NZ Rural Land Management Purchase Consideration

201 Broadway, Stratford, 4332
PO Box 304, Stratford 4352

Phone: 06 765 6199
Web: http://www.alliedfarmers.co.nz
Email: headoffice@alliedfarmers.co.nz
17 March 2023


NZ Rural Land Management Purchase Consideration

Allied Farmers Limited (ALF.NZX) is pleased to advise that it will shortly complete the
purchase of the 50 percent of NZ Rural Land Management (NZRLM)* that it does not
already own, pursuant to the exercise of its NZRLM call option on 19 December 2022.
On completion NZRLM will be wholly owned and controlled by Allied Farmers.

As advised on 3 March 2023 the consideration to settle the acquisition of the 50
percent stake is $8.3 million (NZRLM Consideration) (see NZX announcement
https://www.nzx.com/announcements/407740).

The NZRLM Consideration will be satisfied by payment of $6.55 million of cash, and
the transfer of $1.75 million worth of NZ Rural Land Company Limited shares owned
by Allied at their 20-day volume weighted average price prior to completion date. The
cash component will be funded from a combination of cash reserves and debt facilities.

Allied Independent Directors, Philip Luscombe and Shelley Ruha, engaged Simmons
Corporate Finance to provide an independent opinion on the fairness of the call option
exercise and the manner in which the NZRLM consideration will be satisfied. A copy
of the Fairness Opinion is attached.

On behalf of the Independent Director Philip Luscombe said “We are excited to take
this 100% ownership opportunity. Our existing investment in NZRLM has enabled
strong and diversified earnings growth for the Allied Group, and we are confident that,
with full ownership, this will be enhanced”.

Completion is expected to take place prior to the end of March 2023. A further
update will be provided nearer completion.



Philip Luscombe Shelley Ruha
Independent Director Independent Director


* Specifically, on completion of the Option Exercise Allied Famers will purchase:
• 500 Partnership Units of NZ Rural Land Management Limited Partnership
• 500 Ordinary Shares of NZ Rural Land Management GP Limited
* NZ Farmers Livestock Limited is a 67.77% owned subsidiary of Allied Farmers
Limited.

---

www.simmonscf.co.nz




Allied Farmers Limited


Fairness Opinion


In Respect of the Exercise of a
Call Option to Acquire 50% of
New Zealand Rural Land
Management


March 2023

Allied Farmers Limited Fairness Opinion
Index

Section Page

1. Introduction ..................................................................................................................... 1
2. Evaluation of the Fairness of the Call Option Exercise .................................................... 4
3. Sources of Information, Reliance on Information, Disclaimer and Indemnity ................. 13
4. Qualifications and Expertise, Independence, Declarations and Consents ..................... 15

Allied Farmers Limited Page 1 Fairness Opinion
1. Introduction
1.1 Background
Allied Farmers Limited (Allied Farmers or the Company) is an investment company
focused on the agricultural sector.
Allied Farmers’ shares are listed on the main equities securities market (the NZX
Main Board) operated by NZX Limited (NZX) with a market capitalisation of
approximately $21.9 million as at 15 March 2023. Its unaudited consolidated total
equity as at 31 December 2022 was approximately $18.1 million, of which
approximately $16.0 million was attributable to the Company’s owners.
1.2 NZ Rural Land Management
Allied Farmers owns:
• 50% of the shares in New Zealand Rural Land Management GP Limited
(NZRLM GP) and
• 50% of the partnership units of New Zealand Rural Land Management Limited
Partnership (NZRLM LP).
We refer to NZRLM GP and NZRLM LP collectively as NZ Rural Land Management.
Allied Farmers acquired its 50% interest in NZ Rural Land Management on
18 December 2020.
NZRLM LP is a limited partnership. NZRLM GP is the general partner of NZRLM LP.
NZRLM LP is the external manager of New Zealand Rural Land Company Limited
(NZRLC).
Under the management agreement, NZRLM LP is responsible for all management
functions of NZRLC, including:
• providing administrative and general services
• sourcing and securing potential investors and communicating with investors
• sourcing opportunities for the sale and purchase of land and operators for lease
agreements in respect of land
• overseeing due diligence for and executing transactions for the sale and
purchase and leasing of land
• managing NZRLC’s property assets
• arranging regular valuations and audits of NZRLC
• administering the payment of NZRLC dividends and distributions.
NZRLM LP’s remuneration is in the form of a management fee, land transaction and
leasing fees and a performance fee.

