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Redefine International P.L.C.Annual report and accountsFor the period ending 31 August 2011

Welcome to the Redefine International 2011 Annual Report. This report provides details of the Group, operating and financial results and describes how the Company manages risk and corporate governance.

Contents

2–9

Business Overview

Corporate Governance

Operating and Financial Review

10–27 28–37

28 Board of Directors30 Corporate governance report30 Board of Directors and its Committees30 Board composition, operation and

independence30 Attendance31 Appointment and Directors’ service

contracts31 Induction, training and professional

advice31 Evaluation of the Board31 Retirement and re-election31 Director’s dealings31 Committees33 Shareholder relations34 Investment adviser34 Financial reporting34 Internal control35 Corporate governance gap summary35 The Code35 King III36 Corporate Social Responsibility

Statement36 Business ethics36 Tenants36 Health and safety36 Environment and sustainability37 Whistleblowing

2 Highlights2 Financial Highlights2 Operational Highlights3 Performance at a glance4 Group overview4 Introduction4 Investment strategy4 Investment markets5 Board and management5 Group structure5 Redefine Group references6 Chairman’s statement6 Financial results6 Operations7 Board7 Retirement7 Prospects8 Overview and key facts related to the

reverse acquisition8 Rationale behind the reverse

acquisition8 Information for shareholders8 Effect on the financial statements9 Top 15 properties by value

10 Business review10 Overview10 Performance10 Business segments10 UK Stable Income11 UK Retail16 Hotels16 Europe18 Cromwell19 Portfolio summary20 Financial review20 Overview20 Earnings available for distribution22 Earnings per share22 Net assets23 Cashflow23 Financing and capital25 Hedging25 Taxation26 Managing risk

UK Retail at a glance / page 12 Board of Directors / page 28Top 15 properties / page 9

Directors’ and Auditors’ Reports

Financial Statements

Shareholder Information

38–43 45–97 98–107

38 Directors’ Remuneration Report38 Remuneration policy38 Basic fees38 Directors’ interests39 Directors’ report39 Principal activity39 Business review39 Principal risks and uncertainties39 Results and proposed dividends39 Share capital39 Treasury shares 39 Notified shareholdings40 Going concern40 Directors40 Share options40 Charitable donations41 Payment of suppliers41 Compliance with the Code41 Stakeholder pensions and employee

share schemes41 Auditors42 Statement of Directors’

Responsibilities43 Independent Auditors’ Report

45 Financial statements45 Consolidated Statement

of Comprehensive Income46 Consolidated Statement

of Financial Position47 Consolidated Statement

of Changes in Equity48 Consolidated Statement of Cashflows49 Notes to the Consolidated

Financial Statements87 Company Accounts 87 Independent Auditor’s Report88 Company Balance Sheet89 Notes to the Company Accounts97 Five year review

98 Shareholder Information98 Share performance 100 Company information100 Corporate advisors101 Glossary103 Notice of Meeting Form of Proxy (enclosed)

1Business OverviewRedefine International P.L.C. Annual Report and Accounts 2011

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HighlightsThe 2011 financial period has been a landmark year following the completion of the reverse acquisition between Redefine International and Wichford.

Financial Highlights Operational Highlights

Earnings available for distribution of £20.3 million (2010: £7.5 million).

Second interim dividend of 2.10 pence per share giving a total dividend of 4.13 pence per share (2010: 3.21 pence).

Fully diluted NAV per share of 46.59 pence (2010: 46.77 pence).

Fully diluted EPRA NAV per share 50.72 pence (2010: 48.77 pence).

Successful reverse acquisition of Wichford P.L.C. by Redefine International plc.

Enlarged income focused property company with a assets of over £1.27 billion.

Anticipated cost savings of £0.3 million per annum.

Parent company, Redefine Properties International Limited, successfully listed on the JSE raising £101.7 million of new equity.

Favourable long term restructuring of shopping centre senior debt.

Acquisition of London hotel property portfolio for £116.9 million.

Acquisition of the St George’s Shopping Centre, Harrow for £65.9 million.

Shareholding in Australian associate Cromwell increased to 21.7%.

Appointment of Greg Clarke as Chairman designate announced post period end.

Planning for 2012 refinancing strategy underway.

Further readingFor further information on our business please visit our website at:www.redefineinternational.com

Business Overview2 Redefine International P.L.C. Annual Report and Accounts 2011

Performance at a glance

9.3

97.0%

32.1%

2010: 3.21p

4.13pDistribution per share

+28.7%

2010: 2.38p

4.00pEPRA earnings per share

+68.1%

2010: 48.77p

50.72pEPRA net asset value per share

+4.0%

+95.8%

2011

2010

£32.3 million

£16.5 million

Revenue WAULT

Occupancy

Indexation and fixed rental increases

yEARS

+198.3%

2011

2010

£5.1 million

-£5.2 million

Profit before tax

+170.1%

2011

2010

£20.3 million

£7.5 million

Earnings available for distribution


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Investment strategyThe Group’s strategy is focused on delivering sustainable and growing income returns through investment into income yielding assets let to high quality occupiers on long leases. Development exposure is generally limited to asset management and ancillary development of existing assets in order to enhance and protect capital values. The Group aims to distribute the majority of its earnings available for distribution on a semi-annual basis, providing investors with attractive income returns and exposure to capital growth opportunities.

Redefine International is a property investment company with exposure to a broad range of properties and geographical areas. The Company is domiciled in the Isle of Man and has investments in the UK, Germany, Switzerland, the Channel Islands, the Netherlands and Australia.

Group overview

Geographic breakdown by net rental income

Investment marketsThe Group is focused on real estate investment in large, well developed economies with established and transparent real estate markets. The investment portfolio is geographically diversified across the UK, Europe and Australia providing exposure to the retail, office, industrial and hotel sectors.

UK 69.7% Germany 16.6% Switzerland 1.7% Netherlands 2.0% Australia 10.0%

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Board and managementThe Board is responsible for setting the Group’s strategy and providing leadership for the Company. It supports the principles of good corporate governance as set out in the UK Corporate Governance Code published by the Financial Reporting Council in May 2010. Following the listing of Redefine Properties International Limited (“RIN”, the Company’s largest shareholder) on the JSE, the Board has resolved to comply with the provisions of King III.

The Board is entirely non-executive and comprises ten directors. The Chairman and five other directors are considered to be independent of the Investment Adviser.

The Group is advised on an exclusive basis by Redefine International Property Management Limited (“RIPML”). RIPML has a management team with extensive property and finance experience in the listed property sector and which has been active in the UK and Europe for over a decade.

Group structureRedefine International is listed on the main market of the LSE and is part of the Redefine Properties group. The ultimate holding company, Redefine Properties Limited (“Redefine Properties”), is listed on the JSE and has a market capitalisation of approximately £2 billion.

Redefine International P.L.C.(listed on the LSE)

54%

69%

Note: Shareholdings as at 1 December 2011

31%

Redefine Properties Limited

(listed on the JSE)

Redefine Properties International Limited

(listed on the JSE)Public Shareholders

Company name

Redefine International P.L.C.

Redefine International Holdings Limited

Redefine Properties International Limited

Redefine Properties Limited

Wichford P.L.C.

Redefine International Property Management Limited

Abbreviation

Redefine International, the Company or the Group

RIHL

RIN

Redefine Properties

Wichford

RIPML or Investment Adviser

Description

The enlarged company following the reverse acquisition between Wichford and Redefine International plc

The previously AIM listed property investment company party to the reverse acquisition (previously named Redefine International plc)

The Company’s largest shareholder listed on the JSE, whose sole asset is its shareholding in Redefine International

Ultimate parent company of the Redefine group, listed on the JSE

The previously LSE listed property investment company party to the reverse acquisition

Investment Adviser to the Company

Redefine Group referencesThis report makes various references to companies within the Redefine Group which are summarised within the table.


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Chairman’s statement

The 2011 financial period has been a landmark year. The successful reverse acquisition between Redefine International plc (subsequently renamed Redefine International Holdings Limited (“RIHL”)) and Wichford has created a mid-tier, diversified income focused property company. It has also secured a significant capital commitment from the Company’s largest shareholder, RIN.

Following RIHL’s initial approach to Wichford in November 2010, the Wichford Board undertook a thorough strategic review and concluded that a reverse acquisition with its largest shareholder provided the best possible basis from which to address its 2012 debt maturities as well as securing a supportive and well capitalised major shareholder, with whom to pursue growth opportunities.

Both sets of shareholders stand to benefit from:• a larger, well diversified asset base reducing

exposure to any single market; • a proposed capital raising in 2012 of up to £100

million supported by the Company’s largest shareholder;

• a strategy focused on cashflow and income distribution;

• a larger shareholder base; and • a listing on the Premium Segment of the

Official List of the UK Listing Authority and admission to trading on the LSE’s Main Market for listed securities.

In a period of such intense corporate activity, the Company has asked a great deal of its advisers and their staff and I and my fellow directors wish to thank them for their efforts and dedication.

Financial resultsEarnings for the period reflect the implementation of IFRS rules for business combinations with the result that no earnings have been included for Wichford for the period 1 October 2010 to 31 August 2011 as these are considered to be pre-acquisition earnings. An adjustment has been made to earnings available for distribution to reflect the contribution made by Wichford.

Earnings available for distribution of 4.13 pence per share for the period are marginally ahead of market expectations and pleasing in the context of the prevailing economic conditions.

EPRA net asset value increased 4.0% to 50.72 pence per share following the reverse acquisition. There were further valuation declines in property values, principally in UK regional offices, however this was offset by gains

in the Cromwell investment and fair value adjustments to the carrying value of certain Wichford debt facilities.

The Board has declared a dividend for the second half of the period of 2.10 pence per share. This brings the total dividend per share paid to RIHL shareholders for the period to 4.13 pence and reflects a 100% payout of earnings available for distribution.

OperationsI am pleased to report the Group’s recent investments into Cromwell and the hotel sector are performing strongly. Distributions from Cromwell of £8.4 million (net of withholding tax) in the period reflects an annualised yield of approximately 10% on the market value of the Group’s shareholding as at 31 August 2011 which is underpinned by a high quality property portfolio. The underlying performance of the hotel portfolio benefited from strong demand for hotel rooms in the Greater London market. The Group has, in a short space of time, developed a presence in the UK hotel market which has created a number of new investment opportunities.

The UK Stable Income portfolio produced solid income returns supported by high quality tenants. However, values in regional offices continued to come under pressure. Exposure to weaker regional office markets and underperforming assets are being critically assessed as part of the refinancing strategy for the acquired Wichford portfolio.

The UK Retail portfolio maintained occupancy levels above 97% despite significant pressures on retailers and a difficult trading environment. Redevelopment of 46,000 sq ft of retail space has commenced at Birchwood, Warrington and a refurbishment programme for the recently acquired St George’s Shopping Centre in Harrow is anticipated to commence in the new financial year with a view to creating further value from the asset over the long term.

The European portfolio’s macro-economic environment has been the key driving force during the period under review. The potential sovereign debt default by Greece and other peripheral Eurozone countries has created significant volatility in the markets. Against this backdrop, the European portfolio has performed well at an operating level with occupancy levels close to 100% and consistent cash flows from rental income. The Swiss portfolio benefited from a strong appreciation of the Swiss Franc against Sterling over the period.

While the current..economic and..financial markets..present real..risks, investment..opportunities for..inter alia, hotels,..shopping centres..and German retail.units are once..again looking..attractive..

The Company is now positioned as a mid-tier income focused property company and has secured a significant capital commitment from its largest shareholder.


BoardThe reverse acquisition has inevitably led to some changes in the composition of the Board. David Harrel and Mark Sheardown stepped down following completion of the transaction and I would like to offer my sincere thanks for their services and significant contribution to Wichford, particularly during the strategic review and reverse acquisition process. I would also like to take the opportunity to thank Greg Heron, Peter Todd and John Ruddy who retired from the RIHL board following the reverse acquisition. They have made substantial contributions to the RIHL business over the years.

Marc Wainer, Michael Watters, Michael Farrow and Gavin Tipper, previous RIHL directors, joined the Board with effect from 22 August 2011.

I am also pleased to welcome Stewart Shaw Taylor to the Board. Stewart is Global Head of Real Estate Investments for the Corporate and Investment Banking Division of the Standard Bank Group and I am sure he will add significant strength to the Board.

I believe the Board has considerable depth and breadth of expertise and will bring invaluable experience to the Company.

RetirementIt was with much sadness that, at the time of the reverse acquisition, I announced my intention to retire. I have been involved with the Company since 2004 and following my relocation to Brazil I have found it increasingly difficult to fulfil my duties as Chairman.

I am, however, delighted that Greg Clarke has joined the Board as Chairman Designate to take over from me when I step down from the Board in December. His extensive experience of managing companies across our key geographic areas and his knowledge of real estate in particular should prove valuable to the Company as it enters the next phase of growth.

I wish Greg and the Company every success in the future.

ProspectsFollowing a period of substantial change, the 2012 financial year is set to be one of consolidation and positioning the Company for future growth. The integration with Wichford has progressed well and identified cost savings will be fully achieved in the next financial year. With an asset base of over £1.27 billion, the Company has become a significant player in the listed real

estate sector and will look to leverage off this base to improve access to capital and take advantage of investment opportunities.

The Company has, post period end, undertaken selective share buybacks, in accordance with the existing shareholder authority granted at the AGM held on 27 January 2011 (such authority being subject to the subsequent consolidation of the Company’s share capital which was approved by the Company on 4 August 2011 and effected on 22 August 2011). Further purchases will only be exercised after careful consideration by the Board, as and when conditions are favourable, with a view to enhancing earnings per share and/or net asset value per share. Shares acquired will be held in Treasury and details of all transactions will be announced to the market in accordance with the Listing Rules, when any relevant purchases have been made.

Planning for the refinancing of the debt facilities maturing in 2012 is underway, and is expected to result in a rationalised government portfolio through a refinancing of a core portfolio of assets. The intention, as set out at the time of the reverse acquisition, is to undertake a capital raising during the course of 2012 to partly support a refinancing and to provide capital for identified and secured investment opportunities. Disposals of assets with limited growth potential or significant re-letting risk will be targeted to strengthen the lease length profile and improve the overall quality of the portfolio. Following negotiations with the servicer, a market testing exercise is being undertaken on the VBG2 portfolio which may lead to a sale, remove the refinancing requirement and enhance the overall leverage ratios of the Group.

While the current economic and financial markets present real risks, investment opportunities for inter alia, hotels, shopping centres and German retail units are once again looking attractive. Cromwell continues to go from strength to strength and the Company will look to support the growth of its associate when the opportunity arises. The Company will also continue to monitor developments on changes to the REIT regime and review the possibility of converting to a UK REIT.

The new financial year presents a number of challenges but with a clear strategy to strengthen the balance sheet and enhance the Group’s portfolio, it is well positioned for the future.

Philippe de NicolayChairman

InvestmentThe Company invested £230 million into performing sectors during the period.

28.7%

The Board has declared total dividends for the period of 4.13 pence; an increase of

(2010: 3.21 pence)

I am pleased to..report the Group’s..recent investments..into Cromwell and..the hotel sector..are performing..strongly..


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Overview and key facts related to the reverse acquisition

On 13 July 2011, the boards of Wichford and RIHL announced that they had reached agreement on a reverse acquisition in terms of which Wichford made an all share offer (the “Offer”) for the entire issued ordinary share capital of RIHL (the “reverse acquisition”). RIHL’s shareholders received 7.2 Wichford ordinary 1 pence shares for each RIHL share held. The share register was then consolidated on the basis of 1 new ordinary 7.2 pence share for every 7.2 ordinary 1 pence shares held.

On 22 August 2011, the Company announced that the reverse acquisition had become unconditional in all respects and on 23 August 2011 announced the admission of 543,890,859 ordinary shares of 7.2 pence to the LSE. Wichford subsequently changed its name to Redefine International P.L.C. Following further acceptances of the Offer and the final squeeze out of non-controlling shareholders in RIHL, a total of 567,643,792 Redefine International ordinary shares of 7.2 pence are in issue as at 1 November 2011.

Redefine International now owns a property portfolio well diversified by sector and geography and includes inter alia; office and industrial properties, shopping centres and hotels. The combined income streams of Wichford and RIHL have diversified the risk within Wichford’s portfolio which has significant exposure to UK government tenants and could be subject to the UK Government’s recently announced austerity and rationalisation plans. The commitment by RIN, which is backed by Redefine Properties Limited, to support its share of a capital raising of up to £100 million will also significantly enhance the ability to refinance Wichford’s Delta and Gamma facilities which fall due in October 2012.

Rationale behind the reverse acquisitionThe Board believes that the reverse acquisition represents a clear and strong complementary fit, substantially enhancing the strategic position of the Company through the creation of a stronger, mid-tier UK listed property company, focused on providing an attractive, sustainable and growing income stream for investors.

The reverse acquisition has created an enlarged, income-focused property company with a diversified investment property portfolio. The Group has an improved capital structure benefiting from RIHL’s attractive long term debt facilities as well as an undertaking from its major shareholder, RIN, to support a proposed capital raising of up to £100 million, with RIN’s commitment reflecting its current 69% shareholding.

The income stream from the property portfolio is complemented by a 21.7% interest in the Group’s

associate, Cromwell, an Australian listed property trust with significant exposure to central and state government tenants.

The Group will seek to grow income for its investors through the pursuit of active asset management opportunities within its existing portfolio, including asset repositioning and ancillary development, and through the yield enhancing acquisition and disposal of assets. The Group will act opportunistically and will have the flexibility to execute transactions quickly. This potential growth will be further enhanced by the expected reduction to the combined expenses of the Group as a result of the elimination of certain public company costs.

The Group is managed by RIPML which is a fully resourced and experienced investment adviser. The historic advisory agreement between RIHL and Redefine International Fund Managers Limited was acquired by RIPML on 22 August 2011.

The reverse acquisition has also resulted in an enlarged shareholder base which should enhance trading liquidity for shares in the Company.

Information for shareholdersFollowing the reverse acquisition, the cancellation of RIHL’s previously equity accounted investment in Wichford (refer Note 19 of the consolidated financial statements) and the subsequent issue of ordinary shares to the RIHL shareholders, RIN became the majority shareholder in the Company with a shareholding of approximately 65.59%. Minority shareholders in RIHL held approximately 14.07% and previous Wichford shareholders (other than RIHL shareholders) held approximately 20.34% of the shares in the Company.

Effect on the financial statementsFollowing the adoption of reverse acquisition accounting in accordance with IFRS, RIHL has been identified as the accounting acquirer, as it was deemed to obtain control of Wichford. Consequently, the statement of financial position reflects the reserves, assets and liabilities of RIHL and the capital, reserves, assets and liabilities of Wichford, effectively acquired by RIHL at fair value, as at 22 August 2011. As Wichford was the legal acquirer, the Wichford capital structure remains that of the Company. Although the reverse acquisition became effective on 23 August 2011 the financial statements have been prepared assuming an acquisition date of 31 August 2011. The difference between these dates is not deemed to be material and hence the statement of comprehensive income reflects the income and expenses of RIHL only, for the 12 months ended 31 August 2011.

ReferencesThe following ISIM, TIDM and SEDOL references have been adopted:

ISIN: IM00B4JZYL28TIDM: RDISEDOL: B4JZYL2

With an asset ..base of over .£1.27 billion, the..Company has ..become a .significant player.. in the listed real.. estate sector..


Top 15 properties by value

Weighted average unexpired Market Ownership Lettable Annualised Let lease value interest Business area net rent by area termName Principal occupiers £’million % segments sq ft £’million % years

Wigan, Debenhams, BHS 85.0 50.0% UK Retail 473,355 7.43 99.1% 14.2 Grand Arcade

Harrow, Wilkinsons, Boots 64.0 100.0% UK Retail 215,489 3.76 99.1% 5.6 St George’s

Coventry, Debenhams 45.0 81.3% UK Retail 210,188 3.92 98.0% 8.8 West Orchards

Halle, Ministry of Justice 32.7 93.9% Europe 373,389 2.91 100.0% 8.8 Justizzentrum

Dresden, VBG 31.2 100.0% Europe 187,818 2.44 100.0% 11.5 VBG

Warrington, ASDA 30.0 100.0% UK Retail 393,264 2.54 94.3% 15.9 Birchwood

Bradford, HMRC 27.2 100.0% UK Stable 104,875 2.01 100.0% 9.6 Centenary Court Income

Brentford Lock, RHM1 26.1 71.0% Hotels 61,064 2.01 100.0% 14.3 Holiday Inn

Stuttgart, VBG 25.7 100.0% Europe 134,059 2.07 100.0% 13.4 VBG

Limehouse, RHM1 23.5 71.0% Hotels 61,860 1.78 100.0% 14.3 Holiday Inn Express

Southwark, RHM1 22.4 71.0% Hotels 23,476 1.69 100.0% 14.3 Holiday Inn Express

Royal Docks, RHM1 22.4 71.0% Hotels 49,094 1.74 100.0% 14.3 Holiday Inn Express

The Hague, Royal Dutch 19.8 100.0% Europe 138,618 1.93 100.0% 2.8 ICC Government

Leeds, HMRC 19.7 100.0% UK Stable 78,262 1.25 100.0% 12.3 Castle House Income

Seaham, ASDA 16.8 100.0% Retail 115,377 1.33 100.0% 14.6 Byron Place

Notes: 1 Redefine Hotel Management Limited


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Business review

OverviewAgainst a backdrop of continued volatile and challenging economic conditions, the Group performed well and achieved the significant milestone of owning a portfolio of assets valued in excess of £1.2 billion following the reverse acquisition of Wichford by RIHL, the single most significant corporate event of the reporting period. Despite tough trading conditions the overall performance of the Group, as measured against its stated objective of delivering a high sustainable distribution yield, was satisfactorily met.

Additional highlights for the period included:• The acquisition of the London Hotel portfolio

and Crowne Plaza Hotel, Reading, comprising six assets for £116.9 million (excluding transaction costs);

• The acquisition of the St George’s Shopping Centre in Harrow, North London, for £65.9 million (excluding transaction costs);

• The acquisition of two OBI DIY centres in Germany for a combined cost of £20.9 million;

• The increased shareholding in Cromwell from 19.67% (as at 28 February 2011) to 22.7%; and

• The raising of £107.4 million of new capital through share placements, and the listing of RIN on the JSE.

PerformanceThe portfolio has changed substantially following the reverse acquisition and the acquisition of the Hotel portfolio. In a difficult economic environment, the portfolio has benefited from diversification across both sectors and geographies. While regional office markets and UK retailers have suffered, exposure to discount retail units in Germany, Greater London limited service hotels and the Company’s Australian associate Cromwell have benefited the Company as these segments have performed well. Overall occupancy of 97.0%,

a weighted average unexpired lease length in excess of nine years and indexed or fixed uplifts on close to a third of rental income provides for defensive income returns.

Business segments at 31 August 2011 Net Market Lettable rental values Occupancy area income £’million % % £’million

UK Stable Income 503.3 95.0 3,723 39.7UK Retail3 257.9 97.4 1,5901 19.9Hotels 123.4 100.0 268 9.3Europe 248.5 100.0 1,971 20.0Cromwell 102.5 n/a2 n/a 10.04 (22.7% stake) Total 1,235.6 97.0 7,552 98.9

Notes: 1 UK Retail lettable area excludes the APCOA parking

space of 326,315 sq ft2 Cromwell’s portfolio occupancy was 99.6% as at June

20113 Includes Grand Arcade Wigan, held through a joint

venture entity4 Annualised net distribution receivable UK Stable Income Market conditions outside of London remained challenging with limited occupier demand and excess availability in many regional office markets. As a consequence, investment demand remained weak for all but the most secure property let on long-term leases.

The UK Government’s Comprehensive Spending Review is having a noticeable impact on occupational demand and lease terms in regional markets dominated by government occupiers. While the Group’s government-tenanted portfolio is dominated by occupiers undertaking ‘core’ government functions, many of which are public facing, securing near-term renewals and re-lettings will be challenging and an increase in vacancy is anticipated.

Business Segments

UK Stable Income: Consists of predominantly UK offices, but includes petrol filling stations, Kwik-Fit centres, retail and residential units.

UK Retail: Consists of the Group’s major UK shopping centres.

Europe: Consists of the Group’s properties in Continental Europe, located in Germany, Switzerland and the Netherlands.

Hotels: Consists of all the Group’s hotel properties. The hotels are let to Redefine Hotel Management Limited on a fixed rental basis with annual reviews based on EBITDA.

Cromwell: Relates to the Group’s investment in the Cromwell Property Group, Australia.

This business review sets out the performance of each of the Company’s business segments and the actions being taken to position the portfolio for the future.

Business segments by net rental income

UK Stable Income 40% UK Retail 20%Hotels 10% Europe 20%Cromwell 10%

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UK Stable Income Geographical breakdown by net rental income

Inner London 2.8% Rest of London 7.9%South East 10.9% South West 10.8%Eastern 2.3%East Midlands 6.3% West Midlands 8.4%North West 10.2% Yorks & Humber 14.5%North East 6.0%Scotland 11.4% Wales 4.4%Jersey 4.1%

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Operating and Financial Review10 Redefine International P.L.C. Annual Report and Accounts 2011

The UK stable income portfolio suffered a 7.9% like-for-like decline in values over the period but provided stable income returns supported by the exceptional covenant strength of its tenant and occupier base. Occupancy remained high at 95% after the impact of a lease surrender of 89,636 sq ft at Sapphire House, Telford.

Lyon House & Equitable House, HarrowPreparation for the submission of a planning application is nearing completion with a formal submission anticipated towards the end of this calendar year. The application is for a mixed-use, residential led scheme of approximately 290,000 sq ft. Significant progress has been made in securing a social housing landlord for the affordable housing element of the scheme.

Sapphire House, TelfordThe lease to Tatung (UK) Limited, with a remaining term of six years, was surrendered in return for a tenant’s surrender premium of £5.0 million and the transfer of all rights against the outgoing sub-tenant (Ministry of Defence (“MoD”)) for dilapidations liabilities. A dilapidations settlement of approximately £0.9 million has been agreed with the MoD.

Coburg House, SouthwarkA £0.8 million programme of refurbishment works has been completed following agreement with Trillium to enter into a new 13 year lease with a break option in 2018. The commencing rent of £315,000 per annum reflects £19.3psf with a fixed increase to £336,000 per annum in year five, which will provide a yield of 7.6% on the current value.

Churchill Court, CrawleyA comprehensive refurbishment of this 106,000 sq ft building is underway, as well as the creation of a show suite to enhance marketing of the vacant office space. The programme is set for completion in November 2011.

It is anticipated the UK regional office market will remain challenging. However, the existing portfolio remains defensive from an income perspective given the weighted average unexpired lease length of 8.0 years and the strength of the tenant covenants. The long unexpired lease terms of between 9 and 18 years on the Kwik-Fit and petrol filling station portfolios have provided stable values and secure income. Key objectives for 2012 will focus on retaining income and occupancy and repositioning assets with better alternative uses.

A strategy for improving the overall quality of the assets in the UK Stable Income portfolio will be integrally linked to the refinancing of the Delta and Gamma portfolios in 2012. The immediate and longer term strategy will be focused on reducing the overall number of assets in the portfolio through the sale of smaller non-core assets and concentrating geographical exposure in major regional centres with stronger growth prospects.

UK Retail The Group’s UK Retail portfolio consists of five sub-regional shopping centres which dominate their catchment areas and a town centre redevelopment scheme located in Crewe. The centres have generally performed well and delivered consistent returns against a backdrop of severe stress in the retailing environment caused by low consumer confidence, weak economic conditions and the impact of technology on shopping patterns.

With retailing in the UK under pressure, retailers are looking to consolidate through larger shop units in superior locations. The high street is set to lose out in this rush to quality with leisure (cinema & restaurant) components becoming an increasingly important element in the overall retail mix. With the consumer under pressure and technology becoming a bigger factor, shopping centre owners have to innovate continuously to attract shoppers to their centres.

Increased pressure is also being put on landlords to reduce rentals and service charges and provide more flexible lease terms. The Company is working with its retailers in a constructive and positive manner to reduce occupational costs and a number of capital projects are in place to improve the quality of the centres.

The knock-on effects of reduced demand have caused numerous retailer administrations and company voluntary arrangements. The Group is fortunate, however, that no single retail failure has had a significant impact on any of its shopping centres and, where this has occurred, replacement tenants have been secured without undue income loss. The Group has succeeded in maintaining footfall through its portfolio and, with a void rate of less than 3% by area, it has managed to retain its tenants.

UK Stable Income Tenant profile by net rental income

UK RetailGeographic breakdown by net rental income

Government 78.1% Kwik Fit 2.5%Petrol filling stations 4.4% Other 15%

Rest of London 18.8% West Midlands 19.7%North West 54.8% North East 6.7%

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Business review Continued

UK Retail at a glance

Grand Arcade, Wigan

Market value£257.9 million

Occupancy (by area)97.4%

Annualised gross rental income£21.36 million

ERV£21.5 million

Footfall1

30.1 million

Footfall % change 2010/20111

(0.9%)

Net initial yield7.3%

Lettable area (‘000)1,590 sq ft



Lettable area473,355 sq ft


% Ownership50%

Headline rent ITZA£100 Number of stores48

Footfall per annum6.8 million

Key RetailersDebenhams, BHS, Boots, Marks & Spencer, Next, HMV, WH Smith

Figures assume 100% ownership1 Excludes Crewe

The two major initiatives during the period have been the purchase of St George’s Shopping Centre in Harrow and commencing the redevelopment of the Birchwood Shopping Centre in Warrington. St George’s contains the locally dominant cinema and food offering and provides a number of opportunities to enhance the tenant profile and add value to the asset. Further details of asset management activity are set out below.

The centre traded well throughout the period and with the exception of one unit external to the mall, was fully let at period end. A number of new lettings were completed and Jane Norman and Faith Shoes were replaced post their administrations. New tenants to the centre include, Republic on a 10 year lease in an 8,600 sq ft unit, Skopes Menswear, FX Currency and Schuh.

Footfall decreased marginally, (0.3%) year-on-year, whilst the rental tone has remained constant.


Byron Place, Seaham

West Orchards, Coventry


Occupancy (by area)100% Lettable area115,377 sq ft


% Ownership100%




Occupancy (by area)98.0% Lettable area210,188 sq ft


% Ownership81.3%



Key RetailersAsda, Wilkinsons, Argos, Peacocks

Key RetailersDebenhams, Marks & Spencer, WH Smith, Republic, Peacocks

Byron Place performed well and at period end was fully occupied. It showed footfall growth of 2% over the previous year.

