FINBAR GROUP LIMITED — Interim / Quarterly Report 2012

Feb 22, 2012

22/02/2012

Appendix 4D

For The Six Months Ended 31 December 2011

1. Details of the reporting period

This report details the consolidated results of Finbar Group Limited and its controlled entities for the six months ended 31 December 2011. Comparatives are for the six months ended 31 December 2010.

2. Results for announcement to the market

	31-Dec-11	31-Dec-10	Change %	2010 % Change
2.1 Revenue from ordinary activities	2,050,079	40,898,336	-94.99%	-71.05%
2.2 Profit from ordinary activities after tax attributable to members	(653,937)	12,000,459	-105.45%	-34.00%
2.3 Net Profit for the period attributable to members	(653,937)	12,000,459	-105.45%	-34.00%
2.4 Final 2011 Dividend per share, fully franked Declared Interim 2012 Dividend per share, fully franked	5.5 cents 3.5 cents	5.5 cents 3.0 cents	0.00% 16.67%	10.00% 50.00%
Earnings per Share (Cents per Share)	(0.31)	7.28	-104.23%	-43.17%
2.5 Record date for dividend	6 March 2012
2.6 Explanation	Refer to Company Announcement
3. Net tangible assets per share
	31-Dec-11	31-Dec-10

76.41 76.29 Net tangible assets per share (Cents per Share)

4. Details of entities over which control has been gained or lost during the period

4.1 Not Applicable.

5. Details of dividends

The Board has declared a dividend of 3.5 cents per share payable on 11 April 2012. The record date for the dividend is 6 March 2012.

6. Dividend reinvestment plan

7. Details of subsidiaries

The company has a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than being paid in cash. Last date for the receipt of an election notice for participation in the DRP is 5 April 2012.

	Ownership
8 Davidson Terrace Pty Ltd	100%
17 Sunlander Drive Pty Ltd	100%
17-19 Carr Street Pty Ltd	100%
52 Mill Point Road Pty Ltd	100%
59 Albany Highway Pty Ltd	68.75%
88 Terrace Road Pty Ltd	100%
135 Adelaide Terrace Developments Pty Ltd	100%
175 Adelaide Terrace Pty Ltd	100%
208 Adelaide Terrace Pty Ltd	100%
262 Lord Street Perth Pty Ltd	100%
Burt Way Developments Pty Ltd	100%
Finbar Finance Pty Ltd	100%
Finbar Funds Management Limited	100%
Finbar Property Trust	100%
Finbar Karratha Pty Ltd	100%
Finbar Project Management Pty Ltd	100%
Lake Street Pty Ltd	100%
Lot 1 to 10 Whatley Crescent Pty Ltd	100%

Appendix 4D continued

22/02/2012

For The Six Months Ended 31 December 2011

8. Details of joint venture entities

	Ownership
22 Plain Street Pty Ltd	50%
36 Chester Avenue Pty Ltd	50%
78 Terrace Road Joint Venture Pty Ltd	50%
132 Terrace Road Joint Venture Pty Ltd	50%
143 Adelaide Terrace Pty Ltd	50%
185 Swansea Street Pty Ltd	50%
375 Hay Street Pty Ltd	50%
406 & 407 Newcastle Street Pty Ltd	50%
701 Wellington Street Pty Ltd	50%
Rivervale Concepts Pty Ltd	50%
Rowe Avenue Pty Ltd	50%

8. Foreign entities

Not Applicable.

9. Auditor's review report

No dispute or qualification exists in the auditor's review report.

