Orchid Capital Ltd

Interim Results

Orchid Capital Ltd
20 March 2006

Stock Exchange Announcement


For immediate release

13th March 2006




The Manager
Australian Stock Exchange
Company Announcements Office
Exchange Centre
Level 4 20 Bridge Street
Sydney NSW 2000





                             ORCHID CAPITAL LIMITED



APPENDIX 4D

                    RESULTS FOR ANNOUNCEMENT TO THE MARKET

                     FOR THE PERIOD ENDED 31 DECEMBER 2005

_____________________________________________________



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





Current Reporting Period to: 31st December 2005 - Previous corresponding period:
31st December 2004





Revenue from ordinary activities             down 77% to A$1,552,791


Net profit/(loss) for the period 
attributable to members                      up 232% to (A$1,094,211)


Profit/(loss) from ordinary activities
after tax attributable to members            up 232% to (A$1,094,211)




Dividends



No dividends have been paid or declared during the financial year.  The
Directors do not recommend the payment of a dividend in respect of the financial
year.


NET TANGIBLE ASSETS



Net tangible assets per security were 2.92 cents at 31st December 2005, compared
with 5.40 cents at 31st December 2004.





For and on behalf of the Directors:



Norman Grafton
Date: 18th March 2006

Director and Company Secretary





                    FINANCIAL REPORT FOR THE HALF YEAR ENDED
                                31 DECEMBER 2005



                           FOR ORCHID CAPITAL LIMITED


                               TABLE OF CONTENTS



Directors Report.........................................................      1
Consolidated Income Statement............................................      3
Consolidated Balance Sheet...............................................      4
Consolidated Statement of Changes........................................      5
Consolidated Cash flow Statement.........................................      6
Notes to the Financial Statements........................................      7
Directors' Declaration...................................................     19
Auditor's Independence Declaration.......................................     20
Independent Review Report................................................     21






           FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2005

                              Directors' report

Your directors submit the financial report of the consolidated entity for the
half-year ended 31 December 2005.

Directors

The names of directors who held office during or since the end of the half-year:
           Mr Clive McKee
           Mr Julian Sandt
           Mr Norman Grafton
           Mr Alvin Tan
           Dr David Tyrwhitt (appointed 1 July 2005, resigned 9 September 2005)

Results

The loss for the half year ended 31 December 2005 was $1,094,211 (2004:$329,115)


Review of Operations

Asia is the world's fastest growing region, but still offers investors low equity valuations. Orchid,
in spite of setbacks in the recent past, continues to focus its efforts on seizing the best
opportunities. We expect the demand for Asian equities, listed and unlisted, to increase. Although
Orchid is a small company, our team has access to markets and opportunities in Europe, Asia and
Australia. Based on this, Orchid expects that over the coming years, we will find the right strategy
to generate high returns for our shareholders.



Six Months of Profound Changes

The first months of the current reporting period were characterised by probably the most significant
setbacks in Orchid's history. We learned that the Qu Long copper project in Tibet, for which Orchid
had signed a Memorandum of Understanding with the Tibetan authorities, would instead be awarded to a
local mining company. After a thorough assessment of the situation, the Board decided to cease
activities in Tibet, and to change the strategy of the company.



The costs of investigating the Qu Long project, and other, smaller projects in Tibet, amounted to
several million Australian Dollars, most of it incurred in the year ended 30 June 2005.



However, the fallout from the Tibet project continued to impact the current period under review, with
expenditure of several hundred thousand dollars incurred, for example, on severance payments,
exploration activities and the cost of closing the Lhasa office.



One of the first measures taken by management in the wake of the above change of focus was a drastic
cost cutting exercise, which has reduced Orchid's fixed cost base. The impact of these measures did
not significantly improve the reporting period's results, as there were some one-time charges linked
to the reduction of staff and office expenses. But we expect the operating costs in the calendar year
2006 to be far below those of 2005.



Focus on Core Competences of Management - Building a Bridge between Europe and Asia


As a small listed company, which has just lost a major project, Orchid needs to develop a unique
strategy, and must possess specific strengths, if it wants to have any chance to flourish in the
equity market.





