TOWER LIMITED — Annual Report 2007

Dec 20, 2007

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TOWER Limited Value and Capital Analysis Year Ended 30 September 2007

Supplementary information containing unaudited data in respect of the year ended 30 September 2007.

20 December 2007

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Appendix
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TOWER Group Results	Page 3
Shareholders Funds	Page 4
Enterprise Value/Fair Value	Page 5
Carrying Value/Appraisal Value	Page 6
Financial Summary	Page 7
Change in Embedded Value	Page 8
Change in Value of One Year’s New Business	Page 9
Embedded Value and Value of One Year’s New Business	Page 10

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TOWER Group and Business Unit Results
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30-Sep-07 NZ$ millions	Health and Life	General Ins	Investments	Holdings Companies	Group
Business unit operating earnings Corporate expenses Intercompany Investment Income Investment returns on Shareholder Funds Finance Costs	25.7 4.2	9.6 1.1 11.3	11.8 0.3	(0.8) (6.4) 3.0 (5.6)	46.3 (6.4) 1.1 18.8 (5.6)
Profit Before Taxation	29.9	22.0	12.1	(9.8)	54.2
Tax expense	(7.2)	(9.6)	(4.5)	1.7	(19.6)
Profit After Taxation on Continuing Operations	22.7	12.4	7.6	(8.1)	34.6
Profit from Discontinued Operations	(0.4)	(0.1)	(0.3)	198.8	198.0
Profit After Taxation	22.3	12.3	7.3	190.8	232.6

Investment Returns by Business

	Investment Returns on SHF (Pre tax & Inclusive of Intercompany Investment Income) Shareholder Investment Assets Pre Tax Return	4.2 70.0 6.0%	12.4** 163.6 7.6%	0.3* 0.3 100.0%	3.0 60.5 5.0%	19.9 294.4 6.8%

• •Relates to items classified as Other Investment Income more akin to Sundry Income

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Carrying Value
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Shareholder Funds

Shareholder Funds
Assets backing Shareholder Capital 30-Sep-07 NZ$ millions	Health and Life	General Ins	Investments	Holdings Companies	Group
Fixed Interest Equity Property Eliminate TOWER Life (NZ) Investment in TI	128.4 2.0 13.6	176.2 38.5 11.0 (29.9)	1.3	57.2 3.2	344.6 43.7 24.7 (29.9)
Shareholder Investment Assets in excess of Policyholder Liabilities Deferred Acquisition Costs Net Operational Assets/(Liabilities)	125.5 27.9 (38.4)	195.7 13.0 (125.6)	1.3 10.6 8.2	60.5 20.8	383.1 51.6 (116.5)
Net Tangible Assets Backing Shareholders Capital Excess of Market Value over Net Tangible Assets – Goodwill External Debt	133.5 13.07	83.2 17.7	20.2	81.3 (87.1)	318.2 30.8 (87.1)
Total Equity Attributable to Shareholders	146.6	100.9	20.2	(5.9)	261.9

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Appraisal Value
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30-Sep-07 NZ$ millions	Health and Life	General Ins	Investments	Holdings Companies	Group
Net Worth Value of In-force business	23.7 148.4				23.7 148.4
Embedded Value Value of 1 years new business Value of Future new business	172.1 3.6 14.6	0.0	0.0	0.0	172.1 3.6 14.6
Appraisal Value (Enterprise Value) Fair Value of Net Tangible Assets Eliminate TOWER Life (NZ) Investment in TOWER Investments External Debt	186.7 74.1	0.0 172.9 (29.9)	0.0 20.2	0.0 81.3 (87.1)	186.7 348.5 (29.9) (87.1)
Appraisal Value	260.8	143.0	20.2	(5.8)	418.2

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Carrying Value / Appraisal Value
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NZ$ millions	As at 30-Sep-07	As at 30-Sep-07	As at 31-Mar-07	As at 31-Mar-07
	Carrying Value	Appraisal Value	Carrying Value	Appraisal Value
Health & Life TOWER Health & Life TOWER Medical TOWER Life (NZ) General Insurance TOWER Insurance Eliminate TOWER Life (NZ) Investment in TOWER Insurance Investment Business TOWER Asset Management TOWER Managed Funds Other TOWER Group Head Office, Holding Companies	81.2 32.0 33.4	114.1 74.1 72.5	76.3 30.0 29.9	138.1 69.4 64.0
	146.6 130.9 (29.9)	260.7 172.9 (29.9)	136.2 122.0 (29.4)	271.5 164.5 (29.4)
	100.9 5.7 14.5	143.0 5.7 14.5	92.6 4.2 12.2	135.1 4.2 12.2
	20.2 81.3 (87.1)	20.2 81.3 (87.1)	16.4 83.9 (87.0)	16.4 83.9 (87.0)
Total Capital Employed	261.9	418.1	242.1	419.9

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Life Insurance Profit Summary
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NZ$ millions	Six months ended 30-Sep-07	Six months ended 31-Mar-07
Life Insurance Operating Earnings Planned Profits Experience Profit (Loss) Capitalised Loss (Recognition) Reversal	9.5 (1.4) (0.1)	7.3 1.3 0.0
Operating Earnings from Life Earnings from Health	8.0 1.7	8.7 3.1
Total Operating Earnings (Net of Tax) Net Investment Return on Shareholders Funds Discount Rate Changes Profit from Discontinued Operations	9.7 1.3 (0.7) (0.4)	11.8 1.3 (0.7) 0.0
Profit After Taxation	9.9	12.4

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Change in Embedded Value
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NZ$ millions	TOWER Life (NZ)	TOWER Health & Life
Embedded Value as at 30 September 2006 Expected Increase in Value of In-Force Earnings on Net Worth Experience: - Investment Earnings - Other Changes in Assumptions: - Discount Rate - Investment Earnings - Other Value from New Business Miscellaneous: - Transfers/Distributions - Other	64.2 5.3 0.5 (0.5) 0.6 (1.8) 0.4 2.8 1.8 (6.8) (0.1)	92.9 9.7 0.3 0.0 (2.2) (2.8) 4.1 (2.2) (0.2) 0.0 6.2
Embedded Value as at 30 September 2007	66.4	105.8

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Change in Value of One Year’s New Business
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NZ$ millions	TOWER Life (NZ)	TOWER Health & Life
Value of One Year’s New Business as at 30 September 2006 Change in One Year’s Volumes and Mix of Business Changes in Assumptions: - Discount Rate - Investment Earnings/Inflation - Expenses - Commissions - New Products - Other	1.0 0.5 0.0 0.0 0.0 0.0 0.0 0.0	7.6 0.3 (0.7) 0.0 (3.2) (1.2) 0.0 (0.7)
Value of One Year’s New Business as at 30 September 2007	1.5	2.1

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Embedded Value and Value of One Year’s New
Business
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Embedded Value and Value of One Year’s New Business

NZ$ millions	30-Sep-07	30-Sep-07	31-Mar-07	31-Mar-07
	TOWER Life (NZ)	TOWER Health & Life	TOWER Life (NZ)	TOWER Health & Life
Net Worth Value of In-force Business	17.9 48.5	5.8 99.9	16.5 43.4	7.2 99.4
Embedded Value Value of One Year’s New Business	66.4 1.5	105.7 2.1	59.9 1.0	106.6 7.9

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