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES

ABN 97 009 113 473 ACN 009 113 473

INTERIM FINANCIAL REPORT

for the financial period ended 31st December 2011

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES For the Six Months Ended 31 December 2011 INTERIM FINANCIAL REPORT

CONTENTS	Page
Directors' Report	3
Condensed Consolidated Interim Statement of Comprehensive Income	5
Condensed Consolidated Interim Statement of Changes in Equity	6
Condensed Consolidated Interim Statement of Financial Position	7
Condensed Consolidated Interim Statement of Cash Flows	8
Notes to the Condensed Consolidated Interim Financial Statements	9
Directors' Declaration	14
Auditor's Review Report	15
Lead Auditors' Independence Declaration	17

DIRECTORS' REPORT For the Six Months Ended 31 December 2011 FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES

1 Directors

The Directors present their report together with the consolidated financial report of Finbar Group Limited ('the Company') for the six months ended 31 December 2011 and the auditor's review report thereon.

The Directors of the Company at any time during or since the end of the six months ended 31 December 2011:

Executive Director and Chairman
John CHAN - BSc, MBA, MAICD	Director since 27 April 1995
	Chairman since 15 July 2010
Non-executive (Independent) Director
Paul Anthony RENGEL - B Com, FCA	Director from 22 May 1992 to 29 September 2011
Lee VERIOS - LLB, MAICD	Director since 6 December 2011
Non-executive Directors
John Boon Heng CHEAK - B Com, B Eco	Director since 28 April 1993
Kee Kong LOH - B Acc, CPA	Director since 28 April 1993
Managing Director
Darren John PATEMAN - EMBA, Grad Dip App CorpGov, ACIS, MAICD, AFAIM	Director since 6 November 2008

2 Company Secretary

Edward Guy BANK - B Bus, ASCPA Company Secretary since 15 July 2010

3 Principal Activities

The principal activities of the consolidated group during the course of the six months ended 31 December 2011 continued to be property development and investment.

The consolidated groups' focus is the development of medium to high-density residential buildings in Western Australia by way of direct ownership, ownership through fully owned Subsidiaries or by Jointly Controlled entities (through companies registered specifically to conduct the development).

There were no significant changes in the nature of the activities of the consolidated group during the financial half-year.

4 Results

Operating Results

The net loss of the consolidated group after income tax amounted to \$653,937 (2011 half year net profit \$12,000,459).

5 Review of Operations

During the six months ended 31 December 2011, the Group continued to focus on its core activities of residential and commercial property development. The Group has funded its operations from cash reserves together with short-term construction finance which is project specific.

Completed Project Update

The Saint - 118 Adelaide Terrace East Perth: All units are sold and all but one unit have been settled. The final unit is contracted to settle in the financial year ending 30 June 2012.

Verve - 145 Newcastle Street Northbridge: All units are sold and all but one unit has settled. The final unit is currently being leased and has an extended settlement which will occur in the financial year ending 30 June 2013.

The Edge - 8 Hordern Street Victoria Park: All units are sold and three units were settled in the reporting period. The final two units have been settled since the end of the reporting period.

Gateway Office Building - 59 Albany Highway Victoria Park: The Gateway building is being held as an investment property and is now 96% leased.

Times Two - 143 Adelaide Terrace East Perth: All units are sold and 29 units were settled in the reporting period. The final unit has been settled since the end of the reporting period.

The Company has no remaining apartment stock to sell on all completed projects.

Projects Under Construction

Fairlanes - 181 Adelaide Terrace East Perth: Construction of the Fairlanes office and residential building has continued and is expected to reach completion during the financial year ended 30 June 2012.

To date, 117 unconditional sales have been achieved in the 128 unit residential building.

The Company will be relocating its corporate offices to the Fairlanes office building once complete.

Leases for 2,075 sqm of commercial space has been negotiated, with the balance of space receiving strong leasing enquiry and being well positioned and timed to benefit from a three year low in Perth CBD office vacancy rates of 3.3%.

18 on Plain - 18 Plain Street East Perth: Construction has been completed at 18 on Plain. 27 units have been presold in this 31 lot project, and settlements have now commenced.

DIRECTORS' REPORT FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES For the Six Months Ended 31 December 2011

5 Review of Operations (continued)

Projects Under Construction

Pelago West - 23 Sharpe Avenue Pegs Creek: Construction of the Pelago West commercial and residential building has made rapid progress. To date 77 lots in the 114 lot project have been sold with a further 22 leases currently being documented with the view to release these additional leased lots to the market to convert to investor sales.