The new strategy of Orchid is to benefit from the opportunities arising from the economic boom in
Asia, especially in China. Based on this, we have intensified the efforts to sell our existing
investments, and we are confident of being able to sell a large part of these assets, e.g. those in
the tourism industry in Thailand, in the near future. We expect that such sales will be executed at a
price higher than the actual book value of these assets.



We are also confident that our recent investment in Xing Ling International Pte. Ltd., Singapore, will
develop well. The first products from the Chinese principals of Xing Ling are now being sold in the
Singapore market, and negotiations with potential resellers in various countries are in advanced
stage.



Negotiations are currently in progress with several Asian companies on investments at pre-IPO stage.
We are focusing on undervalued, profitable and growing companies, with a good track record and an
excellent long-term outlook. It is anticipated that these companies can be listed on a Stock Exchange
in Asia or Europe within less than 18 months at a significantly higher price.



At the same time, Orchid Emarb our BVI subsidiary, will continue to take advantage of conservative
opportunities in the bond market, as well as trading opportunities in Asian stock exchanges.

Adoption of Australian Equivalents to IFRS

This interim financial report has been prepared under Australian equivalents to IFRS. A reconciliation
of differences between previous GAAP and Australian equivalents to IFRS has been included in Note 2 of
this report.

Auditor's Declaration

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 for the
half-year ended 31 December 2005 is set out on page No. 21.

This report is signed in accordance with a resolution of the Board of Directors.


Director
Norman Grafton, Director
Dated this 18 March 2006



     Consolidated Income Statement for the half-year ended 31 December 2005


                                                   Notes            CONSOLIDATED
                                                              31.12.05         31.12.04
                                                              $               $
    Revenue                                          2       1,552,791        6,805,923
    Employee benefits expense                                (214,672)        (256,091)
    Depreciation expense                                      (16,016)          (7,505)
    Write back of Tibet expenditure                             15,000                -
    Share based payments                                      (92,000)
    Consulting and professional fees                         (833,205)         (83,362)
    Computer and office expenses                              (80,801)         (82,159)
    Travelling and entertainment expenses                     (81,602)            (916)
    Write down of investment/share of losses                 (163,183)        (120,487)
    of associates
    Cost of Investments sold                               (1,443,013)      (6,512,364)
    Other expenses                                            (63,875)         (72,154)
    Profit/(loss) before income tax                        (1,094,211)        (329,115)
    Income tax expense                                               -                -
    Profit/(loss) from continuing operations                 (851,539)        (329,115)
    Profit/(loss) from discontinued operations               (242,672)                -
    Profit/(loss) for the period after income              (1,094,211)        (329,115)
    tax

    Overall Operations:
    Basic earnings per share (cents per share)                  (72.0)           (23.0)
    (Diluted earnings per share has not been
    included, as it results in a more
    favourable earnings per share figure than
    basic earnings per share)


      The accompanying notes form part of this financial report.


               Consolidated Balance Sheet as at 31 December 2005


                                                             Note               Consolidated
                                                                          31.12.05         30.06.05
                                                                          $               $
             ASSETS
             CURRENT ASSETS
             Cash and cash equivalents                                   3,404,618        2,162,621
             Trade and other receivables                                    23,257           45,111
             Financial assets                                            1,405,961        3,160,971
             Other current assets                                           17,476                -
             TOTAL CURRENT ASSETS                                        4,851,312        5,368,703
             NON-CURRENT ASSETS
             Investments accounted for using the equity                    541,668          936,192
             method
             Property, plant and equipment                                  84,681           48,340
             Intangible assets -Capitalised acquisition and                      -                -
             exploration
             Bonds and deposits                                              4,337            4,337
             TOTAL NON-CURRENT ASSETS                                      630,686          988,869
             TOTAL ASSETS                                                5,481,998        6,357,572
             CURRENT LIABILITIES
             Trade and other payables                                      307,418           164204
             Short-term provisions                                          59,467            55053
             Other current liabilities                                       9,521                -
             TOTAL CURRENT LIABILITIES                                     376,406          219,257
             NON-CURRENT LIABILITIES
             Long-term provisions                                             2987           38,333
             TOTAL NON-CURRENT LIABILITIES                                   2,987           38,333
             TOTAL LIABILITIES                                             379,393          257,590
             NET ASSETS                                                  5,102,605        6,099,982
             EQUITY
             Issued capital                                             31,612,407       31,612,407
             Reserves                                                      238,893          142,058
             Accumulated losses                                       (26,748,695)     (25,654,483)
             Total parent equity interest in equity                      5,002,316        6,099,982
             Total Minority equity interest                              (100,290)                -
             TOTAL EQUITY                                                5,102,605        6,099,982

