16,318 15,861 9,450 41,629
Advances- 13.25% 345,501 236,948 404,589 469,546 1,456,584
$792,225 $236,948 $421,459 $478,996 $800 $1,930,428
Financial Liabilities
Liabilities 22,832 22,832
Borrowings 9.49% 455,943 368,678 385,108 417,014 125,524 1,752,267
$478,775 $368,678 $385,108 $417,014 $125,524 $ 1.775,09.9
*Cash includes cash and cash equivalents
** Advances profile reflect the current interest rate charges. These rates may be varied from time to time
Standard and Poors downgrade of the company's credit rating to BB+ in August 2009, has resulted in an event of review
by the US investors. The investors may within three months of this event request an accelerated repayment of the
USPP funds, totalling $125m. The company is in discussion with these investors. The above liquidity profile reflects the
current contractual payments for these funds. However this profile may differ if early repayment is requested.
The company manages liquidity risk for all financial instruments other than advances on the basis of the contractual
maturity rather than expected maturity dates. The effective cashflow for advances is set out below. For the 2008 income
year all cashflows were managed on a contractual basis.
Listed equities are included in the "0 to 6 month" maturity column above. There is an active market for these
investments however management may elect to hold them beyond the 6 month period. Other investments held for
resale are include in the 7-12 month maturity period but these also may be held beyond that period.
Borrowings in the "0 - 6 month" maturity column include on call deposits of $109,880,905 (last year $334,038,865)
Effective cashflow
0 to 6 months 7 to 12 1 to 2 years 3 to 5 years Beyond 5 Total
30 June 2009 months years
Financial Assets
Advances*k 1,050,213 307,871 428,874 467,613 - 2,254,570
Credit Risk
Concentration of Funding
The Company's activities are funded by way of funds raised through the issue of a prospectus, drawing on investors
throughout New Zealand.
Funds raised by way of debentures and deposits have been provided by:
30.06 .09 30.06.08
$000's $000's
New Zealand residents $1 ,547,862 $1,349,016
Non-residents $32,606 $28,212
Additional funding has been raised as follows:
$125m through a 5 year bond issue , maturing 15 December 2012, listed on the NZDX.
$125m through a 3 year bond issue , maturing 15 June 2011, listed on the NZDX.
$100m through an 18 month bond issue , maturing 12 October 2010, listed on the NZDX
$125.2m (USD100m) on the US private placement market, USD 70m fixed to April 2013 and USD30m fixed to April
2015. Standard and Poors has downgraded the company' s credit rating to BB+ . This has given rise to an event of
review. The company is currently in discussions with the US investors regarding the terms of this facility.
Page 24
Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk principally consist of cash,
short term investments and advances. Cash and short term investments are placed with recognised leading banking
institutions. Credit risk associated with advances is limited due to the large number of individual contracts held. At
balance date NZD61.2 million had been advanced to parties in Australia in the New South Wales and Queensland
regions. (30 June 2008 - NZD45.1 million). All other material loans and investments are held within New Zealand.
Exchange rate swaps have been entered into with a registered bank for loans advanced in Australia.
Geographic Concentrations
30.06.09
Auckland 15.67%
Wellington 7.37%
Other North Island 16.64%
Christchurch 20.66%
Other South Island 35.15%
Australia 3.73%
Fiji 0.79%
1 00 . 00 %
Exposure to Credit Risk by Internal Risk Rating

30.06.09
$000's
Grade 1 123,276
Grade 2 954,422
Grade 3 381,657
Grade 4 78,014
Grade 5 15,149
Grade 6 84,361
Grade 7 202,956
$ 1, 839 , 835
Exposures to credit risk are graded by an internal risk grade mechanism where grade 1 represents the lowest assessed
risk level. Grade 1 exposures relate to funds held in Government Stock and with registered banks. The potential for loss
increases as the grade increases. Grades 2 to 4 are collectively impaired while grades 5 to 7 are all individually
impaired. Comparative figures are not available. This grading system and classification of loans was introduced in the
current year.
Concentrations of Cred it Exposure 30.06 .09 30.06.08
$000's $000's
Agriculture, Forestry, Fishing and Mining 235,394 163,973