A significant amount of asset management activity has taken place in this centre during the period. A major study was undertaken by a specialist in food and restaurant operations to assess the food court (the major attraction of the centre and main food draw in the centre of Coventry) following the operator going into administration. Encouragingly, the report concluded that the existing offer was correctly sized and appropriately pitched for the market. It identified an improved mix and this is being implemented as part of a new 15 year lease agreed with a new operator.

Elsewhere in the centre, ten leases expired with five being renewed, three vacated and two are holding over. The following new tenants took space: Skopes Menswear, Gimme Gizmo and Premier Leathers. Six rent reviews were documented at nil increase.

It is pleasing to report that Thorntons signed a new five year lease, as did the Apple reseller which also undertook a major store refurbishment to bring it into line with latest Apple standards. There are currently four vacant units which are being marketed. Crucially Debenhams continues to trade well notwithstanding a decrease in footfall in the centre for the period. Steps have been taken to reduce the service charge, which had risen to an above average level, through identifying operational efficiencies.


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Birchwood, Warrington

Market value£30.0 million1

Occupancy (by area)94.3%2

Lettable area393,264 sq ft1

Annualised gross rental income£2.8 million1

% Ownership100%



Key RetailersAsda, New Look, Peacocks, Argos, Home Bargains

1 Current (before refurbishment)2 Retail units vacated for refurbishment programme

Planning consent has been granted for the redevelopment of 46,000 sq ft at the eastern end of the centre. The initiative involves the replacement of the weak tenant profile in this area through the expansion and reconfiguration of the space to accommodate a 19,181 sq ft anchor and two 9,000 sq ft sub-anchors. The balance of the space provides five smaller units ranging in size from 1,100 sq ft to 635 sq ft. Deals have been concluded with the anchor (Home Bargains) and one sub-anchor (QVC). Negotiations are in progress with a tenant for the second sub-anchor unit. Active marketing of the remaining units will be initiated closer to works completion. Construction commenced in October 2011.

Thirteen leases expired during the period with five tenants renewing and eight vacating. All eight are part of the redevelopment area where a number of short term leases and licences were agreed with tenants. All agreements were arranged to provide vacant possession in accordance with the phased format of the redevelopment.

Of the four outstanding rent reviews, three were settled, with Domino’s at a 3% uplift; Done Brothers at a 4% uplift and ASDA at a 6.9% uplift. Further rental uplifts are anticipated to be limited.

Footfall for the period was 0.5% down on the same period last year.


St George’s, Harrow



Lettable area215,489 sq ft


% Ownership100%



Key RetailersWilkinson, Boots, TK Maxx, H&M, Vue

The centre, acquired in July 2011, is trading ahead of management expectations.

A new centre manager has been appointed and a number of asset management initiatives are underway. These include a cosmetic upgrade to the floor and walls of the mall, increasing the lighting levels, rebranding and generally improving the appearance and quality of the centre.

New leases have been agreed with Rymans, Toni & Guy and Vision Express. Short term leases have been agreed with three tenants in an area adjacent to a large store which becomes vacant in 2012. Negotiations are underway for a major tenant to take the space created by combining the four individual units.

Footfall was up 3.4% on the same period last year.

Delamere Place, CreweA detailed plan has been formalised for a phased redevelopment of the scheme. A decision will be taken in 2012/13 as to when to commence with the development proposal. This will depend on retailer demand for new space and an economic return being achieved. In the interim the centre will continue to be managed for short term cash generation.


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HotelsThe Group owns six hotels branded as Holiday Inn, Holiday Inn Express and Crowne Plaza, five of which are located in Greater London and one in the South East. The focus on branded, limited service hotels in Greater London provides for defensive underlying occupancies in line with the Company’s income focus.

The Greater London hotel market was buoyant throughout the period with average occupancy levels of 82.1%, up 0.7% on 2010 and Revpar of £106.7 up 10.1% on 2010. The Group’s tenant performed in line with these figures for the period under review. Whilst a fixed lease is in place with the hotel operator, the Group should benefit through EBITDA based rental growth going forward.

Acquisition of Crowne Plaza, ReadingCrowne Plaza, Reading was acquired out of administration from the Pederson Hotel Group for a price of £12.8 million. The hotel was refurbished by the Pederson Group approximately 12 months prior to acquisition for a reported £8.0 million. The hotel has 122 bedrooms and is ideally located on the Thames in Reading and remains the best performing hotel in its competitive set.

Holiday Inn Express, SouthwarkThe Southwark Holiday Inn Express is awaiting planning approval for an additional 50 rooms which, if approved, will see an investment of up to £13 million to double the existing capacity of the hotel. The extension is being driven by high occupancy and excess demand.

Refurbishment programmeThe initial phase of a portfolio refurbishment programme commenced with the refurbishment of the common areas of the Royal Docks Holiday Inn Express.

The Greater London. hotel market was. buoyant throughout. the period with. average occupancy. levels of 82.1%.

HotelsGeographic breakdown by net rental income

Inner London 29.4% Rest of London 59.6%South East 11.0%

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HD flat screens have been installed in all hotels and an upgrade of all wireless connectivity is underway to ensure the hotels remain competitive and in line with on-going guest requirements. There is an established fixtures, fittings and equipment reserve to meet the capital requirements of the proposed refurbishment programme.

ProspectsThere are a significant number of hotels and hotel portfolios coming onto the market, driven mainly by owners being forced to exit investments due to refinancing requirements and LTV breaches. Banks holding hotel debt are in the process of exploring exit strategies and assessing demand for these assets. The Group is considering a number of opportunities and will seek to take advantage of these where possible.

London is likely to have a record year off a high base in 2012. Well publicised events include the Olympics, the Para Olympics and the Farnborough Air Show. The impact of a weaker global economy and the traditional trough periods pre and post major events are unknown, however PriceWaterhouse Coopers has forecast between 0.9% to 8.4% Revpar growth increases over the 2011 – 2012 calendar years.

According to IPD, hotels were the best performing sector in the UK property market over the last 10 years providing an annual total return of 9%. Expectations are that hotels will continue to outperform, with the strong income generation underpinning the investment case.

EuropeAgainst a backdrop of significant macro-economic instability, the European portfolio has performed strongly at an operating level with occupancy levels close to 100% and consistent cash flows from rental income. The Swiss portfolio of Coop retail units benefited from a strong appreciation of the Swiss Franc to Sterling over the period.

Seven lease extensions in Germany, ranging from 10 to 15 years, were completed during the period with anchor tenants such as Lidl and Kik. Further lease extensions are at an advanced stage of negotiations.

Key activity during the period included:

VBG portfolioFollowing negotiations with the servicer, a marketing process is underway to test potential sales values of the Cologne and Stuttgart properties from the former Wichford portfolio. These properties, which make up the VBG2 portfolio, may be disposed of in the near future following the maturity of the CMBS debt facility secured against them and on-going consultation with the facility servicer. There are on-going discussions in relation to the VBG1 portfolio, although a similar process to VBG2 is anticipated in 2012. Further information is provided within the Financial Review.

OBI acquisition, GermanyThe acquisition of a 50% interest in two properties both leased to OBI, one of Europe’s largest DIY stores, was completed. The leases are for 15 years indexed to German CPI. The acquisition price of £20.9 million reflects a net initial yield of 7.0%.

COOP, Switzerland rent reviewA 10% rental increase was agreed through the operation of the turnover clause.

GermanyWhilst Europe is currently experiencing a sovereign debt crisis, the European portfolio is proving to be resilient, as it was during the period between 2007 and 2009. The Group’s largely German portfolio provides exposure to one of Europe’s strongest economies which is anticipated to perform well relative to other European countries.

The Group will continue to look for opportunities to exit non-core properties acquired in the reverse acquisition process in order to rationalise the portfolio and reduce overall gearing levels. The strategy going forward will focus on simple format discount retailers and DIY stores which have proved defensive and provided consistent income returns.

The European.. portfolio has.. performed..strongly at an..operating level with.occupancy levels..close to 100%.

EuropeGeographic breakdown by net rental income

Germany 82% Switzerland 8.3%Netherlands 9.7%

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CromwellCromwell is an internally managed Australian Real Estate Investment Trust (A-REIT) with a property investment portfolio in excess of AUD1.4 billion (£900 million) together with a funds management business that promotes and manages unlisted property investments. Cromwell has an enviable track record of developing and owning high quality investment products whilst delivering consistent returns to investors. It has approximately AUD1.8 billion (£1.18 billion) of assets under management and manages 27 commercial, industrial and retail properties throughout Australia.

Cromwell trades on the Australian stock exchange as a stapled security comprising Cromwell Corporation Limited (which manages the funds management brand and the property operations) and Cromwell Diversified Property Trust (which owns the AUD1.4 billion property portfolio). Cromwell delivers over 95% of the earnings from its property portfolio. The portfolio occupancy stands at 99.6% and has one of the longest unexpired weighted-average lease lengths (6.8 years at 30 June 2011) in the A-REIT sector.

On 2 March 2011 Redefine International exercised its option to acquire a further 35,000,000 stapled securities in Cromwell increasing its shareholding from 19.6% to 22.2%. The increase in shareholding, together with the addition of Michael Watters to the board of Cromwell, resulted in the investment being equity accounted as an associate rather than being carried at fair value. The transaction consolidated Redefine International’s position as Cromwell’s largest shareholder. Following recent share placements undertaken by Cromwell, the Group’s shareholding as at the date of this report was 21.7%. Redefine International’s investment in Cromwell provides a healthy diversification of assets and Cromwell’s income-focused portfolio is in line with the Group’s strategy. Cromwell has a proven management team and an outstanding portfolio of assets; these should result in strong returns.

In addition to the strong returns produced by the underlying business, the return on the Cromwell investment has been bolstered by the weakening of Sterling to the Australian dollar. Should Sterling strengthen and remain relatively stronger, a portion of this gain will reverse.

Cromwell’s performance and outlookCromwell produced strong operating and financial results for their financial year ending 30 June 2011. Highlights included:

• Statutory accounting profit of AUD88.1 million or 9.6 cents per share

• Operating earnings of AUD65.3 million or 7.1 cents per share, distributions of 7.0 cents per share

• Net increase in property valuations of 2.5%, net tangible assets per security increased to AUD0.73

• No material debt maturity until July 2013• Agreement signed to expand Qantas Global

Headquarters and extend lease term to 2032

• 2012 financial year operating earnings guidance of 7.3 cents per share, distributions of 7.0 cents per share (a forward yield of 10% on the 31 August 2011 share price)

Cromwell’s strategy remains focused on managing a portfolio of Australian assets with long lease profiles and quality tenants. Growth in operating earnings is expected to be underpinned by property earnings before the contribution from new funds or other transactions. Cromwell is well positioned to deliver the strong property income returns historically achieved whilst being able to take advantage of current market conditions to buy quality property at attractive prices. Cromwell aims for 4% annual growth in “like for like” property income.

Cromwell.. produced.. strong operating.. and financial ..results for their ..financial year.. ending 30 June.. 2011..


Portfolio summaryPortfolio overview by business segmentBusiness segments – values Lettable Market Segmental Net initial Properties area value split by value yield No. sq ft ‘000 £’million % %

UK Stable Income 135 3,723 503.3 40.7 7.5UK Retail 6 1,590 257.9 20.9 7.3Hotels 6 268 123.4 10.0 7.1Europe 37 1,971 248.5 20.1 7.6Cromwell1 n/a n/a 102.5 8.3 8.2Total investment portfolio 184 7,552 1,235.6 100.0 7.7

Notes:1 Cromwell reflects share of market value. The underlying portfolio consist of 21 assets with a market

value of AUD1.444.9 million as at June 2011. The net initial yield of 8.2% reflects the yield on Cromwell’s underlying portfolio.

Figures reflect 100% ownership of property assets

Business segments – income Weighted average Annualised Average unexpired Occupancy Indexation and gross rental income rent per lease term by area fixed increases £’million £/sq ft (years) % %

UK Stable Income 40.0 10.7 8.0 95.0 54.6UK Retail 21.4 13.4 11.7 97.4 5.5Hotels 9.3 34.7 14.3 100.0 –Europe 20.0 10.1 8.3 100.0 100.0Cromwell 10.01 n/a 6.8 99.6 75.0Total investment portfolio 100.7 13.3 9.3 97.02 32.1

Notes:1 Cromwell income reflects last quarterly dividend of 1.75 Australian cents annualised2 Total occupancy excludes Cromwell. Figures reflect 100% ownership of property assets

Business segments - valuation movement Valuation Valuation Market value movement movement Proportion of 31 August 2011 six months ended 12 months ended portfolio by value £’million 31 August 2011 31 August 2011

UK Stable Income 40.3% 497.7 (4.0%) (7.9%)UK Retail 15.7% 193.9 – (2.8%)Hotels – – – –Europe 18.5% 228.3 2.5% 4.7%Cromwell 6.9% 84.8 (0.4%) 13.4%Total like-for-like portfolio 81.4% 1,004.7 (1.3%) (2.7%)Acquisitions 18.6% 230.9 6.6% 4.5%Total investment portfolio 100.0% 1,235.6 (0.8%) (1.4%)

Notes:1. Acquisitions reflect purchase price excluding acquisition costs

Portfolio overview by sectorProperty sectors at 31 August 2011

Market values Occupancy Lettable area Net rental income £’million % sq ft‘000 £’million

Retail 374.8 99.4 2,524 27.6Office 593.2 97.6 3,938 48.0Industrial 41.0 100.0 816 3.0Hotels 123.4 100.0 268 9.3Other 0.7 100.0 6 1.0Total 1,133.1 97.0 7,552 88.9

Notes:1. Excludes Cromwell

Note: there are no lease breaks in the Industrial and Hotel sectors in the next five years

RetailOfficesOther% of current net rent

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Business segment – values

UK Stable Income 40.7% UK Retail 20.9%Hotels 10.0% Europe 20.1%Cromwell 8.3%

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Sectoral profile by area

Retail 33% Offices 52%Industrial 11% Hotels 4%

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Sectoral lease expiry profile by income (£m)

4–5

year

s

+5 y

ears

3–4

year

s

2–3

year

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1–2

year

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‹1 y

ear

5.6

3.2

2.4

6.3%

68.6

77.1%

4.1

2.70.1

4.6%

1.3

3.6

2.5

4.1%

1.1

4.2

0.1

1.7

4.7%

2.5

2.9

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3.3%

2.0


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Financial review

OverviewThe results for the period ended 31 August 2011 reflect the first set of results for the enlarged group following the reverse acquisition. As a result of the application of reverse takeover accounting the results reflect those of RIHL for the twelve month period to 31 August 2011 and do not give a true reflection of the enlarged group’s underlying earnings available for distribution for the period.

Significant transactions since the interim period include the reverse acquisition of Wichford as well as the acquisitions of the St George’s Shopping Centre, Harrow and the Crowne Plaza Hotel in Reading.

The Company’s financial and strategic position has been strengthened through the creation of an enlarged group which, together with RIN and Redefine Properties’ agreement to support a capital raising of up to £100 million, will significantly enhance the Group’s capital structure and gearing ratios.

The reverse acquisition resulted in one-off acquisition costs of £6.2 million that were largely incurred within the second half of 2011. Following the reverse acquisition, the Board anticipates annual cost savings from synergies amounting to approximately £0.3 million per annum. The majority of these savings are expected to be implemented from the end of 2011 with further cost benefits taking effect in 2012.

The enlarged Group has gross assets of £1.27 billion at 31 August 2011, a significant increase of 195% from the prior period.

As a result of the stronger capital base and capital commitment, it is expected that the Group will benefit from improved access to funding, at an attractive cost. This is particularly important for the refinancing of the Gamma and Delta facilities which have a nominal value of £314.3 million and are due to mature in October 2012.

Earnings available for distributionThe earnings available for distribution represent the earnings available for distribution for RIHL for the financial period ended 31 August 2011 and the acquired earnings available for distribution for Wichford during the five month period ended 31 August 2011. Earnings available for distribution exclude any capital and one-off items and the figure is used by the Board as its measure of underlying earnings performance. Earnings available for distribution have increased by £12.8 million to £20.3 million. This is due to the acquired Wichford earnings (relating to the five month period ended 31 August 2011), the acquisition of the hotel portfolio, St George’s and the OBI portfolio in Germany. The effect of the full twelve month holding of the investment in Cromwell has also meant an increase in £5.8 million of distributions, net of withholding tax. Net Cromwell distributions received during the period amounted to AUD12.8 million (£8.4 million) at an average of 1.75 Australian cents per unit. Apart from a one-off distributable amount of £0.9 million related to the discount received on the Malthurst portfolio loan settlement, the earnings available for distribution reflect recurring earnings.

The Company’s policy is to distribute the majority of its earnings available for distribution in the form of dividends to shareholders. The Wichford shareholders on the shareholder register on 3 June 2011 received an interim dividend of 0.32 pence per share for the six month period ended 31 March 2011 as declared on 23 May 2011. Shareholders of RIHL on the shareholder register on 13 May 2011 received an interim dividend of 2.03 pence per RIHL share for the six month period ended 28 February 2011 as declared on 3 May 2011. Considering the earnings available for distribution at the period end, the Board has declared a second interim dividend of 2.10 pence per share. Taken together with the interim dividend of 2.03 pence per share, total dividends for the period are 4.13 pence per share (2010:3.21 pence), slightly ahead of the forecasted distribution per share in the reverse acquisition prospectus.

As a result of.. the stronger.. capital base ..and capital.. commitment, it ..is expected that.. the Group will.. benefit from ..improved access .to funding, ..at an attractive ..cost.


Statement of earnings available for distribution (unaudited)For the period ended 31 August 2011 12 Month 11 Month period ended period ended 31 August 2011 31 August 2010 £’000 £’000

Gross rental income from investment properties 27,335 13,380Property operating expenses (2,957) (1,661) Net operating income from investment properties 24,378 11,719

Investment income 3,875 3,207Fee income 1,010 420Other income 277 325Total revenue 29,540 15,671

Expenses (4,245) (2,335)

Administrative expenses (774) (466)Investment management fees (2,431) (1,227)Professional fees (1,040) (642)Net operating profit 25,295 13,336

Share of distributable income of associates 7,183 3,363Gain on financial assets and liabilities 840 –Non-controlling interest (569) (257)Adjusted operating profit 32,749 16,442

Net finance charges (14,978) (8,744) Interest paid (23,112) (12,363)Interest received 8,134 3,619 Foreign exchange loss (329) (6)Taxation (291) (200)Profit before earnings adjustments 17,151 7,492

Wichford acquired earnings 3,166 –Earnings available for distribution for the period ended 20,317 7,492

Interim distribution (8,395) (2,719)Earnings available for distribution at the period end 11,922 4,773

Earnings available for distribution per share Earnings available for distribution 11,922 4,773 Number of Ordinary Shares (‘000) 567,644 238,706Actual number of shares in issue on 31 August 567,644 304,706Shares not qualifying for distribution at the period end – (66,000)Earnings available for distribution per share (pence) 2.10 2.00

Summary Distribution per share (pence) 4.13 3.21Interim 2.03 1.14Second interim 2.10 2.07

+170.1%Earnings available for distribution


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Earnings per shareBasic earnings per share were 1.18 pence, an increase of 148% compared to the loss of 2.46 pence per share in the prior period. The improvement was predominantly due to the increase in earnings available for distribution and the mark to market and foreign exchange revaluation of the investment in Cromwell, partly offset by additional shares issued during the period. EPRA earnings per share were 4.00 pence compared to 2.38 pence in the prior period.

Net assetsThe table below summarises the key movements in the net asset value over the period. The reverse acquisition had a slightly dilutive impact on NAV per share due to the reverse acquisition costs incurred.

Fully diluted EPRA NAV per share, which adds back the cumulative fair value movements on interest rate swaps and similar instruments as well as deferred tax, increased 4.0% to 50.72 pence per share. EPRA NAV is used as a reporting measure to better reflect underlying net asset value attributable to shareholders by removing non-cash fair value adjustments not anticipated to be realised.

Net assets attributable to equity shareholders (unaudited)As at 31 August 2011 31 August 31 August 2011 2010 £’000 £’000

Net assets at the beginning of the period 142,506 43,098 Profit after tax attributable to equity shareholders 5,035 (4,915)Earnings available for distribution 20,317 7,492Wichford acquired earnings (3,166) –Fair value adjustment on investment property (10,627) (2,167)Equity accounted earnings 82 2,668Impairment of equity accounted investments (6,326) (6,478)Mark-to-market on derivative financial instruments 2,833 (1,755)Other 1,922 (4,675)

Ordinary Shares issued during the period 71,539 109,601Reverse acquisition costs (2,134) –Reverse acquisition of Wichford 52,535 –Equity instrument recognised 13,768 –Dividends (13,964) (3,685)Currency translation reserve movement 8,277 (1,738)Other reserve movements (258) 145Net assets at the end of the period 277,304 142,506

Fair value of derivative financial instruments 22,354 6,107Deferred tax 2,239 – EPRA net assets as the end of the period 301,897 148,613 Fully diluted number of shares in issue 595,181 304,706Fully diluted NAV per share (pence) 46.59 46.77Fully diluted EPRA NAV per share (pence) 50.72 48.77

+4.0%

EPRA net asset value per share increased to 50.72p

(2010: £48.77p)


CashflowThe cash flow statement shows net cash inflow before financing costs of £35.1 million (2010: £12.9 million), a substantial improvement from 2010, driven mainly by the increased investment in Cromwell.

The Group’s cash balance at 31 August 2011 was £51.4 million of which £11.4 million is restricted against bank borrowings. The Company benefited from the acquisition of £32.3 million of unrestricted cash reserves through the reverse acquisition with Wichford which it has partly utilised, post period end, to settle short-term debt facilities.

Operating cash flows after interest and taxation amounted to £12.3 million. A net £63.1 million was spent on investment property, principally relating to the acquisitions of St George’s, the Hotel Portfolio and the OBI portfolio. The acquisitions were funded by a £20.4 million capital raising in respect of St George’s and capital raised during the listing of RIN on the JSE. The additional investment in Cromwell amounting to £16.4 million was financed by a facility provided by Investec (Australia) Limited.

The repayment of loans and borrowings included a one-off repayment of the Citibank facility on Malthurst amounting to £17.0 million.

Dividends paid during the period (including scrip dividends), being the final August 2010 dividend and the February 2011 interim dividend amounted to £14.2 million.

Financing and capitalThe Group’s nominal value of its senior debt facilities and working capital facility at 31 August 2011 was £863.1 million and £904.6 million including its attributable share of debt in subsidiaries and joint ventures. Overall gearing levels and weighted average maturities have been influenced by the take-on of Wichford’s shorter-term debt maturity profiles, however, there is a strategy for dealing with each of these maturities, including a substantial capital commitment from the Company’s largest shareholder to support its share of a £100.0 million capital raising before October 2012.

The key financing statistics are summarised below. Group Key financing statistics as at 31 August 2011 £’000

Gross Debt 863,149Cash and short-term deposits (51,368)Net debt 811,781Weighted average debt maturity 4.15 years Weighted average interest rate 5.01% Debt at fixed/capped rates 92.9% Loan to value 75.4%

The Group’s weighted average debt maturity is 4.2 years and 4.6 years on a see through basis.

The €52.8 million VBG2 facility matured in April 2011. Following restructuring discussions, the loan servicer has agreed for a consensual marketing process of the Cologne and Stuttgart properties secured against the loans. A standstill agreement, including a waiver of the LTV covenant, has been agreed in the interim while a marketing process is conducted. The loan security is limited to the underlying property assets and property owning companies with no recourse to the Group despite the current LTV ratio of 128.7%. A potential sale of these assets will reduce the Group’s gearing ratio and is in line with the strategy of exiting from non-core assets.

The Group is in the process of reviewing all options related to the £314.3 million Delta and Gamma facilities ahead of the October 2012 maturity date. A process of identifying new sources of finance as well as restructuring options is underway. The current low interest rate environment presents opportunities to refinance at attractive rates; although a rigorous approach will be taken to assess shareholder returns on any new equity commitments.


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Financial review

The €65.6 million VBG1 facility matures in January 2012 and preliminary discussions with the loan servicer are underway. As with the VBG2 loan, the non-recourse nature of the loan provides the Group with a number of options at its disposal, none of which demand the commitment of additional equity.

The Delamere Place, Crewe facility was set for expiry in November 2011. Aviva credit approval has been obtained to extend the facility for four months while approval is sought for a long term restructuring of the facility. There are currently no financial covenant breaches in terms of the loan facility.

As at 31 August 2011 the Malthurst portfolio was ungeared. A new £11.8 million facility was put in place on 30 September 2011 with a five year term at an all-in rate of 4.19%. The loan reflects an LTV of 49.3%, in line with the Group’s strategy of reducing LTV’s, and has allowed the Group to take advantage of the current low interest rate environment.

The Board remains committed to improving the level of gearing across the portfolio and the proposed capital raising will significantly increase the refinancing options available to the Group. In limited cases, financial covenants are exceeded and where this occurs the Group will work with lenders to rectify the breaches on a reasonable basis. Material covenants under discussion or subject to waivers are summarised below. Refer to Note 26 for details on all banking facilities.

ICR ICR LTV LTV Principal Covenant Ratio Covenant Ratio Facility Lender Maturity £’million % % % %

VBG1 Talisman 3 January 2012 58.1 120 282 n/a 122VBG2 Talisman 4 April 2011 46.8 115 176 n/a 129Ciref Berlin RBS September 2014 16.2 120 164 90 93

Notes:1 VBG1 The loan has a current LTV of 122%. It is anticipated that the loan servicer will request a market testing exercise and may look to sell the assets with co-operation from the borrowing SPVs. There is an existing LTV waiver until January 2012. The loan is non-recourse to the Group.

2 VBG2The loan has a current LTV of 129%. The servicer has requested a market testing exercise which is in progress and may look to sell the assets (with co-operation from the borrowing SPVs) should acceptable offers be forthcoming. There is an existing LTV waiver until January 2012. The loan is non-recourse to the Group.

3 RBS (Ciref Berlin)The LTV breach is anticipated to be rectified on completion of the extension works to the Lidl stores and resulting lease re-gears which should provide a sufficient value uplift to cure the temporary LTV breach. A new ten year lease has also been signed with Kik and Tedi with regards to the property in Tarp. RBS have agreed to waive the LTV covenant while asset management initiatives are in place and capital is invested into the portfolio.


HedgingThe Group utilises derivative instruments, including interest rate swaps and interest rate caps to manage its interest-rate exposure. At 31 August 2011, the net fair value liability of the Group’s derivative financial instruments was £22.4 million. This increase is directly related to the decrease in long and short term interest rates in the year – indicative five year swap rates moved from 2.07% to 1.97% during the period.

The Group has a hedging policy which requires at least 75% of all interest rate exposures exceeding one year to be on a fixed rate basis. At 31 August 2011, Group debt (including its economic interest of subsidiaries and joint ventures) was 93.1% fixed. For facilities with interest rate swaps attached, the interest rates are fixed for the duration of the facility. The Group has not applied hedge accounting during the current period and hence changes in the fair value of the Group’s hedging instruments have been recognised in profit or loss.

TaxationThe Company is tax resident in the Isle of Man and property investment portfolios are, generally, owned by single property owning SPV companies which are tax resident outside the UK. The UK government announced on 23 March 2011 that it intends to consult with the property industry and other interested parties on lowering the barriers and regulatory hurdles to enter the REIT regime. In view of these proposed changes and the potential benefits of REIT status, the Board will consider the possibility of converting to a UK REIT, as it believes conversion to REIT status is attractive to UK and international real estate investors and may facilitate access to capital, particularly from institutional investors.

An initial feasibility study has been performed and once the conclusions of the REIT consultation process have been announced, the Company will make a decision as to whether conversion to REIT status is in the best interests of shareholders.

The tax charge for the period includes a deferred tax charge of £0.6 million relating to the increase in value of the Cromwell investment. The current tax charge accrued for the period of £0.6 million includes income taxes as well as real estate taxes specific to the jurisdictions in which the investment properties are located. Withholding taxes incurred amounting to £0.2 million, relate to the distributions received from the investment in Cromwell.

Group debt.. was 93.1% fixed.. as at 31 August.. 2011..

Debt maturity profile (£m)

4–5

year

s

+5 y

ears

3–4

year

s

2–3

year

s

1–2

year

s

‹1 y

ear

77.2

353.4

100.073.376.2

381.1


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While it is not possible to identify or anticipate every risk due to the changing business environment, the Company has an established risk management process to manage and mitigate those key risks which it believes could have an impact on its well-being.

The Company’s process for identifying and managing risk is set by the Board. The Board has delegated the management of risk to the Audit and Risk Committee. The Audit and Risk Committee reviews the risk management plan annually with the design, implementation and monitoring being the responsibility of the Investment Adviser (on a day-to-day basis).

The key risks facing the Company, the potential impact of these risk and the mitigating actions and controls in place are as follows:

1 Additional details on financial risks are set out in Note 3 to the consolidated financial statements

StrategicFailure to execute appropriate property investment strategies and take advantage of opportunities in the current economic climate

Financial1

Shortage of financing and refinancing at acceptable cost

Adverse interest rate movements increase borrowing or hedging costs

OperationalDecrease in demand by investors for real estate

Reduced occupier demand for space, increased supply, occupier defaults

Development and construction risk including contractor solvency and availability, and planning risk including poor engagement with local communities

Key management departure or change in investment adviser

Legal and OtherHealth, safety and environmental risk

Changes or breach of regulatory requirements

Risk

Managing riskRedefine International, like all businesses, is exposed to a number of risks which may have a material or adverse impact on its reputation, performance and financial position.


