Appendix 4D. Half Year Report. reference ('current period') Previous Corresponding period December December 2009

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1 Appendix 4D Half year report Appendix 4D Half Year Report Name of Entity Devine Limited ABN or equivalent company Financial year ended reference ('current period') Previous Corresponding period December 2009 Results for announcement to the market $A'000 Revenues from continuing operations down -24.5% to 229,753 Profit/ (loss) after tax attributable to members up 679.0% to 9,511 Brief explanation of any of the figures reported above and short details of any bonus or cash issue or other item(s) of importance not previously released to the market: An interim dividend of 1 cent per ordinary share has been declared post and, therefore, in accordance with the adoption of AASB 137 Provisions, Contingent Liabilities and Contingent Assets, no provision has been recognised in the Balance Sheet as at. The decrease in revenue is attributable to the apartment business where the prior year revenue included the revenue from exiting property development assets and the completion of a major apartment project in Melbourne. The decrease was partly offset by an increase of 4% in Housing and Land revenue in the half year. Refer attached Directors' Report and Financial Statement Extract which includes: Income Statement, Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Cashflow Statement, Investment in Joint Ventures and Other Notes. Dividends (in the case of a trust, distributions) Date the dividend (distribution) is payable Record date to determine entitlements to the dividend (distribution) (i.e. on the basis of proper instruments of transfer received by 5.00 pm if securities are not CHESS approved, or security holding balances established by 5.00 pm or such later time permitted by SCH Business Rules if securities are CHESS approved) If it is a final dividend, has it been declared? 31 March March 2011 N/A

2 Appendix 4D Half year report (continued) Amount per security Amount per Franked Amount per security amount per security of security at foreign source 30% tax dividend Final dividend: Current year n/a n/a n/a Previous year Interim dividend: Current year Previous year The last date(s) for receipt of election notices for the dividend or distribution plans N/A Statement of Retained Earnings Retained profits at the beginning of the financial period Net profit attributable to members Dividends and other equity distributions paid or payable - FY10 final dividend Current period - $A'000 Previous corresponding period - $A'000 44,145 35,987 9,511 1,221 (6,349) - Retained profits at the end of the financial period 47,307 37,208 Net tangible Assets (NTA) Basic NTA Current period Previous corresponding period Diluted NTA Earnings per security (EPS) Basic EPS Diluted EPS Current period Previous corresponding period

3 Appendix 4D Half year report (continued) Compliance statement 1 This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to the ASX. Identify other standards used N/A 2 This report, and the accounts upon which the report is based (if separate), use the same accounting policies, other than as disclosed 3 This report does/does not* (delete one) give a true and fair view of the matters disclosed 4 This report is based on accounts to which one of the following applies. (Tick one) The accounts have been audited. X The accounts have been subject to review. The accounts are in the process of being audited or subject to review. The accounts have not yet been audited or reviewed. 5 If the audit report or review by the auditor is not attached, details of any qualifications are attached/will follow immediately they are available* (delete one). 6 The entity has/does not have* (delete one) a formally constituted audit committee. Sign here:... Date: 24 February 2011 (Company Secretary) Print name: Vivian N Grayson

4 Directors' report Directors' report Your directors submit their report for the half-year ended. Directors The following persons were directors of Devine Limited during the whole of the half-year and up to the date of this report and were in office for this entire period unless otherwise stated: D J Ridley (Chairman) P J Dransfield D B Keir (Managing Director and CEO) P J Ferris AM, KCSG Hon. T M Mackenroth G E McOrist R W Parris V A Vella T G Young (appointed 23 November 2010) Chief Financial Officer P V Cochrane Company Secretary V N Grayson -1-

5 Directors' report (continued) Review of operations Refer Directors' Comments attached. Operating results for the half-year ended are set out below: Segment revenues * Segment results 31 December 31 December 31 December 31 December $'000 $'000 $'000 $'000 Continued operations Housing & Land 209, ,775 16,417 17,002 Property Development 18, ,261 (1,003) (13,840) Corporate/Other 1,404 1,365 (1,824) (1,456) Total continuing operations 229, ,401 13,590 1,706 Profit/(loss) before income tax expense 13,590 1,706 Income tax expense (4,079) (563) Profit from continuing operations 9,511 1,143 Discontinued operations Body corporate management - 2, Profit before income tax expense Income tax expense - (47) Profit for the year - 78 Profit attributable of members of Devine Limited 9,511 1,221 * The decrease in revenue is attributable to the apartment business where the prior year revenue included the revenue from exiting property development assets and the completion of a major apartment project in Melbourne. The decrease was partly offset by an increase of 4% in Housing and Land revenue in the half year. -2-