Allied Farmers Limited Page 2 Fairness Opinion
NZRLC
NZRLC was incorporated on 11 September 2020 with the purpose of acquiring
agricultural land in New Zealand.
The company leases the acquired rural land to tenants under long-term leases, with
an initial focus on the dairy sector.
Over time, NZRLC intends to diversify into other types of agricultural land, including
livestock, horticulture, viticulture and forestry land.
The company is currently in the process of acquiring forestry assets with a land area
of approximately 2,400 hectares.
NZRLC’s shares are listed on the NZX Main Board with a market capitalisation of
approximately $126.1 million as at 9 March 2023.
Its unaudited total equity as at 31 December 2022 was approximately $190.9 million.
1.3 Call Option
On 18 December 2020, Allied Farmers entered into the Call Option Deed (the Call
Option Deed) with:
• Elevation Capital Management Limited (Elevation Capital)
• Richard Milsom / RPMilsom Investments Limited (RPMilsom) (together the
Milsom Interests)
• Hopeton Trustee Company Limited (Hopeton)
(together the Vendors), whereby the Vendors granted Allied Farmers a call option to
acquire the other 50% of the shares in NZRLM GP and the other 50% of the
partnership units of NZRLM LP collectively owned by the Vendors (the Call Option).
The Vendors now consist of:
• Clyde Holland
• Elevation Capital
• REM Trustee Limited (REM)
• RPMilsom
• Hopeton.
Allied Farmers exercised the Call Option on 19 December 2022 (the Call Option
Exercise).
Under the terms of the Call Option Deed, the exercise price of the Call Option (the
Exercise Price) is set by a binding valuation prepared by PricewaterhouseCoopers
(PwC).
In its valuation report dated 3 March 2023 (the PwC Valuation), PwC assessed the
Exercise Price to be $8.3 million.
Allied Farmers and the Vendors have agreed that the consideration for the Exercise
Price (the Consideration) will consist of:
• cash of $6.55 million
• the transfer of $1.75 million of NZRLC shares held by Allied Farmers.

Allied Farmers Limited Page 3 Fairness Opinion
1.4 Elevation Capital Limited
One of the Vendors – Elevation Capital - is a related party of the Company.
Elevation Capital is the Company’s second largest shareholder. It currently holds
2,750,000 ordinary shares, representing 9.55% of the Company’s shares on issue.
Elevation Capital is wholly owned by Chris Swasbrook. Mr Swasbrook is the
non-independent chair of Allied Farmers and a director of Elevation Capital.
1.5 Purpose of the Report
The directors of Allied Farmers not associated with Elevation Capital, being Philip
Luscombe and Shelley Ruha (the Non-associated Directors) have engaged
Simmons Corporate Finance Limited (Simmons Corporate Finance) to opine on
the fairness of the Call Option Exercise.
We note that there is no regulatory requirement for this Fairness Opinion under either
the NZX Listing Rules (the Listing Rules) or the Takeovers Code.
Simmons Corporate Finance issues this Fairness Opinion to the Non-associated
Directors for the benefit of the Company’s shareholders not associated with Elevation
Capital and / or Mr Swasbrook (the Non-associated Shareholders).
This Fairness Opinion is not to be used for any other purpose without our prior written
consent.
1.6 Summary of Opinion
Our evaluation of the fairness of the Call Option Exercise is set out in section 2.
In our opinion, after having regard to all relevant factors, the terms and conditions of
the Call Option Exercise are fair to the Non-associated Shareholders.