Leases totalling 564 sqm have been negotiated to date in the 1,067 sqm commerical component of the building and will accommodate a range of uses including office, a restaurant/bar, café and a fast food takeaway.

Lime - 185 Swansea Street East Victoria Park: Construction of the Lime commercial and residential building has continued. 44 pre-sales have been achieved at the 111 lot project.

Adagio at Symphony City - 90 Terrace Road East Perth: Construction work has continued at the first stage of the Symphony City project with the structure now reaching level three of 23. 46 pre-sales have been secured in the 115 unit project.

Future Projects

St Marks Apartments - 369 Stirling Street Highgate: 50 units have been pre-sold in this 130 unit project. Construction is expected to commence before the end of the financial year.

Au208 & Au311 - 208 Adelaide Terrace & 311 Hay Street East Perth: 33 units have been pre-sold in this 194 unit project.

Ecco - 262 Lord Street Perth: The public marketing campaign will commence this week and early indications from the soft launch are that the Ecco apartments have been well received by the market.

Knightsgate - 17 Sunlander Drive Currambine: The marketing campaign continues on the Knightsgate project. To date 15 units in the 43 unit project have been pre-sold.

Pelago East - 26 Sharpe Avenue Pegs Creek: The company is preparing to commence the public marketing campaign of this project following the success of the sales and leasing campaign of Pelago West. The company is currently negotiating the sale of a quantity of lots to an entity that if successful will trigger the immediate commencement of construction works of this project which will be well timed to follow on from Pelago West.

36 Chester Avenue Dianella: The company is currently in the planning application process and is going through a redesign as a result of a rejection of our existing development scheme by the local authority. It is still anticipated that the project will be brought to the market in 2012.

Toccata at Symphony City - 88 Terrace Road East Perth: The company currently holds a development approval for this project. Marketing will commence once Adagio, located immediately to the West, has been completed.

Concerto & Harmony at Symphony City - 193 Adelaide Terrace East Perth: The third stage of the Symphony City project is currently in planning and design as varioius concepts and schemes are considered in this large scale mixed use project with heritage considerations.

The Springs, Rowe Avenue Rivervale: Since the end of the reporting period the Company secured the position of preferred developer of this joint venture development site and is currently in the early stages of planning and design brief with the view to releasing a 190 unit project with a substantial office building to the market in 2012.

6 Lead Auditor's Independence Declaration

The Lead Auditor's Independence Declaration is set out on Page 17 and forms part of the Directors' Report for the six months ended 31 December 2011.

Dated at Perth this 21st day of February 2012.

Signed in accordance with a resolution of the Board of Directors:

Darren Pateman Managing Director

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES For the Six Months Ended 31 December 2011 CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

	Note	31-Dec-11	31-Dec-10
		\$	\$
Revenue		2,050,079	40,898,336
Cost of sales		(2,217,617)	(27,204,207)
Gross Profit		(167,538)	13,694,129
Other income	7	3,154,283	9,839,008
Loss on sale of property, plant & equipment		(41,755)	-
Administrative expenses		(2,329,250)	(2,579,490)
Advertising expenses		(1,461,993)	(1,098,892)
Other expenses		(1,337,318)	(2,054,725)
Results from Operating Activities		(2,183,571)	17,800,030
Financial income		1,322,697	2,358,947
Finance costs		(1,248,900)	(506,440)
Net Finance Costs		73,797	1,852,507
Share of profit of Equity Accounted Investees (net of income tax)		488,457	302,713
Profit/(Loss) before Income Tax		(1,621,317)	19,955,250
Income tax expense	8	744,628	(4,003,131)
Profit/(Loss) for the period		(876,689)	15,952,119
Other comprehensive income
Other comprehensive income for the period, net of income tax		-	-
Total comprehensive income for the period		(876,689)	15,952,119
Profit/(Loss) attributable to:
Owners of the Group		(653,937)	12,000,459
Non-controlling interest		(222,752)	3,951,660
Profit/(Loss) for the period		(876,689)	15,952,119
Total comprehensive income applicable to:
Owners of the Group		(653,937)	12,000,459
Non-controlling interest		(222,752)	3,951,660
Total comprehensive income for the period		(876,689)	15,952,119
Earnings per Share:
Basic earnings per share (cents per share)		(0.31)	7.28
Diluted earnings per share (cents per share)		(0.31)	7.28
Dividends per share (cents per share)		5.50	5.50

