Orion Equities : Half Year Report - 31 December 2021

For personal use only

HALF YEAR REPORT

31 December 2021

THIS DOCUMENT SHOULD BE READ IN CONJUNCTION WITH THE

30 JUNE 2021 ANNUAL REPORT OF THE COMPANY

LODGED ON ASX ON 18 OCTOBER 2021

ASX Code : OEQ

Orion Equities Limited

A.B.N. 77 000 742 843

REGISTERED OFFICE:	SHARE REGISTRY:
	Advanced Share Registry Services
	Western Australia - Main Office	New South Wales - Branch Office
Suite 1, Level 1	110 Stirling Highway	Suite 8H, 325 Pitt Street
680 Murray Street	Nedlands, Western Australia 6009	Sydney, New South Wales 2000
West Perth, Western Australia 6005	PO Box 1156, Nedlands
PO Box Q1736, Queen Victoria Building
	Western Australia 6909
	New South Wales 1230
T | [phone]	Local T | 1300 113 258
F | [phone]	T | [phone]	T | [phone]
E | [e-mail]	F | [phone]
W | http://www.orionequities.com.au/	E | [e-mail]	W | www.advancedshare.com.au

For personal use only

31 DECEMBER 2021	ORION EQUITIES LIMITED
	A.B.N. 77 000 742 843

CONTENTS		CORPORATE DIRECTORY
ASX Appendix 4D Half Year Report	2	BOARD
		4	Farooq Khan		Executive Chairman
Directors' Report	Victor Ho		Executive Director
Auditor's Independence Declaration	11	Yaqoob Khan		Non-Executive Director
Consolidated Statement of	12	COMPANY SECRETARY
	Profit or Loss and other		Victor Ho
	Comprehensive Income
Consolidated Statement of	13	PRINCIPAL AND REGISTERED OFFICE
	Financial Position		Suite 1, Level 1
		14	680 Murray Street
Consolidated Statement of	West Perth, Western Australia 6005
	Changes in Equity		Telephone:		[phone]
		15	Facsimile:		[phone]
Consolidated Statement of Cash Flows	Email:	[e-mail]
Notes to the Consolidated	16	Website:	www.orionequities.com.au
	Financial Statements	22	AUDITORS
Directors' Declaration
	Rothsay Auditing
Auditor's Independent Review Report	23	Level 1, Lincoln House
4 Ventnor Avenue
Securities Information	25	West Perth, Western Australia 6005
Telephone:		[phone]
			Website:		www.rothsay.com.au
			STOCK EXCHANGE
			Australian Securities Exchange
			Perth, Western Australia
			Website:		www.asx.com.au
			ASX CODE
			OEQ
			SHARE REGISTRY
			Advanced Share Registry Services
			Main Office
			110 Stirling Highway
			Nedlands, Western Australia 6009
			Local Telephone:	1300 113 258
Visit www.orionequities.com.au for:		Telephone:		[phone]
	Facsimile:		[phone]
•	Market Announcements		Email:	[e-mail]
•	Financial Reports		Investor Web:	www.advancedshare.com.au

• Corporate Governance

•	NTA Backing History	Sydney Office:
•	Forms	Suite 8H, 325 Pitt Street
•	Email subscription	Sydney, New South Wales 2000
		Telephone:	[phone]

HALF YEAR REPORT | 1

For personal use only

31 DECEMBER 2021	ORION EQUITIES LIMITED
	A.B.N. 77 000 742 843

APPENDIX 4D HALF YEAR REPORT

This Half Year Report is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.2A.3.

Current Reporting Period:	1 July 2021 to 31 December 2021
Previous Corresponding Period:	1 July 2020 to 31 December 2020
Balance Date:	31 December 2021
Company:	Orion Equities Limited (OEQ or the Company)
Consolidated Entity:	Orion and controlled entities (Orion)

OVERVIEW OF RESULTS FOR ANNOUNCEMENT TO THE MARKET

	Dec 2021	Dec 2020	%	Up/
Consolidated Entity	$	$	Change	Down
Total revenues	25,390	104,533	76%	Down
Net gain/(loss) on financial assets	(1,550,000)	950,000	263%	Down
Share of Associate entity's net profit/(loss)	(2,092,494)	1,269,664	265%	Down
Expenses:
Personnel expenses	(189,357)	(210,652)	10%	Down
Corporate expenses	(25,022)	(12,731)	97%	Up
Other expenses	4,003	(30,567)	113%	Down
Profit/(Loss) before tax	(3,827,480)	2,070,247	285%	Profit Down
Income tax expense	-	-
Profit/(Loss) attributable to members of the Company	(3,827,480)	2,070,247	285%	Profit Down
Basic and diluted earnings/(loss) per share (cents)	(24.46)	13.23	285%	Earnings Down
	Dec 2021	Jun 2021	%	Up/
Consolidated Entity	$	$	Change	Down
Pre-tax NTA backing per share	$0.21	$0.45	54%	Down
Post-tax NTA backing per share	$0.21	$0.45	54%	Down

BRIEF EXPLANATION OF RESULTS

Orion's $3.827 million net loss for the half year is principally attributable to:

• $2.092 million recognised as a share of an Associate entity's net loss - this relates to Orion's investment in Bentley Capital Limited (ASX:BEL); Bentley generated a net loss of $7.765 million for the half year; and
• $1.55 million unrealised loss from its investment in Strike Resources Limited (ASX:SRK), which declined in price from 26.5 to 11 cents per share during the half year.