Allied Farmers Limited Page 4 Fairness Opinion
2. Evaluation of the Fairness of the Call Option Exercise
2.1 Basis of Evaluation
There is no regulatory requirement for this Fairness Opinion. Nevertheless, the
Non-associated Directors have requested that we prepare a Fairness Opinion in line
with the requirements of an Appraisal Report for a material transaction with a related
party under the Listing Rules.
Listing Rule 7.10.2 requires an Appraisal Report to consider whether terms and
conditions of a transaction (in this case the Call Option Exercise) are fair to the
Non-associated Shareholders.
There is no legal definition of the term fair in either the Listing Rules or in any statute
dealing with securities or commercial law in New Zealand.
In our opinion, the Call Option Exercise will be fair to the Non-associated
Shareholders if:
• they are likely to be at least no worse off if the Call Option Exercise proceeds
than if it does not. In other words, we consider that the Call Option Exercise
will be fair if there is no value transfer from the Non-associated Shareholders
to Elevation Capital and
• the other terms and conditions of the Call Option Exercise are in line with
market terms and conditions.
We have evaluated the fairness of the Call Option Exercise by reference to:
• the rationale for the Call Option Exercise
• the fairness of the terms of the Call Option Exercise
• the impact of the Call Option Exercise on the financial position of Allied Farmers
• the impact of the Call Option Exercise on the control of Allied Farmers
• the dilutionary impact (if any) of the Call Option Exercise
• the impact of the Call Option Exercise on Allied Farmers’ share price
• the benefits and disadvantages to the Non-associated Shareholders of the Call
Option Exercise.
Our opinion should be considered as a whole. Selecting portions of the evaluation
without considering all the factors and analyses together could create a misleading
view of the process underlying the opinion.

Allied Farmers Limited Page 5 Fairness Opinion
2.2 Evaluation of the Fairness of the Call Option Exercise
In our opinion, after having regard to all relevant factors, the terms and
conditions of the Call Option Exercise are fair to the Non-associated
Shareholders.
Our evaluation of the merits of the Call Option Exercise is set out in detail in sections
2.3 to 2.13.
In summary, the key factors leading to our opinion are:
• the rationale for the Call Option Exercise is sound. It provides Allied Farmers
with a favourable means to obtaining greater exposure and diversity of
investments in the New Zealand rural land sector
• the Exercise Price of $8.3 million has been set by a binding valuation
assessment undertaken by PwC. We consider the PwC Valuation to be robust
and the conclusions reached to be reasonable. Accordingly, we are of the view
that the Exercise Price is fair
• the Consideration payable to the Vendors consists of $6.55 million of cash and
$1.75 million of NZRLC shares held by Allied Farmers. This is a variation to
the terms of the Call Option Deed. Nevertheless, we consider the form and
value of the Consideration to be reasonable. Accordingly, we are of the view
that the Consideration is fair
• the Call Option Exercise will have an impact on the Company's financial
position, increasing its level of financial leverage as the Consideration includes
taking on $5.55 million of loans. Allied Farmers had no bank borrowings as at
31 December 2022 and we consider the increase in the level of financial
leverage to be of minimal significance
• the Call Option Exercise will not change Elevation Capital’s level of control over
the Company to any degree
• the Call Option Exercise will have no dilutionary impact on the Non-associated
Shareholders as no new ordinary shares will be issued
• the Call Option Exercise is unlikely to have any significant impact on Allied
Farmers’ share price as we consider both the Exercise Price and the
Consideration to be at fair value
• the Call Option Exercise is unlikely to have any impact on the liquidity of Allied
Farmers’ shares
• the Call Option Exercise will not change the overall business risk profile of Allied
Farmers to any significant degree
• the attraction of Allied Farmers as a takeover target is unlikely to change.