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY For the Six Months Ended 31 December 2011 FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES

	Attributable to equity holders of the company			Non	Total Equity
	Share Capital	Share Option Reserve	Retained Earnings	Total	Controlling Interest
	\$	\$	\$	\$	\$	\$
Balance as at 1 July 2010	77,285,791	2,895,027	31,384,838	111,565,656	(54,382)	111,511,274
Total comprehensive income for the period
Profit			12,000,459	12,000,459	3,951,660	15,952,119
Transactions with owners, recognised directly in equity
Issue of ordinary shares	31,533,112			31,533,112		31,533,112
Dividends to shareholders Note 11			(8,939,798)	(8,939,798)		(8,939,798)
Balance as at 31 December 2010	108,818,903	2,895,027	34,445,499	146,159,429	3,897,278	150,056,707
Balance as at 1 July 2011	127,099,029	-	43,187,420	170,286,449	4,147,459	174,433,908
Total comprehensive income for the period
Profit			(653,937)	(653,937)	(222,752)	(876,689)
Transactions with owners, recognised directly in equity
Issue of ordinary shares	4,899,559			4,899,559		4,899,559
Dividends to shareholders Note 11			(11,425,580)	(11,425,580)		(11,425,580)
Closing balance at 31 December 2011	131,998,588	-	31,107,903	163,106,491	3,924,707	167,031,198

Amounts are stated net of tax

As at 31 December 2011 FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

	Note	31-Dec-11	30-Jun-11
		\$	\$
ASSETS
Current Assets
Cash and cash equivalents		28,604,277	61,303,639
Trade and other receivables		6,622,482	8,252,396
Inventories	9	127,931,408	2,884,321
Prepayments		1,009,244	859,152
Investments in Equity Accounted Investees		220,975	5,632,530
Other investments		1,888,476	1,965,625
Total Current Assets		166,276,862	80,897,663
Non Current Assets Trade and other receivables
Inventories		16,972,032	12,167,005
Investment property	9	53,076,163	115,075,905
Other Investments		68,000,000	68,000,000
Investments in Equity Accounted Investees		666,606 582,825	- 691,053
Property, plant and equipment	10	5,698,456	3,903,677
Deferred tax assets		1,910,144	-
Total Non Current Assets		146,906,226	199,837,640
Total Assets		313,183,088	280,735,303
LIABILITIES
Current Liabilities
Trade and other payables, including derivatives		9,184,065	8,062,637
Loans and borrowings	12	84,015,018	39,180,700
Current tax payable		22,974	3,504,716
Employee benefits		33,640	48,510
Total Current Liabilities		93,255,697	50,796,563
Non Current Liabilities
Loans and borrowings	12	52,847,369	55,206,406
Deferred tax liabilities		-	261,739
Employee benefits Total Non Current Liabilities		48,824	36,687
		52,896,193	55,504,832
Total Liabilities		146,151,890	106,301,395
Net Assets		167,031,198	174,433,908
EQUITY
Share capital	11	131,998,588	127,099,029
Retained earnings		31,107,903	43,187,420
Total Equity Attributable to Holders of the Group		163,106,491	170,286,449
Non-controlling interest		3,924,707	4,147,459
Total Equity		167,031,198	174,433,908

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES For the Six Months Ended 31 December 2011