The accompanying notes form part of this financial report


           Consolidated Statement of Changes in Equity for the half-year ended
                                   31 December 2005

                               Share Capital     Retained                            Minority
                    Note         Ordinary        Profits             Reserves        Interest           Total
                                     $              $                    $                $                $
                                                                                    
Balance at 1.7.04                28,846,935     (21,528,889)         728,115               -        8,046,161
Profit attributable                       -        (329,115)               -               -        (329,115)
to members of
parent entity

Translation reserve                       -               -         (45,247)               -         (45,247)
adjustments

Options exercised                    55,129                           69,988               -          125,117
and transfer from
option premium
reserve

Sub-total                        28,902,064     (21,858,004)         752,856               -        7,796,916

Dividends paid or                         -                -               -               -                -
provided for

Balance at 31.12.04              28,902,064     (21,858,004)         752,856               -        7,796,916

Balance at 1.7.05                31,612,407     (25,654,483)       (142,058)               -        6,099,982

                                          

Shares issued                             -                -               -               -                -
during the half
year

Loss attributable                         -      (1,094,212)               -               -      (1,094,212)
to members of
parent entity

Minority Interest                                                                    100,290


Translation reserve                       -                -          96,835               -           96,835

Subtotal                         31,612,407     (26,748,694)       (238,893)       (100,290)        5,102,605

Dividends paid or                         -                -               -               -                -
provided for

Balance at 31.12.05              31,612,407     (26,748,694)       (238,893)       (100,290)        5,102,605



                           The accompanying notes form part of these financial statements.




           Consolidated Cash Flow Statement for the half-year ended 31 December 2005


                CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2005

                                                                               Consolidated
                                                                           31.12.05       31.12.04
                                                                                  $              $
                CASH FLOWS FROM OPERATING ACTIVITIES
                Payments to suppliers and employees                     (1,258,687)      (474,827)
                Interest received                                            69,620        167,886
                Effect of translating foreign financial statements         (78,432)       (83,294)
                Net cash provided by (used in) operating activities     (1,267,499)      (390,235)

                CASH FLOWS FROM INVESTING ACTIVITIES
                Purchase of non-current assets                             (52,357)        (7,356)
                Proceeds from investments                                 2,808,125      6,690,177
                Payment for investments                                           -    (7,230,842)
                Payment for exploration and evaluation activities         (246,272)      (485,403)
                Net payments on derivative instruments                            -       (58,078)
                Net cash provided by (used in) investing activities       2,509,496    (1,091,502)

                CASH FLOWS FROM FINANCING ACTIVITIES
                Proceeds from share and option issues                             -         50,117
                Net cash provided by (used in) financing activities               -         50,117

                Net increase/(decrease) in cash and cash equivalents      1,241,997    (1,431,620)
                held
                Cash and cash equivalents at 1 July 2005                  2,162,621      2,774,618
                Effect of exchange rates on cash and cash                         -       (10,335)
                equivalents holdings in foreign operations
                Cash and cash equivalents 31 December 2005                3,404,618      1,332,663


                    The accompanying notes form part of this financial report.




           Notes to the Financial Statements for the half-year ended
                                31 December 2005


Note 1: Basis of Preparation

The half-year consolidated financial statements are a general purpose financial report prepared in
accordance with the requirements of the Corporations Act 2001, Australian Accounting Standard AASB
134: Interim Financial Reporting, Urgent Issues Group Interpretations and other authoritative
pronouncements of the Australian Accounting Standards Board.