6 Directors' report (continued) Earnings per share Refer Directors' Comments attached. 31 December 31 December Cents Cents (a) Basic and diluted earnings per share Profit from continuing operations Matters subsequent to the end of the half-year No significant events have occurred post. -3-

7 Directors' report (continued) Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 5. Rounding of amounts The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order. Signed in accordance with a resolution of the directors of Devine Limited. D B Keir Director D J Ridley Director Brisbane 24 February

8 Auditor s Independence Declaration to the Directors of Devine Limited In relation to our review of the financial report of Devine Limited for the half-year ended 31 December 2010, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young Alison de Groot Partner 24 February 2011 Liability limited by a scheme approved under Professional Standards Legislation

9 Consolidated income statement For the half-year ended Consolidated 31 December 31 December Notes $'000 $'000 Revenue 2 226, ,645 Cost of properties sold 3 (166,832) (234,416) Gross profit 59,957 66,229 Other revenue 2 2,964 3,756 Expenses, excluding finance costs 3 (43,521) (58,088) Finance costs (7,394) (9,255) Share of net profits/(losses) of associates and joint venture entities accounted for using the equity method 1,584 (936) Profit before income tax 13,590 1,706 Income tax expense (4,079) (563) Profit/(loss) from continuing operations 9,511 1,143 Profit from discontinued operations - 78 Profit attributable to the members of Devine Limited 9,511 1,221 Basic and diluted earnings per share The above consolidated income statement should be read in conjunction with the accompanying notes. -6-

10 Consolidated statement of comprehensive income For the half-year ended Consolidated 31 December 31 December $'000 $'000 Profit for the half-year 9,511 1,221 Other comprehensive income Changes in the fair value of cash flow hedges/ reserves 59 - Net profit and comprehensive income for the year attributable to members of Devine Limited 9,570 1,221 The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. -7-

11 Consolidated statement of financial position As at Consolidated 31 December 30 June $'000 $'000 ASSETS Current assets Cash and cash equivalents 22,857 20,045 Receivables 49,049 41,910 Inventories 168, ,494 Current tax receivables Other assets 3,131 1,957 Investments accounted for using the equity method Total current assets 244, ,913 Non-current assets Receivables 19,987 36,419 Inventories 248, ,811 Investments accounted for using the equity method 64,376 48,327 Property, plant and equipment Intangible assets 3,316 3,316 Other non-current assets 1,444 1,963 Total non-current assets 338, ,769 Total assets 582, ,682 LIABILITIES Current liabilities Payables 61,816 68,964 Interest bearing liabilities 28,326 26,871 Current tax liabilities Provisions 3,421 3,555 Non-interest bearing liabilities 38,000 32,300 Total current liabilities 131, ,690 Non-current liabilities Interest bearing liabilities 104,492 82,594 Deferred tax liabilities 4,454 3,766 Provisions 1,538 1,319 Non-interest bearing liabilities - 3,483 Derivative financial instruments Total non-current liabilities 110,852 91,585 Total liabilities 242, ,275 Net assets 339, ,407 EQUITY Contributed equity 292, ,367 Reserves 7 (105) Retained earnings 47,307 44,145 Total equity 339, ,407 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. -8-

12 Consolidated statement of changes in equity For the half-year ended Consolidated 31 December 31 December Notes $'000 $'000 Total equity at the beginning of the half-year 336, ,283 Profit for the half-year 9,511 1,221 Other comprehensive income 59 - Transactions with owners in their capacity as owners: Dividends provided for or paid 4 (6,349) - Option expense transferred to reserve 53 - Total equity at the end of the half-year 339, ,504 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. -9-