	31-Dec-11	31-Dec-10
	\$	\$
Cash Flows from Operating Activities
Cash receipts from customers	4,539,677	44,540,419
Cash paid to suppliers and employees	(67,263,375)	(39,504,216)
Cash generated from Operating Activities	(62,723,698)	5,036,203
Interest paid	(3,758,324)	(4,753,190)
Income tax paid	(3,383,433)	(1,827,965)
Net Cash used in Operating Activities	(69,865,455)	(1,544,952)
Cash Flows from Investing Activities
Proceeds from sales of investments	-	25
Interest received	956,179	1,765,267
Dividends received from equity accounted investees	6,008,236	700,000
Acquisition of property, plant and equipment	(1,704,218)	(2,134,579)
Acquisition of other investments	(666,624)	(1)
Loans to equity accounted investees	(3,303,254)	(251,154)
Net Cash provided by Investing Activities	1,290,320	79,558
Cash Flows from Financing Activities
Proceeds from issue of share capital	-	31,262,984
Proceeds from/(repayment of) borrowings	42,425,063	(420,012)
Dividends paid	(6,526,002)	(8,939,798)
Net Cash from Financing Activities	35,899,061	21,903,174
Net increase in cash and cash equivalents	(32,699,362)	20,437,780
Cash and cash equivalents at 1 July	61,303,639	41,543,385
Cash and Cash Equivalents at 31 December	28,604,277	61,981,165

For the Six Months Ended 31 December 2011 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES

1 Reporting Entity

Finbar Group Limited (the 'Company') is a company domiciled in Australia. The address of the Company's registered office is Level 3, 15 Labouchere Road, South Perth, WA 6151. The condensed consolidated interim financial report of the Group as at and for the six months ended 31 December 2011 comprise the Company and its Subsidiaries (together referred to as the "Group") and the Group's interest in Jointly Controlled entities. The Group is primarily involved in residential property development and property investment.

The consolidated annual report of the Group as at and for the year ended 30 June 2011 is available on request from the Company's registered office or can be downloaded from the Company's website at www.finbar.com.au.

2 Statement of Compliance

The condensed interim financial statements have been prepared in accordance with AASB 34 Interim Financial Reporting and the Corporations Act 2001. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 30 June 2011.

The condensed interim financial statements were approved by the Board of Directors on 21st day of February 2012.

3 Significant Accounting Policies

The accounting policies applied by the Group in these condensed interim financial statements are the same as those applied by the Group in its financial statements as at and for the year ended 30 June 2011.

Certain comparative amounts have been reclassified to conform with the current year's presentation.

4 Estimates

The preparation of condensed interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements at and for the year ended 30 June 2011.

5 Financial Risk Management

The Group's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 30 June 2011.

6 Operating Segments

The Group operates predominantly in the property development sector and has identified 3 reportable segments, as described below, which are the Group's strategic business units. The strategic business units offer different products, and are managed separately because they require different technology, marketing strategies and have different types of customers. For each of the strategic business units, the CODM reviews internal management reports on a regular basis. The following describes the operations in each of the Group's reportable segments:

• · Residential apartment development in Western Australia,
• · Commercial office/retail development in Western Australia,
• · Rental of commercial property in Western Australia.

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES For the Six Months Ended 31 December 2011 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Operating Segments continued