Manufacturing 62,880 63,718
Construction 33,256 35,646
Wholesale and Retail Trade 117,307 92,987
Hotels, Motels and Restaurants 74,913 71,302
Transport, Storage and Communication 242,705 232,018
Finance and Insurance 117,055 109,344
Property and Business Services 641,392 579,243
Personal Services and Housing 106,883 110,010
$1,631,786 $1,458.241
Industry categories have been identified using the Australian and New Zealand Standard Industrial Classification
(ANZSIC) codes.
Page 25
Counterparty Concentrations
The following table details individual counterparties or groups of closely held counterparties to which the Company has
a credit exposure in excess of 10% of its equity and in increasing bands of 10%.
30.06.09 30.06.08
10-20% 7 3
20-30% 2
40-50% 1
70-80% 1
All exposures to individual or closely held group counterparties exceeding 20% of Shareholders Equity (Last year 20%)
are to registered banks or to the groups parent company and its subsidiaries.
Allowance for Impairment
Loans and advances are regularly reviewed for impairment loss. Impairment provisions are raised for exposures that are
known to be impaired. Impaired assets include "restructured loans", "assets acquired through enforcement of security"
and "other impaired assets". Loans are impaired and impairment losses are incurred if there is objective evidence of
impairment as a result of one or more loss events occurring after the initial recognition of the loan and prior to the
reporting date, and the loss event has had a reliably measurable impact on the estimated future cash flows of the
individual loan. A specific impairment is assessed on a counterparty by counterparty basis . A full offset of any security
held has been recognised in the calculation of this provision.
Individually significant loans and advances are reviewed for impairment and the net present values of the estimated
future cashflows, based on management's best estimates of future repayments and proceeds from security held, is
discounted at the current market rate. All relevant considerations that have a bearing on future cashflows are taken into
account. The calculation reflects the cashflows that may result from an orderly realisation of the underlying security less
the holding and selling costs. The current specific impairment allowance has been has been deducted from the NPV
calculation. Subjective judgements used in determining this provision can change with time as new information comes to
hand or new exit plans are developed. This may require a revision of the calculated provision which could have a
material impact on the financial statements.
A collective provision is made in respect of past due and performing loans and does not include individual loans for
which specific impairment has already been provided. The collective provision is calculated based on the company's
experience of risk associated with industry sector groups and historical loss data.
The future credit quality of these industry groups is subject to uncertainties that could cause actual credit losses to differ
materially from the collective provision allowed. Uncertainties can relate to external economic environmental
circumstances over which the company has no control.
No provision has been applied to newly written loans or those loans that are performing within their contractual terms
unless the company becomes aware of events that may alter its view on the risk associated with loan exposures to
specific group or class of loans.
Off Balance Sheet Risk
In the normal course of business the Group enters into transactions whereby it guarantees the performance of
customers and issues guarantees to third parties. The maximum credit risk not recorded in the Statement of Financial
Position in respect of these instruments at 30 June 2009 was $9,343,816 (30 June 2008 - $19,697,734). The Directors
do not envisage any likelihood of these guarantees being called upon.
21 SECURITY FOR BORROWINGS

Security has been granted for the provision of certain facilities and borrowings, on funds not raised through the
Debenture and Deposit issue, secured by debenture or specific charge as disclosed in the following note.
22 CHARGE OF ASSETS
a) All rights and interest in the assets of the Company are charged in favour of the Trustee, Trustees Executors Ltd, in
terms of the Amending and Supplemental Trust Deed dated 30 June 1995.
b) The ASB holds a first mortgage over the property owned by the charging subsidiaries, Belfast Park Ltd and Tyrone
Estates Ltd. At 30 June the total owing under this charge was $17.1m. The secured property had a valuation of
$31 M
Page 26
c) Westpac Bank holds a first mortgage over the property owned by the charging subsidiary, Braebrook Properties Ltd.
At 30 June 2009 the mortgage of $3.3m was secured against the property with a value of $10.4m
d) A committed $100million bank facility has been provided by a banking syndicate. This facility will rank equally with
the secured debentures. The Company is in breach of the interest coverage covenants under this facility and is
currently unable to draw under the facilities as a result of the breach. No request has been made of the banking
syndicate nor has any commitment to provide ongoing facilities been made by any syndicate member. The
Company has not drawn down any funds under these facilities since they were first entered into by the Company.
e) Trustees Executors Ltd has a prior charge over the assets of Ashburton Finance Ltd and Southland Finance Ltd in
respect of the debentures and deposits issued under their respective Trust Deeds. At balance date these totalled
$3,401,701 (30 June 2008 $611,375). Both these companies have now amalgamated with South Canterbury
Finance Ltd and no longer take in investment funds under their own Trust Deeds.
23 SUBSIDIARY COMPANIES AND ASSOCIATED COMPANIES

