Notes to Financial Statements

1. Basis of presentation

The interim financial statements presented are those of Fletcher Building Limited and its subsidiaries (the “group”).

Fletcher Building Limited is a company domiciled in New Zealand, is registered under the Companies Act 1993, and is an issuer in terms of the Securities Act 1978 and the Financial Reporting Act 1993. The interim financial statements have been prepared in accordance with NZ IAS 34 Interim Financial Reporting.

Back to top2. Changes in accounting policies

The International Accounting Standards Board has issued a number of other standards, amendments and interpretations which are not yet effective. The group has not yet applied these in preparing these interim financial statements although the application of these standards, amendments and interpretations would require further disclosures, but they are not expected to have a material impact on the group’s results.

There have been no other changes in accounting policy in the six months ended 31 December 2010, however certain comparatives have been restated to conform with the current period’s presentation.

Back to top3. Contingencies and commitments

Provision has been made in the ordinary course of business for all known and probable future claims but not for such claims as cannot presently be reliably measured. There have been no material movements in capital expenditure commitments, lease commitments, contingent liabilities or contingent assets to that disclosed in the 2010 annual report.

Back to top4. Other gains and losses

Other gains/(losses) include the following:

Back to top5. Taxation expense

Back to top6. Purchase of investments and subsidiaries

On 15 December 2010, the Group announced a proposal to acquire Crane Group Limited, an Australian listed company, in which the Group acquired a 14.9% pre-bid holding. As at 31 December 2010, the Group has recorded the shares held in Crane Group Limited as an investment of $146 million.

During the period, the Group acquired subsidiaries with a total value of $52 million. This includes Australian Construction Products Pty Ltd which was purchased on 1 September 2010 for $47 million. The fair value exercise is underway and will be completed by June 2011.