It is recommended that this financial report be read in conjunction with the annual financial
report for the year ended 30 June 2005 and any public announcements made by Orchid Capital Limited
and its controlled entities during the half-year in accordance with continuous disclosure
requirements arising under the Corporations Act 2001.

As this is the first interim financial report prepared under Australian equivalents to IFRS, the
accounting policies applied are inconsistent with those applied in the 30 June 2005 annual report
as this report was presented under previous Australian GAAP. Comparative for the half year ended 31
December 2004 and full year ended 30 June 2005 have been restated accordingly.  Accordingly, a
summary of the significant accounting policies under Australian equivalents to IFRS has been
included below. A reconciliation of equity and profit and loss between previous GAAP and Australian
equivalents to IFRS has been prepared per Note 2.

The half-year report does not include full disclosures of the type normally included in an annual
financial report.

(a) Principles of Consolidation

A controlled entity is any entity Orchid Capital Limited has the power to control the financial and
operating policies of so as to obtain benefits from its activities.

All controlled entities have a June financial year-end except for the Thai subsidiary.
All inter-company balances and transactions between entities in the economic entity, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure consistencies with those policies applied
by the parent entity.

Where controlled entities have entered or left the economic entity during the year, their operating
results have been included/excluded from the date control was obtained or until the date control
ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown
as a separate item in the consolidated financial report.

(b) Income Tax

The change for current income tax expenses is based on the profit for the year adjusted for the
year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that
have been enacted or are substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. No deferred income tax will be recognised from the initial recognition of
an asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset
is realised or liability is settled. Deferred tax is credited in the income statement except where
it relates to items that may be credited directly to equity, in which case the deferred tax is
adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits
will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation
that the economic entity will derive sufficient future assessable income to enable the benefit to
be realised and comply with the conditions of deductibility imposed by the law.

(c) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where
applicable, any accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis less depreciation and impairment losses.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis
of the expected net cash flows that will be received from the assets employment and subsequent
disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but
excluding freehold land, is depreciated on a straight line basis over their useful lives to the
economic entity commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset                                             Depreciation Rate
Plant and equipment                                              33.3%
Furniture and fittings                                           5-20%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each
balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the income statement. When revalued assets are sold, amounts
included in the revaluation reserve relating to that asset are transferred to retained earnings.

(d) Exploration and Development Expenditure

Capitalisation Policy.  As the Company abandoned its interest in all mineral activities, the
Company charged its policy to expense all costs as incurred.  The change in policy had nil effect
on the results for the year.  A total of $242,672 was expensed pertaining to mineral activity as
the titles to properties could not be obtained.

(e) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction
costs, when the related contractual rights or obligations exist. Subsequent to initial recognition
these instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling
in the short term, or if so designated by management and within the requirement of AASB 139:
Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for
trading unless they are designated as hedges. Realised and unrealised gains and losses arising from
changes in the fair value of these assets are included in the income statement in the period in
which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are stated at amortised cost using the effective interest
rate method.

Held-to-maturity investments

These investments have fixed maturities, and it is the group's intention to hold these investments
to maturity. Any held-to-maturity investments held by the group are stated at amortised cost using
the effective interest rate method.

Available-for-sale financial assets

Available for sale financial assets include any financial assets not included in the above
categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and
losses arising from changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt
less principal payments and amortisation.

Derivative instruments

No derivative instruments were held at the end of the half year.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent
arm's length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for sale financial instruments, a prolonged
decline in the value of the instrument is considered to determine whether an impairment has arisen.

Impairment losses are recognised in the income statement.

(f) Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets
to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset's fair value
less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the
asset's carrying value over it recoverable amount is expensed to the income statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(g) Investments in Associates

Investments in associate companies are recognised in the financial statements by applying the
equity method of accounting where significant influence is exercised over an investee. Significant
influence exists where the investor has the power to participate in the financial and operating
policy decisions of the investees but does not have control or joint control over those policies.
The equity method of accounting recognises the group's share of past acquisition reserves of its
associates.