All subsidiary and associated companies are incorporated in New Zealand. The partners in the joint venture partnership
and the activities of that partnership are based in New Zealand.
Interest Principal Activity
30.06.09 30.06.08
Charging Subsidiaries
Ashburton Finance Ltd 100% Financial Services
Auckland Finance Ltd 100% Financial Services
Belfast Park Ltd 100% Property Investment
Braebrook Properties Ltd 100% Property Investment
Canterbury Finance Ltd 100% Financial Services
Face Finance Ltd 75% 75% Financial Services
Fairfield Finance Ltd 100% Financial Services
Flexi Lease Ltd 100% 100% Vehicle Leasing
Galway Park Ltd 100% 100% Property investment
Helicopter Nominees Ltd 100% 100% Helicopter Leasing
Hornchurch Ltd 100% 100 % Investment Activities
Otago Finance Ltd 100% Financial Services
Palmerston North Finance Ltd 100% Financial Services
Rental Cars Ltd 100% 100 % Vehicle Leasing
SCFG Systems Ltd 100% 100% Computer Services
Sophia Investments Ltd 100% 100 % Non Trading
Southbury Insurance Ltd 100% 100% Insurance Company
Tasman Bay Finance Ltd 100% Financial Services
Tyrone Estates Ltd 100% Property Investment
Waikato Finance Ltd 100% Financial Services
Wellington Finance Ltd 100% Financial Services
Non-Charging Subsidiaries
Fairfield Finance Ltd 100% Financial Services
Kelt Finance Ltd 75% 75% Financial Services
Southland Finance Ltd 100% Financial Services
Non-Charging Associates
Commtest Instruments Ltd 40.8% Manufacturing
Dairy Holdings Ltd 33.7% Primary Sector
Financial Synergy Ltd 50% 50% Premium Funding
New Zealand Wool Services Ltd 44% Primary Sector
Joint Venture
Islington Park Partnership 50% 50% Rental Property
Page 27
Amalgamation
On 1 October 2008 Ashburton Finance Ltd, Auckland Finance Ltd, Canterbury Finance Ltd, Otago Finance Ltd,
Palmerston North Finance Ltd, Tasman Bay Finance Ltd, Waikato Finance Ltd, Wellington Finance Ltd and Southland
Finance Ltd amalgamated with South Canterbury Finance Ltd
24 BUSINESS ACQUISITIONS
On 30 June 2009 South Canterbury Finance acquired an interest in the following companies. The consolidated accounts
incorporate assets and liabilities at fair value as set out below. As the acquisition was made on the last day of the
financial year, no trading profit or loss from these companies have been included in the consolidated accounts
A 100% interest in Belfast Park Ltd and its wholly owned subsidiary Tyrone Estates Ltd
Assets
Cash and Cash Equivalents 88
Receivables 79
Property Plant and Equipment 31,034
Total Assets 31,201
Liabilities
Creditors 474
Borrowings 17,533 Equity
Other Financial Liabilities 10,101 Share Capital 1
Total Liabilities 28 ,107 Retained Earnings 3,093
Total Net Assets $3,094 Total Equity $3,094
A 100% interest in Braebrook Properties Ltd

Assets
Cash and Cash Equivalents 56
Receivables 165
Deposit SCF 2,100
Property Plant and Equipment 10,451
Total Assets 12,772
Liabilities Equity
Creditors 100 Share Capital 2,304
Borrowings 3,299 Reserves 9,144
Total Liabilities 3,399 Retained Earnings (2,074)
Total Net Assets $ 9,373 Total Equity $9,373
Had the acquisitions occurred at the beginning of the financial year the consolidated revenue would have increased by
$6.929m and there would be a reduction in the consolidated loss of $2.130m
25 RELATED PARTY TRANSACTIONS

All transactions were in the normal course of business, are fully secured and, except for four loans to key management
personnel, are at rates not less than the company's cost of funds. No related party loans have been written off or
forgiven during the current period.
Page 28
Interest Received Loan Balances

30.06 .09 30.06.08 30 . 06.09 30.06.08
$000's $000 's $000's $000's
Parent company $8,758 $4,602 $85,050 $-

