ORE - Orion Real Estate - Unaudited Interim Consolidated Results of the Group for the six months ended 31 December 2011 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" or "the Group") Unaudited Interim Consolidated Results of the Group for the six months ended 31 December 2011 Abridged Consolidated Statement of Financial Position Restated Unaudited unaudited Audited
six months ended six months ended year ended Figures in Rand 31 December 2011 31 December 2010 30 June 2011 ASSETS Non-current assets 659 480 850 650 062 858 658 327 454 Investment properties 637 289 209 631 900 000 637 289 209 Property, plant and equipment 599 844 603 405 381 113 Deferred tax assets 13 425 544 9 639 716 11 422 941 Other receivables 8 166 253 7 919 737 9 234 191 Current assets 25 568 538 25 068 455 22 333 524 Loans to related parties - 88 487 - Trade and other receivables 25 568 538 24 891 491 22 333 524 Cash and cash equivalents - 88 477 - Total assets 685 049 388 675 131 313 680 660 978 EQUITY AND LIABILITIES Capital and reserves Share capital and share premium 74 235 526 74 235 526 74 235 526 Debenture reserve 10 675 886 10 675 886 10 675 886 Retained earnings 255 745 661 224 344 904 255 758 472 Total equity attributable to equity holders 340 657 073 309 256 316 340 669 884 Non-controlling interest (182 692) (179 971) (180 457) Total equity 340 474 381 309 076 345 340 489 427 Non-current liabilities 252 824 555 334 150 187 253 105 391 Linked debentures 61 043 086 49 343 086 55 043 086 Borrowings 138 578 268 195 368 310 145 036 215 Deferred tax liabilities 53 203 201 89 438 791 53 026 090 Current Liabilities 91 750 452 31 904 781 87 066 160 Current income tax liabilities 7 992 119 3 238 867 6 315 840 Loans from shareholders 700 121 599 013 1 471 907 Loans from directors 2 593 616 2 612 015 2 598 511 Loans from related parties 1 077 731 5 140 850 1 736 046 Tenant deposits 6 750 314 6 726 805 5 939 753 Trade and other payables 17 432 082 11 818 650 16 601 850 Borrowings 54 594 071 1 768 581 51 154 229 Bank overdraft 610 398 - 1 248 024 Total liabilities 344 575 007 366 054 968 340 171 551 Total equity and liabilities 685 049 388 675 131 313 680 660 978 Abridged Consolidated Statement of Comprehensive Income Restated Unaudited unaudited Audited six months ended six months ended year ended
Figures in Rand 31 December 2011 31 December 2010 30 June 2011 Revenue 46 738 090 40 465 888 82 042 959 Other income 1 926 085 261 976 1 753 375 Other direct property operating costs (27 655 400) (22 446 989) (49 416 333) Administrative expenses (5 980 922) (5 657 418) (11 395 598) Repairs and maintenance (1 678 508) (1 190 830) (3 476 676) Net gain from fair value adjustments on investment property - - 2 089 209 Operating profit 13 349 345 11 432 627 21 596 936 Finance income 1 366 462 1 269 880 1 803 626 Finance costs (14 841 807) (9 967 452) (24 371 378) (Loss)/Profit before taxation (126 000) 2 735 055 (970 816) Taxation 110 954 (812 934) (873 486) (Loss)/Profit for the year (15 046) 1 922 121 (1 844 302) Other comprehensive income - - - Total comprehensive income for the year (15 046) 1 922 121 (1 844 302) (Loss)/Profit and total comprehensive income for the year attributable to: Equity holders of the company (12 811) 1 924 484 (1 841 453) Non-controlling interest (2 235) (2 363) (2 849) (15 046) 1 922 121 (1 844 302) Earnings per linked unit Basic earnings per linked (cents) (0,00) 0,31 (0,29) Diluted earnings per linked (cents) (0,00) 0,31 (0,29) Headline earnings per linked unit (cents) (0,00) 0,31 (0,58) Diluted headline earnings per linked unit (cents) (0,00) 0,31 (0,58) Abridged Consolidated Statement of Cash Flows Unaudited Unaudited Audited