13 Statement of cash flows For the half-year ended Consolidated 31 December 31 December Notes $'000 $'000 Cash flows from operating activities Receipts from customers & sale of development assets (inclusive of goods and services tax) 260, ,808 Payments to suppliers and employees (inclusive of goods and services tax) (213,344) (243,421) 47,258 89,387 Profit distributions received from joint venture entities 2,439 - Interest received Interest and borrowing costs (6,527) (13,040) Income taxes paid (2,536) (3,043) Net cash inflow/ (outflow) from operating activities 41,477 74,092 Cash flows from investing activities Payments for property, plant and equipment (233) (125) Payments for investment in joint ventures (22,807) (6,137) Proceeds from sale of interest in joint ventures - 3,355 Joint venture equity distributions received 4,829 - Payments for investment in land inventory (37,417) (6,871) Proceeds from sale of discontinued operations - 7,600 Net cash inflow/ (outflow) from investing activities (55,628) (2,178) Cash flows from financing activities Proceeds from borrowings 38,478 5,725 Repayment of borrowings (15,166) (80,448) Dividends paid to company's shareholders (6,349) - Net cash inflow/ (outflow) from financing activities 16,963 (74,723) Net increase (decrease) in cash and cash equivalents 2,812 (2,809) Cash and cash equivalents at the beginning of the half-year 20,045 3,975 Cash and cash equivalents at end of the half-year 22,857 1,166 The above statement of cash flows should be read in conjunction with the accompanying notes. -10-

14 Notes to the consolidated financial statement 1 Summary of significant accounting policies This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2010 and any public announcements made by Devine Limited during the interim reporting period in accordance with the continuous disclosure obligations of the ASX Listing Rules. The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report apart from the changes in accounting policies noted within Note 1(b). (a) Basis of preparation of half-year financial report Basis of Accounting The half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards including AASB 134 Interim Financial Reporting and other mandatory professional reporting requirements. For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period. (b) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for reporting periods and have not yet been applied in the financial report. There have been a number of changes to new accounting standards and intepretations during the interim reporting period. These standards have been reviewed and an assessment has been made that there will be no significant impact to the Group or on previously reported results. (c) Comparatives Where necessary, comparatives have been reclassified and repositioned for consistency with current period disclosures. -11-

15 Notes to the consolidated financial statement (continued) 2 Revenue Consolidated 31 December 31 December $'000 $'000 From continuing operations Revenue from sale of properties 223, ,907 Revenue from related parties 2,910 3, , ,645 Interest rate swap income - 1,334 Interest received - other persons/bodies corporate 2,325 1,610 Rent received - other persons/bodies corporate Sundry income - other persons/bodies corporate 480-2,964 3, , ,401 From discontinued operations Service revenue - body corporate management - 2,197 Interest received - 4 Rent received - 6-2,

16 Notes to the consolidated financial statement (continued) 3 Expenses Consolidated 31 December 31 December $'000 $'000 Expenses, excluding finance costs, included in the statement of comprehensive income classified by function Cost of properties sold 166, ,416 Other expenses 43,521 58, , ,504 Classification of these expenses by function Cost of properties sold 166, ,416 Other expenses from ordinary activities Marketing and selling costs 22,408 25,593 Occupancy 1,168 1,473 Administration 14,213 14,427 Other 2,958 13,366 Land holding expenses 2,774 3, , ,504 Included in prior period expenses above is net realised and unrealised impairments before tax of $18.9 million. -13-

17 Notes to the consolidated financial statement (continued) 4 Dividends Devine Limited 31 December 31 December $'000 $'000 (a) Ordinary shares Previous year final dividend paid in cash Fully franked based on tax 30% - 1 cent (2009: 0 cents) per share 6,349 - (b) Dividends not recognised at the end of the half-year In addition to the above dividends, since the end of the half-year the directors have recommended the payment of an interim dividend of 1 cent per fully paid ordinary share (2009/10: 0 cents), fully franked based on tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid on 31 March 2011 out of retained profits at 31 December 2010, but not recognised at the end of the half-year, is: 6,349 - (c) Franked dividends Consolidated 31 December 31 December $'000 $'000 Franking credits available for subsequent financial years based on a tax rate of 30% (2009: 30%) 17,538 17,195 The above amounts represent the balance of the franking account as at the end of the financial half-year. -14-

18 Notes to the consolidated financial statement (continued) 5 Contingencies (a) Contingent liabilities The parent entity and group had contingent liabilities at in respect of: Guarantees The parent entity and controlled entities have entered into local authority and other performance guarantees totalling $19,096,390 at (June 2010: $19,910,133) relating to individual land developments and other aspects of the company's operations. The guarantees are secured by charges over the assets of the respective entities. No liabilities are expected to arise. The parent entity (Devine Limited) has guaranteed, under the terms of Class Order 98/1418, to pay any deficiency in the event of winding up of the controlled entities within the Group. The controlled entities have also given a similar guarantee in the event that Devine Limited is wound up. No liabilities are expected to arise. Litigation There are a number of matters that are the subject of litigation or potential litigation with several different parties. It is expected that these matters will be resolved with no material cost being incurred by the company. -15-

