ORION EQUITIES LIMITED — Net Asset Value 2020

Apr 13, 2020

Tuesday, 14 April 2020

ASX Code: OEQ

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MARKET ANNOUNCEMENT

Net Tangible Asset Backing – 31 March 2020

Month Ending: % Change Net tangible assets (NTA) (before tax) Pre-Tax NTA Backing per share -14.58% Net tangible assets (after tax) Post-Tax NTA Backing per share -14.58% Based on total issued share capital The NTA position comprises the following items: Net Tangible Assets	% Change	31 March 2020 Consolidated 29 February 2020 Consolidated
	-14.58%	$1.546m $1.81 m $0.0988 $0.1157
	-14.58%	$1.546m $1.81 m $0.0988 $0.1157
		15,649,228 15,649,228
		Current Month Previous Month $’millions $’millions
Investment in listed Associated Entity: (a) Shares in Bentley Capital Limited (ASX:BEL) Investments in other listed securities: (a) Shares in Strike Resources Limited (ASX:SRK) Investment in property (held for development/resale) Net cash/receivables/payables/other assets/provisions Pre-Tax NTA Tax Provisions: (a) Prior year tax (b) Current year tax (c) Net deferred tax asset / (liability) Post-Tax NTA		(refer below)* 0.206 0.280 0.460 1.100 1.100 0.166** 0.233
		1.546 1.999
		- - - - - -
		1.546 1.999

• Orion notes that the carrying value of its 20,513,783 shareholding in Bentley is based on ‘equity accounting’ for Bentley as an associate entity – as set out in Note (1) over the page, this manner of accounting has technically reduced the carrying value to Nil – whereas this compares with Bentley’s last bid price on ASX of $0.026 per share (valuing Orion’s investment at $0.534m) and Bentley’s after-tax NTA value of $0.0483 per share (valuing Orion’s investment based on Bentley’s NTA backing at $0.991m), as at 31 March 2020.

www.orionequities.com.au

Orion Equities Limited

A.B.N. 77 000 742 843

Level 2, 31 Ventnor Avenue, West Perth, Western Australia 6005 ASX : OEQ T | (08) 9214 9797 E

E |info@orionequities.com.au

20200414 OEQ ASX NTA Backing as at 31 March 2020.docx

Notes:

• (1) The Company’s investment in Bentley Capital Limited (ASX: BEL ), an Associated Entity (i.e. in which the Company has a greater than 20% interest), is accounted for under the equity method in the consolidated financial statements. Under the equity method, the carrying amount of such investment is cost plus a share of the Associate Entity’s net profit or loss (after tax) for the financial year to month end as provided to the Company by such Associated Entity. Refer also Note 23 (Investments in Associates) on pages 39 and 40 of the Company’s 2019 Annual Report for further details in this regard.

Under the equity method of accounting for Associate entities, the Company’s carrying value of its investment in BEL has been reduced from cost to nil – as a consequence of the Company’s accumulated recognition of BEL’s net losses. The Company is not required to carry the BEL investment at a negative value (ie. below Nil) and if BEL should generate net profits in the future, the Company will recognise a share of BEL’s net profits under the equity method, which will permit the Company to recognise a positive carrying value for BEL.

Accordingly, as at 31 March 2020, the Company’s 20,513,783 shares (26.95% interest) (29 February 2020: 20,513,783 shares and 26.95%) in BEL have a nil carrying value; this compares with BEL’s last bid price on ASX of $0.026 per share ($0.534m) and BEL’s after-tax NTA backing of $0.0483 per share ($0.991m)1, as at month end.

• (2) The fair value of investments in ASX-listed Strike Resources Limited (ASX: SRK ) comprise 10,000,000 shares (29 February 2020: 10,000,000 shares) with a value of $0.028 per share (based on the closing bid price as at 29 February 2020) (29 February 2020: $0.04).

• (3) The fair value of investments in other listed securities is based on each security’s last bid price on market at month end.

• (4) Investment in property (held for resale) was valued by an independent qualified valuer (a Certified Valuer and Associate Member of the Australian Property Institute) as at 30 June 2019.

• (5) Tax Provision Item (c) includes where applicable, a provision for income tax on net unrealised gains on the Company’s investments in securities and its share of Associated Entities’ after-tax net profit for the month (deferred tax liability) and the recognition of future income tax benefits on net unrealised losses on the Company’s investments in securities and its share of Associated Entities’ after-tax net loss for the month (deferred tax asset). Refer also Note 6 (Tax) on pages 25 to 26 of the Company’s 2019 Annual Report for further details in this regard.

AUTHORISED FOR RELEASE BY AND FOR FURTHER INFORMATION:

Victor Ho Executive Director & Company Secretary T | (08) 9214 9797

E | cosec@orionequities.com.au

1 Refer BEL’s ASX Announcement dated 14 April 2020: NTA Backing as at 31 March 2020

2