Non charging subsidiaries $2,125 $706 $39,149 $11,887
Associated companies $1,653 $1,193 $13,007 $2,130
Key management personnel $2,327 $1,815 $39,490 $21,530
Ability to exercise significant influence $6,921 $5,328 $53,618 $28,639
$21,783 $13,645 $230,315 $64,185
Ability to exercise significant influence includes entities related by directorships, over whom directors are able to
exercise significant influence and entities related to the ultimate parent company.
Interest Paid Deposit Balances

30.06 .09 30 .06.08 30 .06.09 30-06.08
$000's $000's $000's $000's
Deposits received from related parties
Other related parties $1,059 $1,292 $139 $61
By 30 September 2009 the parent company exposure had reduced by $10m.

Southbury Group Ltd, for the year ended 30 June 2009, received a management fee of $625,000 (30 June 2008
$1,250,000) and insurance payments of $4,000,000 (30 June 2008 $4.8m).
A security sharing agreement with the parent company has seen the parent company acquire loans with a carrying
value of $89.6m. This agreement was subsequently extended by a further $9.5m. South Canterbury Finance has
derecognised these loans. All risks and benefits associated with these loans have been transferred to the parent
company in consideration of a transfer of assets for full value. The security held by the parent company ranks behind
that held by South Canterbury Finance Ltd.
Hornchurch Ltd, a wholly owned subsidiary of South Canterbury Finance, purchased shares in Scales Corporation Ltd
and Commtest Instruments Ltd from its parent company at market value ($22.5m). Helicopters (NZ) Ltd, a subsidiary of
the parent company, issued 20m preference shares, at $1 a share, to Hornchurch Ltd. Shares held in Syft Technologies
Ltd were sold by Hornchurch at their original cost price of $96k to a party under the control of a company director. The
wholly owned subsidiaries, Alford investments Ltd, Dunbarton Investments Ltd and Glamorgan investments were sold to
Southbury Group Ltd at the groups net carrying value of $7.03m.
South Canterbury Finance Ltd purchased capital notes issued by a listed entity at their face value of $13.38m from
entities controlled by a company director. These notes had a market value of $13.09m. At 30 June 2009 the market
value exceeded the price South Canterbury Finance paid to acquire these notes.
South Canterbury Finance Ltd acquired from its parent company a 100% interest in Braebrook Properties Ltd for
$6,095,000 and Belfast Park Ltd and its wholly owned subsidiary, Tyrone Estates Ltd for $3,271,929.
South Island Farm Holdings Ltd, a company which is under the control of a company director, has issued 67.2m
preference shares at $1 per share, to South Canterbury Finance Ltd. On 1 July 2009 6.8m ordinary shares at $1 per
share were acquired by South Canterbury Finance.
South Canterbury Finance Ltd acquired a 33.6% interest in Dairy Holdings Ltd in June 2009 from Southbury Group Ltd
for $75.7m. This transaction exceeds 1% of the company's total assets. In accordance with the terms of the Crown
Guarantee, an independent expert, approved by Treasury, reviewed the transaction and determined the consideration
paid was on the basis of an arms length transaction.
Page 29
26 KEY MANAGEMENT PERSONNEL COMPENSATION 30.06 .09 30.06.08

$000's $000's
Key Management Personnel Compensation
Salaries and short-term employee benefits 2,121 1,416
Long term benefits - -
Total Compensation to key management personnel $2,121 $1,416
Loans to key management personnel $20,983 $21.530
Interest paid by key management personnel $1,284 $1.815
Deposits from key management personnel $1,557 $784
Loans made to and borrowings held by key management personnel (including personally related parties) are made in
the ordinary course of business on normal commercial terms and conditions on no more favourable than those given to
other employees or customers, with the exception of those loans referred to in note 25.
No provision for credit impairment has been recognised for loans made to key management personnel
Key management personnel is defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, including directors. Directors include those deemed directors as defined by the
Companies Act 1993 Part 8 Section 126.
27 DIRECTORS REMUNERATION AND EXPENSES

The following Directors' Fees and Expenses were paid to Directors of the Company
30.06 .09 30.06.08
$000's $000's
Allan J Hubbard ( Chairman) 123 141