• Net asset value• Total property return (income and capital)• Shareholder earnings (dividends)

• Unable to fund property investments or development programme

• Increased cost of finance

• Increase cost of borrowing and hedging

• Net asset value• Eventual pressure on banking covenants

• Rental income and cash flow• Empty units (void) costs• Net asset value

• Reduced development returns• Cost overruns• Programme delays leading to potential loss of occupier

revenue• Failure to secure planning permission

• Loss of business relationships• Loss of management direction, poor or delayed decision

making• Reputational damage with stakeholders

• Impact on reputation or potential legal proceedings resulting in a negative financial impact or adverse publicity

• Financial or reputational impact

• Defined investment strategy• Defined asset appraisal process• Investment Committee reviews all opportunities against

pre-determined criteria• Monitoring of macroeconomic and property market trends

• Spread of sources and maturities of facilities• Sufficient cash balances maintained for spending

commitments• Continuing and extensive capital market and bank

relationship management

• Interest hedging policy

• Diversified investment portfolio• Active asset management • Regular monitoring of LTV and ICR covenants

• Diversified occupier base• Long leases and strong financial covenants• Close occupier relationships• Review of consumer trends• Retail occupiers at risk monitored regularly

• Close supply chain and professional relationships facilitate assessment and monitoring

• Assessment of contractors prior to appointment, including a financial covenant review before the contract is agreed

• 30 months written notice to terminate Investment Adviser contract

• Simple, consistent and known procedures allow operations to continue

• Succession planning regularly evaluated with non-reliance on single individuals

• All properties actively managed to mitigate these risks• Health and safety policies are in place in most properties

but in retail properties in particular• Active environmental programmes being instituted

addressing key areas of waste and energy in particular

• Business is actively managed to ensure that the company is always abreast of latest developments

• Appointment of experienced administrators, brokers and legal advisers in all jurisdictions

Impact Mitigation


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Board of Directors

Philippe de Nicolay (56)Chairman and Independent Non-Executive Director Philippe de Nicolay is Chairman of the Supervisory Board of Rothschild & Cie Gestion and a member of the Supervisory Board of Paris Orleans. He was a General Partner of Rothschild et Cie banque until 2010 and a Director of Rothschild Asset Management Limited (London) (1997-2000). He was a Director of Insight Investment Management (Global) (1997-2000) and Chief Operating Officer of Rothschild Asset Management International Holdings BV (1997-2000).

Greg Clarke (54)Chairman designate and Independent Non-Executive DirectorGreg Clarke joined Redefine International in October 2011, with over 30 years’ experience of working for and running large, international public corporations across Europe and Australia; the two key geographic areas of focus for the Company. Between 2002 and 2009 he was Chief Executive of Lend Lease Corporation, an ASX 50 international corporation specialising in property investment, development and construction. Between 1994 and 2000 he worked for groups owned by Cable and Wireless, ultimately being promoted to Chief Executive Officer of Cable and Wireless Communications Plc. He is currently Chairman of The Football League, a role he has held since 2010. In addition to the executive appointments detailed above, Greg sat on the board of British United Provident Association (‘BUPA’) between 2001 and 2007 as a Non-Executive Director.

Michael Farrow (57)Independent Non-Executive Director and Member of the Audit and Risk CommitteeMichael Farrow is a founder Director of Consortia Partnership Limited, a Jersey licensed trust company; following seven years

as an Executive Director and trustee of a very substantial family trust whose main activity was property investment and development in the UK, central Europe and California. He currently sits on the boards of both UK listed and private property companies and funds. From 1993–1997 he was Group Company Secretary of Cater Allen, Jersey and, prior to that, a regular army officer. He holds an MSc in Corporate Governance and is a Fellow of the Chartered Institute of Secretaries and Administrators.

Ita McArdle (47)Independent Non-Executive Director and Senior Independent DirectorIta McArdle qualified as a Manx Advocate in 1995 and became a partner of Simcocks Advocates in 1996. She practiced in corporate commercial law including financial services for both private and corporate clients before retiring on 30 April 2008 to set up her own consultancy. She sits on the boards of a number of public companies and collective investment schemes together with some private companies in conjunction with clients. She is a member of the Isle of Man Law Society, the Law Society of England and Wales and the International Bar Association. Ms McArdle resides in the Isle of Man. Ms McArdle holds a Class 4 – corporate services – sub-class (6) and Class 5 – trust services – sub-classes (2) and (5) Financial Services Licence and is regulated by the Financial Supervision Commission of the Isle of Man.

Richard Melhuish (64)Independent Non-Executive DirectorRichard Melhuish qualified in 1973 as a Chartered Surveyor and has over 35 years’ experience in property investment and asset management. He was previously Managing Director and co-founder of Chancerygate Asset Management Limited. Since 2006 he has been a Director of Chancerygate (IOM) Limited where he is responsible for strategy

DirectorsFrom left to right:

Philippe de NicolayGreg ClarkeMichael FarrowIta McArdleRichard MelhuishMark TaylorStewart Shaw-TaylorGavin TipperMarc WainerMichael Watters

Corporate Governance28 Redefine International P.L.C. Annual Report and Accounts 2011

management, portfolio performance and acquiring and selling property. Prior to this he worked from 1978 at Liverpool Victoria Friendly Society Limited where, as Head of Property from 1993, he was responsible for the property elements of both the Life Fund and Staff Pension Fund. These two funds directly owned property assets valued at approximately £500 million. From 1975 to 1978 he worked as a senior valuer at Smiths Industries. He was ARICS (Associate, Royal Institution of Chartered Surveyors), qualified in 1973 and elected FRICS (Fellow, Royal Institution of Chartered Surveyors) in 1989.

Mark Taylor (60)Independent Non-Executive Director and Member of the Audit and Risk CommitteeMark Taylor is a Chartered Accountant with over 30 years’ financial and general management experience in the construction, property development and investment sectors. He was Finance Director and Company Secretary of Workspace Group plc for 12 years. Prior to this, in his 17 years with John Laing he was both joint Managing Director of John Laing Developments Ltd and Group Investment Director. Following this he joined the Ministry of Defence for a short period to assist in the privatisation of its married quarters’ estate. He qualified as an accountant in 1975, being admitted as a fellow of the ICAEW in 1980.

Stewart Shaw-Taylor (59)Non-Executive DirectorStewart Shaw-Taylor is a Chartered Accountant with 27 years’ experience in investment banking and real estate. He is currently the Global Head of Real Estate Investments for the Corporate and Investment Banking division of the Standard Bank Group and is responsible for the real estate equity and asset management related activities within its worldwide Corporate and Investment Banking division.

Gavin Tipper (46)Non-Executive Director and Chairman of the Audit and Risk CommitteeGavin Tipper is a Chartered Accountant with BComm and BAcc degrees and a Masters in Business Administration. He has been involved in the financial services industry for over 20 years. He was a former technical partner at KPMG and is currently the Chairman of RIN.

Marc Wainer (63)Non-Executive DirectorMr Wainer has more than 35 years’ experience in the property industry in South Africa, including founding Investec Property Group, Investec Bank’s property division. Marc is Chief Executive Officer and an Executive Director of the listed South African property group Redefine Properties which he founded. He also is a Non-Executive Director of Hyprop Investments Limited, a South African listed retail property fund.

Michael Watters (52)Non-Executive Director Michael Watters is a qualified engineer with a BSc Eng. (Civil) Degree and an MBA. He has over 25 years’ experience in the investment banking and real estate industries. He has held directorships of some of South Africa’s top rated listed property funds including Sycom Property Fund and Hyprop Investments Limited as well as the Sapphire Retail Fund in the United Kingdom. He is the Chief Executive Officer of RIN and RIPML, the Investment Adviser.

Registered officeTop Floor14 Athol StreetDouglasIsle of ManIM1 1JA Company Secretary: Anne Couper Woods

29Corporate GovernanceRedefine International P.L.C. Annual Report and Accounts 2011

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Corporate governance report

The Board of Directors is accountable to the Company’s shareholders for the management and control of the Company’s activities and is committed to high standards of corporate governance.

The Directors recognise the importance of sound corporate governance and have substantially complied with the provisions of the UK Corporate Governance Code (the “Code”) as issued by the Financial Reporting Council in May 2010 and which is effective for periods beginning on or after 29 June 2010.

Following the listing of RIN on the JSE, the Board has resolved to comply with the provisions of the third King Report on Governance for South Africa 2009 based on the Code of Governance Principles for South Africa 2009 (collectively referred to as “King III”). King III became effective on 1 March 2010 and in light of the principle of “apply or explain”, it has been necessary for the Group to assess the status of its corporate governance framework and processes against King III.

The Board has outlined the areas of non-compliance for both the Code and King III on page 35.

Board of Directors and its CommitteesBoard Composition, Operation and IndependenceDetails of the Directors are set out on pages 28 and 29.

Redefine International is managed by a Board of Directors which comprises the Non-executive Chairman and nine Non-executive Directors. The Non-executive Directors are individuals of calibre and credibility and have the necessary skills and experience to bring judgment to bear independent of management, on issues of strategy, risk, performance, resources, transformation, diversity and employment equity, standards of conduct and evaluation of performance.

The Board meets at least quarterly and each member receives up-to-date financial and commercial information in respect of the activities prior to each meeting, in particular, quarterly management accounts and schedules of income and outgoings (each with comparisons against budget), schedules of acquisitions and disposals and relevant appraisals (prior Board approval being required for large transactions) and cash flow forecasts and details of funding availability.

The Chairman and five of the non-executive directors on the Board are independent of the Investment Adviser and meet the independence criteria of the Code and King III provisions, providing an appropriate balance of power and authority, such that no one individual or block of individuals can dominate the Board’s decision taking.

The Board reviews the schedule of matters reserved to it for decision at least once a year. Board approval is required for all significant or strategic decisions including major acquisitions, disposals and financing transactions. Other matters are delegated to the Committees of the Board, which have been established in accordance with the Code and King III, to provide detailed attention of the Board’s responsibilities and which operate within defined, written terms of reference. It should be noted that as Redefine International has no executives, no remuneration Committee has been established.

Ita McArdle has been appointed by the Board as the Senior Independent Director and is available to Shareholders where contact with the Chairman regarding a Company matter is inappropriate.

The Company maintains Directors’ and Officers’ liability insurance cover and provides the Directors with indemnity, the level of which is reviewed annually.

AttendanceThe number of meetings of the Redefine International Board and its Committees held during the year and individual attendance by Directors of Redefine International are set out below.

Audit and Risk Nominations Director Board Meetings Meetings Meetings

Philippe de Nicolay 3 – –Ita McArdle 4 2 –David Harrel 3 - –Richard Melhuish 4 2 –Robert Mark Taylor 4 2 –Wolf Cesman – – –Mark Sheardown 4 – –Gavin Tipper – – –Michael Farrow – – –Stewart Shaw-Taylor – – –Marc Wainer – – –Michael Watters – – –Greg Clarke – – –


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Appointment and Directors’ service contractsNo Redefine International Director has a service agreement with the Company. Each Non-executive Director has a Letter of Appointment, the terms and conditions of which are available for inspection at the Company’s registered office.

Dates of appointment and details of current Letters of Appointment, for all those directors who served throughout the year, can be found in the Directors’ Report on page 40.

It should be noted that Directors are not appointed for a specified term but are appointed for a term which expires when either the Director is (i) not re-appointed following retirement in accordance with the Articles of Association; (ii) removed or vacates office; (iii) resigns or does not offer himself for re-election; or (iv) terminates his appointment on three months’ notice.

Induction, training and professional adviceOn their appointment to the Board new Directors are briefed on the ethical conduct expected, activities of the Group and its key business and risks, given the latest financial information for the Group, the Terms of Reference of the Board and its Committees and a list of matters reserved for the Board.

The Chairman regularly reviews the training and development for each Director and ensures that the Directors update their skills, knowledge and familiarity with the Company to fulfil their roles on the Board and on Board Committees.

The Company Secretary provides the Board and Directors individually with detailed guidance as to how their responsibilities should be properly discharged in the best interest of the Company. The Company Secretary provides a central source of guidance and advice to the Board, and within the Company, on matters of ethics and good corporate governance

A procedure for Directors to take independent professional advice, if necessary, has been agreed by the Board and formally confirmed to all Directors.

Evaluation of the BoardAll Directors are subject to an annual performance evaluation, which is an on-going exercise. As part of this evaluation, the Chairman confirms that the retiring Directors continue to demonstrate commitment to their role and responsibly fulfil their functions on the Board and its Committees.

The Company Secretary is subject to an annual evaluation by the Board as a whole.

Retirement and Re-electionAll members of the Board are subject to the re-election provisions of the Articles of Association which require one third to offer themselves for re-election, with each Director to be re-elected at least once every three years and, if appointed by the Board during the year, at the first General Meeting after appointment. Furthermore any member of the Board who has served for more than six years is subject to annual review.

Accordingly, Ms Ita McArdle and Mr Richard Melhuish, both independent directors, offer themselves for re-election at the AGM of Redefine International.

Following his appointment to the Board on 4 October 2011, Mr Greg Clarke will seek to be formally elected at the AGM of Redefine International.

Director’s dealings The Company adheres to a strict Share Dealing Code, as prescribed by the Model Code of the Listing Rules, which prohibits dealings in shares by directors, officers and connected persons for a designated period preceding the announcement of its annual and interim financial results, interim distributions or any other period considered price sensitive. Dealings in shares by Directors and connected persons are strictly monitored and the necessary RNS announcements are made as required.

CommitteesAudit and Risk CommitteeThe members of the Audit and Risk Committee (the “Committee”) are:Gavin Tipper (Chairman) – Non-executive Director, independent of the Investment AdviserMark Taylor – Independent Non-executive DirectorMichael Farrow – Independent Non-executive Director

The Board considers that the members of the Audit and Risk Committee as a whole have sufficient recent and relevant experience to carry out the functions of the Committee and more specifically has identified Gavin Tipper as having such experience.

The Committee operates within Terms of Reference, a copy of which can be found on the website.


Corporate governance reportContinued

The Committee’s objective is to provide the Board with additional assurance regarding the efficacy and reliability of the financial information used by the directors to assist them in the discharge of their duties relating to corporate accountability and the associated risk in terms of management, assurance and reporting. The Committees are responsible for reviewing and assessing the integrity of the risk control systems and for ensuring that the risk policies and strategies are effectively managed.

The Committee meets at least twice a year. Executives and advisers responsible for finance and the external auditors are in attendance. The Committee is responsible for ensuring that the Group’s financial performance is properly monitored, controlled and reported. The Committee also meets the auditors and reviews reports from the auditors relating to accounts and internal control systems. The Committees will meet at least twice a year with the auditors.

The Committee will provide an independent and objective review of the information presented by management on corporate accountability and associated risk, taking account of reports by advisers and the Audit and Risk Committee to the Board on financial, business and strategic risk. Risk includes strategic, financial, operational, legal and other risk. Details of these risks have been set out in the Risk Management on page 26 and in Note 3 of the Financial statements on pages 57 to 59.

The Committee may authorise engaging for non-audit services with the appointed external auditors or any other practising firm of auditors, after consideration of the following:

• the essence of the work to be performed may not be of a nature that any reasonable and informed observer would construe as being detrimental to good corporate governance or in conflict with that normally undertaken by the accountancy profession;

• the nature of the work being performed will not affect the independence of the appointed external auditors in undertaking the normal audit assignments;

• the work being done may not conflict with any requirement of generally accepted accounting practice or principles of good corporate governance;

• to the operational structure, internal standards and processes that were adopted by the audit firm in order to ensure that audit independence is maintained in the event that such audit firm is engaged to perform accounting or other non-audit services to its client base. Specifically:

– the Group may not appoint a firm of auditors to improve systems or processes where such firm of auditors will later be required to express a view as to the functionality or effectiveness of such systems or processes;

– the Group may not appoint a firm of auditors to provide services where such firm of auditors will later be required to express a view on the fair representation of information the result of these services to the Company;

– the total fee earned by an audit firm for non-audit services in any financial year of the Company, expressed as a percentage of the total fee for audit services, may not exceed 35% without the approval of the Boards; and

– a firm of auditors will not be engaged to perform any management functions (e.g. acting as curator) without the express prior approval of the Board. A firm of auditors may be engaged to perform operational functions, including that of bookkeeping, when such firm of auditors are not the appointed external auditors of the Company and work is being performed under management supervision.

The Committee may delegate the approval of the appointment of a firm of auditors for non-audit services to advisers when the cumulative total budgeted cost for an assignment or assignments does not exceed £100,000 from the date of the last report-back of the use of the appointed external auditors or any other practising firm of auditors, to the Committee. The Investment Adviser shall report back on the use of the appointed external auditors or any other practising firm of auditors at meetings of the Audit Committee.

Information relating to the use of non-audit services from the appointed external auditors of Redefine International shall be disclosed in the notes to the annual financial statements. Separate disclosure of the amounts paid to the appointed external auditors for non-audit services as opposed to audit services, shall be made in the annual financial statements.

There were two Redefine International Audit and Risk Committee meetings during the 2010/2011 financial year.

Investment CommitteeThe members of the Investment Committee are:Marc Wainer (Chairman) – Non-executive DirectorRichard Melhuish – Independent Non-executive DirectorMichael Farrow – Independent Non-executive Director


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The Investment Committee will meet when necessary to consider acquisitions, development and sales of investment properties and acquisitions and disposals of listed property securities. It will approve acquisitions, disposals and capital expenditure in line with limits delegated to it and strategy determined by the Board. All members of the Investment Committee have extensive experience and technical expertise in the commercial property industry.

There was no formal Investment Committee prior to the reverse acquisition therefore no meetings were held for the financial period ended 31 August 2011.

Nomination CommitteeMembers of the nomination Committee are:Richard Melhuish (Chairman) – Independent Non-executive DirectorGreg Clarke – Independent Non-executive DirectorStewart Shaw-Taylor – Non-executive Director

The nomination Committee operates within Terms of Reference, a copy of which can be found on the Group’s website.

Board appointments are conducted in a formal and transparent manner by the Board as a whole, assisted by the nomination Committee, free from any dominance of any one particular shareholder.

No meetings were held for the financial period ended 31 August 2011. However further to the announcement that Philippe de Nicolay wished to retire as Chairman, and subsequent to the year end, the Nominations Committee has met twice in order to discuss succession planning and select a new Chairman.

A shortlist of candidates was drawn up with the help of Deutsche Bank, the Company’s financial adviser. An extensive search was carried out and up to 10 candidates were interviewed. After an exhaustive process of analysing each candidate a list of five candidates was drawn up and circulated to all advisers and brokers for comment. RIN, the major shareholder, was also consulted and the CEO of its controlling shareholder, Redefine Properties Limited, interviewed a number of the candidates.

A shortlist of three was then selected and forwarded to the Nomination Committee who recommended Greg Clarke. Mr Clarke’s appointment was confirmed and announced to the market on 5 October 2011.

Remuneration CommitteeAs the Board has no executive directors, it does not consider it necessary to establish a separate Remuneration Committee. The Board as a whole determines the Directors’ remuneration and the Directors’ fees payable to directors and members of the Boards’ subCommittees are approved by shareholders at the AGM.

The Directors Remuneration Report can be found on page 38.

Shareholder relationsRedefine International is accountable to its shareholders: by providing clear communication; by meeting regularly with major shareholders; by acting with integrity towards all current and prospective shareholders and by ensuring that all shareholders are treated fairly.

The Group reports to the shareholders on its stewardship of the Company through the publication of half-yearly and annual financial statements.

The Group maintains regular dialogue and update meetings with institutional and major shareholders following the announcement of preliminary and interim results and as requested, throughout the year.

The Board supports the principle that the AGM be used to communicate with all shareholders and encourages them to attend and participate. All Directors attend the AGM, where practicable, with the Chairman and Senior Independent Director, in particular, being accessible to all Shareholders. Enquiries from individual shareholders on matters relating to the business of the Company are welcomed and addressed.

Announcements are made in accordance with the Listing Rules and a website is maintained on which annual report and accounts, shareholder presentations copies and announcements are available to view – www.redefineinternational.com.


Corporate governance reportContinued

Investment adviserAs a result of the reverse acquisition, the pre-existing terms and conditions relating to the Investment Advisory Agreement between RIPML and Wichford, which came into effect from 1 October 2009, was replaced. From 23 August 2011, being the effective date of the reverse acquisition, the provisions relating to the amended Investment Advisory Agreement dated 13 July 2011 (the “IAA”) came into force. In terms of the IAA, the Company will pay to RIPML an asset management fee of 0.5 per cent on the aggregate gross value of the Group’s assets (including cash) and a commission of 0.75 per cent in respect of sales and acquisitions, or 1 per cent where sub-agent costs are incurred. RIPML will also receive a fee of 3 per cent of the annual rents in respect of multi-let retail property and 1 per cent for any other properties.

In addition to the asset management fee, an incentive fee is payable by the Company to RIPML, and will be satisfied by the issue of ordinary shares in Redefine International at no cost to RIPML. The number of ordinary shares to be issued in terms of the award will be determined by reference to their average middle market price for the 20 working days prior to the final day of the relevant three year award period. The amount of any award is calculated as 20 per cent of the amount by which the total return on the Ordinary Shares in the Company exceeds 12 per cent for the first award under the contract and 10 per cent for subsequent awards.

The award of shares will only vest if the Company’s EPRA earnings per share in respect of the relevant award period is equal to or greater than 20 per cent of the EPRA net asset value per share as at the date immediately prior to the award date.

The grant-date fair value of the award granted to the Investment Adviser is measured based on multiple scenarios. Expected volatility and dividends are estimated by considering historic average data.

Financial reportingThe Group’s annual report and accounts include a detailed review of the business, together with a detailed review of the financial results and financing positions. In this way, and as required by the Code and King III, the Board seeks to present a balanced and understandable assessment of the Group’s position and prospects to all shareholders.

The Group has established comprehensive management reporting disciplines which include the preparation of quarterly management accounts, detailed budgets and forecasts. Quarterly results, the financial position and cash flows of operating units are reported against approved budgets and compared to the prior period. Profit and cash flow forecasts are reviewed regularly and working capital levels are monitored on an on-going basis.

Internal controlThe Board recognises its ultimate responsibility for the Group’s system of internal control and has accordingly appointed an internal auditor. It has established procedures for identifying, evaluating and managing risks to which the Group is exposed and has identified risk management controls in the key areas of strategic, financial, operational and legal as areas for extended review. These procedures have operated throughout the year and up to the date of approval of the Annual Report and audited financial statement. It has, however, to be understood that systems of internal control, no matter how carefully designed, operated and supervised, can only provide reasonable and not absolute assurance against material misstatement or loss.


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Corporate governance gap summaryThe Code The table below outlines the key areas where Redefine International does not currently comply with the Code.

Code Provision Redefine International Compliance

Non-executives Directors should be appointed for specific terms subject to re-election and to statutory provisions relating to the removal of the director

Directors are not appointed for a specified term but are appointed for a term which expires when either the Director is:• not re-appointed following retirement in accordance with the

Articles of Association; • removed or vacates office; • resigns or does not offer himself for re-election; or • terminates his appointment on three months’ notice.

There should be a division of responsibilities between the Chairman and the Chief Executive

The Board comprises solely of Non-executive Directors.

The Board should establish an Audit Committee of Independent Non-executive Directors

Gavin Tipper, the Chairman of the Audit Committee, is not deemed to be independent due to his directorship held in RIN. The membership of this Committee is to be reviewed in the near future.

The Board should establish a Remuneration Committee As the Board has no executive directors, it does not consider it necessary to establish a separate Remuneration Committee

It should be noted that in accordance with Listing Rule 15.6.6 of the London Stock Exchange, Section D1 and D2 of the Code do not apply, except to the extent that those principles or provisions specifically relate to Non-executive Directors.

The Board as a whole has responsibility for ensuring that a satisfactory dialogue with shareholders takes place.

Shareholder relations are conducted by the Investment Adviser, RIPML. All Shareholder feedback is reported to the Board.

Recent meetings were attended by the Chairman Designate, Greg Clarke.

All Directors attend the Annual General Meeting, where practicable, with the Chairman and Senior Independent Director, in particular, being accessible to all Shareholders.

King III The table below outlines the key areas where Redefine International does not currently comply with King III

King III Governance Principle Redefine International Compliance

The board should ensure that the Company’s ethics are managed effectively

A Code of Ethics has been approved post year end and will be implemented throughout the Group

The CEO and Director responsible for finance should be appointed to the board.

There are no executives on the Board. The Company’s assets are managed by its Investment Adviser, a Director of which is a member of the Board

Audit, risk, nomination and remuneration Committees should be established.

No remuneration Committee has been established as there are no Executives.

The Audit Committee should be suitably skilled and experienced independent Non-executive Directors

Gavin Tipper, the Chairman of the Audit Committee, is not deemed to be independent. The membership of the Committee is due to be reviewed in the near future.


Corporate Social Responsibility Statement

Redefine International believes that a successful business should operate in an ethical and responsible way, whilst taking account of its stakeholders and society as a whole.

As a listed property company, Redefine International is committed to conducting its business activities in a responsible manner with due consideration to Shareholders, contractors, suppliers, tenants, local communities and to the sustainability of the environment for the future.

Corporate social responsibility is reviewed regularly by the Board. Opportunities and risks are evaluated, appropriate action discussed and a policy agreed by the Board.

Business ethicsPolicy: The Company is committed to the strictest standards of ethical conduct, fairness and integrity in all business practices both in the workplace and in the market place.

Although Redefine International has no employees, the Investment Adviser has adopted a new code of ethics in line with that of the Group, subsequent to the financial period end, which includes, but is not limited to:• Adherence to the strictest standards of corporate governance;• Honesty and integrity in business dealings;• Compliance with laws, regulations, policies and procedures• Anti-Bribery Policy• Management of conflicts of interest;• Confidentiality of information;• Conduct befitting the reputation of the Company;• Share Dealing Code for the legitimate dealings in the shares and linked units of Redefine International, RIN and its associates;• Protection and proper use of the Group’s assets; and• Sound environmental practices.

Directors and employees of the Group are encouraged to report any instances of unethical behaviour using the Whistleblowing Policy.

Performance: During the year there were no occasions when poor business ethics were reported to have occurred.

Tenants Policy: The Company aims to be a considerate and receptive landlord ensuring our tenants are given clear and adequate lines for reporting. All complaints or suggestions are given full and due consideration.

Performance: Redefine International is continuously working to improve communication with its tenants. Tenants are encouraged to give feedback which is monitored, considered and if appropriate, acted upon.

Health and safetyPolicy: Redefine International is committed to complying with all local Health and Safety legislation and regulations, maintaining a safe place of work for our tenants and our contractors.

Performance: Periodic visits are made to all properties with as little notice as practically possible given to the tenants to ensure that all Health and Safety requirements of the tenants are being adhered to. Where the Company has building contractors on site, checks are made to ensure that these contractors are adhering to Health and Safety requirements.

Environment and sustainabilityPolicy: The Company is committed to sustainability and protecting the environment for future generations. Tenants and contractors are encouraged to consider and promote energy efficient practices and to recycle and use sustainable products where possible.

Performance: Redefine International promotes recycling and energy efficiency. Where Redefine International contracts for works to its properties it requires its contractors to use sustainable products as much as the work allows and to recycle waste as appropriate. The Group has registered under the Carbon Reduction Commitment programme but does not have any on-going commitments under this initiative as most of the Group’s tenants are contracted directly with energy providers.


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WhistleblowingPolicy: Redefine International is committed to a culture of openness in which legitimate concerns can be reported without fear of penalty or punishment. Incidents involving the following should be reported: a criminal offence, miscarriage of justice, failure to comply with a legal obligation, failure to comply with Redefine International’s regulations, danger to health or safety, damage to the environment, financial malpractice, bribery and actions likely to harm the reputation of the Company.

Concealment of any of these issues should also be reported. All allegations should be made in good faith and be reported anonymously via the whistleblowing procedure. Any misconduct or malpractice within the workplace is taken extremely seriously. Any knowingly false or malicious allegations will result in actions against the individual making them. The principles and procedure are in line with the Public Interest Disclosure Act 1998 (PIDA) and apply to all contractors of Redefine International.

Performance: Contractors or tenants can raise concerns via the Redefine International website. During the past year there were no whistleblowing reports received.

Directors’ and Auditors’ Reports38 Redefine International P.L.C. Annual Report and Accounts 2011

Directors’ Remuneration Report

Remuneration policyThe Directors (other than alternate Directors) shall be paid by the Company for their services as Directors such aggregate sums as the Board may determine, or as the Company may by ordinary resolution approve . Any such sums shall be distinct from any salary, remuneration or other amounts payable to a Director pursuant to other provisions of the Articles of Association.

The Directors are entitled to be paid all reasonable travelling, hotel and other expenses properly incurred in attending meetings of the Board, Committees of the Board, general meetings or otherwise in connection with the business of Redefine International.

Basic feesThe table below shows the actual fees paid to each of the current Directors for the pro-rata 12 month period ended 31 August 2011 and the proposed fees to be paid for the 12 month period ending 31 August 2012, following the resignation of Mr de Nicolay: 2010/2011 2011/2012 Actual Annual Fees Director Fees Paid Payable

Philippe de Nicolay 50,000 –Ita McArdle 30,000 30,000Richard Melhuish 30,000 30,000Mark Taylor 40,000 35,000Gavin Tipper 20,0001 40,000Michael Farrow 25,0001 35,000Stewart Shaw Taylor – 30,000Marc Wainer 20,0001 30,000Michael Watters 20,0001 30,000Greg Clarke – 75,000

1 Paid in respect of services provided as directors of RIHL

Philippe de Nicolay informed the Directors that he intended to retire from the Board of Redefine International once a suitable replacement had been identified (refer Chairman’s Statement). Greg Clarke was appointed to the Board on 4 October 2011 and will assume the position of Chairman with effect from 1 December 2011.

Following the reverse acquisition, the number of Directors on the Board was increased from six to ten (nine after the resignation of Mr de Nicolay). It will therefore be necessary to increase the aggregate amount of fees paid to Directors, for which shareholder approval is sought at the AGM.

No share option, bonus or pension schemes are offered to the Directors.

Directors’ interestsAs at 1 December 2011, the interests (all of which are beneficial unless otherwise stated) of the Directors, their immediate family members and persons connected with them in the share capital of Redefine International, the existence of which is known to or could with reasonable diligence be ascertained by that Director, whether or not held through another party, were as follows:

Number of Ordinary Shares held in Redefine International Number Percentage of Ordinary of issued Director shares held share capital

Philippe de Nicolay 33,333 0.006Michael Watters1 2,011,213 0.355Gavin Tipper 261,358 0.046Ita McArdle 2,083 0.001Richard Melhuish 11,111 0.002Mark Taylor – –Michael Farrow – –Stewart Shaw Taylor 591,221 0.104Marc Wainer 1,555,227 0.274Greg Clarke – –

1 The interest attributed to Michael Watters is held by a discretionary trust of which members of Michael Watters’ family are discretionary beneficiaries. The trust’s interest is held via intermediate companies.