(h) Functional and presentation currency

The functional currency of each of the group's entities is measured using the currency of the
primary economic environment in which that entity operates. The consolidated financial statements
are presented in Australian dollars which is the parent entity's functional and presentation
currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income
statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange difference arising on the translation of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange
difference is recognised in the income statement.

Group companies

The financial results and position of foreign operations whose functional currency is different
from the group's presentation currency are translated as follows:

-   Assets and liabilities are translated at year-end exchange rates prevailing at that
    reporting date.

-   Assets and liabilities are translated at year-end exchange rates prevailing at that
    reporting date.

-   Retained profits are translated at the exchange rates prevailing at the date of the
    transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the
group's foreign currency translation reserve in the balance sheet. These differences are recognised
in the income statement in the period in which the operation is disposed.

(i) Employee Benefits

Provision is made for the company's liability for employee benefits arising from services rendered
by employees to balance date. Employee benefits that are expected to be settled within one year
have been measured at the amounts expected to be paid when the liability is settled, plus related
on-costs. Employee benefits payable later than one year have been measured at the present value of
the estimated future cash outflows to be made for those benefits.

(j) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of economic benefits will results and that
outflow can be reliably measured.

(k) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts.
Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(l) Revenue

Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.

All revenue is stated net of the amount of goods and services tax (GST).

(m) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component
of investing and financing activities, which are disclosed as operating cash flows.





Note 2: First-time Adoption of Australian Equivalents to International Financial Reporting Standards
AASB Transition Exemptions

The consolidated entity has made its election in relation to transitional exemptions allowed by AASB1: First
time adoption to AIFRS as follows:

1)      Business Combination

AASB3: Business combination was not prepared retrospectively to past business combinations that occurred before
the date of transition to AIFRS.

2)      Exemptions from the requirement to restate comparative information for AASB132 and AASB 139

The consolidated entity has elected to adopt this exemption and has not applied AASB 132: Financial Instruments
presentation and Disclosure and AASB 139: Financial Instruments Presentation and Disclosure and AASB 139:
Financial Instruments: Recognition and measurements to its comparative information.


                                                                            Consolidated
        Reconciliation of Equity    Note     Previous GAAP at     Adjustments on       Australian
             at 1 July 2004                      1.7.2004        introduction of   equivalents to IFRS
                                                                    Australian         at 1.7.2004
                                                                  equivalents to
                                                                       IFRS
                                                     $                  $                   $
        ASSETS
        CURRENT ASSETS
        Cash and cash equivalents                     2,774,618                              2,774,618
        Trade and other                                  34,620                                 34,620
        receivables
        Other Financial Assets                        4,125,506                              4,125,506
        TOTAL CURRENT ASSETS                          6,934,744                              6,934,744
        NON-CURRENT ASSETS
        Trade and other                                       -
        receivables                                                                -
        Investments accounted for                     1,206,307                              1,206.307
        using the equity method
        Property, plant and                              39,212                                 39,212
        equipment
        TOTAL NON-CURRENT ASSETS                      1,245,519                               1.245519
        TOTAL ASSETS                                  8,180,263                              8,180,263

        CURRENT LIABILITIES
        Trade and other payables                         48,075                                 48,075
        Short-term provisions                            23,628                                 23,628
        Other current liabilities                        38,834                                 38,834
        TOTAL CURRENT LIABILITIES                       110,537                                110,537
        NON-CURRENT LIABILITIES
        Long-term provisions                             23,565                                 23,565
        TOTAL NON-CURRENT                                23,565                                 23,565
        LIABILITIES
        TOTAL LIABILITIES                               134,102                                134,102
        NET ASSETS                                    8,046,161                               8,046161

        EQUITY
        Issued capital                               28,846,935                             28,846,935
        Reserves                                        728,115                                728,115
        Retained earnings                          (21,528,889)                           (21,528,889)
        Parent interest
        Minority equity interest                              -                                      -
        TOTAL EQUITY                                  8,046,161                              8,046,161