6

Information about Reportable Segments For the Six Months ended 31 December 2011	Residential Apartment Development	Commercial Office/Retail Development	Rental of Commercial Property	Other	Total
	\$	\$	\$	\$	\$
External Revenues - Company and Subsidiaries	1,874,494	82	3,079,124	250,662	5,204,362
External Revenues - Equity Accounted Investees	4,190,676	-	15,790	93	4,206,559
External Revenues - Total	6,065,170	82	3,094,914	250,755	9,410,921
Interest Income	10,740	-	-	1,311,950	1,322,690
Interest Expense	-	-	-	1,244,102	1,244,102
Depreciation and Amortisation	-	-	-	21,035	21,035
Reportable Segment Profit before Income Tax - Company and	(1,709,277)	(95,757)	1,741,806	199,941	136,713
Reportable Segment Profit before Income Tax - Equity Accounted	712,750	(90,457)	15,790	93	638,176
Reportable Segment Profit before Income Tax - Total	(996,527)	(186,214)	1,757,596	200,034	774,889
Information about Reportable Segments as at 31 December 2011
Reportable Segment Assets - Company and Subsidiaries	144,100,028	44,196,643	70,172,932	5,857,199	264,326,803
Reportable Segment Assets - Equity Accounted Investees	18,675,757	3,875,843	-	-	22,551,600
Capital Expenditure	-	-	5,117,444	-	5,117,444
Information about Reportable Segments	Residential	Commercial	Rental of	Other	Total
For the Six Months ended 31 December 2010	Apartment	Office/Retail	Commercial
	Development	Development	Property
	\$	\$	\$	\$	\$
External Revenues - Company and Subsidiaries External Revenues - Equity Accounted Investees	34,800,050 3,001,156	4,869,118 1,125,000	3,147,227 9,334	1,229,168 -	44,045,563 4,135,490
External Revenues - Total	37,801,206	5,994,118	3,156,561	1,229,168	48,181,053
Interest Income	20,482			1,907,991	1,928,473
Interest Expense				503,637	503,637
Depreciation and Amortisation			1,231	30,830	32,061
Reportable Segment Profit before Income Tax - Company and Reportable Segment Profit before Income Tax - Equity Accounted	6,210,400 (543,058)	5,155,669 932,236	1,092,502 9,334	1,229,168 -	13,687,739 398,512
Reportable Segment Profit before Income Tax - Total	5,667,342	6,087,905	1,101,836	1,229,168	14,086,251
Information about Reportable Segments as at 30 June 2011
Reportable Segment Assets - Company and Subsidiaries Reportable Segment Assets - Equity Accounted Investees	99,804,846 16,010,038	28,715,912 2,472,229	70,794,600 -	45,515 -	199,360,873 18,482,267

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES For the Six Months Ended 31 December 2011 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Operating Segments continued

6

Reconciliation of Reportable Segment Revenues, Profit or Loss, Assets and Liabilities

	31-Dec-11	31-Dec-10
	\$	\$
Revenues
Total revenue for development reportable segments	1,874,576	39,669,168
Total revenue for other reportable segments	175,503	1,229,168
	2,050,079	40,898,336
Total revenue for rental and other segments included in other income	3,154,283	3,147,227
Consolidated Revenue	5,204,362	44,045,563
Total revenue for development reportable segments - Equity Accounted Investees	4,190,676	4,126,156
Total revenue for rental segments included in other income - Equity Accounted Investees	15,790	9,334
Total revenue for other reportable segments included in other income - Equity Accounted Investees	93	-
Total Reportable Segments Revenue	9,410,921	48,181,053
Profit or Loss
Total profit or loss for reportable segments	774,889	14,086,251
Financial income - Company and Subsidiaries	1,322,697	2,358,947
Financial income - Equity Accounted Investees	93,290	54,418
Financial expense - Company and Subsidiaries	(1,248,900)	(506,440)
Financial expense - Equity Accounted Investees	(1,034)	(3,525)
Unallocated amounts:
Other corporate expenses	(2,342,065)	(2,590,849)
Revaluation of investment property	-	6,691,781
Income tax applicable to share of profit/(loss) of Equity Accounted Investees	(220,194)	(135,333)
Consolidated Profit/(Loss) before Income Tax	(1,621,317)	19,955,250
	31-Dec-11	30-Jun-11
	\$	\$
Assets
Total assets for reportable segments	264,326,803	199,360,873
Cash and cash equivalents	28,604,277	61,303,639
Investments in Equity Accounted Investees	803,800	6,323,583
Other assets	19,448,208	13,747,208
Consolidated Total Assets	313,183,088	280,735,303

Geographical Segments

The Group operates predominantly in the one geographical segment of Western Australia.