There has been no change in the Directors’ shareholdings since the financial period ended 31 August 2011.

Save as disclosed in this part, none of the Directors nor any member of their respective immediate families, nor any person connected with the Directors within the meaning of section 252 of the UK Companies Act 2006, has any interest whether beneficial or non-beneficial in any share capital of Redefine International.

39Directors’ and Auditors’ ReportsRedefine International P.L.C. Annual Report and Accounts 2011

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The Directors present their report together with the audited consolidated financial statements for the period ended 31 August 2011.

Principal activityRedefine International was established in order to generate rental income and capital growth through the investment in properties across the UK and Continental Europe, which are occupied principally by Central or State Government bodies. Following the reverse acquisition, the principal activities have been expanded to include investment in shopping centres, hotels, industrial properties and listed investments in property owning companies. The geographical region has been extended to include Australia.

Business reviewA review of the activities and prospects of the Group is given in the Chairman’s statement on page 6 and 7, the Business Review on pages 10 to 19 and the Financial Review on pages 20 to 25 .

Principal risks and uncertaintiesThe principal risks pertaining to the Group and the way in which it manages and controls these risks are outlined on page 26 and in Note 3 to the consolidated financial statements.

Results and proposed dividendsThe consolidated statement of comprehensive income is set out on page 45 and shows an income attributable to equity holders of the parent of £5.0 million.

The Directors of Redefine International resolved to declare a second interim dividend of 2.10 pence per Ordinary Share. The record date was Friday 11 November 2011 and the dividend was paid to shareholders on 24 November 2011.

Share capitalDetails of the authorised and issued share capital, together with details of the movements in Redefine International’s issued share capital during the period are shown in Note 24. Redefine International has one class of share; all shares rank equally and are fully paid.

In accordance with IFRS and in reference to the effect on financial statements on page 8, the share capital comprises that of the legal acquirer, being Wichford. The Company had 1,062,095,584 in issue at 30 September 2010 and prior to the reverse acquisition. 3,255,711,718 shares were issued pursuant to the agreed reverse acquisition ratio of 7.2 Wichford shares for each RIHL share. 230,772,000 shares previously held by RIHL in Wichford, were then cancelled and a share consolidation of 7.2 shares was enacted.

The financial statements reflect 567,643,792 shares being in issue at 31 August 2011 at a par value of 7.2 pence per share, which includes the issue of 23,752,933 shares post period end as part of the squeeze out of shareholders (under Part 18 of the Companies (Jersey) Law 1991 (as amended)) who subsequently accepted the offer in relation to the reverse acquisition. Further details are given in Note 19 to the consolidated financial statements.

There are no specific restrictions on the size of a holding nor on the transfer of Ordinary Shares. The Directors are not aware of any agreements between holders of Redefine International’s Ordinary Shares that may result in restrictions on the transfer of securities or on voting rights.

Treasury sharesOn 11 November 939,000 Redefine International Ordinary Shares of 7.2 pence were acquired by the Company and are currently held in treasury. No Shares have been cancelled.

The Treasury Shares were acquired in accordance with the existing shareholder authority granted at the AGM held on 27 January 2011 and were purchased with a view to enhancing earnings per share and/or net asset value per share.

In accordance with the Isle of Man Companies Act 1992, the rights of the 939,000 Shares held in Treasury have been suspended and therefore the total number of voting rights in the Company is currently 566,704,792. The figure of 566,704,792 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA’s Disclosure and Transparency Rules.

Notified shareholdings As at the date of this report, the following interests of the Company of 3% and over have been notified to the Company:

Company Number of shares held Percentage of Voting Rights held

Redefine Properties International Limited 389,544,640 68.74

Directors’ report


Directors’ reportContinued

Going concernAfter considering the relevant factors, the Board has a reasonable expectation that the Company and Group has adequate resources to continue in operation for the foreseeable future. They have, therefore, adopted the going concern basis in preparing these financial statements.

The principal issues the Board considered in their enquiries included, inter alia, the maturity of the Delta and Gamma Facilities in October 2012, the maturity of the VBG2 facility in May 2011, the maturity of the VBG1 facility in January 2012 and the maturity of the Crewe facility in November 2011.

Following the conclusion of the reverse acquisition, the Group’s capital structure has improved, benefiting from RIHL’s attractive long-term facilities as well as a commitment from its major shareholder to support a proposed capital raising of their share of up to £100 million (i.e. £69 million), the Board is confident that the maturity of the Delta and Gamma Facilities will be addressed.

With regard to both the VBG1 and VBG2 facilities the Board is confident that these facilities may not be required to be repaid at maturity. The Board notes that these facilities are ring-fenced with no recourse to any other assets pledged to other Group facilities. There can be no certainty as to the outcome of current negotiations or the market testing exercises requested by the servicer on VBG2, however the Board remains of the view that there would be limited impact on the continued operations of the Group.

Credit approval has been obtained to extend the Crewe facility for four months while approval is sought for a longer term restructuring solution. The Board notes that this facility is ring-fenced with no recourse to any other assets pledged to other Group facilities. There can be no certainty that agreement will be reached on restructuring the facility but the Board is of the view that this will not impact the continued operations of the Group.

DirectorsThe Directors of Redefine International, who served during the period, were as follows:

Director Date of Appointment Appointment Letter Date Resigned

Philippe de Nicolay 28 /06 /2004 19 /12 /2007Ita McArdle 28 /06 /2004 19 /12 /2007David Harrel 11 /07 /2007 19 /12 /2007 22 /08 /2011Richard Melhuish 08 /11 /2007 19 /12 /2007Mark Taylor 08 /11 /2007 19 /12 /2007Wolf Cesman 22 /05 /2008 23 /06 /2008 10 /11 /2010Mark Sheardown 11 /02 /2010 11 /02 /2010 22 /08 /2011Gavin Tipper 22 /08 /2011 03 /10 /2011Michael Farrow 22 /08 /2011 03 /10 /2011Stewart Shaw Taylor 22 /08 /2011 03 /10 /2011Marc Wainer 22 /08 /2011 03 /10 /2011Michael Watters 22 /08 /2011 03 /10 /2011Greg Clarke 04 /10 /2011 03 /10 /2011

Details of the interests of the current Directors in the Ordinary Shares of Redefine International are set out in the Report on Redefine International Directors’ Remuneration on page 38.

Biographical details of the Non-executive Directors are set out on pages 28 and 29.

Redefine International maintains insurance for the Directors in respect of liabilities arising from the performance of their duties.

Share optionsThere are no share options granted to Directors.

An incentive fee is payable by the Company to RIPML and will be satisfied by the issue of ordinary shares in Redefine International. No shares have been issued, or deemed to have been issued, in respect of this fee for the period ended 31 August 2011. Refer Note 8 to the financial statements.

Charitable donationsDuring the period Redefine International made no charitable donations.


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Payment of suppliersThe policy of the Group is to settle supplier invoices within the terms of trade agreed with individual suppliers. Where no specific terms have been agreed, payment is usually made within one month of receipt of the goods or service.

Compliance with the CodeA statement on corporate governance is set out on pages 30 to 35.

Stakeholder pensions and employee share schemes As there are no employees, no pension plan or employee share schemes are in place.

AuditorsKPMG have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the AGM.

Included in net operating income in the consolidated statement of comprehensive income, are the following fees paid to KPMG during the period: 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Audit fees 160 126Disbursements 19 15Total 179 141Non-audit fees Taxation 72 6 Transactional services 279 –Total 351 6

The Board of Directors1 December 2011


Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Directors’ Report and the Financial Statements in accordance with applicable law and regulations.

Isle of Man Companies Acts 1931-2004 (as amended) requires the Directors to prepare Group and parent Company financial statements for each financial year. Under the Listing Rules issued by the London Stock Exchange, the Directors are required to prepare the Group financial statements in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and have elected to prepare the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (“UK GAAP”) and as applied in accordance with the Isle of Man Companies Acts 1931-2004 (as amended).

The Group and parent Company financial statements are required by law, IFRS as adopted by the EU and UK GAAP, to present fairly the financial position and performance of the Group and Company respectively. The Isle of Man Companies Acts 1931-2004 (as amended) provide in relation to such financial statements that references in the relevant part of the law to financial statements giving a true and fair view are references to their achieving a fair presentation.

In preparing each of the Group and parent Company financial statements, the Directors are required to:• select suitable accounting policies and then apply them consistently;• make judgements and estimates that are reasonable and prudent;• state that the financial statements comply in the case of the Group with IFRSs as adopted by the EU and in the case of the parent

Company with UK GAAP as applied in accordance with the Isle of Man Companies Acts 1931-2004 (as amended); and• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent

Company will continue in business.

Under applicable law and the requirements of the Listing Rules issued by the London Stock Exchange, the Directors are also responsible for preparing a Directors’ Report and reports relating to Directors’ remuneration and corporate governance that comply with that law and those Rules. In particular, in accordance with the Disclosure and Transparency Rules (the “DTR”), the Directors are required to include in their report a fair review of the business and a description of the principal risks and uncertainties facing the Group and the Company and a responsibility statement relating to these and other matters, included below.

The Directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial position of the Group and parent Company and enable them to ensure that the financial statements comply with the Isle of Man Companies Acts 1931-2004 (as amended) and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Responsibility statement, in accordance with the transparency regulations

Each of the Directors confirms that to the best of each person’s knowledge and belief;• the Group financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets,

liabilities and financial position of the Group at 31 August 2011 and its profits of the period then ended;• the parent Company financial statements, prepared in accordance with UK GAAP and as applied in accordance with the Isle of

Man Companies Acts 1931-2004 (as amended), give a true and fair view of the assets, liabilities and financial position of the parent Company at 31 August 2011; and

• the Report of the Directors contained in the Annual Report together with the Business Review includes a fair review of the development and performance of the business and the position of the Group and parent Company, together with a description of the principal risks and uncertainties that they face.

The Board of Directors1 December 2011


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Independent Auditors’ Report

Independent Auditors’ Report to the Members of Redefine International P.L.C.We have audited the Group financial statements (the “financial statements”) of Redefine International for the period ended 31 August 2011 which comprise the consolidated statement of financial position, the consolidated statement of comprehensive income, the consolidated cash flow statement, the consolidated statement of changes in equity, and the related notes.

These financial statements have been prepared under the accounting policies set out therein.

This report is made solely to the Company’s members, as a body, in accordance with the Section 15 of the Companies Act 1982. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an Auditor’s Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinion we have formed.

Respective Responsibilities of Directors and AuditorsThe Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU, are set out in the Statement of Director’s Responsibilities on page 42.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view in accordance with IFRSs as adopted by the EU and are properly prepared in accordance with Isle of Man Companies Acts 1931-2004 (as amended) and Article 4 of the IAS Regulation.

We also report to you, if in our opinion the Group has not kept proper accounting records or if we have not received all the information and explanations we require for the audit.

We also report to you if, in our opinion, any information specified by law or the Listing Rules of the London Stock Exchange regarding Directors’ remuneration and Directors’ transactions is not disclosed and, where practicable, include such information in our report.

We review whether the Corporate Governance Report reflects the Company’s compliance with the provisions of the UK Corporate Governance Code (effective for period commencing after 29 June 2010) as issued by the Financial Reporting Council specified for our review by the Listing Rules of the London Stock Exchange, and we report if it does not. We are not required to consider whether the Board’s statements on internal controls cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures.

We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises only the Chairman’s Statement, Business Review, Financial Review and Directors’ Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Basis of Audit OpinionWe conducted our audit in accordance with the International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements.

It also includes an assessment of the significant estimates and judgments made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.


Independent Auditors’ Report Continued

OpinionIn our opinion:• the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the

Group’s affairs as at 31 August 2011 and of its profits for the period then ended;• the Group financial statements have been properly prepared in accordance with the Isle of Man Companies Acts 1931-2004 (as

amended), and Article 4 of IAS Regulation; and• the information given in the Directors’ Report is consistent with the Group financial statements.

Darina BarrettFor and on behalf of KPMGChartered Accountants, Statutory Audit Firm1-2 Harbourmaster PlaceInternational Financial Services CentreDublin 1Ireland

1 December 2011

45Financial StatementsRedefine International P.L.C. Annual Report and Accounts 2011

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Consolidated Statement of Comprehensive IncomeFor the period ended 31 August 2011

12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 Notes £’000 £’000

RevenueGross rental income 5 26,823 13,267Investment income 6 3,875 2,560Other income 7 1,592 673Total revenue 32,290 16,500

ExpensesAdministrative expenses (774) (466)Investment adviser and professional fees 8 (4,664) (3,406)Property operating expenses (2,368) (1,661)Net operating income 24,484 10,967

Gain/(loss) from financial assets and liabilities 9 13,540 (544)Equity accounted loss 10 (3,088) (3,525)Impairment of loans 11 (444) (598)Net fair value losses on investment property 15 (10,627) (2,167)Impairment/amortisation of intangible assets 18 (591) (345)Profit from operations 23,274 3,788

Interest income 12 8,134 3,381Interest expense 13 (24,305) (12,363)Share based payment 25 (768) –Foreign currency loss (1,224) (6)Profit/(loss) before tax 5,111 (5,200)

Taxation 14 (1,360) (200)Profit/(loss) after tax 3,751 (5,400)

Profit/(loss) attributable to:Equity holders of the parent 5,035 (4,915)Non-controlling interests (1,284) (485)Profit/(loss) after tax 3,751 (5,400)

Other comprehensive incomeForeign currency translation on foreign operations – subsidiaries 1,927 (43)Foreign currency translation on foreign operations – joint ventures and associates 4,882 (217)Share of foreign currency movement recognised in associate undertaking 1,494 (1,494)Share of cash flow hedge reserve movement recognised in associate undertaking (155) 155Total comprehensive income for the period 11,899 (6,999)

Total comprehensive income attributable to:Equity holders of the parent 13,157 (6,498)Non-controlling interests (1,258) (501)Total comprehensive income for the period 11,899 (6,999)

Basic earnings/(loss) per share (pence) 35 1.18 (2.46)Diluted earnings/(loss) per share (pence) 35 1.11 (2.46)

The accompanying notes form an integral part of these financial statements.

Financial Statements46 Redefine International P.L.C. Annual Report and Accounts 2011

Consolidated Statement of Financial PositionAs at 31 August 2011

31 Aug 31 Aug 2011 2010 Notes £’000 £’000

AssetsNon-current assetsInvestment property 15 986,654 227,675Long-term receivables 16 104,080 48,160Investments designated at fair value 17 1,123 75,139Intangible assets 18 – 7,559Investments in joint ventures 20 2,607 2,041Investments in associates 21 104,680 18,923Total non-current assets 1,199,144 379,497

Current assetsTrade and other receivables 22 23,785 13,233Cash at bank 23 51,368 35,411Total current assets 75,153 48,644

Total assets 1,274,297 428,141

Equity and liabilitiesCapital and reservesShare capital 24 40,870 10,621Share premium 161,420 161,420Reverse acquisition reserve 134,295 42,365Retained earnings (87,598) (78,327)Other reserve 3,912 3,912Currency translation reserve 10,637 2,360Cash flow hedge reserve – 155Capital instrument 25 13,768 –Total equity attributable to equity shareholders 277,304 142,506Non-controlling interest 5,506 2,254Total equity 282,810 144,760

Non-current liabilitiesBorrowings 26 811,415 161,156Derivatives 27 6,824 4,529Deferred tax 14 2,239 -Total non-current liabilities 820,478 165,685

Current liabilitiesBorrowings 26 117,071 100,003Derivatives 27 16,291 1,578Trade and other payables 28 37,647 16,115Total current liabilities 171,009 117,696

Total liabilities 991,487 283,381

Total equity and liabilities 1,274,297 428,141

Basic net asset value per share (pence) 36 48.85 46.77

Diluted net asset value per share (pence) 36 46.59 46.77

Number of ordinary shares in issue 36 567,643,792 304,706,406


These financial statements were approved by the Board of Directors on 1 December 2011 and signed on its behalf by:

Ita McArdle Richard MelhuishDirector Director


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Consolidated Statement of Changes in EquityFor the period ended 31 August 2011

Total Reverse Currency Cash Flow attributable Non- Share Share acquisition Treasury Retained Other translation Hedge Capital to equity Controlling Total capital premium reserve shares earnings reserve reserve reserve instrument shareholders interest equity £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 October 2009 739 104,127 – (61) (69,717) 3,912 4,098 – – 43,098 2,512 45,610Total loss for the period – – – – (4,915) – – – – (4,915) (485) (5,400)Foreign currency translation effect – – – – – – (1,738) – – (1,738) (16) (1,754)Effective portion of cash flow hedges – – – – – – – 155 – 155 – 155Total comprehensive income – – – – (4,915) – (1,738) 155 – (6,498) (501) (6,999)Shares issued 2,308 110,553 – – – – – – – 112,861 – 112,861Share issue costs – (3,260) – – – – – – – (3,260) – (3,260)Dividend paid to equity stakeholders – (61) – 61 (3,685) – – – – (3,685) – (3,685)Dividends paid to non-controlling interests – – – – – – – – – – (14) (14)Increase in non-controlling interest – – – – (10) – – – – (10) 10 –Contribution of non-controlling shareholders – – – – – – – – – – 247 247

Balance at 31 August 2010 3,047 211,359 – – (78,327) 3,912 2,360 155 – 142,506 2,254 144,760

Adjustment to present Wichford capital structure 7,574 (49,939) 42,365 – – – – – – – – –Restated balance at 31 August 2010 10,621 161,420 42,365 – (78,327) 3,912 2,360 155 – 142,506 2,254 144,760

Balance at 31 August 2010 3,047 211,359 – – (78,327) 3,912 2,360 155 – 142,506 2,254 144,760Total profit for the period – – – – 5,035 – – – – 5,035 (1,284) 3,751Foreign currency translation effect – – – – – – 8,277 – – 8,277 26 8,303Effective portion of cash flow hedges – – – – – – – (155) – (155) – (155)Total comprehensive income – – – – 5,035 – 8,277 (155) – 13,157 (1,258) 11,899Shares issued 1,471 73,096 – – – – – – – 74,567 – 74,567Share issue costs – (3,028) – – – – – – – (3,028) – (3,028)Dividend paid to equity stakeholders – – – – (13,964) – – – – (13,964) – (13,964)Scrip dividend paid to equity stakeholders 4 235 – – (239) – – – – – – –Dividends paid to non-controlling interests – – – – – – – – – – (81) (81)Convertible shares to be issued – – – – – – – – 13,000 13,000 – 13,000Share based payment – – – – – – – – 768 768 – 768Decrease in non-controlling interest – – – – (103) – – – – (103) (326) (429)Contribution of non-controlling shareholders – – – – – – – – – – 4,917 4,917Adjustment to present Wichford capital structure 6,099 (120,242) 114,143 – – – – – – – – –Shares issued pursuant to reverse acquisition 32,557 – 19,978 – – – – – – 52,535 – 52,535Cancellation of shares (2,308) – 2,308 – – – – – – – – –Share issue costs – – (2,134) – – – – – – (2,134) – (2,134)Balance at 31 August 2011 40,870 161,420 134,295 – (87,598) 3,912 10,637 – 13,768 277,304 5,506 282,810



Consolidated Statement of CashflowsFor the period ended 31 August 2011

12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 Notes £’000 £’000

Cash flows from operating activitiesProfit/(loss) for the period before tax 5,111 (5,200)Adjusted for:Straight lining of rental income 169 -Foreign exchange loss 1,224 6(Gain)/loss from financial assets and liabilities 9 (13,540) 544Equity accounted losses 10 3,088 3,525Impairment of loans 11 444 598Impairment/amortisation of intangible assets 18 591 345Net fair value losses on investment property 15 10,627 2,167Investment income 6 (3,875) (2,560)Interest income 12 (8,134) (3,381)Interest expense 13 24,305 12,363Share based payment 25 768 -Cash generated by operations 20,778 8,407Changes in working capital 37.1 93 279

Cash generated by operations 20,871 8,686Interest income 4,540 1,158Interest paid (22,867) (12,257)Taxation paid (152) (200)Distributions received 3,875 1,395Distributions from associates and joint ventures 5,986 1,849Net cash generated by operating activities 12,253 631

Cash flows from investing activitiesPurchase of investment properties 15 (211,083) (527)Investment in associates and joint ventures 20, 21 (18,586) (22,885)Cash acquired on reverse acquisition 19 32,340 -Acquisition of subsidiaries 37.2 (307) (390)Disposal of subsidiaries 37.3 (477) -Decrease/(increase) in loans to related parties 3,990 (1,504)Purchases of financial assets (1,565) (72,188)Decrease/(increase) in restricted cash balances 14,616 (18,442)Net cash utilised in investing activities (181,072) (115,936)

Cash flows from financing activitiesProceeds from loans and borrowings 152,831 13,610Repayment of loans and borrowings (21,846) (2,648)Dividends paid to non-controlling interests (81) (14)Dividends paid to equity shareholders (13,964) (3,465)Proceeds from issue of share capital 37.4 73,644 112,642Share issue and reverse acquisition costs 37.4 (3,993) (3,260)Additional contribution from non-controlling shareholders 4,804 247Net cash generated from financing activities 191,395 117,112

Net increase in cash 22,576 1,807

Effect of exchange rate fluctuations on cash held 392 (370)

Net cash at the beginning of period 16,969 15,532

Net cash at the end of the period 23 39,937 16,969



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Notes to the Consolidated Financial StatementsFor the period ended 31 August 2011

1. General information

Redefine International (formerly “Wichford P.L.C.) was incorporated on 28 June 2004 under the laws of the Isle of Man and is listed on the Main Market of the London Stock Exchange. On 23 August 2011 the Company’s financial year end was changed to 31 August from 30 September.

With effect from 23 August 2011, Redefine International plc (subsequently renamed Redefine International Holdings Limited (“RIHL”)) reverse acquired Wichford P.L.C. (“Wichford”). As a result of the terms of the transaction, reverse acquisition accounting has been applied under IFRS 3 Business Combinations (2008). Following the adoption of reverse acquisition accounting, RIHL has been identified as the accounting acquirer. Consequently, the statement of financial position reflects the reserves, assets and liabilities of RIHL and the capital, reserves, assets and liabilities of Redefine International, effectively acquired by RIHL at fair value as at 31 August 2011.

Although the reverse acquisition became effective on 23 August 2011 the financial statements have been prepared assuming an acquisition date of 31 August 2011. The difference between these dates is not deemed to be material and hence the statement of comprehensive income reflects the income and expenses of RIHL only, for the 12 months ended 31 August 2011.

The consolidated financial statements of the Company for the twelve month period ended 31 August 2011 consolidate the Company and its subsidiaries (together referred to as the “Group”). They are presented in pound sterling which represents the functional currency of the Company and are rounded to the nearest thousand. The report is prepared on the historical cost basis except for investment properties, derivative financial instruments and financial instruments designated at fair value through profit or loss.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ materially from these estimates. In preparing these financial statements, the significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are discussed further in Note 2.2, Basis of preparation.

These consolidated financial statements have been prepared on a going concern basis as the Directors consider this the most appropriate basis.

Statement of complianceThese consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the EU.

2. Significant accounting policies

2.1 Adoption of new accounting standardsExcept as described below, the accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its audited financial statements as at and for the period ended 31 August 2010.

The following standards/amendments to standards were adopted by the Group during the period:

Amendment to IAS 24 – Related Party DisclosuresThis amendment simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition. It also provides a partial exemption from the disclosure requirements for government-related entities. The remainder of the amendment impacts upon the disclosure of certain related party relationships, transactions and outstanding balances including commitments in the financial statements of the Group.

Amendment to IAS 32 – Financial Instruments: Presentation-Classification of rights issuesThe amendment which is effective for annual periods beginning on or after 1 February 2010, states that if rights issues are issued by an entity pro rata to all existing shareholders in the same class for a fixed amount of currency, they should be classified as equity regardless of the currency in which the exercise price is denominated. This amendment did not have any impact on the Group’s financial statements but may do so in the future.

IFRIC 19 Extinguishing Financial Liabilities with Equity InstrumentsThis IFRIC which is effective for annual periods beginning on or after 1 July 2010 clarifies the requirements of IFRSs when an entity renegotiates the terms of a financial liability with its creditor and the creditor agrees to accept the entity’s shares or other equity instruments to settle the financial liability fully or partially. This amendment did not have any impact on the Group’s financial statements but may do so in the future.

Improvement to IFRSs May 2010In May 2010, the IASB issued its third edition of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording.


Notes to the Consolidated Financial StatementsContinued

The adoption of the following amendments did not have any impact on the financial position or performance of the Group.• IFRS 3 Business Combinations: The measurement options available for non-controlling interest (“NCI”) have been amended. Only

components of NCI that constitute a present ownership interest that entitles their holder to a proportionate share of the entity’s net assets in the event of liquidation shall be measured at either fair value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable net assets. All other components are to be measured at their acquisition date fair value.

• IFRS 7 Financial Instruments - Disclosures: The amendment to IFRS 7 clarifies the required level of disclosure about credit risk and collateral held and provides relief from disclosures previously required regarding renegotiated loans.

• IAS 1 Presentation of Financial Statements: The amendment clarifies that an option to present an analysis of each component of other comprehensive income may be included either in the statement of changes in equity or in the notes to the financial statements.

Other amendments resulting from Improvements to IFRSs did not have any impact on the accounting policies, financial position or performance of the Group.

New standards and interpretations not yet adoptedThe Directors have considered all IFRSs and interpretations that have been issued, but which are not yet effective and are currently assessing whether they will have a significant impact on how the results of operations and financial position of the Group are prepared and presented.

2.2 Basis of preparationThe consolidated financial statements are presented in Great British Pounds, which is the functional currency of the Company and the presentation currency of the Group, rounded to the nearest thousand pounds. They are prepared using the historical cost basis except for investment property, derivative financial instruments and financial instruments designated at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of judgements and estimates that affect the reported amounts of assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the period reported. Although these estimates are based on the Directors’ best knowledge of the amount, event or actions, actual results may differ from those estimates.

The principal areas where such judgements and estimates have been made are:

Application of the going concern basis of accountingThese consolidated financial statements have been prepared on a going concern basis as the Directors consider this the most appropriate basis. After considering the relevant factors, the Directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future.

The principal issues the Board considered in their enquiries included, inter alia, the maturity of the Delta and Gamma Facilities in October 2012, the maturity of the VBG2 facility in May 2011, the maturity of the VBG1 facility in January 2012 and the maturity of the Crewe facility in November 2011.

Following the conclusion of the reverse acquisition the Group’s capital structure improved benefiting from RIHL’s attractive long term facilities as well as a commitment from its major shareholder to support a proposed capital raising of their share of up to £100 million (i.e. £67 million), the Directors are confident that the maturity of the Delta and Gamma facilities will be addressed.

With regard to both the VBG1 and VBG2 facilities the Board is confident that these facilities may not be required to be repaid at maturity. The Board notes that these facilities are ring-fenced with no recourse to any other assets pledged to other Group facilities. There can be no certainty as to the outcome of current negotiations or the market testing exercises requested by the servicer on VBG2, however the Board remains of the view that there would be limited impact on the continued operations of the Group.

Credit approval has been obtained to extend the Crewe facility for four months while approval is sought for a longer term restructuring solution. The Board notes that this facility is ring-fenced with no recourse to any other assets pledged to other Group facilities. There can be no certainty that agreement will be reached on restructuring the facility but the Board is of the view that this will not impact the continued operations of the Group.

The Board has a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future as outlined in the Directors’ Report.


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Investment Property ValuationThe Group uses the valuation performed by its independent valuers as a fair value of its investment properties. The valuation is based upon assumptions including estimated rental values, future rental income, anticipated maintenance costs, future development costs and appropriate discount rates. The valuers also make reference to market evidence of transaction prices for similar properties.

Classification of Investment Property The hotel properties are held for capital appreciation and to earn rental income. The properties have been let to Redefine Hotel Management Limited (“RHML”) for a fixed rent which is subject to annual review. RHML operates the hotel business on its own account and is exposed to the fluctuations in the underlying trading performance of the hotels. It is responsible for the day to day upkeep of the properties and retains the key decision making responsibility for the business. Aside from the payment of rental income to Redefine International there are limited or no transactions between the two entities. As a result, in line with guidance in IAS 40, Redefine International classifies the hotel properties as investment properties.

Determination of the fair value of the liabilities of Wichford on acquisitionIn determining the fair value of Wichford financing, consideration has been given to the non-recourse nature of the loans, the remaining duration of the financing and the current cost of funding for similar transactions. See Note 19 for further details.

TaxationThe Group is exposed to the risk of changes to tax legislation in the various countries in which the Group operates. It is also exposed to different interpretations of tax regulations between the tax authorities and the Group.

Deferred TaxationThe Group considers that the value of the property portfolio is likely to be realised by both the sale and the use over time. The Group bases its deferred taxation provision on the assumption that the residual value of the investment properties is not less than the present value as provided by its external valuers.

The Group makes an initial estimate of the length of time that each property will be held in order to determine the initial recognised exemption for both the in use and on sale elements for each property. Periodically the Group will review the length of time for which each property will continue to be held and this can be significantly different from the residual of the time from the initial estimate.

The resulting provision, being subject to assumptions on the length of the time that each property will be held by the Group which can change over time, can lead to significantly different results for each property from one period to another.

The recoverability of any deferred tax asset is assessed and, where it is thought unlikely that a recovery will be made, is not included in the Group’s provision.

2.3 Basis of consolidation2.3.1 Investment in subsidiariesSubsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries are included in the Group results from the effective dates of acquisition to the effective dates of disposal. Any difference between the purchase price of a subsidiary and the Group’s share of the fair value of the identifiable net assets acquired is treated in accordance with the Group’s accounting policy for intangible assets.

All intergroup transactions are eliminated on consolidation. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company using consistent accounting policies.

The initial interest of non-controlling interests is stated at the non-controlling interest’s proportion of the net asset value of the company or the fair value.

2.3.2 Investment in associates and joint venturesAssociates are entities over whose financial and operating policies the Group has the ability to exercise significant influence but not control and which are neither subsidiaries nor joint ventures. Joint ventures are those entities over which the Group exercises joint control in terms of a contractual agreement.

Investments in associated undertakings and joint ventures are initially recorded at cost and increased (or decreased) each year by the Group’s share of the post-acquisition net income (or loss), and other movements reflected directly in the equity of the associated undertaking.