Allied Farmers Limited Page 6 Fairness Opinion
2.3 Process Undertaken by Allied Farmers
In 2022, the Non-associated Directors engaged Northington Partners to provide
advice on whether it would be in the Non-associated Shareholders’ best interests to
exercise the Call Option, and, if so, when would be the optimum time to do so.
Northington Partners’ advice concluded that:
• “exercising the option provides Allied Farmers with a favourable means to
obtaining greater exposure to the New Zealand rural land sector in a capital
efficient way that improves Allied Farmers’ earnings per share and growth
outlook relative to the current 50% ownership position”
• “unless there was an expectation of a material medium term decline in
New Zealand rural property prices and transaction activity, the option should
be called at its earliest opportunity”.
Having considered this advice, the Non-associated Directors determined that the
most optimal outcome to exercise the Call Option was as soon as possible.
Accordingly, the Call Option was exercised on 19 December 2022 (being the first day
it could be exercised under the Call Option Deed).
2.4 Terms of the Call Option Deed
The key terms of the Call Option Deed are:
• the Exercise Price will be determined by a valuer independent of NZRLM LP,
Allied Farmers and the Vendors
• the valuer will determine the Exercise Price based on the fair value of NZ Rural
Land Management as at the day before the Call Option is exercised
• the valuation is conclusive and binding
• after the valuer has advised the parties of the binding consideration, the
Vendors can ask for the purchase price to be either paid in cash or in Allied
Farmers shares at the 20 business day volume weighted average share price
(VWAP) over the period immediately preceding a market announcement of the
exercise
• individual Vendors cannot ask for a mixture of cash and shares, but some
Vendors may ask for all cash and some may ask for all Allied Farmers shares
• only if a Vendor asks to be paid in cash, Allied Farmers can opt instead to pay
that Vendor in shares but at a 10% discount to the VWAP.
2.5 Fairness of the Exercise Price
The parties agreed to appoint PwC as valuer.
The Exercise Price of $8.3 million has been set by the PwC Valuation.
Under the terms of the Call Option Deed, the PwC Valuation is binding on Allied
Farmers and the Vendors.

Allied Farmers Limited Page 7 Fairness Opinion
We have reviewed the PwC Valuation and consider it to be robust and the
conclusions reached to be reasonable:
• the valuation date of 18 December 2022 is appropriate
• the standard of value applied is appropriate
• the valuation methodology applied is appropriate
• the assumptions adopted in the assessment (including in respect of future
maintainable earnings and capitalisation rates) are reasonable
• the valuation calculations are arithmetically correct
• the conclusions reached are reasonable.
Accordingly, we are of the view that the Exercise Price of $8.3 million is fair.
2.6 Fairness of the Consideration
Allied Farmers and the Vendors have agreed that the Consideration will consist of:
• cash of $6.55 million
• the transfer of $1.75 million of NZRLC shares held by Allied Farmers.
The Consideration is expected to be paid on 22 March 2023.
The agreed form of the Consideration – particularly the transfer of the NZRLC shares
– is a variation to the terms of the Call Option Deed.
The Non-associated Directors have advised us that they have received legal advice
that payment of the Consideration in this manner (ie without the issue of new ordinary
Allied Farmers shares) does not require shareholder approval as the Call Option
Deed was entered into prior to any of the Vendors becoming related parties of the
Company.
Cash Component
The cash of $6.55 million will be sourced from:
• cash on hand – $1.0 million
• a loan from NZ Farmers Livestock Limited (NZFLL) – $2.0 million (the NZFLL
Loan)
• a loan from Heartland Bank - $3.55 million (the Heartland Loan).
Allied Farmers had approximately $1.146 million of cash on hand as at 15 March
2023.
Allied Farmers owns 67.1% of NZFLL, a national livestock agency business.
The key terms of the NZFLL Loan are:
• a principal sum of up to $2.0 million
• a maturity date of 31 August 2023
• an interest rate equivalent to NZFLL’s applicable ANZ Bank overdraft rate
throughout the term of the loan.
The NZFLL Loan is a short term loan from the Company’s 67.1% subsidiary at an
interest rate equivalent to the interest rate NZFLL borrows at.