six months ended six months ended year ended Figures in Rand 31 December 2011 31 December 2010 30 June 2011 Cash flows from operating activities 4 106 008 (550 151) 4 294 849 Cash generated by/(utilised in) operations 12 986 075 9 531 035 23 079 961 Interest paid (8 841 807) (9 967 452) (18 671 378) Taxation paid (38 260) (113 734) (113 734) Cash flows from investing activities 208 038 4 585 849 (1 696 031) Cash flows from financing activities (3 676 420) (4 035 693) (3 935 313) Net increase/(decrease) in cash and cash equivalents 637 626 5 (1 336 495) Cash and cash equivalents at the beginning of the period (1 248 024) 88 471 88 471 Cash and cash equivalents at the end of the period (610 398) 88 476 (1 248 024) Investing and financing transactions that did not require the use of cash and cash equivalents are excluded from the cash flow statement. Abridged Consolidated Statement of Changes in Equity Total share
capital Share Share and Debenture Figures in Rand capital premium premium reserve Restated opening balance - 1 July 2009 5 758 013 56 530 088 62 288 101 15 018 472 Issue of linked units 512 085 11 435 340 11 947 425 - Issue of linked debentures - - - (4 342 586) Issue of equity portion of linked debentures - - - (6 031 369) Deferred taxation on equity portion of linked debentures issued - - - 1 688 783 Amendment to IAS 12 "Income Taxes" - - - - Total comprehensive income for the year - - - - Restated balance at 30 June 2010 6 270 098 67 965 428 74 235 526 10 675 886 Total comprehensive income for the six months - - - - Balance at 31 December 2010 6 270 098 67 965 428 74 235 526 10 675 886 Total comprehensive income for the six months Balance at 30 June 2011 6 270 098 67 965 428 74 235 526 10 675 886 Total comprehensive income for the six months - - - - Balance at 31 December 2011 6 270 098 67 965 428 74 235 526 10 675 886 Non- Retained controlling Total
Figures in Rand earnings Total interest equity Restated opening balance - 1 July 2009 202 899 564 280 206 137 (171 185) 280 034 952 Issue of linked units - 11 947 425 - 11 947 425 Issue of linked debentures - (4 342 586) - (4 342 586) Issue of equity portion of linked debentures - (6 031 369) - (6 031 369) Deferred taxation on equity portion of linked debentures issued - 1 688 783 - 1 688 783 Amendment to IAS 12 "Income Taxes" 2 029 651 2 029 651 - 2 029 651 Total comprehensive income for the year 52 670 710 52 670 710 (6 423) 52 664 287 Restated balance at 30 June 2010 257 599 925 342 511 337 (177 608) 342 333 729 Total comprehensive income for the six months 1 924 484 1 924 484 (2 363) 1 922 121 Balance at 31 December 2010 259 524 409 344 435 821 (179 971) 344 255 850 Total comprehensive income for the six months (3 765 937) (3 765 937) (486) (3 766 423) Balance at 30 June 2011 255 758 472 340 669 884 (180 457) 340 489 427 Total comprehensive income for the six months (12 811) (12 811) (2 235) (15 046) Balance at 31 December 2011 255 745 661 340 657 073 (182 692) 340 474 381 Segment Reporting for the period ended 31 December 2011 By gross revenue R % Commercial 15 778 886 44 Industrial 5 604 018 16 Retail 9 357 201 26 Hospitality 4 293 610 12 Residential 445 857 1 35 479 572 100
R % Gauteng 25 060 487 71 Western Cape 2 387 711 7 Mpumalanga 7 531 147 21 KwaZulu-Natal 500 227 1 35 479 572 100 Property values R % Commercial 245 385 507 38 Industrial 83 497 000 13 Retail 148 876 012 23 Hospitality 61 843 786 9 Residential 45 686 904 7 Land 52 000 000 9 637 289 209 100 R % Gauteng 491 571 000 77 Western Cape 36 095 000 6 Mpumalanga 100 823 209 16 KwaZulu-Natal 8 800 000 1 637 289 209 100
Gross lettable area Sqm % Commercial 53 331 43 Industrial 21 988 18 Retail 27 576 22 Hospitality 16 029 13 Residential 5 205 4 124 129 100 Sqm %
Gauteng 93 495 75 Western Cape 8 784 7 Mpumalanga 15 850 13 KwaZulu-Natal 6 000 5 124 129 100 Liabilities R % Commercial 84 921 279 44 Industrial 35 314 995 18 Retail 44 780 637 23 Hospitality 17 990 028 9 Residential 10 165 400 5 193 172 339 100
R % Gauteng 152 115 915 79 Western Cape 14 697 101 8 Mpumalanga 18 396 923 10 KwaZulu-Natal 7 962 400 4 193 172 339 100 Tenant categories R % Commercial A 5 118 418 17 B 4 572 139 16 C 3 085 693 11 Industrial A - - B 2 310 832 8
C 2 514 716 9 Retail A 3 729 365 13 B 1 553 628 5 C 4 406 219 15
Hospitality A - - B 1 563 154 5 C - - Residential A - - B - - C 413 317 1 29 267 481 100 R %