Goodwill arising on the acquisition of an associated undertaking or joint venture is included in the carrying amount of the investment. When the Group’s share of losses in an associate or joint venture has reduced the carrying amount to zero, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations to make payments on behalf of the associate or joint venture.

The Group’s share of the results of associated or joint venture undertakings after tax reflects the Group’s proportionate interest in the relevant undertaking and is based on financial statements made up to a date not earlier than three months before the period end reporting date, adjusted to conform with the accounting policies of the Group.

Since goodwill that forms part of the carrying amount of the investment in an associate or joint venture is not recognised separately, it is therefore not tested for impairment separately. Instead, the entire amount of the investment in an associate or joint venture is tested for impairment as a single asset when there is objective evidence that the investment in an associate or joint venture may be impaired.

Reversals of impairments are recorded as an adjustment to the investment balance to the extent that the recoverable amount of the associate or joint venture increases.

Associates and joint ventures are carried at cost less impairments in the company financial statements. Unrealised gains and losses arising from transactions with associates and joint ventures are eliminated to the extent of the Group’s interest in the entities.

2.3.3 Accounting for business combinationsThe Group applies IFRS 3 Business Combinations (2008) in accounting for business combinations.

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

The Group measures goodwill at the acquisition date as:• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination has been achieved in stages, the fair value of the existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses.

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably.

The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree.Costs related to the acquisition, other than those associated with the issue of debt or equity securities that the Group incurs in connection with a business combination, are expensed as incurred.

Costs associated with the issue of equity securities are recorded directly in equity.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

2.3.4 Property acquisitionsWhere properties are acquired through the acquisition of corporate interests, the Directors have regard to the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.

Where such acquisitions are not judged to be an acquisition of a business the transactions are accounted for as if the Group had acquired the underlying property directly. Accordingly, no goodwill arises, rather the cost of the corporate entity is allocated between the identifiable assets and liabilities of the entity based on their relative fair values at the acquisition date.


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Otherwise corporate acquisitions are accounted for as business combinations.

2.3.5 Goodwill and intangible assetsGoodwill and intangible assets are carried at cost less accumulated impairment losses. In respect of equity accounted investments the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill that forms part of the carrying amount of the investee.

Amortisation of intangible assets is recognised in profit or loss on a straight-line basis over their estimated useful life, from the date that they are available for use.

2.3.6 Transactions eliminated on consolidationIntragroup balances, transactions and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

2.4 Currency translation reserve2.4.1 Foreign currency transactionsTransactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of comprehensive income. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to the functional currency at the foreign exchange rates ruling at the dates that the values are determined.

2.4.2 Foreign operationsExchange differences arising from the translation of the net investment in foreign operations are taken to the currency translation reserve (CTR). They are released into the statement of comprehensive income upon disposal. On consolidation, the statements of financial position of foreign subsidiaries and associates are translated at the closing rate and the statement of comprehensive income is translated at the average rate for the period.

2.5 Investment propertyInvestment properties are those which are held either to earn rental income or for capital appreciation or for both. Investment properties are stated at fair value. External, independent valuation companies, having professionally qualified valuers and recent experience in the location and category of property being valued, value the portfolios on an annual basis. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably and without compulsion.

The valuations are prepared by considering comparable market transactions for sales and letting. In the case of lettings this includes considering the aggregate of the net annual market rents receivable from the properties and where relevant, associated costs. A yield which reflects the risks inherent in the net cash flows is applied to the net annual rentals to arrive at the property valuation.

As the fair value model is applied, property under construction or redevelopment for future use as investment property is measured at fair value. However, where the fair value of investment property under redevelopment is not reliably measurable, the property is measured at cost.

Property held under leases for the same purpose is also classified as investment property, accounted for as held under a finance lease and initially recognised at the sum of any premium paid on acquisition and the present value of any further minimum lease payments. The corresponding liability to the superior leaseholder is included in the consolidated statement of financial position as a finance lease obligation.

Thereafter investment property is measured at fair value, which reflects market conditions at the reporting date. For the purposes of the historical financial information, the assessed fair value is:• reduced by the carrying amount of any accrued income and expense resulting from the spreading of lease incentives and/or

minimum lease payments; and• increased by the carrying amount of any liability to the superior leaseholder included in the consolidated statement of financial

position as a finance lease obligation.

The annual valuations of investment property are based upon estimates and subjective judgements that may vary from the actual values and sales prices that may be realised by the Group upon ultimate disposal. The critical assumptions made relating to valuations have been disclosed in Note 3 and Note 15 to the financial statements.



Gains or losses arising from changes in the fair value of investment property are included in the profit or loss in the year in which they arise. Profits or losses on the disposal of investment property are recognised at contract completion for the disposal.

Disposals of investment properties are recognised on completion and the profit or loss on disposal is calculated as the difference between the sale proceeds and the latest carrying value of the property after adding attributable costs of the disposal.

2.5.1 Borrowing costs and cost of constructionAll costs directly associated with the purchase and construction of a property are capitalised.

Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred. Capitalisation of borrowing costs may continue until the assets are substantially ready for their intended use. If the resulting carrying amount of the asset exceeds its value, an impairment loss is recognised. The capitalisation rate is arrived at by reference to the actual rate payable on borrowings for development purposes or, with regard to that part of the development cost financed out of general funds, to the average rate.

2.6 Financial instruments – Recognition, classification and measurementNon-derivative financial instrumentsNon-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not designated at fair value through profit or loss, any directly attributable transaction costs, except as described below. Loan receivables and payables are subsequently measured at amortised cost using the effective interest rate method.

A financial instrument is recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial assets to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire.

Investments at fair value through profit or lossAn instrument is classified at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated as fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss comprise equity securities and are measured at fair value, and changes therein are recognised in the statement of comprehensive income. Fair values are determined by reference to their quoted bid price at the reporting date, where such a price is available. Investment in investment property funds are recorded at the net asset value per share reported by the managers of such funds, which is the best estimate of fair value.

Derivative financial instrumentsThe Group holds derivative financial instruments to manage its interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for in profit or loss and disclosed in losses/gains from financial assets and liabilities.

2.7 Finance leasesFinance leases, which are the ground rents payable to the superior landlord on leasehold properties, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged through profit or loss as they arise.


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2.8 ImpairmentA financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

2.9 Cash and cash equivalentsCash and cash equivalents comprise cash balances on hand, cash deposited with financial institutions and short-term call deposits. Cash and cash equivalents have a maturity of less than three months.

Restricted cash comprises cash deposits which are restricted until the fulfilment of certain conditions.

2.10 Share capitalOrdinary share capitalOrdinary shares are classified as equity. External costs directly attributable to the issue of new shares are shown as a deduction from equity, net of tax.

Treasury sharesWhen share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. The shares are available for reissue in the future.

2.11 Leasehold propertyLeasehold properties that are leased out to tenants under operating leases are classified as investment properties as appropriate, and included in the statement of financial position at fair value.

Land interests held under an operating lease are classified and accounted for as investment property on a property by property basis when they are held to earn rentals or for capital appreciation on both the land and the property. Any such property interest under an operating lease classified as investment property is carried at fair value.

2.12 Loans and borrowingsInterest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of comprehensive income over the period of the borrowings on an effective interest basis.

Finance costsFinance costs recognised in the statement of comprehensive income comprises interest payable on borrowings calculated using the effective interest method, net of interest capitalised.

Restructured debtA financial liability is derecognised when it is extinguished (i.e. it is discharged, cancelled or expires) which may happen when a payment is made to the lender, the borrower legally is released from primary responsibility for the financial liability or where there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument.

Any difference between the carrying amount of the original liability and the consideration paid is recognised in profit or loss. The consideration paid includes non-financial assets transferred and the assumption of liabilities, including the new modified financial liability. Any new financial liability recognised is measured initially at fair value. Any costs or fees incurred are recognised as part of the gain or loss on extinguishment and do not adjust the carrying amount of the new liability.



2.13 DividendsDividends to shareholders are recognised when they become legally payable. In the case of interim dividends, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at a general meeting.

2.14 Rental incomeRental income from investment property leased out under operating leases is recognised in the statement of comprehensive income on a straight-line basis over the term of the leases. Lease incentives granted are recognised as an integral part of the total rental income and amortised over the term of the leases.

Contingent rental income is recognised as it arises. Premiums to terminate leases are recognised in profit or loss as they arise.

2.15 Service chargesWhere the Group invoices service charges, these amounts are not recognised as income as the risks in relation to the provision of these goods and services are primarily borne by the Group’s customers. Any servicing expenses suffered by the Group are included within property operating expenses in the statement of comprehensive income.

2.16 Investment incomeDividends from listed property investments are recognised on the date the Group’s right to receive payment is established. Interest earned on cash invested with financial institutions is recognised on an accrual basis using the effective interest rate method.

2.17 Income taxIncome tax on the profit or loss for the period comprises current and deferred tax. Income tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Deferred tax is provided using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences is not provided for: goodwill not deductible for tax purposes, those arising from the initial recognition of assets or liabilities that affect neither accounting or taxable profit, nor differences relating to investments in subsidiaries to the extent described below. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised and is reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax is not provided on temporary differences arising on investments in subsidiaries and joint ventures where the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

In determining the expected manner of realisation of an asset, the Directors consider that the Group will recover the residual value of an asset through sale and the depreciable amount through use. Whilst investment property is measured at fair value, it is intrinsically depreciable. Consequently deferred tax relating to that portion of the carrying amount of the investment property that would be considered depreciable under IAS 16 is measured on an “in use”, not an “on sale” basis. The element of the total carrying amount of the investment property represented by the land is considered non-depreciable and the Directors estimate the depreciable amount and residual value of the building element on a case-by-case basis.

2.18 Earnings per shareThe Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for the effects of all dilutive potential ordinary shares.

2.19 Segment reportingAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and in respect of which it may incur expenses, including revenues and expenses that relate to the transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. See Note 4 for further details.


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2.20 Capital instrumentA financial instrument or its component parts is classified on initial recognition as a financial liability, a financial asset or an equity instrument in accordance with the substance of the contractual arrangement.

An instrument is classified as equity where there is no contractual obligation to deliver cash or another financial asset to another party, or to exchange financial assets or financial liabilities with another party under potentially unfavourable conditions (for the issuer of the instrument) or where the instrument will or may be settled for a fixed number of the entity’s own equity instruments.

Equity instruments are recognised initially at their fair value with any directly attributable costs allocated to the instrument. The equity instrument is not re-measured subsequent to initial recognition.

Payments in relation to the capital instrument are deemed to be share based payments and are recorded in the statement of comprehensive income due to the unavoidable nature of the obligation. See Note 25 for further details

2.21 Share based paymentsThe grant-date fair value of equity share-based payment awards granted to the Investment Adviser is recognised as an expense, with the corresponding increase in equity, over the period that the Investment Adviser become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related non market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related non market condition performance conditions at the vesting date.

3. Financial risk management

OverviewThe Group has exposure to the following risks from its use of financial instruments:• credit risk• liquidity risk• market risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout the consolidated financial statements.

The Group’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board is responsible for developing and monitoring the Group’s risk management policies.

The Group’s risk management policies require the identification and analysis of the risks faced by the Group, the setting of appropriate risk limits and controls, and the monitoring of risks and adherence to limits. Risk management policies and systems are reviewed regularly and adjusted to reflect changes in market conditions and the Group’s activities.

The Group Audit Committee oversees management’s monitoring of compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from tenants and on investment securities.

Trade and other receivablesThe Group is exposed to concentrations of credit risk. Concentrations of tenant risk exist in each individual property portfolio. The Board of Directors monitors the concentration of credit risk with individual tenants and counterparties across the portfolio. The level of concentration is addressed both with regards to the sector of property, the industry in which the tenant operates and the credit history of the tenant/customer. An allowance is made where there is an identified loss event which is evidence of a reduction in the recoverability of the cash flows.

Cash and cash equivalentsThe Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have a credit rating of at least investment grade from Standard & Poor’s or Moody’s, except where specific exemptions are granted by the Board. Given the credit quality, management does not expect any counterparty to fail to meet its obligations. Cash transactions are limited to high-credit-quality financial institutions. The Board of Directors monitors the exposure of the Group to any one financial institution and ensures that this is limited by diversification of deposits and lending from each institution across the portfolio.



Loan counterpartiesThe Group limits its exposure to loan counterparty risk by firstly, diversifying its property related loans over a number of high credit rated financial institutions and secondly, only enters into single interest rate swap agreements with the respective financial institution providing the loan. Mezzanine counterparties are assessed for suitability prior to entering into loan agreements and are reviewed regularly in line with the Group’s risk management policies.

Long-term receivablesThe Group limits its exposure to credit risk by ensuring all loans are made to high-credit-quality financial institutions and counterparties, whose investments are secured over their underlying property assets. See Note 16 for further details.

Liquidity riskThe Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient rental income to service its financial obligations when they fall due. The monitoring of liquidity risk is assisted by the monthly review of financial covenants imposed by financial institutions, such as interest and loan to value covenant ratios. Renegotiation of loans takes place in advance of any potential covenant breaches in so far as the factors are within the control of the Board. In periods of increased market uncertainty the Board will ensure sufficient cash resources are available for potential loan repayments/cash deposits as may be required by financial institutions. Refer Note 2.2 for further details on the going concern assumption adopted by the Board.

Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its investments in financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

The Group enters into derivative financial instruments in the ordinary course of business, and incurs financial liabilities, in order to manage market risks. The Board of Directors receives reports on a quarterly basis with regards to currency exposures as well as interest rate spreads and takes the necessary steps to hedge/limit the risk the Group is exposed to. The Group does not apply hedge accounting. See Note 26, 27 and 32 for further details.

Currency riskThe Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro (“EUR”), Australian Dollar (“AUD”), United States Dollar (“USD”) and Swiss Franc (“CHF”). Foreign exchange risk arises from current exposures the Group has to foreign currencies, recognised monetary assets and liabilities and net investments in foreign operations.

The Group’s investments in foreign subsidiaries are not hedged as the currency positions are considered to be long-term in nature. See Note 31 for further details.

Interest rate riskThe Group’s exposure to the risk of the changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates. The Group uses interest rate derivatives to mitigate its exposure to interest rate fluctuations. At the period end, as a result of the use of interest rate swaps, the majority of the Group’s borrowings were at fixed interest rates.

The Group’s profit before tax has limited exposure to interest rate fluctuations until the repayment dates of the loans for which the interest rate swaps have been arranged. Refer Note 27 for further details on the Group’s interest rate swap agreements.

Equity price riskEquity price risk arises from investment securities held by the Group. These investments are held at fair value. Their performance is actively monitored and managed on a fair value basis.

Commercial property price riskThe Directors draw attention to the risks associated with commercial property investments. Although over the long term property is considered a low risk asset, investors must be aware that significant short and medium term risk factors are inherent in the asset class.

Investments in property are relatively illiquid and usually more difficult to realise than listed equities or bonds and this restricts the Group’s ability to realise value in cash in the short-term.


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Estimates of fair value of investment propertiesThe best evidence of fair value is current prices in an active market for similar lease and other contracts. In the absence of such information, the Group determines the amount within a range of reasonable estimates. The Group considers a variety of information including:• valuations from independent valuers;• current prices in an active market for properties of a different nature, condition or location, adjusted for those differences;• recent prices from similar properties in less active markets, with adjustments to reflect differences in economic conditions;• discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of any existing lease

and from external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments.

The Board have estimated the recoverable value of the property under development based on expected/agreed development plans and have made a number of assumptions in deriving this value, including, in their view, various reasonable long-term assumptions relating to likely interest and the ultimate rental potential of the development and likely expected yields in the range of 6%-7%. Based on these calculations, which, given current market conditions and the uncertainties in projecting forward these assumptions, are subjective, the Directors have valued the properties under development at a value of £17.15m.

Capital managementThe Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors both the demographic spread of shareholders, as well as the return on capital, which the Group defines as total shareholders’ equity, excluding non-controlling interests, and the dividends paid to ordinary shareholders.

The Company has the necessary shareholder authorisation to purchase its own shares on the market. The timing of these purchases will depend on market conditions and purchase and sale decisions will be made on a transaction by transaction basis by the Board of Directors. No share purchases took place in the period. The Group does not have a defined share buy-back plan.

Neither the Company nor any of its subsidiaries are subject to externally imposed regulatory capital requirements. The Company, in terms of its articles of association, shall not at any time, without the previous sanction of an ordinary resolution of the Company exceed ten times the aggregate of:i. the amount paid up on the issued share capital of the Companyii. the total of capital and revenue reserves

The Company’s dividend policy is to distribute the majority of its earnings available for distribution to shareholders.

4. Segment reporting

The Group’s identified reportable segments are set out below. These segments are generally managed by separate management teams. During the twelve month period ended 31 August 2011, the Group acquired six hotel properties. The hotel properties are managed by a separate management team and represent a new segment within the Group. As required by IFRS 8, Operating Segments, the information provided to the Board of directors, who are the CODM, can be classified in the following segments:

UK Stable Income: Consists predominantly of UK offices, but includes petrol filling stations (“PFS”), Kwik-Fit centres, retail and residential units.

UK Retail: Consists of the Group’s major UK shopping centres.

Europe: Consists of the Group’s properties in Continental Europe, located in Germany, Switzerland and the Netherlands.

Hotels: Consists of all the Group’s hotel properties. The hotels are let to Redefine Hotel Management Limited on a fixed rental basis with annual reviews based on EBITDA.

Wichford: Consists of the Group’s investment in Wichford, up to the date of the reverse acquisition.

Cromwell: Relates to the Group’s investment in the Cromwell Property Group, Australia.



Relevant revenue, assets and capital expenditure information is set out below:

i. Information about reportable segments UK Stable UK Income Retail Europe Hotels Wichford Cromwell Total £’000 £’000 £’000 £’000 £’000 £’000 £’000

At 31 August 2011 Rental income 3,965 10,656 5,816 6,386 – – 26,823Investment income – – – – – 3,875 3,875Net fair value (losses)/gains on investment property (354) (8,485) (2,298) 510 – – (10,627)Gains/(losses) from financial assets and liabilities 4,384 519 816 (2,225) – 10,046 13,540Equity accounted losses 173 (2,137) 473 – (4,224) 2,627 (3,088)Impairment of loans (444) – – – – – (444)Interest income 2,316 3,348 – 2,397 – – 8,061Interest expense – bank debt (1,204) (8,400) (2,270) (2,460) – (727) (15,061)Property operating expenses (102) (1,896) (303) (67) – – (2,368)

Investment property 467,426 82,796 312,657 123,775 – – 986,654Investments designated at fair value 361 592 170 – – – 1,123Investments in joint ventures 823 – 1,784 – – – 2,607Investment in associates – – – – – 104,680 104,680Loans and receivables 29,889 42,804 – 31,387 – – 104,080

Borrowings – bank loans (378,793) (139,818) (186,511) (75,778) (17,344) (798,244)

At 31 August 2010Rental income 3,532 5,745 3,990 – – – 13,267Investment income – – – – 2,560 2,560Net fair value gains/(losses) on investment property 691 (703) (2,155) – – – (2,167)Losses from financial assets and liabilities (2,766) (350) – – 2,572 (544)Equity accounted losses (615) (1,016) (786) – (1,108) – (3,525)Impairment of loans (598) – – – – – (598)Interest income 1,714 909 – – – – 2,623Interest expense (2,238) (4,934) (1,989) – – – (9,161)Property operating expenses (177) (1,029) (455) – – – (1,661)

Investment property 58,913 114,439 54,323 – – – 227,675Investments designated at fair value 362 – – – – 74,777 75,139Investments in joint ventures 650 – 1,391 – – – 2,041Investment in associates – – – – 18,923 – 18,923Loans and receivables 31,426 16,734 – – – – 48,160 Borrowings – bank loans (99,868) (133,941) (33,457) – – – (267,266)


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ii. Reconciliation of reportable segment profit or loss 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Rental incomeTotal rental income for reported segments 26,823 13,267Profit or lossInvestment income 3,875 2,560Net fair value losses on investment property (10,627) (2,167)Gain/(loss) from financial assets and liabilities 13,540 (544)Equity accounted losses (3,088) (3,525)Impairment of loans (444) (598)Interest income 8,061 2,623Interest expense (15,061) (9,161)Property operating expenses (2,368) (1,661)Total gain per reportable segments 20,711 794

Other profit or loss – unallocated amountsOther income 1,592 673Administrative expenses (774) (466)Investment management and professional fees (4,664) (3,406)Amortisation of intangible assets (591) (345)Interest income 73 758Interest expense (9,244) (3,202)Share based payment (768) –Foreign exchange loss (1,224) (6)Consolidated profit/(loss) before tax 5,111 (5,200)

5. Gross rental income 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Gross lease payments collected/accrued from third parties 20,437 13,052Gross lease payments collected/accrued from related parties (refer Note 34) 6,386 –Service charge income – 215Gross rental income 26,823 13,267

The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:Not later than 1 year 72,505 16,614Later than 1 year not later than 5 years 263,536 60,145Later than 5 years 389,167 137,970 725,208 214,729

6. Investment income 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Dividends received from equity securities designated at fair value through profit or loss (refer Note 17) 3,875 2,560Total investment income 3,875 2,560



7. Other income 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Fee income from third parties – 420Fee income from related parties (refer Note 34) 1,010 –Other property income 582 253Total other income 1,592 673

8. Investment adviser & professional fees 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Investment adviser’s fees 2,431 1,227Independent Auditor’s remuneration – – for audit 179 141– for tax compliance and advisory work 72 6Reverse acquisition costs 914 –Legal fees 115 55

Pursuant to the reverse acquisition, the Group will be managed by RIPML. The historic advisory agreement between RIHL and Redefine International Fund Managers Limited was acquired by RIPML on 22 August 2011. The investment adviser’s fees of £2.4m for the period ended 31 August 2011 reflect fees relating to the historic advisory agreement.

As a result of the reverse acquisition, the pre-existing terms and conditions relating to the investment advisory agreement between RIPML and Wichford which came into effect from 1 October 2009, was replaced. From 23 August 2011, being the effective date of the reverse acquisition, the provisions relating to the amended Investment Advisory Agreement dated 13 July 2011 (the “IAA”) came into force. In terms of the IAA, the company will pay to RIPML an asset management fee of 0.5 per cent on the aggregate gross value of the Group’s assets (including cash) and a commission of 0.75 per cent in respect of sales and acquisitions, or 1 per cent where sub-agent costs are incurred. RIPML will also receive a fee of 3 per cent of the annual rents in respect of multi-let retail property and 1 per cent for any other properties.

In addition to the asset management fee, an incentive fee is payable by the Company to RIPML, and will be satisfied by the issue of ordinary shares in Redefine International at no cost to RIPML. The number of ordinary shares to be issued in terms of the award will be determined by reference to their average middle market price for the 20 working days prior to the final day of the relevant three year award period. The amount of any award is calculated as 20 per cent of the amount by which the total return on the Ordinary Shares in the Company exceeds 12 per cent for the first award under the contract and 10 per cent for subsequent awards.

No incentive fee has been accrued for the period ended 31 August 2011 as the performance related conditions had not been met.

9. Gain/(loss) from financial assets and liabilities 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Fair value through profit or lossEquity investments – realised – 72 – unrealised 10,351 2,572Derivative financial instruments – realised 3,540 – – unrealised (857) (1,755)Financial assets carried at amortised costImpairment of loans and receivables (73) (1,433)Loss on sale of subsidiaries (334) –Financial liabilities carried at amortised costRedemption of loans and borrowings 913 –Net loss from financial assets and liabilities 13,540 (544)


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10. Equity accounted loss

Equity accounted profit/(loss) consist of the following: 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Investment in joint ventures (refer to Note 20) (1,491) (2,415)Investments in associates (refer to Note 21) 4,729 5,368Investments in associates – impairment (refer to Note 21) (6,326) (6,478)Total equity accounted losses (3,088) (3,525)

11. Impairment of loans

Impairment of loans consist of the following: 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Impairment of loans (444) (598)Total impairment of loans (444) (598)

12. Interest income

The following table details the interest income earned by the Group during the period: 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Interest income on bank deposits 136 454Interest income from mezzanine financing 7,998 2,927Total interest income 8,134 3,381

13. Interest expense

The following table details the interest expense at amortised cost incurred by the Group during the period: 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Interest expense on secured bank loans (15,060) (9,161)Finance lease interest (386) –Interest expense on other financial liabilities (868) (663)Interest expense on mezzanine financing (7,991) (2,539)Total interest expense (24,305) (12,363)

14. Taxation

a) Tax recognised in profit or loss 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Current income taxIncome tax in respect of current year 563 43Withholding tax 174 157Deferred taxOrigination and reversal of temporary differences 623 –Total income tax expense reported in the statement of comprehensive income 1,360 200

No tax was recognised on equity or other comprehensive income during the period (2010: nil).



b) Recognised deferred liability and movement during the period 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Deferred tax and movement for the period ended 31 August 2011 is attributable to the following:Deferred tax liabilityDeferred tax liability acquired on investment properties (refer Note 19) 1,616 –Deferred tax liability recognised on associates 623 –Deferred taxation liability 2,239 –

The deferred tax provision mainly reflects the likely tax charge in the future periods based on the current expectation of how long each of the property will be owned. The calculation of this provision is based on separate calculations for recovering the initial investment through its use and on sale. See Note 2 for further details on deferred tax judgments.

c) Factors affecting the tax charge in the yearAs the largest portion of the Group’s properties are principally in the UK and owned by companies registered in the Isle of Man or in the British Virgin Islands, the Company regards the UK’s income tax rate of 20% (2010: 20%), as payable under the UK’s Non Resident Landlord Scheme, to be most relevant tax rate for the reconciliation of the theoretical tax charge on accounting profits to the tax charge for the year shown through the profit or loss.

The Group invests in Swiss property and therefore is liable to cantonal and federal taxes in Switzerland. The rates depend largely on the canton in which the property is situated and the property value. The effective rate of tax ranges from 21.6% to 23.7%.

The Group also invests in German properties held either in corporates or partnerships. The effective rate of tax ranges from 15.825% to 25%.

The Group’s investment in the Australian resident Cromwell Group is held through an Irish company. Unfranked dividends received from the Cromwell Group are subject to an Australian withholding tax of 7.5% (15% pre 1 July 2010).

The tax for the period is higher (lower in 2010) than the 20% payable under the UK’s NRL Scheme. The differences are explained below: 12 Month 11 Month period ended period ended 31 Aug 31 Aug 2011 2010 £’000 £’000

Profit/(loss) before tax 5,111 (5,200) Profit/(loss) before tax multiplied by NRL rate of UK income tax (20%) 1,022 (1,040) Effect of:– exempt property revaluations 2,125 433– income not subject to UK income tax (321) (94)– gain/(loss) in financial assets and liabilities (2,708) 109– losses carried forward 415 446– expenses not deductible for tax 653 189– withholding tax 174 157Total tax charge for the period 1,360 200

From the reconciliation above, the effective tax rate of the Group was 26.6% (2010: 3.85%).

d) Unrecognised deferred tax assets and liabilitiesDeferred tax have not been recognised in respect of the following items:Deferred tax assetFair value adjustment – investment property 31,691 6,044Fair value adjustment – derivatives 4,695 503Deferred taxation asset not recognised 36,386 6,547

Deferred tax liabilityFair value adjustment – investment property 146 645Fair value adjustment – borrowings 6,081 –Deferred taxation liability not recognised 6,227 645

The deferred tax liability noted above has not been recognised due to existence of deferred tax assets which can be utilised against the deferred tax liability. The remaining deferred tax assets have not been recognised because it is not probable that future taxable profits will be available against which the Group can utilise the benefits.


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15. Investment property

The book cost of properties as at 31 August 2011 was £1.19 billion (31 August 2010: £239.70 million). The carrying amount of investment property, apart from the investment properties in Delamere Place Crewe, is the fair value of the property as determined by a registered independent appraiser having an appropriate recognised professional qualification and recent experience in the location and category of the property being valued (together referred to as “valuers”). The carrying amount of the investment property in Crewe as at 31 August 2011 is the fair value as determined by the directors’ valuation.

Pursuant to the reverse acquisition the RIHL and Wichford investment properties were valued as at 30 June 2011 and 31 March 2011 respectively. A “no material change” statement was then obtained from the valuers from the valuation dates to the date of the issue of the Prospectus being 13 July 2011. The Wichford property valuations were then subsequently updated as at 31 August 2011. The Board is confident that there was no material change in the RIHL property valuations between 13 July 2011 and 31 August 2011.

The fair value of each of the properties has been assessed by the valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors (“Red Book”). In particular, the Market Value has been assessed in accordance with PS 3.2. Under these provisions, the term “Market Value” means “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently and without compulsion”.

In undertaking the valuations on the basis of Market Value, the valuers have applied the interpretative commentary which has been settled by the International Valuation Standards Committee and which is included in PS 3.2. The RICS considers that the application of the Market Value definition provides the same result as Open Market Value, a basis of value supported by previous editions of the Red Book.

The valuation does not include any adjustments to reflect any liability to taxation that may arise on disposal, nor for any costs associated with disposals incurred by the owner. No allowance has been made to reflect any liability to repay any government or other grants, or taxation allowance that may arise on disposals.

The valuers have used the following key assumptions:

The Market Value of investment properties has been primarily derived using comparable market transactions on arm’s-length terms and an assessment of market sentiment. The aggregate of the net annual rents receivable from the properties and, where relevant, associated costs, have been valued at an average yield of 7.7%, which reflect the risks inherent in the net cash flows. Valuations reflect, where appropriate, the type of tenants actually in occupation or likely to be in occupation after letting of vacant accommodation and the market’s perception of their creditworthiness and the remaining useful life of the property.

The directors have estimated the recoverable value of the property under development based on expected/agreed development plans and have made a number of assumptions in deriving this value, including, in their view, various reasonable long-term assumptions relating to likely interest and the ultimate rental potential of the development and likely expected yields in the range of 6%-7%. Based on these calculations, which, given current market conditions and the uncertainties in projecting forward these assumptions, are subjective, the Directors have valued the property under development at a value of £17.15 million (2010: £29.20 million, including the disposed Ciref Streatham Limited property).