Allied Farmers Limited Page 8 Fairness Opinion
We consider the terms of the NZFLL Loan to be reasonable.
The key terms of the Heartland Loan are:
• a loan facility of $3.8 million
• a 5 year term
• an interest rate of the 90-day bank bill rate + a margin of 4.00%
• interest only for the first 5 months
• security in the form of general security agreements in respect to all present and
after acquired property in respect to Allied Farmers and NZ Rural Land
Management.
We are of the view that the terms of the Heartland Loan are in line with commercial
terms for a loan of this nature.
NZRLC Shares Component
Allied Farmer is currently the 4
th
largest shareholder in NZRLC, holding 4,200,000
shares (3.63% of the shares on issue).
The number of NZRLC shares forming the $1.75 million component of the
Consideration will be determined based on the 20 business day VWAP for NZRLC
immediately prior to when the shares are transferred.
The 20 business day VWAP for NZRLC to 9 March 2023 was $1.04. This would
result in Allied Farmers transferring 1,682,692 NZRLC shares to the Vendors.
The closing share price for NZRLC’s shares on 9 March 2023 was $1.00.
We consider the use of the 20 business day VWAP to determine the number of
NZRLC shares to be transferred to be reasonable.
Based on the above, we are of the view that the Consideration is fair.
2.7 Impact on Financial Position
Financial Performance
A summary of Allied Farmers’ recent consolidated financial performance is set out
below.

Summary of Allied Farmers Financial Performance



Year to
30 Jun 20
(Audited)
$000
Year to
30 Jun 21
(Audited)
$000
Year to
30 Jun 22
(Audited)
$000
6 Mths to
31 Dec 22
(Unaudited)
$000

Total income 20,761 24,351 26,818 15,804

Total expenses (19,209) (21,481) (22,970) (13,600)

Finance costs

(453)
(389) (292) (75)

Profit before tax 1,099 2,481 3,556 2,129

Income tax (expense) / benefit 119 95 (24) (32)

Profit after tax

1,218
2,576 3,532 2,097

EPS ($) $0.0430 $0.0857 $0.0998 $0.0550

EPS: Earnings per share

Source: Allied Farmers annual reports and consolidated result for the 6 months ended 31 December 2022

Allied Farmers Limited Page 9 Fairness Opinion
The Company’s total income and profitability has steadily increased over the past
3 and a half years.
The Company’s main source of revenue is from commission and fee income and the
sale of goods generated by NZFLL.
Operating expenses consist mainly of cost of goods sold, personnel expenses and
administration costs.
Financial Position
A summary of Allied Farmers’ recent consolidated financial position is set out below.

Summary of Allied Farmers Financial Position

As at
30 Jun 20
(Audited)
$000
As at
30 Jun 21
(Audited)
$000
As at
30 Jun 22
(Audited)
$000
As at
31 Dec 22
(Unaudited)
$000


Current assets 18,320 20,097 17,573 14,524

Non current assets 5,936 11,239 13,440 13,495

Total assets

24,255 31,336 31,012 28,019

Current liabilities (14,086) (14,937) (13,132) (8,284)

Non current liabilities (3,779) (2,828) (1,377) (1,626)

Total liabilities

(17,865) (17,765) (14,509) (9,910)

Total equity

6,390 13,571 16,503 18,109

NTA per share attributable to the Company’s
shareholders
$0.22 $0.38 $0.48 $0.54

NTA: Net tangible assets

Source: Allied Farmers annual reports and consolidated result for the 6 months ended 31 December 2022


The Company's current assets as at 31 December 2022 consisted mainly of trade
receivables ($8.7 million), finance receivables ($3.6 million), inventories ($1.2 million)
and cash and cash equivalents ($0.8 million).
Non current assets as at 31 December 2022 consisted mainly of the investments in
NZRLC ($4.4 million) and NZ Rural Land Management ($2.7 million), as well as
$3.0 million of owned property and $1.5 million of right of use assets.
The Company's main current liabilities as at 31 December 2022 were trade and other
payables ($6.9 million) and employee benefits ($1.1 million) and the $1.6 million of
non current liabilities consisted of lease liabilities.
Consolidated total equity of $18.1 million as at 31 December 2022 consisted of:
• $158.2 million of issued share capital
• accumulated losses of negative $142.2 million
• $2.1 million of non-controlling interests.

