General SENS Submitter Company - GEN General Orion Real Estate Limited. Censure imposed by the JSE on Orion Real Estate Limited (Orion)

GEN – General – Orion Real Estate Limited. Censure imposed by the JSE on Orion Real Estate Limited (“Orion”)

GEN – General – Orion Real Estate Limited
Censure imposed by the JSE on Orion Real Estate Limited (“Orion”)


The JSE hereby informs stakeholders of the following findings in respect of Orion:


  1. In 2018, the JSE’s proactive monitoring unit identified that Orion’s financial statements for the 2017
      period contained material errors in accordance with International Financial Reporting Standards
      (“IFRS”). On 9 May and 17 May 2019 respectively, Orion published its results for the year ended 30
      June 2018 and the six months ended 31 December 2018, which contained restatements to the prior
      periods to correct material errors identified by Orion and the JSE’s proactive monitoring unit, in
      accordance with IFRS.


  2. The errors in the prior periods that required restatement were:


             •   Borrowings incorrectly classified as non-current liabilities instead of current liabilities
                 amounting to R86 million;
             •   Storage units of R94 930 incorrectly classified as inventory (current asset) instead of
                 property, plant and equipment (non-current asset);
             •   Interest of 8% that should have been raised on loans to a shareholder in the years 2016 and
                 2017, affecting retained earnings by R811 987 and R3,6 million respectively; and
             •   The R40,6 million impairment of Orion’s investment in Elma Park and its effect on the
                 statement of cash flows.


      The correction of errors affected basic earnings/(loss) per share for the years ended 30 June 2016 and
      2017 by 39%, and basic and diluted earnings per share for the six months ended 31 December 2017 by
      17%.


  3. Furthermore, the JSE found that the disclosure of the restatements in Orion’s financial statements for
      the six months ended 31 December 2018 did not comply with IFRS. To correct this, Orion published
      subsequent SENS announcements on 23 May and 28 May 2019, in order to address the deficient
      disclosures.
  4. Accordingly, the JSE found Orion to be in breach of paragraphs 8.57(a) and 8.62(b) of the JSE’s Listings
      Requirements in respect of its previously published financial statements which did not comply with
      IFRS, as well as General Principle (v) of the Listings Requirements for not observing the highest
      standards of care when disseminating information into the market place which necessitated the
      corrective announcements.


  5. The JSE has decided to impose this public censure against Orion in relation to the above-mentioned
      breaches of the Listings Requirements. Orion delisted from the JSE with effect from close of business
      on 18 December 2019 and the transgressions occurred during Orion’s period of listing on the JSE.




20 February 2020

Date: 20-02-2020 07:05:00
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