       Reconciliation of Equity   Note    Previous GAAP at    Adjustments on         Australian
         at 31 December 2004                 31.12.2004       introduction of   equivalents to IFRS
                                                                Australian         at 31.12.2004
                                                            equivalents to IFRS
                                                  $                  $                   $
       ASSETS
       CURRENT ASSETS
       Cash and cash                              1,332,663                                1,332,663
       equivalents
       Trade and other                               61,915                                   61,915
       receivables
       Other Financial Assets                     4,942,117                                4,942,117
       Other current assets                          16,529                                   16,529
       TOTAL CURRENT ASSETS                       6,353,224                                6,353,224
       NON-CURRENT ASSETS
       Investments accounted                      1,036,072                                1,036,072
       for using the equity
       method
       Property, plant and                           38,969                                   38,969
       equipment
       Capitalised acquisition                      485,403                                   -
       and exploration expenses
       TOTAL NON-CURRENT ASSETS                   1,560,444                                1,560,444
       TOTAL ASSETS                               7,913,668                                7,913,668
       CURRENT LIABILITIES
       Trade and other payables                      25,290                                   25,290
       Short-term provisions                         23,628                                   23,628
       Other current                                 44,269                                   44,269
       liabilities
       TOTAL CURRENT                                 93,187                                   93,187
       LIABILITIES
       NON-CURRENT LIABILITIES
       Long-term provisions                          23,565                                   23,565
       TOTAL NON-CURRENT                             23,565                                   23,565
       LIABILITIES
       TOTAL LIABILITIES                            116,752                                  116,752
       NET ASSETS                                 7,796,916                                7,796,916

       EQUITY
       Issued capital                            28,902,064                               28,902,064
       Reserves                                     752,856                                  752,856
       Retained earnings                       (21,858,004)                             (21,858,004)
       Parent interest                            7,796,916                                7,796,916
       Minority equity interest                           -                                        -
       TOTAL EQUITY                               7,796,916                                7,796,916






       Note 2: First-time Adoption of Australian Equivalents to International Financial Reporting
       Standards (cont'd)


       Reconciliation of Equity   Note    Previous GAAP at     Adjustments on         Australian
       at 30 June 2005                        30.6.2005        introduction of   equivalents to IFRS
                                                                 Australian          at 30.6.2005
                                                             equivalents to IFRS
                                                  $                   $                   $
       ASSETS
       CURRENT ASSETS
       Cash and cash equivalents                   2,162,621                                2,162,621
       Trade and other                                45,111                                   45,111
       receivables
       Other current assets                        3,160,971                                3,160,971
       TOTAL CURRENT ASSETS                        5,368,703                                5,368,703
       NON-CURRENT ASSETS
       Trade and other                                 4,337                                    4,337
       receivables
       Investments accounted for                     936,192                                  936,192
       using the equity method
       Property, plant and                            48,340                                   48,340
       equipment
       TOTAL NON-CURRENT ASSETS                      988,869                                  988,869
       TOTAL ASSETS                                  357,572                                6,357,572
       CURRENT LIABILITIES
       Trade and other payables                      164,204                                  164,204
       Short-term provisions                          55,053                                   55,053
       Other current liabilities                           -                                        -
       TOTAL CURRENT LIABILITIES                     219,257                                  219,257
       NON-CURRENT LIABILITIES
       Long-term provisions                           38,333                                   38,333
       TOTAL NON-CURRENT                              38,333                                   38,333
       LIABILITIES
       TOTAL LIABILITIES                             257,590                                  257,590
       NET ASSETS                                  6,099,982                                6,099,982

       EQUITY
       Issued capital                             31,612,407                               31,612,407
       Reserves                                      142,058                                  142,058
       Retained earnings                        (25,654,483)                             (25,654,483)
       Parent interest                             6,099,982                                6,099,982
       Minority equity interest                            -                                        -
       TOTAL EQUITY                                6,099,982                                6,099,982