Allied Farmers Limited Page 10 Fairness Opinion
Cash Flows
A summary of Allied Farmers’ recent consolidated cash flows is set out below.

Summary of Allied Farmers Cash Flows



Year to
30 Jun 20
(Audited)
$000
Year to
30 Jun 21
(Audited)
$000
Year to
30 Jun 22
(Audited)
$000
6 Mths to
31 Dec 22
(Unaudited)
$000

Net cash inflow / (outflow) from operating activities 767 4,501 3,439 (2,184)

Net cash inflow / (outflow) from investing activities 322 (2,866) 954 (981)

Net cash inflow / (outflow) from financing activities

(1,304) 821 (4,388) (629)

Net increase / (decrease) in cash held (215) 2,456 5 (3,794)

Opening cash balance 2,301 2,086 4,542 4,547

Closing cash balance

2,086 4,542 4,547 753

Source: Allied Farmers annual reports and consolidated result for the 6 months ended 31 December 2022

Allied Farmers raised approximately $2.7 million of fresh equity in the 2021 financial
year through a rights issue.
Impact of the Call Option Exercise on Allied Farmers’ Financial Position
As at 31 December 2022, Allied Farmers’ consolidated total equity amounted to
approximately $18.1 million, representing 64.6% of consolidated total assets of
approximately $28.0 million. The Company had no bank borrowings at that date.
The Call Option Exercise will introduce $5.55 million of borrowings into the
Company’s capital structure and reduce cash by $1.0 million and investments by
$1.75 million in exchange for $8.3 million of additional investment in NZ Rural Land
Management.
While the Call Option Exercise will result in an increase in Allied Farmers’ level of
financial leverage, we are of the view that the level of increase is of minimal
significance.
2.8 Impact on Control
Share Capital and Shareholders
Allied Farmers currently has 28,806,434 fully paid ordinary shares on issue held by
2,417 shareholders.
The names, number of shares and percentage holding of the 10 largest shareholders
as at 3 March 2023 are set out below.

Allied Farmers’ 10 Largest Shareholders

Shareholder No. of Shares Held %

Custodial Services Limited 2,975,017 10.33%
Elevation Capital 2,750,000 9.55%
REM 1,687,000 5.86%
Forsyth Barr Custodians Limited 1,400,008 4.86%
Wairahi Investments Limited 1,300,000 4.51%
New Zealand Central Securities Depository Limited 1,091,460 3.79%
Donald Jacobs 831,050 2.88%
Elizabeth Benjamin and Michael Benjamin 682,622 2.37%
DFS Investment Partners LLC 522,185 1.81%
Deborah Seerup 500,001 1.74%

Subtotal
13,739,343 47.70%
Others (2,407 shareholders) 15,067,091 52.30%

Total
28,806,434 100.00%

Source: NZX Company Research

Allied Farmers Limited Page 11 Fairness Opinion
Elevation Capital is owned by Chris Swasbrook, the Company’s non-independent
chair.
The Milsom Interests hold 1,937,000 shares (6.72%) through REM and RPMilsom.
Shareholding Voting
The Call Option Exercise will not result in the Elevation Capital increasing its control
of voting rights in the Company.
Board Control
The directors of Allied Farmers are:
• Chris Swasbrook, non-independent chair (associated with Elevation Capital)
• Philip Luscombe, independent non-executive director
• Shelley Ruha, independent non-executive director.
We are advised by the Non-associated Directors that the Call Option Exercise will
not have any impact on Elevation Capital’s representation on the Board.
Mr Swasbrook will remain as Elevation Capital’s sole representative on the Board.
Operations
We are advised by the Non-associated Directors that the Call Option Exercise will
not increase Elevation Capital’s level of influence over the Company’s operations.
Elevation Capital’s influence over Allied Farmers’ operations is predominantly
through Mr Swasbrook’s board representation.
2.9 No Dilutionary Impact
The Call Option Exercise does not involve the issue of any new ordinary shares and
therefore will have no dilutionary impact on the Non-associated Shareholders.
2.10 Impact on Share Price and Liquidity
Share Price
Set out below is a summary of Allied Farmers’ daily closing share price and monthly
volumes of shares traded from 5 January 2021 to 15 March 2023.