In terms of IAS40 Investment property: Paragraph 14, judgement is needed to determine whether a property qualifies as an investment property. The Group has developed criteria so that it can exercise its judgement consistently in recognising investment properties. These include inter alia; property held for long-term capital appreciation, property owned (or held under finance leases) and leased out under one or more operating leases; and property that is being constructed or developed for future use as an investment property. The recognition and classification of property as investment property principally assures that the Group does not retain significant exposure to the variation in cash flows arising from the underlying operations of the properties. Investment property comprises a number of commercial and retail properties that are leased to third parties. All investment properties are income generating, as is the investment property under development.

The hotel properties are held for capital appreciation and to earn rental income. The properties have been let to Redefine Hotel Management Limited (“RHML”) for a fixed rent which is subject to annual review. RHML operates the hotel business on its own account and is exposed to the fluctuations in the underlying trading performance of the hotels. It is responsible for the day to day upkeep of the properties and retains the key decision making responsibility for the business. Aside from the payment of rental income to Redefine International there are limited or no transactions between the two entities. As a result, in line with guidance in IAS 40, Redefine International classifies the hotel properties as investment properties.



Property operating expenses in the consolidated statement of comprehensive income relate solely to income generating properties. 31 Aug 31 Aug 2011 2010 £’000 £’000

Opening balance 227,675 186,021Properties acquired during the period/year 197,424 –Capitalised expenditure 13,659 527Disposals (6,543) –Impact of reverse acquisition (refer Note 19) 546,900 –Investment property at fair value 543,275 –Finance leases 3,625 –Impact of acquisition of subsidiaries 2,381 46,100Foreign exchange movements in foreign operations 6,073 (2,806)Recognition of finance leases 9,712 –Net fair value losses on investment property (10,627) (2,167)Closing balance 986,654 227,675

Analysis of additions:

New additions:Redefine Hotel portfolio 116,914 –St George’s Harrow shopping centre 59,610 –OBI Portfolio 20,900 – 197,424 –Additions/(disposals) as a result of a change in control of underlying entities: Ciref Kwik-fit Stafford Limited 1,456 –Ciref Kwik-fit Stockport Limited 925 –Ciref Streatham Limited (6,543) –Byron Place Seaham Limited – 16,100Birchwood Warrington Limited – 30,000 (4,162) 46,100

1 The Redefine Hotels portfolio consists of five Holiday Inn branded hotels located in London and the Crowne Plaza Caversham Hotel, Reading.2 Consists of a shopping centre in Harrow, London.3 OBI portfolio consists of two properties located in Herzogenrath and Schwandorf, Germany.4 Consists of a Kwik Fit outlet in Stafford, Staffordshire. 5 Consists of a Kwik Fit outlet in Stockport, Lancashire.

A reconciliation of investment property valuations to the consolidated statement of financial position are shown below:

31 Aug 31 Aug 2011 2010 £’000 £’000

Investment property at market value as determined by external valuers 956,167 198,473Freehold 714,430 136,893Freehold and long leasehold 17,900 –Leasehold 223,837 61,580Investment property at directors’ valuation 17,150 29,202Adjustments for items presented separately on the consolidated statement of financial position:– Add minimum payment under head leases separately included under borrowings 13,337 –Consolidated statement of financial position carrying value of investment property 986,654 227,675

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16. Long term receivables 31 Aug 31 Aug 2011 2010 £’000 £’000

Security deposits with banks 464 4,306Amounts due from related parties (refer Note 34) 116 116Amounts due from Corovest Mezzanine Capital Limited 103,500 43,738Loans 121,592 61,386Impairment (18,092) (17,648)

104,080 48,160

Security deposits with banks bear interest at a rate of 6.725% with maturity between 1 and 3 years.

The loans from joint ventures are unsecured, bear interest at rates between 0% and 7% and are repayable on demand, but the expectation is that the term will be greater than 12 months.

The loans from Corovest Mezzanine Capital Limited are secured, bear interest at rates between 10% and 12% and are repayable between 1 and 3 years.

Included in amounts due from Corovest Mezzanine Capital Limited is rolled up interest in respect of the period of £6.0 million (2010: £3.6 million).

17. Investments designated at fair value 31 Aug 31 Aug 2011 2010 £’000 £’000

Opening balance 75,139 290Acquisitions during the period – 72,188Fair value adjustments 10,351 2,572Foreign exchange movement in foreign investments – 89Reclassification to investment in associates (85,128) –Derivative financial instruments (refer Note 27) 761 –Closing balance 1,123 75,139

With effect from 4 March 2011 the Group’s shareholding in Cromwell was reclassified from investments designated at fair value to an investment in an associate (Refer Note 21).

During the financial period to the date where significant influence was held, the Group received AUD 6,259,167 (2010: AUD 4,372,174) as a distribution, before withholding tax of AUD 279,657 (2010: AUD 268,109), resulting in net income of AUD 5,979,510 (2010: AUD 4,104,065). The GBP equivalent of the above is £3.87 million (2010: £2.56 million) as a distribution, before withholding tax of £0.17 million (2010: £0.16 million), resulting in net income of £ 3.70 million (2010: £2.40 million).

18. Intangible assets 31 Aug 31 Aug 2011 2010 £’000 £’000

CostOpening balance 8,092 7,517Additions 16 575Recovered during the period (7,517) –Impairment (591) – – 8,092Amortisation and impairment lossesOpening balance 533 188Amortisation for the year - 345Recovered during the period (533) – – 533Closing balance – 7,559

The movement in the intangible asset over the period relates to the fact that on the restructure of the West Orchards Coventry loan facility certain rights associated with the original debt were relinquished.



19. Business combinations

On 13 July 2011 the Boards of Wichford and RIHL announced that they had reached agreement on the terms of a reverse acquisition. The transaction was undertaken in terms of which Wichford made a recommended all share offer (“the offer”) for the entire issued ordinary share capital of RIHL (“the reverse acquisition”). Under the terms of the offer RIHL shareholders received 7.2 Wichford shares for each RIHL share. The share register was then consolidated with 1 new share for every 7.2 shares held. Following the adoption of reverse acquisition accounting in accordance with IFRS, RIHL has been identified as the accounting acquirer.

Following the reverse acquisition, the cancellation of RIHL’s previously equity accounted investment in Wichford (refer Note 21) and the subsequent issue of ordinary shares to the RIHL shareholders, RIN became the majority shareholder in the Company with a shareholding of approximately 65.59%. Non-controlling Interest (“NCI”) shareholders in RIHL hold approximately 14.07% and previous Wichford shareholders (other than RIHL shareholders) hold approximately 20.34% of the shares in the Company.

a) Consideration transferredIn accordance with IFRS3.B20, the consideration transferred by RIHL to the Company is based on the number of shares RIHL would have had to issue to give the shareholders of the Company the same percentage equity interest in the combined entity that results from the reverse acquisition, ie. a 20.34% equity interest:

Previous shareholding of the Company 831,323,584 20.3%Shares deemed to be issued to all RIHL shareholders 3,255,711,718 79.7% 4,087,035,302

Number of issued shares in RIHL 452,182,183 79.7%

Hypothetical shares to be issued to reflect the same percentage as above 115,461,609 20.3%

RIHL Share price as at 23 August 2011 (pence per share) 45.5Value of shares to be issued to reflect the same percentage as above (£’000) 52,535

31 Aug 2011 £’000

Value of 115,461,609 shares at share price of 45.5p per share on 23 August 2011 52,535Total consideration 52,535

b) Identifiable assets acquired and liabilities assumed

Investment property 546,900Trade and other receivables 3,769Cash and cash equivalents – unrestricted 32,340Cash and cash equivalents – restricted 7,605Loans and borrowings (487,894)Derivative financial instruments (18,704)Deferred tax (1,616)Trade and other payables (15,342)Total identifiable net assets 67,058

c) Goodwill

Goodwill was recognised as a result of the acquisition as follows:

Total consideration transferred 52,535Fair value of existing interest in the Company (refer Note 21) 14,539Fair value of identifiable net assets (67,058)Goodwill 16

Goodwill was impaired in the statement of comprehensive income as no lasting economic benefits could be attributed to the goodwill.

The financial statements have been prepared assuming an acquisition date of 31 August 2011, with the statement of comprehensive income reflecting the income and expenses of RIHL only for the 12 months ended 31 August 2011. If the acquisition had occurred on 1 September 2010, management estimates that consolidated revenue would have been £68.11 million and consolidated loss for the year would have been £44.73 million. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition occurred at the beginning of the period.


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20. Investments in joint ventures

The Group’s investments in joint ventures currently consist of the following:(i) 50% in Pearl House Swansea Limited, a joint venture with Sandgate Properties Limited, which owns a long leasehold retail

interest in Swansea, Wales.(ii) 50% in Swansea Estates Limited, a joint venture with Sandgate Properties Limited, which owns a long leasehold retail interest

in Swansea, Wales.(iii) 50% in Ciref NEPI Holdings Limited, a joint venture with New Europe Property Investments, which ultimately owns property in

Germany, Western Europe.(iv) 50% in 26 The Esplanade No 1 Limited, a joint venture with Rimstone Limited which ultimately owns an office building in St.

Helier, Jersey.(v) 50% in Ciref Crawley Limited, a joint venture with Graymont Limited which owns 3 blocks of offices in Crawley, Surrey.(vi) 50% in Grand Arcade Wigan Limited, a joint venture with Sandgate Properties Limited, which owns a shopping centre in Wigan,

Greater Manchester. 31 Aug 31 Aug 2011 2010 £’000 £’000

Opening balance 2,041 5,008Increase in investment 2,137 153Equity accounted loss (1,491) (2,415)Change in fair value due to foreign currency translation (80) (217)Distribution received from joint ventures – (488)Closing balance 2,607 2,041

Summarised financial informationThe summarised financial information derived from the gross balance sheets of the joint ventures is set out below: 31 Aug 31 Aug 2011 2010 £’000 £’000

Investment property 156,193 78,789Current assets 6,213 6,208Total assets 162,406 84,997

Capital and reserves (6,236) (26,611)Long term liabilities 159,212 101,644Current liabilities 9,430 9,964Total equity and liabilities 162,406 84,997Revenue 12,996 9,589Net loss (2,306) (5,236)

On 14 September 2010 50% of Grand Arcade Wigan Limited was acquired out of administration as part of the Group’s debt restructuring with Aviva. Currently, the fair value of the liabilities exceeds the fair value of the assets within the company and the investment is carried at a nil value as a result.

Investment in joint ventures includes investments which have been written down to a carrying amount of nil during the period ended 31 August 2011. Additionally, there are joint ventures included at nil value in the balance carried forward on 1 September 2010.



21. Investments in associates 31 Aug 31 Aug 2011 2010 £’000 £’000

Wichford Cromwell Total

Opening balance 18,923 – 18,923 –Investment at cost – 16,449 16,449 22,732Deemed acquisition at fair value (refer Note 17) – 85,128 85,128 –Change in fair value due to foreign currency translation – 4,963 4,963 1Equity accounted (loss)/profit (3,375)1 8,104 4,729 5,368Impairment of investment (849) (5,477) (6,326) (6,478)Share of foreign currency movement recognised 1,494 – 1,494 (1,494)Share of cash flow hedge reserve movement recognised (155) – (155) 155Distribution received from associates (1,499) (4,487) (5,986) (1,361)Cancellation of investment at fair value (14,539) – (14,539) –Closing balance – 104,680 104,680 18,923

1 Includes a loss on sale of associate of £1.34 million.

Following the reverse acquisition as referred to in Note 19 and in the investment manager’s review, RIHL’s previous shareholding of 230,772,000 (21.73%) in Wichford was cancelled. RIHL’s previously equity accounted investment in Wichford was deemed to be disposed of.

Investment in associates includes a 22.36% investment in Cromwell as at 31 August 2011.

The closing price of Cromwell on 31 August 2011 was 72 Australian cents per stapled security and the total fair value of shares held is AUD 155.67 million (£102.48 million). On 2 March 2011 Redefine International exercised its option to acquire a further 35,000,000 stapled securities in Cromwell and hence increased its shareholding from 19.6% to 22.2%. The increase in shareholding, along with the addition of Michael Watters to the board of Cromwell, resulted in the investment now being equity accounted as an associate as opposed to an investment recognised at fair value. During August 2011 the Group acquired an additional 2,370,920 stapled securities. A further investment is anticipated, post the period end. Refer post balance sheet event, Note 40 for further details. The new portions of the investment in Cromwell acquired in March 2011 and August 2011 are financed by a loan of AUD 26.35 million from Investec, the GBP equivalent being £17.34 million. Refer to Note 26 for further details.

During the period from the date where significant influence was held, the Group received AUD 7,062,222 as a distribution, before withholding tax of AUD 196,730, resulting in a net distribution of AUD 6,865,492. The GBP equivalent is £4.66 million as a distribution, before withholding tax of £0.17 million, resulting in a net distribution of £4.49 million.

There are no restrictions on the ability of Cromwell to transfer funds to its shareholders in the form of cash, distributions and loan repayments.

Summarised financial informationThe summarised financial information derived from the gross statements of financial position of the associates, is set out below. The financial information for 2011 represents those as reported by Cromwell at 30 June 2011 (2010: Wichford only).

31 Aug 31 Aug 2011 2010 £’000 £’000

Investment property 1,444,850 551,400Other non-current assets 35,126 –Current assets 59,452 85,200Total assets 1,539,428 636,600 Capital and reserves 705,160 57,000Long term liabilities 780,865 461,800Current liabilities 53,403 117,800Total equity and liabilities 1,539,428 636,600Revenue 181,976 21,900Net profit 88,102 4,300


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22. Trade and other receivables 31 Aug 31 Aug 2011 2010 £’000 £’000

Interest receivable 299 286Deposits and prepayments (net of provision of £73k (2010: £21k)) 2,253 931Service charges recoverable from tenants 1,787 191Amounts receivable from related parties (refer Note 34) 4,393 4,908Net receivables – Corovest Mezzanine Capital Limited 5,947 3,228Gross receivables 8,626 5,907Impairment of receivables from joint ventures (2,679) (2,679)VAT recoverable 578 35Consideration outstanding on disposed subsidiaries 5,374 –Sundry receivables 3,154 3,654 23,785 13,233

Short term loans to joint ventures are unsecured, bear no interest and are expected to mature within 12 months.

23. Cash at bank 31 Aug 31 Aug 2011 2010 £’000 £’000

Cash and cash equivalents consist of the following:Unrestricted cash balances 39,937 16,969Bank balances 35,742 4,158Call deposits 4,195 12,811Restricted cash balances 11,431 18,442 51,368 35,411

As at 31 August 2011 there was £11.43 million of the cash at bank to which the Group did not have instant access. The principle reason for this is that rents received are primarily held in locked bank accounts as interest and other related expenses are paid from these monies on the interest payment dates. Included in the restricted cash balance is £3 million held with Aviva with regards to development in Birchwood Warrington Limited.



24. Capital and reserves

Share capitalIn accordance with IFRS 3 Business Combinations and in reference to Note 19, with a reverse acquisition the issued equity instruments information relates to that of the legal acquirer, Wichford. The prior period numbers have also been adjusted to reflect the capital structure of Wichford. 31 Aug 31 Aug 2011 2010 £’000 £’000

AuthorisedOrdinary Shares of 1 penny each– number – 5,000,000,000– £’000 – 50,000Ordinary Shares of 7.2 pence each– number 1,000,000,000 –– £’000 72,000 –

Issued, called and fully paidOpening: Ordinary Shares of 1 penny each– number 1,062,095,584 1,062,095,584– £’000 10,621 10,621Allotted: Ordinary Shares of 1 penny each– number 3,255,711,718 –– £’000 32,557 –Consolidation from 1 pence to 7.2 pence each –– number 599,695,459 –– £’000 43,178 –Cancellation of Ordinary Shares of 7.2 pence each –– number (32,051,667) –– £’000 (2,308) –Closing: Ordinary Shares of 7.2 pence each– number 567,643,792 1,062,095,584– £’000 40,870 10,621

Following the reverse acquisition and the subsequent consolidation of the Company’s Ordinary Shares of 1 pence each into Ordinary Shares of 7.2 pence each, the resulting number of Ordinary Shares post-consolidation, at listing and at the period end calculates as 599,695,459. Of this number 32,051,666 shares were held by RIHL as an equity accounted investment (refer Note 21) which did not form part of the applications for listing on the LSE’s main market for listed securities and were subsequently cancelled. On 23 August 2011, 428,429,251 Ordinary Shares out of the previous total of 452,182,183 issued Ordinary Shares were allotted to RIHL shareholders pursuant to the Offer. The 23,752,932 shares not initially voted on were subject to compulsory acquisition in terms of Articles 116-124A of the Companies (Jersey) Law 1991 (“the compulsory acquisition shares”). The Company’s issued share capital therefore consisted of 543,890,859 Ordinary Shares as at 23 August 2011. The compulsory acquisition shares were issued in tranches post the period end, the last of which was issued on 5 October 2011. As at the date of this report 567,643,792 Ordinary Shares are in issue and this is the deemed number of shares in issue at 31 August 2011 for the purposes of the financial statements.

DistributionsWith effect from 23 August 2011, the Company adopted the dividend policy of RIHL. In terms of the dividend policy, the Company will seek to distribute the majority of its recurring earnings available for distribution in the form of dividends subject to realisable profits. However, there is no assurance that the Company will pay a dividend, or if a dividend is paid the amount of such dividend.The following dividends have been distributed during the period ended 31 August 2011:

Wichford RIHL

Final 2010 dividend (pence per share) 0.33 2.07Interim 2011 dividend (pence per share) 0.32 2.03

Reverse acquisition reserveThe acquisition reverse comprises the difference between the capital structure of the Company and RIHL.

Other reservesThese are non-distributable reserves arising from the acquisition of subsidiaries.


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25. Capital instrument

As part of the Aviva debt restructuring RIHL has entered into a £13 million facility (the “convertible loan”) with Aviva. The loan bears interest at 6% per annum, and all interest is rolled up until payment or conversion. The capital plus rolled up interest is repayable three years after the date of the agreement or on any earlier date if there is an event of default.

Should the drawings together with interest not be repaid, RIHL will be required to issue shares (“conversion shares”) to discharge the outstanding amount due, the number of which is calculated by dividing the outstanding amount by 50 pence per ordinary share in RIPLC.

The new capital instrument is an equity instrument under IAS 32 as it is to be settled in either cash or a fixed number of equity shares at the discretion of the Company. The fixed number of shares to be issued changes over time but is fully predetermined based on the time the Company chooses to settle the instrument. The additional shares that arise over time are charged to profit or loss in each period as a share based payment charge and is credited to the equity reserve. 31 Aug 31 Aug 2011 2010 £’000 £’000

Opening balance – –Capital instrument issued 13,000 –Share based payment 768 –Closing balance 13,768 –

26. Borrowings 31 Aug 31 Aug 2011 2010 £’000 £’000

Non-currentBank loans 800,518 160,513 Less: deferred finance costs (2,440) –Finance leases 13,337 –Unsecured shareholder loans (refer Note 34) – 643Total non-current borrowings 811,415 161,156

CurrentBank loans 117,822 100,003 Less: deferred finance costs (751) –Total current borrowings 117,071 100,003

a) LoansThis note provides information about the contractual terms of the Group’s loans and borrowings, which are measured at amortised cost.



26.1 Secured borrowingsThe terms and conditions of outstanding loans are as follows: 2011 2010 Loan Nominal Nominal Interest Maturity Face Carrying Face Carrying Facility Amortising Lender rate Currency date value amount value amount

Gibson Property Holdings Limited Yes Aviva 6.37%* GBP June 2029 11,053 11,053 11,348 11,197Ciref Kwik-fit Stafford Limited No KBC LIBOR + 2.5% GBP April 2012 718 718 – –Ciref Kwik-fit Stockport Limited No KBC LIBOR + 2.5% GBP April 2012 463 463 – –Newington House Limited Yes AIB LIBOR + 2.5% GBP Sept 2013 6,509 6,509 7,300 6,699Ciref Reigate Limited No RBS LIBOR + 2.5% GBP June 2015 2,500 2,500 2,980 2,980Kalihora Holdings Limited Yes UBS 2.87%* CHF Oct 2018 13,522 13,522 13,355 12,618Delamere Place Crewe Limited No Aviva 6.49%* GBP Nov 2011 17,150 17,150 17,150 17,150West Orchards Coventry Limited **** Yes Aviva 6.29%* GBP July 2027 55,970 49,227 56,750 56,183Byron Place Seaham Limited **** Yes Aviva 6.44%* GBP Sept 2031 16,907 15,182 17,198 15,203Birchwood Warrington Limited **** No Aviva 6.1%* GBP Sept 2035 29,150 16,629 42,000 29,307Ciref Berlin 1 Limited Yes RBS EURIBOR + 1.2% EUR Sept 2014 16,242 16,242 15,833 15,399Ciref German Portfolio Yes RBS EURIBOR + 1.2% EUR Sept 2014 3,447 3,447 3,323 3,281 Limited InkstoneGrundstucksverwaltung Limited & Co.KG Yes Barclays 5.75%* EUR Aug 2012 3,603 3,603 3,630 3,434InkstoneZwei Grundstucksverwaltung Limited & Co.KG Yes Barclays 5.91%* EUR Aug 2012 3,986 3,986 4,105 3,837CEL Portfolio Limited & Co. KG Yes Valovis 4.95%* EUR Nov 2014 4,427 4,427 4,219 4,208Redefine Hotel Holdings Limited Yes Aareal LIBOR + 2.45% GBP Nov 2015 75,778 75,778 – –ITB Herzogenrath B.V. Yes Bayern LB EURIBOR + 1.3% EUR Oct 2017 6,593 6,593 – –ITB Schwandorf B.V. Yes Bayern LB EURIBOR + 1.3% EUR Oct 2017 7,971 7,971 – –Redefine Australian Investments Limited No Investec BBSY + 4% AUD Feb 2013 17,344 17,344 – –St George’s Harrow Yes Landesbank LIBOR + 2.5% GBP April 2016 41,630 41,630 – – Limited Berlin Delta No Windermere XI LIBOR + 0.75% GBP Oct 2012 199,678 197,791 – – CMBS Gamma No Windermere VIII LIBOR + 0.75% GBP Oct 2012 114,608 113,759 – – CMBS Zeta No Lloyds TSB LIBOR + 1.15% GBP May 2013 46,000 46,000 – –Hague Yes SNS Property EURIBOR + 2.3% EUR July 2014 19,309 16,879 – – Finance Halle No Windermere XIV EURIBOR + 0.85% EUR April 2014 32,849 25,975 – – CMBS


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2011 2010 Loan Nominal Nominal Interest Maturity Face Carrying Face Carrying Facility Amortising Lender rate Currency date value amount value amount

VBG1 Yes Talisman 3 EURIBOR + 1.1% EUR Jan 2012 58,063 37,984 – –VBG2 Yes Talisman 4 EURIBOR + 1.1%*** EUR April 2011 46,770 45,882 – – Ciref Malthurst Limited – – 20,000 17,913Ciref Streatham Limited – – 1,400 1,400Total bank loans 852,240 798,244 220,592 200,809

Corovest Mezzanine Capital Limited 7.10% – 10%* GBP 2012 107,847 107,847 40,423 40,423Coronation Capital Limited 4%* GBP 2011 10,910** 10,910 13,600** 13,600Loans secured by cash deposits 7.00%* GBP 2011 650 650 5,040 5,040CEL Portfolio Limited & Co. KG 0%* GBP 2029 689 689 644 644Total secured loans 972,335 918,340 280,298 260,516

* Fixed rates ** Loan secured over Redefine Australian Investments Limited. *** Increase of 1% default interest since repayment date. **** These facilities are cross collateralised against each other and against facilities to Redefine Wigan Limited. See Note 39 for details.

All bank loans are secured over investment property, and bear interest at the specified interest rates.

The Delamere Place, Crewe facility was set for expiry in November 2011. Aviva credit approval has been obtained to extend the facility for four months while approval is sought for a long term restructuring of the facility. There are currently no financial covenant breaches in terms of the loan facility.

There have been a number of covenant breaches within the Group during the period. Material covenants under discussion or subject to waivers are summarised below:

Principal ICR covenant ICR ratio LTV covenant LTV ratio Facility Lender Maturity £’000 % % % %

VBG1 Talisman 3 Jan 2012 58,063 120 282 n/a 122VBG2 Talisman 4 April 2011 46,770 115 176 n/a 129Ciref Berlin 1 Limited RBS Sept 2014 16,242 120 164 90 93

VBG 1The loan has a current LTV of 122%. It is anticipated that the loan servicer will request a market testing exercise and may look to sell the assets with co-operation from the borrowing SPVs. There is an existing LTV waiver and standstill agreement until January 2012. The loan is non-recourse to the Group.

VBG 2The loan has a current LTV of 129%. The servicer has requested a market testing exercise which is in progress and may look to sell the assets (with co-operation from the borrowing SPVs) should acceptable offers be forthcoming. There is an existing LTV waiver until January 2012. The loan is non-recourse to the Group.

RBS (Ciref Berlin)The LTV breach is anticipated to be rectified on completion of the extension works to the Lidl stores and resulting lease re-gears which should provide a sufficient value uplift to cure the temporary LTV breach. A new ten year lease has also been signed with Kik and Tedi with regards to the property in Tarp.

RBS have agreed to waive the LTV covenant while asset management initiatives are in place and capital is invested into properties.


26.2 Unsecured borrowings 31 Aug 31 Aug 2011 2010 £’000 £’000

Non-controlling shareholders loans – 643Total unsecured loans – 643

26.3 Current and non-current borrowingsNon-current liabilitiesSecured loans 800,518 160,513Unsecured shareholder loans – 643Total non-current loans and borrowings 800,518 161,156

The maturity of non-current borrowings is as follows:Between one year and five years 685,581 89,026More than five years 114,937 72,130 800,518 161,156

Current liabilitiesSecured loans 117,822 100,003Total current loans and borrowings 117,822 100,003

Total loans and borrowings 918,340 261,159

Exposure to credit, interest rate and currency risks arise in the normal course of the Group’s business. Derivative financial instruments are used to reduce exposure to fluctuations in interest rates. Please refer to Note 27 for further details.

b) Finance LeasesObligations under finance leases at the reporting dates are analysed as follows: 2011 2010 £’000 £’000

Gross finance leases liabilities repayable:Not later than 1 year 680 –Later than 1 year not later than 5 years 2,720 –Later than 5 years 48,344 – 51,744 –Less: finance charges allocated to future periods (38,407) –Present value of minimum lease payments 13,337 –

Present value of finance lease liabilities repayable: Not later than 1 year 511 –Later than 1 year not later than 5 years 1,821 –Later than 5 years 11,005 –Present value of minimum lease payments 13,337 –

27. Derivatives

The Group enters into interest rate swaps and interest rate cap agreements. The purpose is to manage the interest rate risks arising from the Group’s operations and its sources of finance.

The interest rate swaps employed by the Group to convert the Group’s borrowings to fixed interest ones fall into two categories, as explained in a) i) and ii) below.

The interest rate caps employed by the Group limit the exposure to upward movements in interest rates. These are detailed in b) below.

It is the Group’s policy that no economic trading in derivatives shall be undertaken.



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a) Interest rate swap agreementsIn accordance with the terms of the borrowing arrangements, the Group has entered into interest swap agreements. The interest rate swaps are used to manage the interest rate profile of financial liabilities. The Group has employed interest rate swaps to eliminate future exposure to interest rate fluctuations as well as being charged fixed rate interest on those facilities described as having lender level swaps.

i) Lender level interest rate swap agreementsLender level interest rate swaps agreements are those from which the Group benefits but which do not have any Group entity as a counter-party, instead the lender is the counter-party with the commercial banking entity providing the interest rate swap. These arise where the loan agreements call for interest rate swaps to be taken out to allow a fixed interest charge to be made to the borrowing subsidiaries and these borrowers have given indemnities to the lenders in respect to these interest rate swaps.

The interest rate swaps for the Delta, Gamma and Halle facilities, from which the Group benefits by both eliminating any interest rate fluctuations in the market over the course of the facilities and also from any benefit (or cost) of closing these instruments out, are lender level interest rate swaps. The swaps are between the CMBS vehicles (the lenders) and commercial banking counterparties.

The Group recognises these embedded derivatives separately as, while the Group is charged interest at a fixed rate on these facilities, the terms of the facilities mean the Group ultimately receives their benefit or pay their burdens.

As a result of the use of interest rate swaps, the fixed rate profile of the Group’s lender level interest rate swaps was: Fair value Nominal value hedged 2011 2010 2011 2010 Facility Effective date Maturity date Swap rate £’000 £’000 £’000 £’000

Delta 21/07/2006 15/10/2012 4.95% (5,062) – 199,678 –Gamma 23/05/2005 20/10/2012 4.77% (8,426) – 114,608 –Halle 19/02/2007 22/04/2014 4.19% (2,325) – 32,849 – (15,813) – 347,135 –

ii) Borrower level interest rate swap agreementsBorrower level interest rate swap agreements are those that have a Group company as the counter-party to the commercial bank providing the interest rate swap. As a result of the use of interest rate swaps, the fixed rate profile of the Group was: Fair value Nominal value hedged 2011 2010 2011 2010 Facility Effective date Maturity date Swap rate £’000 £’000 £’000 £’000

SubsidiariesCiref Reigate Limited 23/09/2010 30/06/2015 2.03% (68) (43) 2,500 2,000Newington House Limited 03/09/2010 19/09/2013 1.54% (82) (64) 6,509 6,699Ciref Berlin 1 Limited 05/06/2007 15/04/2014 4.61% (735) (947) 8,591 8,176Ciref Berlin 1 Limited 31/07/2007 15/04/2014 4.20% (569) (734) 7,681 7,274Ciref German Portfolio Limited 31/07/2007 15/04/2014 4.20% (256) (330) 3,452 3,186Redefine Hotel Holdings Limited 30/11/2010 30/11/2015 2.45% (2,105) – 68,145 –Redefine Hotel Holdings Limited 30/06/2011 30/11/2015 2.32% (290) – 7,633 –Redefine International Holdings Limited 04/03/2011 04/03/2013 5.45% (305) – 16,293 –Hague 01/08/2008 01/08/2014 4.89% (1,751) – 19,309 –Zeta 20/07/2010 09/05/2013 2.73% (1,141) – 46,000 –Ciref Malthurst Limited – (3,989) – 18,000 (7,302) (6,107) 186,113 45,335

Held in joint venturesCiref Jersey Limited 31/07/2007 30/07/2027 5.48% (5,532) (5,343) 18,500 18,500Ciref Jersey Limited 30/01/2008 30/07/2027 4.80% (371) (378) 1,800 1,800Premium Portfolio Limited & Co. KG 31/03/2008 31/12/2014 4.23% (435) (565) 5,544 5,269Premium Portfolio Limited & Co. KG 31/03/2008 31/12/2014 4.13% (1,486) (1,925) 18,182 17,282Churchill Court Limited 10/04/2008 10/04/2018 5.08% (1,554) (1,657) 9,863 10,613 (9,378) (9,868) 53,889 53,464


b) Interest rate cap agreementsThe Group has entered into interest rate caps in order to take advantage of the low interest rates in the market while at the same time protecting the Group against any significant increases in these interest rates. The current interest rate cap agreements are detailed below:

Fair value Nominal value hedged 2011 2010 2011 2010 Facility Effective date Maturity date Cap rate £’000 £’000 £’000 £’000

VBG1 15/07/2010 15/01/2012 2.50% – – 58,063 –St George’s Harrow Limited 27/04/2011 27/04/2016 2.85% 591 – 41,630 –ITB Herzogenrath B.V. 31/05/2011 31/05/2017 4.50% 93 – 6,593 –ITB Schwandorf B.V. 31/05/2011 31/05/2017 4.50% 77 – 7,971 – 761 – 114,257 –

c) Summary of fair value of interest rate swaps and interest rate caps 2011 2010 £’000 £’000

Fair value of lender level interest rate swaps (15,813) –Fair value of borrower level interest rate swaps (7,302) (6,107) (23,115) (6,107)Fair value of interest rate cap agreements* 761 –Fair value of the Group’s derivative instruments (22,354) (6,107)

*Interest rate cap assets are included in investments designated at fair value (please refer Note 17).

