Mr. Gordon Reykdal reports

THE CASH STORE FINANCIAL SERVICES INC. FILES AMENDED FINANCIAL STATEMENTS

The Cash Store Financial Services Inc. has filed amended and restated consolidated financial statements and management's discussion and analysis for the years ended Sept. 30, 2012, Sept. 30, 2011, and the 15-month period ended Sept. 30, 2010. The company has also restated the Dec. 31, 2011, March 31, 2012, June 30, 2012, and Dec. 31, 2012, unaudited interim consolidated financial statements.

These consolidated financial statements and MD&A, as initially reported, have been amended and restated to correct for an error resulting from the misunderstanding of the settlement terms and conditions of the March 5, 2004, B.C. class action claim, which resulted in the application of an accounting principle to measure and record the liability as at Sept. 30, 2010, and subsequent reporting periods, that was not appropriate in the circumstances. The restatement resulted in a reduction in net income in the 15 months ended Sept. 30, 2010, of $6.6-million, or 38 cents per share, an increase in net income in the year ended Sept. 30, 2011, of $1.5-million, or nine cents per share, and an increase in net loss of $433,000, or three cents per share, in the year ended Sept. 30, 2012.

The correction of the error resulted in the previously disclosed maximum settlement exposure of $18.8-million being expensed with the majority of the expense being recognized in the 15-month period ended Sept. 30, 2010. The maximum potential exposure consists of approximately $6.2-million in cash, which was paid to the settlement administrator in 2011, approximately $6.2-million in credit vouchers and $6.4-million in legal fees, which were paid to the plaintiff's counsel in 2010. After cash and credit vouchers have been disbursed by the settlement administrator, the remaining accrual for unclaimed credit vouchers as of March 31, 2013, was approximately $5.3-million. The company will revise its accrual for unclaimed cash and vouchers to the extent that the applicable derecognition criteria have been met, which is expected to occur in late fiscal 2014.

In conjunction with the restatement, the company has also restated the consolidated financial statements and MD&A for the year ended Sept. 30, 2011, the 15-month period ended Sept. 30, 2010, and the three months ended Dec. 31, 2011, to include disclosure of related-party transactions consistent with those provided by the company from March 31, 2012, onward. Specifically, the restated disclosures include transactions with a privately held entity that raises capital and provides advances to the company's customers (third party lender). The privately held entity is controlled by the father of the senior vice-president of operations of the company. The addition of this disclosure did not impact the previously reported financial position or results of operations of the company.

The corrections had no impact on total revenues, operating margin or cash position and had no impact on compliance with debt covenants in any periods presented.

In connection with these matters, the company has re-evaluated its conclusions regarding the effectiveness of its internal control over financial reporting for the affected periods and determined that material weaknesses existed. As a result of the material weaknesses, the company has now concluded that such controls were ineffective. Accordingly, the company has restated its disclosures to include the identification of material weaknesses related to the restatements.

The financial statements are available at SEDAR.

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