7 Other Income

Administration Expenses	50,703	-
Revaluation of investment property	-	6,691,781
Rental income	3,079,124	3,147,227
Commission income	2,533	-
Other	21,923	-
Total Other Income	3,154,283	9,839,008

8 Income Tax Expense

The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 31 December 2011 was nil percent (for the year ended 30 June 2011: 19.23 percent; for the six months ended 31 December 2010: 20.06 percent).

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the Six Months Ended 31 December 2011

9 Inventories

Current	31-Dec-11	30-Jun-11
Work in progress	126,774,876	-
Completed Stock	1,156,532	2,884,321
Total Current Inventories	127,931,408	2,884,321
Non Current
Work in progress	53,076,163	115,075,905
Total Non Current Inventories	53,076,163	115,075,905

10 Property, Plant & Equipment

During the six months ended 31 December 2011 the Group acquired assets with a cost of \$1,752,774 (six months ended 31 December 2010: \$2,539,020).

11 Capital and Reserves

Share Capital	Company
	Ordinary shares
	31-Dec-11	31-Dec-10
On issue at 1 July	207,737,781	162,541,761
Issued under Dividend Reinvestment Plan	5,718,456	3,670,658
Issued for cash	-	25,381,863
On Issue at 31 December - Fully Paid	213,456,237	191,594,282

Dividends

The following dividends were declared and paid by the Group:

	Cents per Share	Total Amount \$	Franked / Unfranked	Date of Payment
Dividend Paid During the six months ended 31 December 2011
Final 2011 ordinary	5.50	11,425,580	Franked	5 September 2011
Total Amount		11,425,580
Dividend Paid During the six months ended 31 December 2010
Final 2010 ordinary	5.50	8,939,798	Franked	20 September 2010
Total Amount		8,939,798

12 Loans and Borrowings

.

The following loans and borrowings (non-current and current) were issued and repaid during the six months ended 31 December 2011:

Terms and debt repayment schedule

Terms and conditions of outstanding loans are as follows:

			31-Dec-11		31-Dec-10
			\$	\$	\$	\$
	Nominal Interest Rate	Financial Year of Maturity	Face Value	Carrying Amount	Face Value	Carrying Amount
Commercial bills (Secured)	BBRD	2011	-	-	43,770,000	43,770,000
Commercial bills (Secured)	5.66%	2016	43,770,000	43,770,000	-	-
Commercial bills (Secured)	BBSY+2.00%	2012	59,543,500	59,543,500	10,674,000	10,674,000
Commercial bills (Secured)	BBSY+1.70%	2012	6,000,000	6,000,000	6,000,000	6,000,000
Commercial bills (Secured)	BBSY+1.09%	2013	18,471,518	18,471,518	-	-
Shareholders loan to subsidiaries (Unsecured)	BBSY+5.00%	2014	5,114,666	5,114,666	10,563,385	10,563,385
Shareholders loan to subsidiaries (Unsecured)	BBSY+5.00%	2012	33,378	33,378	3,107,265	3,107,265
Shareholders loan to subsidiaries (Unsecured)	BBSY+5.00%	2014	3,929,325	3,929,325	4,442	4,442
Total Facilities Available			136,862,387	136,862,387	74,119,092	74,119,092

For the Six Months Ended 31 December 2011 FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

		31-Dec-11	30-Jun-11
		\$	\$
13	Capital and Other Commitments
	Commitments and Contingent Liabilities
	Property Development
	Contracted but not provided for and payable:
	Within one year	71,899,025	103,969,550
	Later than one year	12,054,883	33,411,723
	Total Property Development Commitments	83,953,908	137,381,273
	Property Development - Jointly Controlled Entities
	Contracted but not provided for and payable:
	Within one year	15,726,932	26,210,829
	Later than one year	-	2,652,659
	Total Property Development Commitments - Jointly Controlled Entities	15,726,932	28,863,488
	Group's Share of Property Development - Jointly Controlled Entities
	Contracted but not provided for and payable:
	Within one year	7,863,466	13,105,415
	Later than one year	-	1,326,330
	Total Share of Property Development Commitments - Jointly Controlled Entities	7,863,466	14,431,744
	Group's Property Development Commitments including Jointly Controlled Entities
	Contracted but not provided for and payable:
	Within one year	79,762,491	117,074,965
	Later than one year	12,054,883	34,738,053
	Total Property Development Commitments including Jointly Controlled Entities	91,817,374	151,813,017