28. Trade and other payables 31 Aug 31 Aug 2011 2010 £’000 £’000

Rent received in advance 3,274 1,144Trade creditors 4,246 –Accrued interest 6,007 2,329Short-term loans from joint venture entities 16 3,546Amount owing to related parties (refer to Note 34) 4,391 567Amount owing to Corovest Mezzanine Capital Limited 6,019 4,055VAT payable 2,306 296Income tax payable 586 104Accrued reverse acquisition costs 2,235 –Other accruals 8,567 4,074 37,647 16,115

Short term loans from joint ventures are unsecured, bear no interest and are expected to mature within 12 months.



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29. Credit risk

Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: 31 Aug 31 Aug 2011 2010 £’000 £’000

Financial assets 1,123 75,139Loans and receivables 104,080 48,160Trade and other receivables 23,785 13,233Cash and cash equivalents 51,368 35,411 180,356 171,943

The concentration of credit risk per segment is set out below:UK Stable Income 53,413 34,987UK Retail 48,456 13,535Europe 3,408 1,718Hotels 35,669 -Australia 2,054 75,942Other1 37,356 45,761 180,356 171,943

1 Includes £31.1 million (2010: £26.1 million) of cash held by the Company and its subsidiary, RIHL.

Included in loans and receivables and trade and other receivables are debtors with the following age profile:

2011 2011 2011 2010 2010 2010 £’000 £’000 £’000 £’000 £’000 £’000 Gross Impairment Net Gross Impairment Net

Not past due 135,589 (18,092) 117,497 71,472 (17,648) 53,824Past due 0 – 120 days 4,588 - 4,588 420 – 420Past due – 120 days 8,459 (2,679) 5,780 11,261 (4,112) 7,149

Bad debt provisions of £72,565 (2010: £20,565) have been booked against trade and other receivables as detailed in Note 22. These provisions are specific to tenants that went into administration.

30. Liquidity risk

The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact of netting agreements:

Carrying Contractual 6 months 6 – 12 1 – 2 2 – 5 More than Amount Cash flows or less Months Years Years 5 years £’000 £’000 £’000 £’000 £’000 £’000 £’000

31 August 2011Financial liabilities at amortised costSecured loans 917,690 (1,147,239) (135,931) (44,596) (414,293) (344,736) (207,683)Loans secured by cash deposits 650 (776) (23) (23) (46) (684) –Finance leases 13,337 (51,744) (340) (340) (680) (2,040) (48,344)Trade and other payables 37,647 (37,647) (37,647) – – – –

Derivative financial liabilitiesInterest rate swaps used for economic hedging 23,115 (25,771) (8,283) (8,283) (5,382) (3,823) – 992,439 (1,263,177) (182,224) (53,242) (420,401) (351,283) (256,027)


Carrying Contractual 6 months 6 – 12 1 – 2 2 – 5 More than Amount Cash flows or less Months Years Years 5 years £’000 £’000 £’000 £’000 £’000 £’000 £’000

31 August 2010 Financial liabilities at amortised costSecured bank loans 255,476 (399,399) (39,465) (75,097) (19,675) (105,642) (159,520)Loans secured by cash deposits 5,040 (6,885) (176) (176) (353) (6,180) –Unsecured loans 643 (643) – – – – (643)Trade and other payables 16,115 (16,115) (16,115) – – – –

Derivative financial liabilitiesInterest rate swaps 6,107 (13,308) (769) (769) (1,538) (3,608) (6,624) 283,381 (436,350) (56,525) (76,042) (21,566) (115,430) (166,787)

Cash flows on financial liabilities at amortised cost and derivative financial liabilities were based on the respective loan interest rates as per Note 26 and 27.

31. Currency risk

Structural riskThe investments in subsidiaries in Germany, the Netherlands, Switzerland and Australia represent structural currency risk as these investments have functional currencies of Euro, Swiss Franc and Australian Dollar respectively. Fair value Fair value 31 Aug 31 Aug 2011 2010 £’000 £’000

Assets EUR 60,475 39,617CHF 24,050 17,817USD – 723AUD 106,734 74,777

LiabilitiesEUR 49,853 33,447CHF 14,130 16,156USD – 30

Transactional riskThe Group’s income from income-producing rental properties is denominated in the same currencies as the loans that are financing those properties. Loans have been made by the Group to subsidiary companies in the foreign currencies as set out below: Fair value Fair value 31 Aug 31 Aug 2011 2010 £’000 £’000

Swiss Francs 1,774 1,655 1,774 1,655

As at 31 August 2011 the Group’s transactional risk associated with Cromwell is £18.12 million which represents the loan facility used to finance part of the investment.

Sensitivity analysisA five percent strengthening in the GBP exchange rate against the following currencies at year end would have decreased equity and profit by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2010.



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Profit Equity or loss £’000 £’000

31 August 2011EUR (112) 4CHF (209) 33USD – –AUD (4,054) 826 31 August 2010EUR (380) 12CHF (63) –USD (151) 10AUD (6,798) (6,837)

A five percent weakening in the GBP exchange rate against the above currencies at year end would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis all other variables remain constant.

The Group’s total net exposure to fluctuations in foreign currency exchange rates at the reporting date was as above. This reflects the total and financial and non-financial assets and liabilities in foreign currencies.

The following exchange rates were applied during the year: Average rate Period end rate 2011 2010 2011 2010

USD – 1.560 – 1.534 EUR 1.154 1.149 1.129 1.209 CHF 1.461 1.644 1.309 1.559 AUD 1.534 1.708 1.519 1.724

32. Interest rate risk

The Group’s exposure to the risk of the changes in market interest rates, relate primarily to the Group’s long-term debt obligations with floating interest rates. The Group uses interest rate derivatives to mitigate its exposure to interest rate fluctuations. At the period end, as a result of the use of interest rate swaps, the majority of the Group’s borrowings were at fixed interest rates.

The Group’s profit before tax has limited exposure to interest rate fluctuations until the repayment dates of the loans for which the interest rate swaps have been arranged. Refer Note 27 for further details on the Group’s borrowings and interest rate swap agreements.

33. Fair values

Fair values versus carrying amountsThe fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated balance sheet, are as follows: 31 August 2011 31 August 2010 Carrying Fair Carrying Fair Note £’000 £’000 £’000 £’000

Financial assets Loans and receivables 16, 22 127,865 126,279 61,393 60,155Designated at fair value through profit or loss 17 1,123 1,123 75,139 75,139Cash and cash equivalents 23 51,368 51,368 35,411 35,411 180,356 178,770 171,943 170,705

Financial liabilitiesAmortised cost 26, 28 966,133 960,269 277,274 275,484Derivatives at fair value through profit or loss 27 23,115 23,115 6,107 6,107 989,248 983,384 283,381 281,591


Basis for determining fair valuesThe Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

• Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.• Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

• Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments the Company determines fair values using net present value and discounted cash flow models and comparisons to similar instruments for which market observable prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premia used in estimating discount rates, foreign currency exchange rates and expected price volatilities and correlations. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm’s length.

The Group uses widely recognised valuation models for determining the fair value of common and more simple financial instruments such as interest rate swaps that use only observable market data and require little management judgement and estimation. Observable prices and model inputs are usually available in the market for simple over the counter derivatives, e.g. interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.

The following is a summary of the classifications of the financial assets and liabilities: Total Level 1 Level 2 Level 3 Fair value £’000 £’000 £’000 £’000

31 August 2011Financial assets Designated at fair value through profit or loss – 1,123 – 1,123 1,123 1,123Financial liabilitiesInterest rate swaps – 23,115 – 23,115 – 23,115 – 23,115

31 August 2010Financial assets Designated at fair value through profit or loss – 75,139 – 75,139 75,139 75,139Financial liabilitiesInterest rate swaps – 6,107 – 6,107 – 6,107 – 6,107

No financial instruments were transferred between levels during the period.

The financial assets designated at fair value through profit and loss has been categorised as Level 2 as the have been priced using quoted prices for identical instruments in markets that are considered less than active.

Interest rate swaps have been categorised as Level 2 as although they are priced using directly observable input, the instruments are not traded in an active market.

No instruments have been categorised as Level 3.



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34. Related party transactions

Investment managerFollowing completion of the reverse acquisition, the investment adviser duties are to be carried out in accordance with the Investment Adviser’s Agreement (as approved on 13 July 2011) between the Company and RIPML (“IAA”). The Company and RIPML agreed that RIPML would acquire the rights previously enjoyed by RIFM under the investment managers agreement between RIFM and RIHL. This acquisition was completed on 23 August 2011 upon completion of the reverse acquisition. The director, Michael Watters, is a director of associated companies of the investment adviser.

31 Aug 31 Aug 2011 2010 £’000 £’000

Trading transactionsRental income received from Redefine Hotel Management Limited 6,386 –Fee income from Redefine Hotel Management Limited 700 –Fee income from the Cromwell Property Group 310 –Portfolio management fees charged by Redefine International Fund Managers Limited (2,028) (1,027)Portfolio management fees charged by Redefine International Fund Managers Europe Limited (403) (200)Administration fees charged by Redefine International Group Services Limited (153) (135)

Loans receivablePearl House Swansea Limited 116 116Redefine Hotel Management Limited 2,922 –Redefine Properties International Limited 70 –Cromwell Property Group 1,217 1,165Ciref Crawley Investments Limited 100 76Swansea Estates Limited 84 84Ciref Kwik-fit Stafford Limited – 2,209Ciref Kwik-fit Stockport Limited – 1,374

Loans PayableRedefine International Fund Managers Limited 1,688 366Redefine International Fund Managers Europe Limited 260 124Redefine International Group Services Limited 80 77Non-controlling shareholder loans – 643Corovest Offshore Limited 2,363 –

Loans payable to Redefine International Fund Managers Limited, Redefine International Fund Managers Europe Limited and Redefine International Group Services Limited are not secured, bear no interest and are expected to be repaid in cash within 12 months.

DirectorsThe remuneration paid to directors of RIHL for the period ended 31 August 2011 was £175,000.


35. Earnings per share

Earnings per share are calculated on the weighted average number of shares in issue and the profit/(loss) attributable to shareholders. The weighted average number of shares in issue is based on the new capital structure. 31 Aug 31 Aug 2011 2010 £’000 £’000

Profit/(loss) attributable to shareholders 5,035 (4,915)Weighted average number of ordinary shares 426,125 199,492Effect of potential share based payment transactions – performance fee arrangements –Effect of potential share based payment transactions – capital instrument 26,480 –Diluted weighted average number of ordinary shares 452,605 199,492

Number of ordinary shares– In issue 567,644 304,706*– Weighted average 426,125 199,492– Diluted weighted average 452,605 199,492 Earnings per share (pence)– Basic 1.18 (2.46)– Diluted 1.11 (2.46)

* Relates to the capital structure of RIHL, for comparative purposes.

36. Net assets per share

The net assets per share are calculated by dividing the net assets at 31 August 2011 attributable to equity holders of the parent of £277.3 million (2010: £142.5 million) by the number of Ordinary Shares in issue as at 31 August 2011 of 567,643,792 (2010:304,706,406).

The potential number of Ordinary Shares to be issued to Aviva at 50p per share under the convertible instrument at 31 August 2011 is 27,536,990 as the value of the instrument on 31 August 2011 is £13.77 million. 31 Aug 31 Aug 2011 2010* £’000 £’000

Net assets attributable to equity shareholders (£’000) 277,304 142,506Number of Ordinary Shares (‘000’s) 567,644 304,706Effect of potential share based payment transactions – performance fee arrangements –Effect of potential share based payment transactions – capital instrument 27,537 –Diluted number of shares (‘000’s) 595,181 304,706

Net asset value per share (pence):– Basic 48.85 46.77– Diluted 46.59 46.77

* Relates to the capital structure of RIHL, for comparative purposes.



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37. Cash flow information

37.1 Changes in working capital 31 Aug 31 Aug 2011 2010 £’000 £’000

(Increase)/decrease in trade receivables (2,087) 349Increase/(decrease) in trade payables 2,180 (70) 93 279

37.2 Acquisition of subsidiariesThe Group acquired the following subsidiaries during the financial year ended 31 August 2011: • Ciref Kwik-Fit Stafford Limited was acquired on 30 April 2011.• Ciref Kwik-Fit Stockport Limited was acquired on 30 April 2011.• The non-controlling interest in Kalihora Holdings Limited was acquired on 1 October 2011

The assets and liabilities arising from those acquisitions were as follows: 31 Aug 31 Aug 2011 2010 £’000 £’000

Assets acquiredInvestment Property 2,381 46,100Trade and other receivables 159 9,520Cash and cash equivalents 142 710Trade and other payables (742) (3,074)Loans and borrowings (998) (52,730)Intangible assets – 574Total 942 1,100

Less: Non-controlling interest 458 –Gain on acquisition recognised in equity (29) –Total consideration 1,371 1,100

Less: shares issued as consideration (922) –Less: cash and cash equivalents acquired (142) (710)Net cash consideration acquired 307 390

37.3 Disposal of subsidiariesThe Group disposed of the following subsidiaries during the financial year ended 31 August 2011: • TYS Holdings Limited with effect from 1 December 2010.• Ciref Streatham Limited with effect from 1 December 2010.

The assets and liabilities arising from those disposals were as follows: 31 Aug 31 Aug 2011 2010 £’000 £’000

Assets disposedInvestment Property 6,543 –Trade and other receivables (5,244) –Trade and other payables (42) –Loans and borrowings (1,400) –Total (143) –Less: Loss on sale of subsidiary (334) –Net cash disposed (477) –

37.4 Proceeds from issue of share capital 31 Aug 31 Aug 2011 2010 £’000 £’000

Proceeds from shares issued 73,644 112,642Share issue and reverse acquisition costs (3,993) (3,260) 69,651 109,382

Please see Note 24 for details of share transactions.


38. Movement in non-controlling interest

During the financial period the interest of non-controlling shareholders was increased in Redefine Hotel Holdings Limited by their injection of additional capital not matched by the Company.

The Group also acquired the remaining 19.54% of Kalihora Holdings Limited which it did not already hold.

2011 2010 Retained Non-controlling Retained Non-controlling earnings interest earnings interest £’000 £’000 £’000 £’000

Ciref Europe Limited – – (10) 10Kalihora Holdings Limited 29 (458) – –Redefine Hotel Holdings Limited (132) 132 – – (103) (326) (10) 10

39. Contingencies, guarantees and capital commitments

The Group has capital commitments of £3 million (2010: £51 million) in respect of capital expenditure contracted for at the reporting date, but not yet incurred, for future transactions approved by the Board. The Group has entered into a corporate guarantee agreement with IHG Hotels Limited, the contingent liability of which is not expected to exceed £0.3 million.

External financing totalling £142.6 million to Redefine Wigan Limited, a joint venture of Redefine International which holds Grand Arcade Wigan Limited, has been cross collateralised against properties held directly by the Group. The value of Grand Arcade Wigan Limited at the period end is £85 million. However there is currently no exposure for the Group, as the combined LTV of the cross collateralised properties is greater than 100%.

40. Post balance sheet events

The Board has declared a second interim dividend of 2.10 pence per share. The last day to trade “cum” dividend in order to participate in the dividend was 8 November 2011. The shares will commence trading “ex” dividend on 9 November 2011 and the record date was 11 November 2011. The dividend was paid to shareholders on 24 November 2011.

Further to the preliminary results announcement on 1 November 2011, in which the Company informed the market that it was considering selective share buybacks, 939,000 Redefine International ordinary shares of 7.2 pence (“the Shares”) were acquired by the Company on 11 November 2011 and will be held in Treasury until further notice. The Shares were acquired in accordance with the existing shareholder authority granted at the AGM held on 27 January 2011 and were purchased with a view to enhancing earnings per share and/or net asset value per share.

The Company announced on 22 November 2011, that it had concluded an agreement to partially underwrite a capital raising by Cromwell (“the underwriting agreement”). Cromwell intended to undertake a capital raising during November 2011 in terms of which Cromwell proposed to raise approximately AUD145.4 million (the “Cromwell capital raising”) through:• An institutional placement of Cromwell stapled securities at AUD0.68 per stapled security, to raise AUD31 million; and• A pro-rata non-renounceable entitlement offer of new Cromwell stapled securities (the “New Cromwell Securities”) at

AUD0.68 per stapled security, to raise AUD114.4 million (the “Entitlement Offer”).

The net proceeds of the Cromwell capital raising, after payment of costs, will be used to partially fund the acquisition of the “HQ North” office tower in Fortitude Valley, Brisbane for AUD186 million.

In terms of the underwriting agreement, the Entitlement Offer will be partially underwritten by Redefine International up to a maximum amount of AUD35 million (GBP22.1 million) (“underwriting commitment”), which includes the Group’s entitlement of AUD24.8 million (GBP15.6 million).

Pursuant to the closure of the Entitlement Offer on 15 December 2011, Redefine International will be informed of the number of the New Cromwell Securities which it is obliged to subscribe for in terms of its underwriting commitment on 20 December 2011. A further announcement will be released at that time.

41. Comparatives

Comparative figures for 2010 have been regrouped on a basis consistent with the current year. A reverse acquisition reserve has been created in order to represent the capital structure of the Group to reflect that of the Company.

42. Approval of financial statements

The financial statements were approved by the board on 1 December 2011.



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We have audited the Company financial statements (the “financial statements”) of Redefine International P.L.C. (formerly Wichford P.L.C.) for the period ended 31 August 2011 which comprise the Company balance sheet and the related notes. These financial statements have been prepared under the accounting policies set out therein.

This report is made solely to the Company’s members, as a body, in accordance with the Section 15 of the Companies Act 1982. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an Auditor’s Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinion we have formed.

Respective responsibilities of Directors and AuditorsThe Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice are set out in the Statement of Directors’ Responsibilities on page 42.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice and are properly prepared in accordance with Isle of Man Companies Acts 1931-2004 (as amended).

We also report to you, if in our opinion the Company has not kept proper accounting records or if we have not received all the information and explanations we require for the audit.

We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises only the Directors’ Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Basis of audit opinionWe conducted our audit in accordance with the International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements.

It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

OpinionIn our opinion:• the Company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting

Practice, of the state of the Company’s affairs as at 31 August 2011;• the Company financial statements have been properly prepared in accordance with the Isle of Man Companies Acts 1931-2004 (as

amended); and• the information given in the Directors’ Report is consistent with the Company financial statements.

Darina BarrettFor and on behalf of KPMGChartered Accountants, Statutory Audit Firm1-2 Harbourmaster PlaceInternational Financial Services CentreDublin 1Ireland1 December 2011

Company AccountsIndependent Auditor’s Report to the Members of Redefine International P.L.C.


31 August 30 September 2011 2010 Notes £m £m

Fixed assetsInvestments 2 212.8 201.9Current assetsDebtors 3 49.5 49.9Cash at bank 26.0 27.5Total assets 288.3 279.3Creditors – amounts falling due within one year 4 (3.5) (0.6)Total assets less current liabilities 284.8 278.7Creditors – amounts falling due after one year 5 (37.3) (34.4)Net assets 247.5 244.3

Capital & ReservesCalled up share capital 6 40.9 10.6Share premium account 7 161.4 161.4Profit & loss account 8 45.2 72.3Equity shareholders’ funds 9 247.5 244.3

These financial statements were approved by the Board of Directors on 1 December 2011 and signed on its behalf by:

Ita McArdle Richard MelhuishDirector Director

Company Balance SheetAs at 31 August 2011


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1. Accounting policies

A summary of the significant accounting policies is set out below. They have all been applied consistently throughout the period.

Basis of PresentationThe financial information has been prepared under historical cost convention, and in accordance with applicable Isle of Man law and United Kingdom accounting standards.

Going ConcernAfter considering the relevant factors, the Board has a reasonable expectation that the Company has adequate resources to continue in operation for the foreseeable future. They have, therefore, adopted the going concern basis in preparing these financial statements.

The principal issues the Board considered in their enquiries included, inter alia, the maturity of the Delta and Gamma Facilities in October 2012 and the maturity of the VBG 2 Facility in January 2012. Following the conclusion of the reverse acquisition, coupled with the proposed capital raising, the Board is confident that the maturity of the Delta and Gamma Facilities will be addressed. This has been outlined in the Chairman’s statement and Financial review.

With regard to the VBG 2 Facility the Board is currently confident that this facility may not be required to be repaid at maturity, following on-going but non-concluded negotiations with the loan servicer. The Board notes that this facility is ring-fenced with no recourse to any other assets pledged to other Group facilities. There can be no certainty that agreement will be reached on the extension of the facility but the Board remains of the view that this will have limited impact on the continued operations of the Group.

Profit for the YearAs permitted under Section 3 of the Isle of Man Companies Act 1982, the Company has not published its own income statement.

Cash Flow StatementThe Company has taken advantage of the exemption under FRS 1 not to produce a cash flow statement as one is published for the consolidated financial statements.

Fixed AssetsInvestments in subsidiaries are shown in the Company balance sheet as financial fixed assets and are valued at cost less provisions for impairments in value. Pursuant to the terms of the offer document dated July 2011, the Company issued shares in exchange for shares in Redefine International Holdings Limited. No share premium was recorded in the Company Financial Statements through the operation of the reverse acquisition relief provisions of the Companies Act.

Cash at BankCash and short-term deposits in the Company balance sheet comprise cash at bank, short-term deposits held at call with banks and other short-term highly liquid investments.

Trade and Other ReceivablesTrade and other receivables are recognised at their fair value on initial recognition and subsequently at amortised cost. A provision for impairment of trade receivables is established where there is objective evidence that the Company will not be able to collect all amounts due according to original terms of the receivables concerned. Where such a provision for impairment has been made then the fair value on initial recognition less the provision is the amortised cost.

Trade and Other PayablesTrade and other payables are recognised at fair value and subsequently measured at amortised cost.

Interest Income and ExpenseInterest income and expense is recognised as it accrues using the effective interest rate basis.

ExpensesExpenses are recognised on an accrual basis.

Foreign Currency TranslationTransactions in foreign currencies are initially recorded in the functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date. All differences are recognised through profit and loss.

Notes to the Company Accounts


TaxationCurrent tax, including UK corporation tax, UK income tax and foreign tax, is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted, or substantially enacted, by the balance sheet date.Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. Where transactions or events have occurred at that date, that will result in an obligation to pay more, or a right to pay less or receive more, tax, with the following exception:

Deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the underlying timing differences can be deducted.

Where required deferred tax is provided, without discounting, under the liability method at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date.

Share-based PaymentsThe grant-date fair value of equity share-based payment awards granted to the Investment Adviser is recognised as an expense, with the corresponding increase in equity, over the period that the Investment Adviser become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related non market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related non market condition performance conditions at the vesting date.

2. Investments 31 Aug 30 Sept Shares Loans Provisions 2011 2010 £m £m £m £m £m

Opening balance 7.9 285.5 (91.5) 201.9 274.7Foreign exchange differences – 1.5 – 1.5 (3.1)Additions 32.6 4.0 – 36.6 57.0Reductions – – – – (35.2)Provisions – – (27.2) (27.2) (91.5)Closing balance 40.5 291.0 (118.7) 212.8 201.9

The investment in Redefine International Holdings Limited of £32.6m is included in additions.

Provisions against investments increased as a result of reduced property valuations in the period.

The principal subsidiaries, whose results are included in these financial statements, are: % Equity owned by:Principal subsidiary Principal activity Company Subsidiary

Incorporated in British Virgin IslandsWichford Centenary Court Limited Property Investment 100.00Trito Kwik-fit Limited Holding Company 84.23Tritam Investments Limited Holding Company 90.79Newington House Limited Property Investment 76.73Trito Petersfield Limited Property Investment 60.42Banstead Property Holdings Limited Property Investment 71.43Ciref Reigate Limited Property Investment 61.36Ciref Ashtead Limited Property Investment 100.00Acton Properties Limited Holding Company 100.00Ciref Malhurst Limited Holding Company 84.00Ciref Coventry Limited Holding Company 81.25Ciref Europe Limited Holding Company 92.71Ciref Jersey Limited Holding Company 100.00Seaham Wax Limited Holding Company 100.00St Georges Harrow Limited Property Investment 100.00Redefine Hotel Holdings Limited Property Investment 71.04

Notes to the Company AccountsContinued


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% Equity owned by:Principal subsidiary Principal activity Company Subsidiary

Incorporated in GermanyB. Holding II GmbH Holding Company 94.80B. Holding III GmbH Holding Company 94.80Dandelion KG Property Investment 96.36Dandelion Verwaltungsgesellschaft mb H General Partner* 96.36Ebony KG Property Investment 96.36Chelvey Holdings Limited Holding Company 66.60Ebony Verwaltungsgesellschaft mbH General Partner** 96.36Justizzentrum Halle Parkplatz Verwaltungs-GmbH & Co. KG Property Investment 100.00Justizzentrum in Halle Wichford & Co. KG Property Investment 93.87Justizzentrum in Halle Wichford Verwaltungsgesellschaft mbH General Partner*** 100.00Ludwigsburg Property GmbH & Co. KG Property Investment 96.36Ludwigsburg Property Management GmbH General Partner**** 100.00Ludwigsburg Real Estate Management GmbH Holding Company 96.30Ticino Property GmbH & Co. KG Property Investment 96.36Ticino Property Management GmbH General Partner***** 100.00Ticino Real Estate Management GmbH Holding Company 96.30Wichford Parkplatz GmbH Property Investment 100.00Incorporated in GibraltarWichford Edgbaston Limited Property Investment 100.00Incorporated in Great BritainWichford Carlisle Limited Property Investment 100.00Wichford Ladywell Limited Property Investment 100.00Wichford Property General Partner Limited Holding Company 100.00 Byron Place Seaham Limited Property Investment 100.00 Incorporated in the Isle of ManWichford Property (LP) Limited Holding Company 100.00 Wichford Alpha Limited Holding Company 100.00 Wichford Atherton Wigan Limited Property Investment 100.00Wichford DSA Uxbridge Limited Property Investment 100.00Wichford DSA Dundee Limited Property Investment 100.00Wichford Glidewell Limited Property Investment 100.00Wichford Liverpool Limited Property Investment 100.00Wichford Park Place Leeds Limited Investment Property 100.00Wichford Parliament Square Edinburgh Limited Investment Property 100.00Wichford Sheffield Limited Property Investment 100.00Wichford St George House Leeds Limited Property Investment 100.00Wichford St Helens Limited Property Investment 100.00Wichford Swindon Limited Property Investment 100.00Wichford Temple Back Limited Property Investment 100.00Wichford Wellesley Road Limited Property Investment 100.00Wichford West Tullos Aberdeen Limited Property Investment 100.00Wichford Weymouth Limited Property Investment 100.00Wichford Beta Limited Holding Company 100.00 Wichford Bedford Limited Property Investment 100.00Wichford Bromley Limited Property Investment 100.00Wichford Hartlepool Limited Property Investment 100.00Wichford Manchester Limited Property Investment 100.00Wichford Northampton Limited Property Investment 100.00Wichford Redcar Limited Property Investment 100.00Wichford Rotherham Limited Property Investment 100.00Wichford Washington Limited Property Investment 100.00Wichford Wigan Limited Property Investment 100.00Wichford Gamma Limited Holding Company 100.00 Wichford Aberdeen (Atholl House) Limited Property Investment 100.00Wichford Aberdeen (Cullen House) Limited Property Investment 100.00Wichford Acton Limited Property Investment 100.00Wichford Barnsley Limited Property Investment 100.00Wichford Basildon No 1 Limited Property Investment 100.00Wichford Billingham Limited Property Investment 100.00



Wichford Birkenhead Limited Property Investment 100.00Wichford Birmingham Limited Property Investment 100.00Wichford Bradford Limited Property Investment 100.00Wichford Bridgewater Limited Property Investment 100.00Wichford Chester Limited Property Investment 100.00Wichford Chippenham Limited Property Investment 100.00Wichford Dalkeith Limited Property Investment 100.00Wichford Dundee Limited Property Investment 100.00Wichford G3 Limited Property Investment 100.00Wichford Grays Limited Property Investment 100.00Wichford Leeds Limited Property Investment 100.00Wichford Lindsay Limited Property Investment 100.00Wichford Llandarcy Park Limited Property Investment 100.00Wichford Newport Road Limited Property Investment 100.00Wichford Paisley Limited Property Investment 100.00Wichford Peterborough Limited Property Investment 100.00Wichford Plymouth Limited Property Investment 100.00Wichford Property Holdings No 3 Limited Property Investment 100.00Wichford Redditch Limited Property Investment 100.00Wichford Riverside Exchange Limited Property Investment 100.00Wichford Salford Quays Limited Property Investment 100.00Wichford Smethwick Limited Property Investment 100.00Wichford Sparkhill Limited Property Investment 100.00Wichford St Asaph Limited Property Investment 100.00Wichford St Mellons Limited Property Investment 100.00Wichford Swansea Limited Property Investment 100.00Wichford Telford Limited Property Investment 100.00Wichford Wakefield Limited Property Investment 100.00Wichford Waterside Leeds Limited Property Investment 100.00Wichford Wolverhampton Limited Property Investment 100.00Wichford Delta Limited Holding Company 100.00Wichford Bristol Limited Property Investment 100.00Wichford Chatham Limited Property Investment 100.00Wichford Chelmsford Limited Property Investment 100.00Wichford Durley Limited Property Investment 100.00Wichford Molineux Wolverhampton Limited Property Investment 100.00Wichford Newcastle Limited Property Investment 100.00Wichford Newington Causeway Limited Property Investment 100.00Wichford North Street Limited Property Investment 100.00Wichford Norwich Limited Property Investment 100.00Wichford Tamar Limited Property Investment 100.00Wichford Trentside Limited Property Investment 100.00Wichford Uxbridge Limited Property Investment 100.00Wichford West Point Limited Property Investment 100.00Wichford Woodlands Limited Property Investment 100.00Wichford Europe Limited Holding Company 100.00Wichford Halle Limited Property Investment 100.00Wichford Halle II Limited Property Investment 100.00Wichford Halle III Limited Property Investment 100.00Wichford Halle IV Limited Property Investment 100.00



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Incorporated in Jersey Exchange House Unit Trust Property Investment 100.00Wichford Harrow Limited Property Investment 100.00Wichford Ipswich Limited Property Investment 100.00Wichford Oldham Limited Property Investment 100.00Wichford Southampton Limited Property Investment 100.00Redefine International Holdings Limited Holding Company 100.00Birchwood Warrington Limited Property Investment 100.00Incorporated in CyprusKalihora Holdings Limited Holding Company 100.00Redefine Cyprus Limited Holding Company 100.00Incorporated in Luxembourg Concertine SA Holding Company 100.00Mirano SA Holding Company 100.00Wichford Dandelion Holding sarl Holding Company 100.00 Wichford VGB Holding sarl Holding Company 100.00

* General Partner of Dandelion KG ** General Partner of Ebony KG *** General Partner of Justizzentrum in Halle Wichford GmbH & Co. KG **** General Partner of Ludwigsburg Property GmbH & Co. KG ***** General Partner of Ticino Property & Co. KG

3. Debtors 3 1 August 30 September 2011 2010 £m £m

Prepayments 0.3 0.1Amounts due from subsidiary undertakings 61.8 49.8Provisions against amounts due from subsidiary undertakings (12.6) –Total debtors 49.5 49.9

4. Creditors: amounts falling due within one year 31 August 30 September 2011 2010 £m £m

Other creditors and accruals 3.5 0.6Total creditors falling due within one year 3.5 0.6

5. Creditors: amounts falling due after one year 31 August 30 September 2011 2010 £m £m

Amounts due to subsidiary undertakings 37.3 34.4Total creditors falling due after one year 37.3 34.4



6. Called up share capital

At the Extraordinary General Meeting of the Company held on 4 August 2011, Shareholders approved an all share offer for the entire share capital of Redefine International Holdings Limited “RIHL”

On 22 August 2011 the offer became unconditional and pursuant to the terms of the Offer Document, 3,255,711,718 new Ordinary Shares were issued to RIHL Shareholders.