                                                             Economic Entity
       Reconciliation of Profit  Note       Previous GAAP        Effect of          Australian
       or Loss for the half year                               transition to    equivalents to IFRS
       31 December 2004                                          Australian
                                                               equivalents to
                                                                    IFRS
                                                  $                  $                   $

       Revenue                                     6,805,923                              6,805,923
       Profit before income tax                    (329,115)                              (329,115)

       Revenue                                     1,552,791                              1,552,791


       Profit before income tax                  (4,125,594)                            (4,125,594)
       Income tax expense                                  -                                      -
       Profit from continuing                     4,125,594)                            (4,125,594)
       operations




There were no changes to the results of for the year ended 30 June 2005 as a
result of adoption of IFRS


Note 3: Changes in Accounting Policy

Orchid Capital Limited made a long term investment of $198,224 in Xing Ling International Private Limited,
incorporated in Singapore, in December 2005

Under AASB 139: Financial Instruments: Recognition and Measurement, available-for-sale financial assets are
required to be revalued at each reporting date, with revaluation increments or decrements to be taken
directly to a financial asset revaluation reserve.

AASB 139 has prospective application for years commencing on or after 1 January 2005. Previous Australian
Accounting Standards have been applied to comparative financial information.

As the cost of acquisition of Xing Ling International Private Limited equated to its fair value at 31
December 2005, the introduction of AASB 139 has had no effect on earnings or reserves for the half-year
ended 31 December 2005.


Note 4: Dividends

No dividends were paid during the period



Note 5: Acquisition and Disposal of Subsidiaries and Restructuring

The parent entity acquired 51% of Xing Ling International Private Limited, on its incorporation in Singapore,
in December 2005. Xing Ling is an importer and distributor of traditional Chinese medicines. The purchase was
paid in cash amounting to $198,224

The assets and liabilities arising from the acquisition are recognised at fair value which is equal to their
carrying value at acquisition date.

There was no profit included in the consolidated income statement in respect of Xing Ling International
Private Limited as it had not commenced trading operations by 31 December 2005.


Note 6: Segment Information

Primary reporting - Business segments

                                                                          Economic Entity    
                                                                             (Continuing     Discontinued    
                              Investment         Mining       Eliminations   Operations       Operations
                                  $                $              $               $               $
    2005
    Revenue                       1,552,791               -                      1,552,791               -
    Share of associates            (40,079)                                       (40,079)
    net profits of equity
    accounted associates
    and joint venture
    entities
    Total segment revenue         1,512,712               -                      1,512,712               -
    Total revenue from            1,512,712               -                      1,512,712               -
    ordinary activities
    Segment Result              (1,337,038)       (242,672)                      (851,539)       (242,672)
    Profit before income        (1,337,038)       (242,672)                      (851,539)       (242,672)
    tax
    Income tax expense                    -               -                              -               -
    Profit after income         (1,337,038)       (242,672)                      (851,539)       (242,672)
    tax


Note 7: Contingent Liabilities

There has been no change in contingent liabilities since the last annual reporting date.


Note 8: Events Subsequent to Reporting Date

There has not been, in the interval between 31 December 2005 and the date of this report, any item, transaction or
event of a material and unusual nature likely, in the opinions of the directors of the Company, to affect
significantly the operations of the economic entity, the results of those operations, or the state of affairs in
the economic entity in future years.






    Directors' declaration

                 The directors of the company declare that:

                 1.      The financial statements and notes of the consolidated entity:
                         a.     comply with Accounting Standard AASB 134 Interim Financial
                                Reporting and the Corporations Regulations; and
                         b.     give a true and fair view of the economic entity's financial
                                position as at 31 December 2005 and of its performance for the
                                half-year ended on that date.

                 2.      In the directors' opinion there are reasonable grounds to believe that
                         the company will be able to pay its debts as and when they become due
                         and payable.

                 This declaration is made in accordance with a resolution of the Board of
                 Directors.