Source: NZX Company Research
-
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
5/01/20215/04/20215/07/20215/10/20215/01/20225/04/20225/07/20225/10/20225/01/2023
Volumes Traded
Share Price ($)
Allied Farmers Share Price
Monthly volume (rhs)Closing price (lhs)

Allied Farmers Limited Page 12 Fairness Opinion
During the period, Allied Farmers’ shares have traded between $0.51 and $0.94 at a
VWAP of $0.70.
An analysis of VWAP, traded volumes and liquidity (measured as traded volumes as
a percentage of shares outstanding) up to 15 March 2023 is set out below.

Allied Farmers Share Trading up to 15 March 2023

Period
Low

$
High
$
VWAP
$
Volume
Traded
(000)
Liquidity

1 month $0.75 $0.77 $0.75 617 2.1%

3 months $0.71 $0.78 $0.75 1,115 3.9%

6 months $0.70 $0.79 $0.75 1,849 6.4%

12 months $0.70 $0.88 $0.77 3,301 11.5%

Source: NZX Company Research

In our view, the Call Option Exercise is unlikely to have any significant impact on the
Company’s share price as we are of the view that both the Exercise Price and the
Consideration are fair.
No Impact on Liquidity
The analysis shows that Allied Farmers’ shares are relatively thinly traded on the
NZX Main Board, with only 11.6% of the shares being traded in the past year.
As the Call Option Exercise does not involve any change in the number of shares on
issue nor who holds the Company’s shares, we do not consider that it will impact the
liquidity of the Company’s shares in any way.
2.11 Advantages to the Non-associated Shareholders of the Call Option Exercise
The Call Option Exercise will increase Allied Farmers’ ownership of NZ Rural Land
Management from 50% to 100%, providing a greater exposure to the New Zealand
rural land sector.
2.12 Disadvantages to the Non-associated Shareholders of the Call Option Exercise
We do not consider that the Call Option Exercise poses any significant disadvantages
to the Non-associated Shareholders.
2.13 Other Issues for the Non-associated Shareholders to Consider
No Significant Change in Business Risk
Allied Farmer currently faces a variety of business risks associated with investing in
the agricultural sector.
The Call Option Exercise will increase the Company’s ownership of NZ Rural Land
Management from 50% to 100%. It will have no significant impact on the key
business risks faced by Allied Farmers as the Company is already fully exposed to
such risks.
Likelihood of a Takeover Offer Unlikely to Change Significantly
In our view, the Call Option Exercise is unlikely to change the attraction of Allied
Farmers as a takeover target to Elevation Capital or to other parties.

Allied Farmers Limited Page 13 Fairness Opinion
3. Sources of Information, Reliance on Information, Disclaimer
and Indemnity
3.1 Sources of Information
The statements and opinions expressed in this report are based on the following main
sources of information:
• the Call Option Deed
• the PwC Valuation
• the Northington Partners advice to the Non-associated Directors
• the Allied Farmers annual reports for the years ended 30 June, 2020 to 2022
and half year consolidated result for the 6 months ended 31 December 2022
• Allied Farmers share price data and shareholder data from NZX Company
Research.
During the course of preparing this report, we have had discussions with and / or
received information from the Non-associated Directors.
The Non-associated Directors have confirmed that we have been provided for the
purpose of this Fairness Opinion with all information relevant to the Call Option
Exercise that is known to them and that all the factual information provided by
Company contained in this report is true and accurate in all material aspects and is
not misleading by reason of omission or otherwise.
Including this confirmation, we have obtained all the information that we believe is
necessary for the purpose of preparing this Fairness Opinion.
In our opinion, the information set out in this Fairness Opinion is sufficient to enable
the Non-associated Directors and the Company’s shareholders to understand all the
relevant factors in respect of the fairness of the Call Option Exercise.
3.2 Reliance on Information
In preparing this report we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was available from
public sources and all information that was furnished to us by Allied Farmers and its
advisers.
We have evaluated that information through analysis, enquiry and examination for
the purposes of preparing this report but we have not verified the accuracy or
completeness of any such information or conducted an appraisal of any assets. We
have not carried out any form of due diligence or audit on the accounting or other
records of Allied Farmers. We do not warrant that our enquiries would reveal any
matter which an audit, due diligence review or extensive examination might disclose.