14 Contingencies

The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

26,500,000 26,500,000 The Company has guaranteed the bank facilities of certain Controlled entities: Guarantees

Guarantees

Subsidiaries The Company has provided a \$20,000,000 limited guarantee and indemnity to Westpac Banking Corporation for security on a finance facility in 175 Adelaide Terrace Pty Ltd.

The Company has provided a \$6,500,000 limited guarantee and indemnity to National Australia Bank for security on a finance facility in Finbar Property Trust.

15 Related Parties

Arrangements with related parties continue to be in place on the same basis at at 30 June 2011. For full disclosure of transactions refer to 30 June 2011 annual financial report.

16 Subsequent Events

Other than the items below, there has not arisen in the interval between the end of the financial half-year and the date of this report any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group, in future financial years.

The commericial bill facility of \$6,000,000 in relation to Finbar Property Trust has been repaid in full. The Company is no longer providing a \$6,500,000 limited guarantee and indemnity to National Australia Bank for security on this finance facility.

The limited guarantee and indemnity to Westpac Banking Corporation for security on the 175 Adelaide Terrace Pty Ltd finance facility, has been reduced from \$20,000,000 to \$7,400,000.

88 Terrace Road Pty Ltd has a commercial bill facility of \$86,800,000 with Westpac Banking Corporation. The Company has provided a \$7,500,000 limited guarantee and indemnity to Westpac Banking Corporation for security on this finance facility.

185 Swansea Street Pty Ltd has a commercial bill facility of \$24,000,000 with Westpac Banking Corporation. The Company has provided a \$5,000,000 limited guarantee and indemnity to Westpac Banking Corporation for security on this finance facility.

Directors' Declaration

1.

In the opinion of the Directors of Finbar Group Limited ('the Company'):

• The financial statements and notes that are contained in Pages 5 to 13 are in accordance with the Corporations Act 2001, including:
• i) giving a true and fair view of the Group's financial position as at 31 December 2011 and of its performance for the year ended on that date; and
• ii) complying with Australian Accounting Standards AASB134 Interim Financial Reporting and the Corporations Regulations 2001; and
• 1. There are reasonable grounds to believe that the Company and the group entities will be able to meet any obligations or liabilities to which they are or may become subject to.

Dated at Perth this 21st day of February 2012.

Signed in accordance with a resolution of the Directors:

Managing Director Darren Pateman

Independent auditor's review report to the members of Finbar Group Limited

Report on the financial report

We have reviewed the accompanying interim financial report of Finbar Group Limited, which comprises the condensed consolidated statement of financial position as at 31 December 2011, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the interim period ended on that date, notes 1 to 16 comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the Group comprising the company and the entities it controlled at the half-year's end or from time to time during the interim period.

Directors' responsibility for the interim financial report

The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group's financial position as at 31 December 2011 and its performance for the interim period ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of Finbar Group Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Finbar Group Limited is not in accordance with the Corporations Act 2001, including:

• (a) giving a true and fair view of the Group's financial position as at 31 December 2011 and of its performance for the interim period ended on that date; and
• (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

KPMG KPMG

Kevin Smout Partner

Perth

Dated: 21 February 2012

Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

To: the Directors of Finbar Group Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 31 December 2011 there have been:

• no contraventions of the auditor independence requirements as set out in the $(i)$ Corporations Act 2001 in relation to the review; and
• no contraventions of any applicable code of professional conduct in relation to the $(ii)$ review.

KPMG KPMG

Kevin Smout Partner

Perth

Dated: 21 February 2012