Orion accounts for Bentley as an Associate entity, which means that Orion is required to recognise a share of Bentley's net gain or loss in respect of a financial period based on Orion's (26.95% as at 31 December 2021) shareholding interest in Bentley (this is known as the equity method of accounting for an associate entity).

Orion and Bentley's financial performance is primarily dependent on the share price performance of Strike Resources Limited (ASX:SRK) (in which Orion has 10 million shares and Bentley has 53.7 million shares).

Strike is developing its Paulsens East Iron Ore Project in Western Australia and has commenced exporting iron ore from Peru and accordingly, it is exposed to the iron ore price and market sentiment in the junior iron ore sector - Orion notes that the iron price has declined significantly from a historical high of ~US$220/t in July 2021 to a recent low of ~US$91/t (in November 2021) and has recovered to current levels of ~US$140/t (as at 18 February 2022).

HALF YEAR REPORT | 2

For personal use only

31 DECEMBER 2021	ORION EQUITIES LIMITED
	A.B.N. 77 000 742 843

APPENDIX 4D HALF YEAR REPORT

The volatility in the iron ore price has matched the volatility in the Strike share price, which has traded within a range of 32 cents (on 15 July 2021) to 9 cents (on 6 December 2021) in the past 12 months, with a current price of 10.5 cents.

Further information is outlined in Bentley's 31 December 2021 Half Year Report.

Please refer to the Directors' Report and Financial Report for further information on a review of Orion's operations and the financial position and performance of Orion for the financial half year ended 31 December 2021.

Notwithstanding the accounting value of Orion's investments as outlined herein, it is noted that the market value of these share investments are as follows:

				ASX Market Value1
Investment		Shareholding		31 December 2021
Bentley Capital Limited (ASX:BEL)	20,513,783		$1,435,965
Strike Resources Limited (ASX:SRK)	10,000,000		$1,100,000
		Total		$2,535,965

DIVIDEND

The Directors have not declared a dividend in respect of the financial half year ended 31 December 2021.

ASSOCIATE ENTITY

The Company has accounted for the following share investment at the Balance Date as an investment in an Associate entity (on an equity accounting basis):

1. 26.95% interest (20,513,783 shares) in Bentley Capital Limited (ASX:BEL) (30 June 2021: 26.95%; 20,513,783 shares).

CONTROLLED ENTITIES

The Company did not gain or lose control over any entities during the financial half year.

For and on behalf of the Directors,

Victor Ho		Date: 23 February 2022
Executive Director and Company Secretary
Telephone:	[phone]	Email: [e-mail]

1 Based on closing bid price on ASX

HALF YEAR REPORT | 3

For personal use only

31 DECEMBER 2021	ORION EQUITIES LIMITED
	A.B.N. 77 000 742 843

DIRECTORS' REPORT

The Directors present their report on Orion Equities Limited ABN 77 000 742 843 (OEQ or the Company) and its controlled entities (Orion or the Consolidated Entity) for the financial half year ended 31 December 2021 (Balance Date).

Orion Equities Limited is a public company limited by shares that was incorporated in New South Wales and has been listed on the Australian Securities Exchange (ASX) since November 1970 (ASX Code: OEQ).

PRINCIPAL ACTIVITIES

OEQ is a listed investment company (LIC).

NET TANGIBLE ASSET BACKING (NTA)

		Dec 2021	Jun 2021
Consolidated Entity	$	$
Net tangible assets (before tax)	3,226,274	7,053,754
Pre-Tax NTA Backing per share		0.206	0.451
Less deferred tax assets and tax liabilities	-	-
Net tangible assets (after tax)	3,226,274	7,053,754
Pre-Tax NTA Backing per share		0.206	0.451
Value of dividend paid in previous 6 months	-	-
Based on total issued share capital		15,649,228	15,649,228

FINANCIAL POSITION

		Dec 2021	Jun 2021
Consolidated Entity	$	$
Cash and cash equivalents	28,886	195,423
Financial assets at fair value through profit and loss	1,100,000	2,650,000
Investment in Associate entity (BEL)	888,900	2,981,394
Property held for development or resale	1,750,000	1,750,000
Receivables	77,171	42,597
Other assets	2,024	2,418
Deferred tax asset		-	-
Total Assets	3,846,981	7,621,832
Other payables and liabilities	(620,707)	(568,078)
Deferred tax liability		-	-
Net Assets		3,226,274	7,053,754
Issued capital	18,808,028	18,808,028
Profits Reserve	6,639,498	6,546,107
Accumulated losses		(22,221,252)	(18,300,381)
Total Equity		3,226,274	7,053,754

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