Allied Farmers Limited Page 14 Fairness Opinion
3.3 Disclaimer
We have prepared this report with care and diligence and the statements in the report
are given in good faith and in the belief, on reasonable grounds, that such statements
are not false or misleading. However, in no way do we guarantee or otherwise
warrant that any forecasts of future profits, cash flows or financial position of Allied
Farmers will be achieved. Forecasts are inherently uncertain. They are predictions
of future events that cannot be assured. They are based upon assumptions, many
of which are beyond the control of Allied Farmers and its directors and management
team. Actual results will vary from the forecasts and these variations may be
significantly more or less favourable.
We assume no responsibility arising in any way whatsoever for errors or omissions
(including responsibility to any person for negligence) for the preparation of the report
to the extent that such errors or omissions result from our reasonable reliance on
information provided by others or assumptions disclosed in the report or assumptions
reasonably taken as implicit.
Our evaluation has been arrived at based on economic, exchange rate, market and
other conditions prevailing at the date of this report. Such conditions may change
significantly over relatively short periods of time. We have no obligation or
undertaking to advise any person of any change in circumstances which comes to
our attention after the date of this report or to review, revise or update this report.
3.4 Indemnity
Allied Farmers has agreed that, to the extent permitted by law, it will indemnify
Simmons Corporate Finance and its directors and employees in respect of any
liability suffered or incurred as a result of or in connection with the preparation of this
report. This indemnity does not apply in respect of any negligence, wilful misconduct
or breach of law. Allied Farmers has also agreed to indemnify Simmons Corporate
Finance and its directors and employees for time incurred and any costs in relation
to any inquiry or proceeding initiated by any person. Where Simmons Corporate
Finance or its directors and employees are found liable for or guilty of negligence,
wilful misconduct or breach of law, Simmons Corporate Finance shall reimburse such
costs.

Allied Farmers Limited Page 15 Fairness Opinion
4. Qualifications and Expertise, Independence, Declarations and
Consents
4.1 Qualifications and Expertise
Simmons Corporate Finance is a New Zealand owned specialist corporate finance
advisory practice. It advises on mergers and acquisitions, prepares independent
expert's reports and provides valuation advice.
The person in the company responsible for issuing this report is Peter Simmons,
B.Com, DipBus (Finance), INFINZ (Cert).
Simmons Corporate Finance and Mr Simmons have significant experience in the
independent investigation of transactions and issuing opinions on the merits and
fairness of the terms and financial conditions of the transactions.
4.2 Independence
Simmons Corporate Finance does not have at the date of this report, and has not
had, any shareholding in or other relationship with Allied Farmers or Elevation Capital
or any conflicts of interest that could affect our ability to provide an unbiased opinion
in relation to the Call Option Exercise.
Simmons Corporate Finance has not had any part in the formulation of the Call
Option Exercise or any aspects thereof. Our sole involvement has been the
preparation of this report.
Simmons Corporate Finance will receive a fixed fee for the preparation of this report.
This fee is not contingent on the conclusions of this report. We will receive no other
benefit from the preparation of this report.
4.3 Declarations
An advance draft of this report was provided to the Non-associated Directors for their
comments as to factual accuracy of the contents of the report. Changes made to the
report as a result of the circulation of the draft have not changed the methodology or
our conclusions.
Our terms of reference for this engagement did not contain any term which materially
restricted the scope of the report.
4.4 Consents
We consent to the issuing of this report in the form and context in which it is to be
provided to Allied Farmers’ shareholders. Neither the whole nor any part of this
report, nor any reference thereto may be included in any other document without our
prior written consent as to the form and context in which it appears.


Peter Simmons
Director
Simmons Corporate Finance Limited
16 March 2023