Interim Results

China Real Estate Opportunities SA 27 September 2006 27 September 2006 China Real Estate Opportunities S.A. Interim Results for the period ended 30 June 2006 CHAIRMAN'S STATEMENT I am pleased to announce the maiden interim results of your Company, China Real Estate Opportunities S.A. ("CREO" or "the Company"), for the period from its incorporation on 6 December 2005 to 30 June 2006. For the period under review the Company made an operating loss of €2.04 million and had net cash of €19.54 million at the end of the period. Your Board continues to evaluate a number of potential transactions in China and, although we have not to date considered any suitable to progress to contract stage, I am pleased to report that a number of promising prospective acquisitions are now under consideration. We apply strict criteria when evaluating transactions and undertake comprehensive due diligence. Whilst this is very time-consuming it is, we believe, critical to the process to ensure that we only contract for the right deals after in-depth research. It would be wrong at this stage in the Company's development to give forward indications on timing but shareholders will be kept informed on developments. CREO, through its associate Treasury Holdings, has committed significant resources to China and has two Directors now working full time in Shanghai, complemented by approximately 15 other full time staff, researching and assessing potential transactions. The Board is encouraged by the continuing strong growth of the Chinese economy and in particular by the outstanding opportunities in the Chinese real estate market. China's GDP continued its strong upward trend, increasing by 10.3% in the year to March 2006 while retail sales in the first 6 months of 2006 were 13.3% higher than in the first 6 months of 2005, with the larger urban centres of Beijing and Shanghai experiencing even higher GDP growth rates. Prime rents and capital values across all sectors continued to increase in most parts of China during 2006. During the second quarter of the year, Shanghai office rents increased by 3.1%, retail rents by 3.8% and luxury residential rents by 1.3%. These growth rates were driven by lack of supply of quality space and robust demand from multinational corporations. The growth in demand from foreign companies is expected to continue in the future as World Trade Organisation driven economic reforms are implemented. A recent study by PricewaterhouseCoopers in association with the Urban Land Institute, a US based research institute, ranked Shanghai first in the Asia Pacific area in terms of investment and development prospects and third in terms of the real estate market's potential. Outlook Your Board remains confident that CREO will build up a substantial portfolio of development and investment opportunities in China and looks forward to updating shareholders in due course. Ray Horney Chairman Enquiries to: CREO Ray Horney, Chairman Tel: +44 (0)1273 775225 Guy Leech, Group Finance Director Tel: +353 1 6189300 Teather & Greenwood Paul Fincham Tel: +44 (0)20 7426 7736 Bankside Consultants Simon Rothschild Oliver Winters Tel: +44 (0)20 7367 8871 --------------------------- --------- Income Statement 2006 From 6 December 2005 to 30 June 2006 € --------------------------- --------- Operating Expenses (2,229,307) Investment income 191,521 --------- Loss before taxation (2,037,786) Income tax expense - --------- Loss for the period (2,037,786) ========= --------- Loss per share (in Euro cent) (0.09) ========= --------------------------- --------- Balance Sheet 2006 As at 30 June 2006 € --------------------------- --------- Current assets Cash and cash equivalents 19,541,266 Debtors: amounts falling due within one year 2,865,102 ========= Total assets 22,406,368 ========= Equity Issued capital 23,000,000 Share option reserve 750,000 Retained loss (2,037,786) --------- Shareholders' funds - equity 21,712,214 --------- Total current liabilities Trade and other payables 694,154 -------- --------- Total equity and liabilities 22,406,368 --------- -------------------------- -------- Cash Flow statement 2006 Period ended 30 June 2006 € -------------------------- -------- Operating activities Loss for the period (2,037,786) Share based payments 750,000 Increase in debtors (2,865,102) Increase in trade and other payables 694,154 -------- Net cash outflow from operating activities (3,458,734) ======== Financing activities 2006 € Issuance of share capital 23,000,000 -------- Net cash inflow from financing activities 23,000,000 ======== Increase in cash and cash equivalents 19,541,266 ======== Notes: Forming part of the financial statements 1. Basic loss per share The calculation of the basic earnings per share is based on the following data: 2006 € --------- Attributable earnings (2,037,786) Weighted average number of shares 23,000,000 --------- Loss per share (in Euro cent) (0.09) ========= 2. Income tax expense In the jurisdiction that the company is registered, the income tax rate is nil, as other forms of taxation are applied. 2006 € -------- Current tax: Corporation tax at 0% (2004: 0%) on the loss for the period on ordinary activities - -------- Total current tax - ======== 3. Employees and remuneration The Company did not employ any persons during the period, save for the directors who received no remuneration during the financial period. 4. Debtors: amounts falling due within one year The debtor balance at 30 June 2006 included a refundable deposit of €2,819,852. This amount was repaid in full to the company on 7 July 2006. 5. Equity 2006 € -------- Authorised: 20,000,000 ordinary shares of €1.25 each 25,000,000 ========= 2006 € --------- Allocated and called up: 18,400,000 ordinary shares of €1.25 each 23,000,000 ========= On 6 December 2005 24,800 ordinary shares were issued fully paid as subscriber shares at a price of €1.25 each. On 22 December 2005 18,375,200 ordinary shares were issued at a price of €1.25 each for cash. 6. Share option reserve Share options have been conditionally granted over 920,000 ordinary shares in the Company, equivalent to 5 per cent. of its current issued share capital. The options, which were granted on 1 February 2006, are not exercisable before 1 February 2008, and their exercise is conditional, inter alia, on the Company having made an acquisition or acquisitions with a gross value of €100 million or more. The options, exercisable at €1.25 per share being the price at which ordinary shares were issued when the Company was launched in December 2005, were granted to the directors of the Company and others involved in the day to day activities of the Company in China. The number of options granted to directors of the Company is as follows: No of share options Richard Barrett 365,000 Raymond Horney 75,000 Guy Leech 75,000 Rory Williams 75,000 The share option reserve represents the directors' interim fair value provision for the share options conditionally granted. 7. Reconciliation of movements in shareholders' funds and profit and loss account 2006 € Total recognised losses for the period (2,037,786) Opening shareholders' funds - equity - Share option reserve 750,000 Share capital issued during the period 23,000,000 --------- Closing shareholders' funds - equity 21,712,214 ========= Loss for the financial period (2,037,786) Profit and loss account at beginning of period - --------- Profit and loss account at end of period (2,037,786) ========= 8. The Interim Results have been prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations adopted by the International Accounting Standards Board (IASB). The Interim Results also comply with IFRS as endorsed by the European Commission. This information is provided by RNS The company news service from the London Stock Exchange

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