                 Director


                 Norman Grafton
                 Director

                 Dated this                                18 day   2006
                                    of March





                                STANTON PARTNERS



                               1 HAVELOCK STREET
                                WEST PERTH 6005
                               WESTERN AUSTRALIA

                           TELEPHONE: (08) 9481 3188

                           Facsimile: (08) 9321 1204

                       e-mail:  [email protected]





18 March 2006



Board of Directors
Orchid Capital Limited
Suite 3, Ground Floor,
610, Murray Street,
West Perth, WA, 6005


Dear Directors



RE:   ORCHID CAPITAL LIMITED



In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of Orchid
Capital Limited.



As Audit Partner for the audit review of the financial statements of Orchid
Capital Limited for the half year ended 31 December 2005, I declare that to the
best of my knowledge and belief, there have been no contraventions of:



(i)   the auditor independence requirements of the Corporations Act 2001
     in relation to the audit review; and



(ii)  any applicable code of professional conduct in relation to the audit
      review.



Yours sincerely
STANTON PARTNERS




John Van Dieren
Partner





                                STANTON PARTNERS

                               1 HAVELOCK STREET
                                WEST PERTH 6005
                               WESTERN AUSTRALIA

                           TELEPHONE: (08) 9481 3188

                           Facsimile: (08) 9321 1204

                       e-mail:  [email protected]





                           INDEPENDENT REVIEW REPORT
                               TO THE MEMBERS OF
                             ORCHID CAPITAL LIMITED




Scope



We have reviewed the financial report comprising the income statement, balance
sheet, statement of changes in equity, statement of cash flows, accompanying
notes to the financial statements and the directors' declaration of Orchid
Capital Limited (the Company) for the half-year ended 31 December 2005 as set
out on pages 3 to 19.  The financial report includes the consolidated financial
statements of the consolidated entity comprising the disclosing entity and the
entities it controlled at the end of the half year or from time to time during
the half year.  The disclosing entity's directors are responsible for preparing
a financial report that gives a true and fair view of the financial position and
performance of the consolidated entity, and that complies with Accounting
Standard AASB 134: 'Interim Financial Reporting' in accordance with the
Corporations Act 2001. This includes responsibility for the maintenance of
adequate accounting records and internal controls that are designed to prevent
and detect fraud and error, and for the accounting policies and accounting
estimates inherent in the financial report.



Review Approach



We have performed an independent review of the financial report in order to
state whether, on the basis of the procedures described, anything has come to
our attention that would indicate that the financial report is not presented
fairly in accordance with Accounting Standard AASB 134: 'Interim Financial
Reporting' and other mandatory professional reporting requirements in Australia
and statutory requirements, so as to present a view which is consistent with our
understanding of the consolidated entity's financial position, and performance
as represented by the results of its operations and its cash flows, and in order
for the disclosing entity to lodge the financial report with the Australian
Securities and Investments Commission and the Australian Stock Exchange.



Our review has been conducted in accordance with Australian Auditing and
Assurance Standards applicable to review engagements.  A review is limited
primarily to inquiries of the disclosing entity's personnel and analytical
procedures applied to the financial data.  These procedures do not provide all
the evidence that would be required in an audit, thus the level of assurance
provided is less than that given in an audit.  We have not performed an audit
and, accordingly, we do not express an audit opinion.




Independence



We are independent of the Company, and have met the independence requirements of
Australian ethical pronouncements and the Corporations Act 2001.  We have given
the directors of the Company a written Auditor's Independence Declaration.



Statement



Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the financial report of Orchid Capital Limited
is not in accordance with:



(a)     the Corporations Act 2001, including:


(i)      giving a true and fair view of the consolidated entity's financial
position as at 31 December 2005 and of its performance for the half year ended
on that date; and



(ii)    complying with Accounting Standard AASB 134 'Interim Financial 
Reporting' and the Corporations Regulations 2001; and



(b)     other mandatory financial reporting requirements in Australia.



STANTON PARTNERS





J P Van Dieren
Partner



West Perth, Western Australia
18 March 2006





                                     -End-




Press enquiries:



Julian Sandt - Chief Executive Officer, 
Orchid Capital Limited                                     00 65 9658 9940








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