19 Notes to the consolidated financial statement (continued) 6 Interests in joint ventures (a) Joint venture operations % Interest Held % Interest Held 31 December June 2010 Name Deer Park Joint Venture Hallets Road Joint Venture Casey Fields Joint Venture Henry Rd Pakenham Joint Venture Bacchus Marsh Joint Venture 50 - (b) Joint venture entities At balance date, the group had equity interest in a number of joint venture entities and these are listed below. Each joint venture is resident in Australia and their principal activity is property development. % Ownership interest Name 31 December June 2010 Hamilton Harbour Unit Trust Townsville City Project Trust Deep Blue Consortium Pty Ltd Fallingwater Trust Riverina Estate Developments Pty Ltd VR Pakenham Pty Ltd

20 Notes to the consolidated financial statement (continued) 7 Segment information Operating segments Half-year 2010 Housing and Land Property Development Corporate / Other Total continuing operations Discontinued operation Consolidated $'000 $'000 $'000 $'000 $'000 $'000 Total sales revenue 209,779 17, , ,789 Other revenue 146 1,414 1,404 2,964-2,964 Total segment revenue 209,925 18,424 1, , ,753 Segment result 16,417 (1,003) (1,824) 13,590-13,590 Income tax expense (4,079) - (4,079) Profit for the half-year 9,511-9,511 Segment assets 403, ,345 32, , ,470 Half-year 2009 Housing and Land Property Development Corporate/ Other Total continuing operations Discontinued operation Consolidated $'000 $'000 $'000 $'000 $'000 $'000 Total sales revenue 201,694 98, ,645 2, ,842 Other revenue 81 2,310 1,365 3, ,766 Total segment revenue 201, ,261 1, ,401 2, ,608 Segment result 17,002 (13,840) (1,456) 1, ,831 Income tax expense (563) (47) (610) Profit for the half-year 1, ,221 Segment assets 430, ,908 12, , ,

21 Notes to the consolidated financial statement (continued) 8 Earnings per share Consolidated 31 December 31 December Cents Cents (a) Basic and diluted earnings per share * Profit attributable to the ordinary equity holders of the company Profit/ (loss) from discontinued operation - - Total basic earnings per share attributable to the ordinary equity holders of the company (b) Reconciliations of earnings used in calculating earnings per share* Basic earnings per share Profit attributable to the ordinary equity holders of the company used in calculating basic earnings per share from continuing operations 9,511 1,143 from discontinued operations ,511 1,221 (c) Weighted average number of shares used as the denominator * Consolidated 31 December 31 December Number Number Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 634,918, ,068,104 Options 2,035,562 - Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share 636,953, ,068,104 (i) Conversions, calls, subscriptions or issues since the reporting date There have been no conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report. * Comparative year basic EPS and diluted EPS has been restated in accordance with AASB 133 Earnings per Share. 9 Events occurring after the reporting period No significant events have occurred post. -18-

22 Directors' declaration In the directors' opinion: (a) the financial statements and notes set out on pages 6 to 18 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations (ii) giving a true and fair view of the consolidated entity's financial position as at and of its performance, as represented by the results of its operations, changes in equity and its cash flows, for the half-year ended on that date; and (b) 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 directors. D B Keir Director D J Ridley Director Brisbane 24 February

23 To the members of Devine Limited Report on the Half-Year Financial Report We have reviewed the accompanying half year financial report of Devine Limited, which comprises the statement of financial position as at, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors declaration of the consolidated entity comprising the company and the entities it controlled at the half end or from time to time during the half-year. Directors Responsibility for the Half Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the half-year 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 half-year 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 financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity s financial position as at and its performance for the halfyear ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As the auditor of Devine Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year 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 We have given to the directors of the company a written Auditor s Independence Declaration, a copy of which is included in the Directors Report. Liability limited by a scheme approved under Professional Standards Legislation

24 Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Devine Limited is not in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the consolidated entity s financial position as at and of its performance for the half-year ended on that date; and b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations Ernst & Young Alison de Groot Partner Brisbane 24 February 2011