Edward 0 Sullivan 82 72
Robert A White ( Resigned 27 August 2009) 52 52
Stuart J Nattrass ( Resigned 27 August 2009) 52 52
$308 $315
28 DIRECTORS INTERESTS
During the period South Canterbury Finance Ltd conducted normal business transactions with organisations in which
individual Directors have an interest. In all instances no individual advantage was received in their capacity as Directors.
The Directors' interest in these transactions have been declared and noted. Transactions in which Directors' interests
have been noted are:
Mr A J Hubbard is in an accounting practice supplying secretarial and accounting services to the company. Charges
totalling $429,242 are on a time-fee basis and are calculated at or below standard commercial rates. The practice also
received brokerage of $249,367 on client funds introduced, together with a share of brokerages earned by its associated
sharebroking partnership Munro Hubbard and Co. Brokerages paid and payable are on no more favourable terms than
those paid to unrelated brokers.
Mr E 0 Sullivan is a partner in a firm of solicitors who provide periodic legal services to the Company. Fees paid,
totalling $45,217, are at normal arms-length rates for work of a similar type. The firm also received brokerage of $16,538
on client funds introduced. Brokerages paid and payable are on no more favourable terms than those paid to unrelated
brokers.
Mr A J Hubbard is a director of Helicopters (NZ) Ltd. Cancellable operating lease agreements generating income for the
period of $2.96m have been entered into with Helicopters (NZ) Ltd and one of the charging subsidiary companies. The
terms and conditions of the leases are on the basis of normal arms-length transactions.
Page 30
29 INDEMNITY AND INSURANCE OF DIRECTORS AND OFFICERS

South Canterbury Finance Ltd has made arrangements for the insurance of the company's Directors and executives in
accordance with Section 162 of the Companies Act 1993 and the constitution of the company. This indemnifies and
insures directors and executives against liability and costs for actions undertaken by them in the course of their duties to
the extent permitted by Section 162.
30 FIXED CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

The company has committed to pay management fees of up to $150,000 pa for the three years from 2008 in relation to
a loan advanced in Wellington. Apart from these matters and the guarantees referred to in note 20, no other capital
commitments or contingent liabilities existed at balance date.
31 DONATIONS
Donations made during the current financial period totalled $14,978 (30 June 2008 - $300,000).
32 PARENT COMPANY
The ultimate parent, Southbury Group Ltd holds all the ordinary shares issued by South Canterbury Finance Ltd.
33 SEGMENTAL REPORTING
The company operates in the New Zealand market in the financial services industry.
34 IMPUTATION CREDIT ACCOUNT 30.06 . 09 30.06.08

$000's $000's
Opening balance (debit) (3,971) (8,361)

Credits acquired 6,647 25,307
Credits allocated (3,383) (20,916)
Closing balance (debit) $(707) $(3,971)
South Canterbury Finance has a group imputation registration with its parent company, Southbury Group Ltd. Southbury
Group Ltd maintains the imputation credit account on behalf of the group.
35 TAXATION STATEMENT 30.06 .09 30.06.08

$000's $000's
Taxable profit has been calculated as:
Net Profit before Taxation (63,462) 82,721
Add Non Deductible Expenses 14,684 -
Add (Less) Allowance for Impairment 57,655 (26,769)
8,877 55,952
Less Non Assessable Income (1,413) -
Less Adjustment for Depreciation to Taxation Rates (1,804) -
Less Taxable Profit on Subsidiary Company (6,276) -
Subvention Payment - (4,008)
Loss Offsets - (8,138)
(617) 43,805
Movement in Deferred Income (47,807) (16,883)
Taxable Income $(48,424) $26,922
Taxation as per Income Statement $(13,893) $8,884
Page 31
Consisting of
Current Taxation Payable 1,883 14,456
Credit (Debit) to Deferred Tax (15,776) (5,572)
$(13,893) $8,884
Tax Paid
Less Current Tax Payable (1,539) (14,456)
Add Tax Paid 5,388 22,386
Tax Paid per Balance Sheet $38,416 $34,567
Deferred Taxation
Acquired on Acquisition of Subsidiary Company 905 916
Impact of change in tax rates (586)
Increase (decrease) in deferred tax 15,776 5,572
Deferred tax comprises the following temporary differences:

Provision for Credit Impairment 22,590 8,725
Property, Plant and Equipment (1,767) (2,093)
Asset Revaluation 3,855 1,893
Other (353) (294)
$24,326 $8,231
36 SUBSEQUENT EVENTS
On 13 August 2009, SCF's credit rating was downgraded by Standard & Poors to BB+ (Outlook Negative).
The downgrade to the company's credit rating has resulted in an event of review for the purposes of the company's
existing USPP funds currently shown at a value of $153.7m in borrowings (See note 16)
On 17 September 2009, the company elected to withdraw its prospectus pending registration of a new prospectus to
incorporate its audited financial statements for the year ended 30 June 2009. As a consequence the company has
placed all subsequent new investments and depositor reinvestments in a trust account under the control of its Trustees,
Trustee Executors Ltd.
On 19 September 2009, the company's credit rating was placed on "negative watch" by Standard & Poors.
A market update from the company on 16 September announced that "Work related to the Company's restructuring and
capital raising initiatives continues and the Company intends making a further announcement on these matters in
coming weeks."
Page 32
(Established 1926)
ANNUAL REPORT

INDEX
PAGE NUMBER
1 COMPANY DIRECTORY
2 :: AUDITORS REPORT
3 :: INCOME STATEMENT
4 :: STATEMENT OF CHANGES IN EQUITY
5 :: BALANCE SHEET
6 :: CASH FLOW STATEMENT
7 :: NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

SCF Annual Report, Year Ended June 30, 2009

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SCF Annual Report, Year Ended June 30, 2009

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SOUTH CANTERBURY FINANCE LTD

FOR THE YEAR ENDED 30 JUNE 2009

4 :: STATEMENT OF CHANGES IN EQUITY

6 :: CASH FLOW STATEMENT

7 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

CHIEF EXECUTIVE OFFICER

COMPANY INCORPORATION NUMBER IRD NUMBER

Board of Directors ' Responsibilities

Fundamental uncertainty - Going concern

Woodnorth Myers & Co.

Net Profit After Taxation (50,429) 59,799

Equity at End of the Period 17 $225 ,922 $243,569

Total Net Assets $225,922 $243569

Cashflows from Investing Activities

Cashflows from Financing Activities

Net Increase ( Decrease) in Cash Held (279 , 495) $263 , 185

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Impairment Losses on Loans and Advances

F PRIOR PERIOD ADJUSTMENTS

Statement of Changes in Equity

3 RECONCILIATION OF REPORTED PROFIT WITH CASHFLOWS FROM OPERATING ACTIVITIES

Net profit after taxation (50,429) 59,799

4 INTEREST RECEIVED 30.06.09 30.06.08

Advances 171,363 183,356

5 AGGREGATE CURRENT ASSETS 30.06 . 09 30.06.08

Cash and Cash Equivalents 123,276 402,771

Opening balance 5,920 -

6 AGGREGATE CURRENT LIABILITIES 30.06.09 30.06.08

Employee Entitlements 577 693

7 ADVANCES 30.06 .09 30.06.08

Net advances are summarised as follows:

Impaired and Past Due Assets ($000's)

30 June 2009 $61.707 $276 ,888 $(9,305) $(24,086) $305,204

30 June 2009 $23,569 $144,075 $(477) $(26,462) $140,704

30 June 2008 $22,512 $23,466 $- $(22,409) $23,569

30 June 2009 $93,072 $34 ,299 $13 ,334 $140,704

Movements of Impairment by Class of Asset ($000's)

8 PROPERTY, PLANT & EQUIPMENT

Period ended 30 June 2009

Period ended 30 June 2008

LEASE COMMITMENTS 30.06.09 30.06.08

Due within 1 year 758 708

Due within 1 year 6,066 5,401

Opening balance 3,475 3,475

13 SHARES AND INVESTMENTS 30.06.09 30.06.08

Assets Available for Resale 233,405 41,629

14 JOINT VENTURES 30.06 . 09 30.06.08

Non Operating Revenue - -

15 SHARES IN ASSOCIATED COMPANIES 30.06 . 09 30.06.08

Opening Balance 18,484 19,834

16 BORROWINGS 30.06.09 30.06.08

Secured Debentures 1,552,295 1,338,485

Due within 1 year 919,247 830,834

NON CURRENT LIABILITIES 30.06 .09 30.06.08

Debenture Stock 672,536 542,126

NON CURRENT LIABILITIES MATURITY 30.06 .09 30.06.08

1-2 years 609,637 385,108

17 EQUITY 30.06 .09 30.06.08

18 ASSET REVALUATION RESERVE

Opening Balance (1,773) 2,792

19 RETAINED EARNINGS 30.06.09 30.06.08

Balance at beginning of period 54,429 37,296