ORION REAL ESTATE LIMITED - Publication of Additional Information Relating to Previously Published Results, Lifting of Suspension and Reminder

Publication of Additional Information Relating to Previously Published Results, Lifting of Suspension and Reminder

ORION REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE ISIN: ZAE000075651
("Orion Real Estate" or “the Company”)

PUBLICATION OF ADDITIONAL INFORMATION RELATING TO PREVIOUSLY PUBLISHED RESULTS, LIFTING OF
SUSPENSION AND REMINDER OF REIT STATUS


Additional Information
Shareholders are referred to the recent Annual Report for the year ended 30 June 2018 (“2018 AFS”) and are
advised that the following additional disclosure as requested in the JSE Pro-active Monitoring Review (“JSE
Review”) of the Annual Financial Statements for the year ended 30 June 2017 (“2017 AFS”) was inadvertently
omitted with the change in auditors and change in Financial Director subsequent to the closing of the JSE
Review.

The 2018 AFS should have included the additional disclosure as presented below:

Impairment of Elma Park recognised in the published 2017 and 2016 Group and Company Annual Financial
Statements

 Group Annual Financial Statements                                                 Group
                                                               2018           2017 restated       2016 restated
 Profit before tax for the period before
                                                         18 943 082              29 307 961           2 569 397
 Impairment/Loss of control of subsidiary
 Impairment loss on investment in Elma Park                       -             (30 424 170)                  -
 Profit before tax after Impairment loss/loss of
                                                         18 943 082              (1 116 209)          2 569 397
 control of subsidiary

 % change in profit after recognition of
                                                                 0%                  (104%)                  0%
 impairment loss

 As a result of the impairment / loss of control of subsidiary, the profit for 2017, after restatement, reduced
 by 104% to a loss of (R 1 116 209) for the Group

 Company Annual Financial Statements                                             Company
                                                               2018           2017 restated       2016 restated
 Profit before tax for the period before
                                                         18 689 168              67 317 798          47 664 539
 (Impairment)/ reversal of impairment
 Impairment loss on investment in Elma Park                       _                       _         (21 024 659)
 Reversal of impairment/ (Impairment) of loan
                                                          1 332 278             (25 084 163)        (11 866 702)
 to related party
 Profit before tax after Impairment loss/loss of
                                                         20 021 446              42 233 635          14 773 178
 control of subsidiary

 % change in profit after recognition of
                                                                 0%                    (37%)               (69%)
 impairment loss

The financial impact is based on the numbers produced in the 2018 Integrated Annual Report and the
Company AFS.

As a result of the impairment / loss of control of subsidiary, the profit for 2016 and 2017, after restatement,
reduced by 69% in 2016 to R14 773 178 and 37% to R42 233 635 in 2017 for the Company.

During the 2016 period a provisional liquidation order was granted to the Elma Park body corporate
against Erf 195 Elma Park Proprietary Limited which was a subsidiary of Orion Real Estate Limited.
Because of the deficit on equity in the subsidiary company the holding company impaired its investment in
the shares of Erf 195 Elma Park and a portion of the loan account in 2016.

In the 2017 financial year the provisional liquidation order was made final and as a result there was a loss of
control of the subsidiary Erf 195 Elma Park which resulted in a full impairment of the subsidiary balance
sheet along with any additional loans from companies within the Group.

Adjustment of Group Headline and Diluted Headline Earnings\(Loss) per Share for 2016

In addition to the above, whilst the headline earnings reconciliation was performed correctly for the 2018
AFS, a further analysis of prior periods revealed that the previous computation for the year ended 30 June
2016 was not correct due to the incorrect inclusion of the lease smoothing adjustment. The previously
published and restated information on the headline loss and headline loss per share is set out below:

The Group wishes to restate the Group Headline and Diluted Headline Earnings (Loss) per Share for 2016 after
intensive discussions in this regard with the Johannesburg Stock Exchange.

                                                                      HEPS per Annual report      Restated HEPS
                                                                                    for 2016               2016
Basic earnings to Headline earnings \ (loss) reconciliation
Basic earnings                                                                     2 886 345          2 886 345
Fair value gain adjustment                                                       (18 705 591)       (22 944 906)
Net gain on disposal of Investment properties                                       (791 238)          (791 238)
Headline loss                                                                    (16 610 484)       (20 849 799)

Reconciliation of numerators used for basic and diluted
earnings
Number of shares in issue for headline earnings per share                        627 009 822        627 009 822

Headline loss per share (cents)                                                        (2.65)             (3.33)
Diluted headline loss per share (cents)                                                (2.65)             (3.33)

King IV Principles and Remuneration Policy and Implementation Report
In addition to the above, shareholders are also advised that a summary of the Company’s compliance with
the 16 King IV® principles and a remuneration report detailing the remuneration policy and implementation
report are available on the Orion website at www.oriongroup.co.za. These disclosures should have been
included in the Company’s integrated report.

Lifting of suspension
Shareholders are advised that, following the review by the Johannesburg Stock Exchange (“JSE”) of the
Annual Report for the year ended 30 June 2018 and consideration of the ongoing compliance with the JSE
Listings Requirements, the suspension in trade in the Company’s securities will be lifted after the JSE has
considered the matters currently under review, including shareholder spread.

REIT status
Shareholders are reminded that the REIT status was removed on 5 February 2019 and the JSE Listings
Requirements precludes the JSE from reissuing REIT status for a period of 24 months after removal thereof.

Johannesburg
11 July 2019

Sponsor
Arbor Capital Sponsors Proprietary Limited

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