Gauteng A 5 113 237 17 B 7 523 116 26 C 7 758 507 27 Western Cape A 1 480 813 5 B 408 409 1 C 528 529 2 Mpumalanga A 2 253 733 8 B 1 568 002 5
C 2 132 908 7 KwaZulu-Natal A - - B 500 227 2 C - -
29 267 481 100 A: Represents major listed companies B: Represents smaller listed companies and big unlisted companies C: Represents smaller unlisted companies and private businesses Commentary on the December 2011 Interim Financial Statements 1. Operating Performance The Group managed to grow revenue despite tight trading conditions by 15.5%. Other direct property operating costs increased by 23.20%. Administrative expenses and repairs and maintenance also showed increases of 5.72% and 40.95% respectively. The operating profit increased from R11.43 million to R13.35 million. The total comprehensive income for the year decreased from R1.92 million to a total comprehensive loss for the year of R15 046. Finance cost increasing from R9.97 million to R14.84 million was mainly responsible for the decline in profits. Included in finance costs of R14.84 million is an amount of R6.0 million relating to the debenture revaluation. 1.1 Reconciliation of basis earnings and headline earnings: R Loss attributable to equity holders (12 811) Adjustments - Headline loss (12 811) 2. Restatement of Unaudited Abridged Consolidated Financial Statements for the six months ended 31 December 2010 In line with the prior period restatements of the Annual Financial Statements for the year ended 30 June 2011 the Interim Results for the period ended 31 December 2010 were also adjusted accordingly. The effect of these restatements is summarised below: 2.1 Deferred Tax Assets Deferred tax assets were previously offset against deferred tax liabilities and are now disclosed separately as deferred tax assets. 2.2 Tenant Deposits Tenant deposits were previously included under trade and other payables but are now disclosed separately. 2.3 Repairs and Maintenance The cost of repairs and maintenance was previously disclosed as part of operating costs but is now disclosed separately. 3. Basis of Preparation The interim financial report was prepared in accordance with the requirements of IAS 34: Interim Financial Reporting. The accounting policies followed the preparation thereof are in compliance with International Financial Reporting Standards ("IFRS") and are consistent with those used to prepare the most recent annual financial statements. 4. Contingent Liabilities The company has signed surety for the obligations of its subsidiaries in respect of mortgage bond finance and has guaranteed the debts of a wholly-owned subsidiary company until that company`s assets, fairly valued, exceeds its liabilities, and whilst it remains a wholly-owned subsidiary. 5. Investment Property Acquired and Disposed 5.1 Acquired No properties were acquired during the reporting period. 5.2 Disposed No properties were disposed of during the reporting period. 6. Subsequent Events The company acquired various sections and real rights in the sectional title scheme known as Selborne Park, situated at Pennington Township, Municipality of Umdoni. The transfer of the property has not yet been finalised. 7. Dividends No dividends were paid or declared during the financial period under review. 8. Change to the Board of Directors Dr A Parker has joined the Board of Directors during the period under review. 9. Future Prospects The trading conditions were tight during the reporting period, but it is expected that measures to improve recoveries and manage cost would yield positive results in the remaining period. Special attention is also given to reduce vacancies and improve revenue. Johannesburg 29 March 2012 Directors: R S Wilkinson*, F M Viruly*, A Boessenkool*, A Parker*, A C Gmeiner#, F Gmeiner, C B Nolte * Independent non-executive # Non-executive Executive Company secretary and registered office: Corporate Governance Facilitators CC Sponsor: Arcay Moela Sponsors (Pty) Limited Transfer office: Computershare Investor Services (Pty) Limited Prepared by C B Nolte. Date: 29/03/2012 10:50:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.