The Shareholders (including RIHL) at the same meeting on 4 August 2011 approved the consolidation of existing Ordinary Shares from 1 penny each to 7.2 pence each on completion of the Reverse acquisition.

Following the consolidation of the Company’s shares, RIHL’s original shareholding in the Company comprising, 230,772,000 Ordinary Shares of 1 penny each, (now represented by 32,051,667 Ordinary Shares of 7.2 pence each), were cancelled as approved by Shareholders at the same meeting on 4 August 2011 and in accordance with Isle of Man law.

31 August 30 September 2011 2010

AuthorisedOrdinary Shares of 1 penny each – number – 5,000,000,000– £m – 50.0Ordinary Shares of 7.2 pence each– number 1,000,000,000 –– £m 72.0 –Consolidation from 1 penny each to 7.2 pence each – number 694,444,444 –– £m 50.0 –Issued, called up and fully paidOpening: Ordinary Shares of 1 penny each– number 1,062,095,584 1,062,095,584– £m 10.6 10.6Allotted: Ordinary Shares of 1 penny each– number 3,255,711,718 –– £m 32.6 –Consolidation from 1 pence to 7.2 pence each– number 599,695,459 –– £m 43.2 –Cancellation of ordinary shares of 7.2 pence each– number (32,051,667) –– £m (2.3) –Closing: Ordinary Shares of 7.2 pence each– number 567,643,792 1,062,095,584– £m 40.9 10.6

Holders of the Ordinary Shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting.

7. Share premium account 31 August 30 September 2011 2010 £m £m

Opening balance 161.4 161.4Premium on shares issued in period/year (net of expenses) – –Transfer to distributable reserves – –Closing balance 161.4 161.4


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8. Profit and loss account 31 August 30 September 2011 2010 £m £m

Opening balance 72.3 148.1(Loss) for the period/year (22.1) (81.5)Dividends paid (6.9) (6.7)Share based payment transaction (0.4) 0.4Transfer to distributable reserves due to cancellation of shares 2.3 12.0Closing balance 45.2 72.3

9. Reconciliation of shareholders’ funds 31 August 30 September 2011 2010 £m £m

Opening balance 244.3 332.1(Loss) for the period/year (22.1) (81.5)Dividends paid (6.9) (6.7)Share based payment transaction (0.4) 0.4Issuance of Ordinary Shares* 32.6 –Closing balance 247.5 244.3

* Pursuant to shareholders approval, RIHL’s original shareholding in the Company comprising, 230,772,000 Ordinary Shares of 1 penny each, were cancelled in accordance with Isle of Man law.

10. Financial risk management objectives and policies

The Company’s principal financial instruments comprise investments to subsidiary undertakings and cash. The main purpose of these financial instruments is to finance the subsidiaries’ operations. The Company has various other financial assets and liabilities such as debtors and creditors.

The main risks arising from the Company’s financial instruments are interest rate risk, exchange rate risk, credit risk and liquidity risk. The Board of Directors reviews and agrees policies for managing each of these risks that are summarised below.

(a) Interest rate riskThe interest rate profile of the Company is as follows: 31 August 30 September 2011 2010 Fixed rate assets £m £m

Investments in subsidiary undertakings 172.3 194.0

31 August 30 September 2011 2010 Variable rate assets £m £m

Cash at bank 26.0 27.5

The weighted average interest rate of the investments in subsidiary undertakings and cash at bank is 7% and LIBOR respectively.


(b) Exchange rate riskThe Company is exposed to foreign currency risk on assets, liabilities and earnings that are denominated in a currency other than pounds Sterling. 31 August 30 September 2011 2010 £m £m

Assets 56.8 54.3

The following table demonstrates the sensitivity to a reasonably possible change in the €/£ exchange rate, with all variables held constant, of the Company’s profit before tax due to changes in value of loans from/to subsidiaries undertakings and interest streams.

Increase/ Effect on profit decrease in €/£ before tax exchange rate £m

2011 +5% (2.7) -5% 2.72010 +5% (2.6) -5% 2.6

The €/£ exchange rate as at 31 August 2011 was 1.12942 (2010: 1.16170).

(c) Credit riskThe maximum exposure to credit risk at period end was: 31 August 30 September 2011 2010 £m £m

Investments 212.8 201.9Cash at bank 26.0 27.5Debtors 49.5 49.9Total 288.3 279.3

During the period ended 31 August 2011 a provision of £118.7 million (2010: £91.5m) was made against the carrying value of the shares and loans to subsidiaries undertakings to write down their carrying value to their estimated recoverable amount of £212.8 million.

As at 31 August 2011 a provision of £12.8 million (2010: nil) was made against the carrying value of the intercompany debtors to write down their carrying value to their estimated recoverable amount of £49.2m.

With respect to credit risk arising from cash at bank, the majority of the counterparties are investment grade or above.

(d) Liquidity riskThe table below represents the maturity profile of contracted undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. Amounts due to subsidiaries Trade and undertakings other payables £m £m

At 31 August 2011In one year or less – 3.5In more than one year, but not more than two years - –In more than two years, but not more than three years 37.3 –Total contractual cash flows 37.3 3.5Carrying amount 37.3 3.5

At 30 September 2010In one year or less – 0.6In more than one year, but not more than two years – –In more than two years, but not more than three years 34.4 –Total contractual cash flows 34.4 0.6Carrying amount 34.4 0.6

(e) Fair valueDue to the short maturities of cash at bank, debtors and creditors, the fair value approximates their book value.



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2011 2010* 2009 2008 2007 £’000 £’000 £’000 £’000 £’000

Summarised consolidated statement of financial positionAssetsInvestment property 986,654 227,675 186,021 106,636 121,815Long-term receivables 104,080 48,160 39,210 52,894 59,347Investments designated at fair value 1,123 75,139 290 735 6,605Intangible assets – 7,559 7,329 – –Investments in joint ventures 2,607 2,041 5,008 13,003 13,426Investments in associates 104,680 18,923 – 6,859 20Current assets 75,153 48,644 27,065 26,768 21,735Total assets 1,274,297 428,141 264,923 206,895 222,948

Equity and liabilitiesShareholders interest 277,304 142,506 43,098 78,974 82,595Non-controlling interest 5,506 2,254 2,512 9,588 14,994Non-current liabilities 820,478 165,685 195,523 107,737 112,732Current liabilities 171,009 119,696 23,790 10,596 12,627Total equity and liabilities 1,274,297 428,141 264,923 206,895 222,948

Summarised consolidated statement of comprehensive incomeGross rental income 26,823 13,267 10,198 7,579 4,169Investment income 3,875 2,560 10 559 30Other income 1,592 673 2,188 1,197 407Total revenue 32,290 16,500 12,396 9,335 4,606Administrative expenses (774) (466) (425) (424) (347)Investment management and professional fees (4,664) (3,406) (1,772) (1,693) (1,370)Property operating expenses (2,368) (1,661) (1,525) (787) (546)Net operating income 24,484 10,967 8,674 6,431 2,343Gain/(loss) from financial assets and liabilities 13,540 (544) (202) (2,821) 1,236Equity accounted (loss)/gain (3,088) (3,525) (10,658) (15,321) 2,384Impairment of loans (444) (598) (23,773) (11,647) – Net fair value losses on investment property (10,627) (2,167) (16,831) (10,090) (88)Impairment/amortisation of intangible assets (591) (345) (188) – – Profit/(loss) from operations 23,274 3,788 (42,978) (33,448) 5,875Interest income 8,134 3,381 4,225 5,908 4,532Interest expense (25,073) (12,363) (9,210) (7,359) (4,832)Foreign currency (loss)/gain (1,224) (6) 37 9 17Taxation (1,360) (200) (38) (84) (88)Profit/(loss) after tax 3,751 (5,400) (47,964) (34,974) 5,504Other comprehensive income 8,148 (1,599) 3,329 1,763 141Comprehensive income for the period 11,899 (6,999) (44,635) (33,211) 5,645Non-controlling interests 1,258 501 7,257 6,798 (645)Attributable to equity holders of the parent 13,157 (6,498) (37,378) (26,413) 5,000

Summarised consolidated statement of cash flowsCash flows from operating activities 12,253 631 (3,016) (2,392) (747)Cash flows from investing activities (181,072) (115,936) 389 (17,262) (55,350)Cash flows from financing activities 191,395 117,112 (63) 23,524 44,502Net movement in cash and cash equivalents 22,576 1,807 (2,690) 3,870 (11,595)

Shares in issue 567,643,792 304,706,406 73,760,277 72,685,751 54,921,023Earnings/(loss) per share 1.18 (2.46) (54.20) (39.69) 10.72Diluted net asset value per share 46.59 46.77 58.43 108.65 150.39

Note: The five year review reflects the summarised statements of financial position, comprehensive income and cash flows of the RIHL group due to reverse takeover accounting being applied (refer Overview and key facts related to the Reverse acquisition on page ••).

*11 month period ended 31 August 2010

Five year review (unaudited)

Shareholder Information98 Redefine International P.L.C. Annual Report and Accounts 2011

Share performanceSummary of ordinary share trading for Redefine International

Traded price (pence per ordinary share) Date Pence

Open 1 September 2010 57.82Low 31 August 2011 40.00High 2 September 2011 58.18Close 31 August 2011 40.00

Ordinary shares in issue 31 Aug 2011

Total shares in issue Ordinary 1p shares n/aTotal shares in issue Ordinary 7.2p shares 567,643,792Weighted average number of shares in issue 426,125,259

Ordinary shares trading volumes 31 Aug 2011

Value traded (GBP) 28,583,770Volume traded (millions) 350.7Volume traded as % of number of ordinary shares in issue 61.8%Volume traded as % of weighted number of ordinary shares in issue 82.3%

Number of shareholders as at 1 December 2011 879Market capitalisation at 31 August 2011 £227.1Market capitalisation at 1 December 2011 £222.4

Ordinary shares issued during the periodThe following additional ordinary shares were issued during the period:

Number of Redefine International Date of issue shares Reason for the issue

23/08/2011 543,890,859 Issue of shares following the reverse acquisition of Wichford, representing 94.74% of the RIHL shareholders accepting the offer

Post year end19/09/2011 3,166,874 Additional listing for further RIHL shareholdings accepting the offer26/09/2011 6,756,379 As above06/10/2011 13,829,680 As above and 0.55% of RIHL shareholdings compulsorily bought,

completing the reverse acquisition.Total 567,643,792

Beneficial ordinary shareholders holding in excess of 5% Number of Shareholder Ordinary shares %

Redefine Properties International Ltd – as at 31 August 2011 380,405,640 67.01 – as at 1 December 2011 389,544,640 68.74

Shareholder Information

99Shareholder InformationRedefine International P.L.C. Annual Report and Accounts 2011

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Total returnOpening price 1 September 2010 (pence per ordinary share) 57.82Closing price 31 August 2011 (pence per ordinary share) 40.00Increase in price (pence per ordinary share) (17.82)Total distribution to 31 August 2010 (pence per ordinary share) 4.13Total return (pence per ordinary share) (13.69)Total return (%) 1 (24.1)

1 Source. Datastream; reflects time weighted returns and reinvestment of dividends

Total return compared to FTSE All Share Index and EPRA IndexRI plc (24.1%)FTSE All Share Index 4.59%EPRA* Index (Sterling) 10.1%

* European Public Real Estate Association

140

120

100

80

60

40

20

0

Sep

201

0

Oct

201

0

Nov

201

0

Dec

201

0

Jan

2011

Feb

2011

Mar

201

1

Apr

201

1

May

201

1

Jun

2011

Jul 2

011

Aug

201

1

RDI TSR EPRA Total Return FTSE All Share Total Return

Total Shareholder Return


Registered officeTop Floor14 Athol StreetDouglasIsle of ManIM1 1JACompany secretary: Anne Elizabeth Couper Woods

Corporate advisorsInvestment adviserRedefine International Property Management LimitedSecond Floor30 Charles II StreetLondonSW1Y 4AE

Group services managerRedefine International Group Services LimitedSecond Floor30 Charles II StreetLondonSW1Y 4AE

Joint brokerPeel Hunt Ltd111 Old Broad StreetLondonEC2N 1PH

Evolution Securities Limited100 Wood StreetLondonEC2V 7AN

AuditorsKPMG1 Harbourmaster PlaceIFSCDublin 1

Administrator IQE LimitedTop Floor14 Athol StreetDouglasIsle of ManIM1 1JA

RegistrarCapita Registrars (Isle of Man) Limited3rd FloorExchange House54-62 Athol StreetDouglasIsle of ManIM1 1JD

Group solicitorsSimcocks Advocates LimitedRidgeway HouseRidgeway StreetDouglasIsle of ManM99 1PY

SJ Berwin LLP10 Queen Street PlaceLondonEC4R 1BE

Carey Olsen47 EsplanadeSt HelierJerseyJE1 0BD

Pinsent Masons LLP30 Crown PlaceLondonEC2A 4ES

Property valuersJones Lang LaSalle22 Hanover SquareLondon W1S 1JA

Colliers International UK plc9 Marylebone LaneLondon W1U 1HL

Savills PlcFountain Court68 Fountain StreetManchester M2 2FE

DTZRivergate House70 Redcliff StreetBristol BS1 6AL

BNP Paribas Real Estate Jersey3rd FloorDialogue House2-6 Anley StreetJerseyJE2 3QE

CB Richard Ellis33 Rue des Bains1205 GenevaSwitzerland

Dr Lübke GmbH10 Baseler Street60329 FrankfurtGermany

Savills Commercial Limited20 Grosvenor HillLondonW1K 3HQ

DTZ8 Rue de l’Hotel de Ville92522 Neuilly-sur-SeineFrance

Shareholder InformationContinued


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Glossary

AUDAGM The Code Cromwell

EPRA Estimated Rental Value (ERV) Eurozone

Euro or €

Exceptional item

Fair value movement

Finance lease

FSAGBP or £ or SterlingHeadlease IFRSInterest Cover Ratio (ICR)

Interest-rate swap

Investment Property Databank (IPD)

ITZA

JSE

King III

LIBOR

Listing RulesLoan-to-value (LTV) LSEMarket value Mark-to-market adjustment

Australian Dollar made up of 100 cents.Annual General MeetingThe UK Corporate Governance Code as issued by the Financial Reporting Council in May 2010.Cromwell Property Group is an Australian Securities Exchange listed stapled security (ASX:CMW) comprising the Cromwell Corporation Limited and Cromwell Property Securities Limited, which acts as the responsible entity of the Cromwell Diversified Property Trust. www.cromwell.com.auEuropean Public Real Estate Association. The estimated market rental value of lettable space which could reasonably be expected to be obtained on a new letting or rent review.The geographic and economic region that consists of all the European Union countries that have fully incorporated the Euro as their national currency.The lawful common currency of participating member states of the European Monetary Union.An item of income or expense that is deemed to be sufficiently material, either by its size or nature, to require separate disclosure.An accounting adjustment to change the book value of an asset or liability to its market value.A lease that transfers substantially all the risks and rewards of ownership from the lessor to the lessee.The UK Financial Services Authority.Great British Pound, the legal currency of the UKA lease under which the Group holds an investment property.International Financial Reporting Standards.A calculation of a Company’s ability to meet its interest payments on outstanding debts.A financial instrument where two parties agree to exchange an interest rate obligation for a predetermined amount of time. These are used by the Group to convert floating-rate debt or investments to fixed rates.Investment Property Databank. A global real estate information business providing independent research and analysis on the commercial real estate market.A means of analysing and comparing the rental value of retail space by dividing it into zones parallel with the main frontage. The most valuable zone, Zone A, is at the front of each unit. Each successive zone is valued at half the rate of the zone in front of it.JSE Limited, licenced as an exchange and a public company incorporated in terms of the laws of South Africa.The third King Report on Governance for South Africa 2009 based on the Code of Governance Principles for South Africa 2009. The London Interbank Offered Rate, the interest rate charged by one bank to another for lending money.The UK Listing Authority rules for listed companies.A ratio of debt divided by the market value of investment property.The London Stock Exchange plcA ratio of debt divided by the market value of investment property.An accounting adjustment to change the book value of an asset or liability to its market value.


NAVOver-rented Pre-let Redefine International P.L.C. (Redefine International, the Company or the Group)RIHL

RIPML

RIN

Redefine Properties Limited (Redefine Properties)REIT

Revpar

Total Shareholder Return (TSR)

UKWAULTWichford P.L.C. (Wichford)

Net Asset ValueSpace where the passing rent is above the estimated rental value.A lease signed with an occupier prior to completion of a development.The enlarged company following the reverse acquisition between Wichford and Redefine International plc.Redefine International Holdings Limited. The previously AIM listed property investment company party to the reverse acquisition (previously named Redefine International plc).Redefine International Property Management Limited. The Investment Adviser to the Company.Redefine Properties International Limited. The Company’s largest shareholder listed on the JSE, whose sole asset is its shareholding in Redefine International.Ultimate parent company of the Redefine Group, listed on the JSE.

Real Estate Investement Trust. A REIT must be a publicly quoted company with at least three-quarters of its profits and assets derived from a qualifying property rental business. Income and capital gains from the property rental business are exempt from tax but the REIT is required to distribute at least 90% of those profits to shareholders. Corporation tax is payable on non-qualifying activities in the normal way.Revenue per available room (calculated by multiplying the hotel’s average daily room rate by its occupancy rate).The growth in value of a shareholding over a specified period, assuming that dividends are reinvested to purchase additional units of the stock.The United Kingdom of Great Britain and Northern Ireland.Weighted average unexpired lease term.The previously LSE listed property investment company party to the reverse acquisition.

GlossaryContinued


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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000 immediately.

If you have sold or otherwise transferred all of your shares, please send this document, but not the accompanying personalised proxy form, at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee

REDEFINE INTERNATIONAL P.L.C.(incorporated in the Isle of Man with registered number 111198C)

NOTICE OF ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the Annual General Meeting of Redefine International P.L.C. (the “Company” or “Redefine International”) will be held at the Company’s Registered Office at Top Floor, 14 Athol Street, Douglas, Isle of Man, IM1 1JA on 24 January 2012 at 10:30am.

Resolutions 1 to 7 (inclusive) and Resolution 10, will be proposed as ordinary resolutions, meaning that for each of those resolutions to be passed, more than 50 per cent. of the votes cast must be in favour of the resolution. Resolutions 8, 9 and 11 will be proposed as special resolutions, meaning that for each of those resolutions to be passed, at least 75 per cent. of the votes cast must be in favour of the resolution.

ORDINARY BUSINESSRESOLUTION 1:To receive and adopt the Group and the Company’s audited financial statements for the period ended 31 August 2011 together with the reports of the Directors and independent auditors.

RESOLUTION 2:To approve the Directors’ Remuneration Report for the period ended 31 August 2011.

RESOLUTION 3:To re-elect Ms Ita McArdle as a Director.

RESOLUTION 4:To re-elect Mr Richard Melhuish as a Director.

RESOLUTION 5:To elect Mr Gregory Clarke as a Director.

RESOLUTION 6: To re-appoint the Independent Auditor until the conclusion of the Company’s next Annual General Meeting in 2013 and authorise the Directors to determine its remuneration,

SPECIAL BUSINESSRESOLUTION 7: THAT the aggregate fees for the directors’ remuneration be increased from £250,000 to £350,000 per annum (being an increase of £100,000).

RESOLUTION 8: THAT the Directors be hereby generally and unconditionally authorised pursuant to the Articles of Association of the Company from time to time to allot Ordinary Shares and to grant rights to subscribe for or convert any security into Ordinary Shares: (i) up to a maximum aggregate nominal value of £13,623,450.98 (equivalent to 189,214,597 Ordinary Shares); and(ii) in addition, in connection with a rights issue in favour of holders of Ordinary Shares in proportion (as nearly as may be

practicable) to their respective holdings of Ordinary Shares (but subject to such exclusions or other arrangements as the Directors consider necessary or expedient in connection with treasury shares, fractional entitlements or any legal or practical problems arising under the laws or regulations of, or the requirements of any regulatory body or stock exchange in, any territory) up to a maximum nominal amount of £13,623,450.98 (equivalent to 189,214,597 Ordinary Shares).

In each case for the period expiring on the date of the Company’s Annual General Meeting to be held in 2013, provided that the Company may before such expiry make an offer or agreement which would or might require Ordinary Shares to be allotted after such expiry and the Directors may allot Ordinary Shares or grant rights in pursuance of such offer or agreement as if the power conferred hereby had not expired.

Notice of Meeting


RESOLUTION 9:THAT the Directors be hereby generally authorised and empowered to allot Ordinary Shares as Shares either pursuant to Resolution 8 or by way of sale of treasury shares as if the pre-emption provisions in Article 10 of the Articles of Association of the Company did not apply to any such allotment, such power (unless and to the extent previously revoked, varied or renewed by the Company in general meeting) to expire on the date of the Company’s Annual General Meeting to be held in 2013 and be limited to:(a) the allotment of Ordinary Shares for Shares either pursuant to Resolution 8 or by way of sale of treasury shares for cash to

Shareholders where the shares attributable to the interest of such Shareholders are offered (whether by way of rights issue, open offer or otherwise) in proportion (as nearly as may be practicable) to the respective numbers of Ordinary Shares held by them, but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with any fractional entitlements or any legal or practical problems under the laws of, or the requirements of any regulatory body or any recognised stock exchange in, any country or territory;

(b) the allotment (other than pursuant to (a) above) of Ordinary Shares up to a maximum aggregate nominal value of £2,043,517.68 (equivalent to 28,382,190 Ordinary Shares), provided that the authority shall allow the Company before its expiry to make offers or agreements which would or might require Ordinary Shares to be allotted after such expiry and, notwithstanding such expiry, the Directors may allot Ordinary Shares in pursuance of such offers or agreements.

(c) the allotment of Ordinary Shares for cash to Aviva Commercial Finance Limited up to a maximum aggregate nominal value of £2,238,542.57 where by the Company elects to issue Ordinary Shares rather than repay the amount of the relevant facility in place between the Company and Aviva Commercial Finance Limited.

RESOLUTION 10: THAT, subject to the passing of Resolution 8 and 9, the Directors be hereby generally authorised:(i) to allot Ordinary Shares (including by way of transfer of Treasury Shares), within the limits of the authorised share capital of

the Company, at an issue price below the latest published net asset value of Ordinary Shares as at their date of issue or exercise; and

(ii) to issue Ordinary Shares (including any issue of Treasury Shares) at an issue or exercise price that is or can be below the latest published net asset value,

such power (unless and to the extent previously revoked, varied or renewed by the Company in a general meeting) to expire on the date of the Company’s Annual General Meeting to be held in 2013.

RESOLUTION 11:THAT the Directors be generally and unconditionally authorised to make market purchases (within the meaning of Section 13 of the Isle of Man Companies Act 1992) of Ordinary Shares on such terms and in such manner as the Directors may determine provided that:(a) the maximum number of Ordinary Shares authorised to be acquired is 56,764,379, representing 10 per cent. of the issued

Ordinary Shares as at the date of the Director’s Report;(b) the minimum price (exclusive of expenses) which may be paid for any such Ordinary Share is 7.2 pence, being the nominal

value of each Ordinary Share;(c) the maximum price (exclusive of expenses) which may be paid for any such Ordinary Share is the amount equivalent to 105%

of the arithmetical average of the middle market quotations for an Ordinary Share (as derived from the Daily Official List of the London Stock Exchange plc) for the five business days immediately preceding the day on which the Ordinary Share is purchased; and

(d) the authority shall expire on the date of the Annual General Meeting of the Company to be held in 2013 (provided that the Company may enter into a contract for the purchase of Ordinary Shares before the expiry of this authority which would or might be completed wholly or partly after such expiry and may make a purchase of Ordinary Shares in pursuance of any such contract).”

Registered Office:BY ORDER OF THE BOARDTop Floor14 Athol StreetDouglasIsle of ManIM1 1JA

Dated this 1st day of December 2011Anne Elizabeth Couper WoodsCompany Secretary

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NOTESA member entitled to attend and vote at the above meeting is entitled to appoint a proxy or proxies to attend and vote, on a poll instead of him. If a member appoints more than one proxy, each proxy must be entitled to exercise the rights attached to different shares. A proxy need not be a member of the Company. The appointment of a proxy will not preclude a member from attending and voting at the meeting in person should he subsequently decide to do so.

A Form of Proxy is enclosed for your use if desired. To be valid, the instrument appointing a proxy must be completed and reach the Company’s Registrars, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less than 48 hours before the time of holding the meeting.

In the case of joint holders of Ordinary Shares, the vote of the senior shareholder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the other joint holder(s) and for this purpose seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

To direct your proxy how to vote on the resolutions mark the appropriate box on your proxy form with an ‘X’. To abstain from voting on a resolution, select the relevant ‘Vote withheld’ box. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.

Any power of attorney or any other authority under which your proxy form is signed (or a duly certified copy of such power or authority) must be included with your proxy form.

In the case of a member which is a company, your proxy form must be executed under its common seal or signed on its behalf by a duly authorised office of the Company or an attorney for the Company.

If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.

Any member attending the meeting has the right to ask questions. The Company has to answer any questions raised by members at the meeting which relate to the business being dealt with at the meeting unless: 1. to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information; 2. the answer has already been given on a website in the form of an answer to a question, or 3. it is undesirable in the interests of the company or the good order of the meeting to answer the question.

Resolutions 3, 4, and 5: Ms McArdle is being proposed as is required under Article 85 that a director shall retire by rotation at the third Annual General Meeting after their last appointment or re-appointment. Mr Melhuish is being proposed as director as he is retiring due to the requirements of Article 85 of the Company’s articles of association that one third of the directors shall resign each year and may offer themselves for re-election. Mr Clarke is required to seek election under Article 80 due to his appointment by the Directors during the year. All of the individuals offer themselves for re-election as a Director. Their biographies can be found on pages 28 and 29.

An explanation of resolutions 7 to 11 is set out in Appendix 1 to this document.

Pursuant to Regulation 22 of the Uncertificated Securities Regulations 2005 of the Isle of Man, the Company specifies that only those shareholders of the Company on the register 11:00am on 22 January 2012 shall be entitled to attend or vote at the Annual General Meeting in respect of the number of shares registered in their name at the time. Changes to the register of members after that time will be disregarded in determining the rights of any person to attend or vote at the meeting.

CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by utilising the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take appropriate action on their behalf.

In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message must be transmitted so as to be received by the Company’s agent, Capita Registrars (whose CREST ID is RA10) by the specified latest time(s) for receipt of proxy appointments. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Company agent is able to retrieve the message by enquiry to CREST in the manner prescribed.


Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

As at 1 December 2011 (being the last practicable day prior to the date of this Notice of Annual General Meeting), the Company’s issued share capital consisted of 567,643,792 Ordinary Shares, carrying one vote each. However, in accordance with the Isle of Man Act 1992, the rights of the 939,000 Ordinary Shares held in Treasury have been suspended and therefore, the total voting rights in the Company as at 1 December 2011 were 566,704,792.

Copies of the letters of appointment for the non-executive directors and the Articles of Association of the Company will be made available for inspection during normal business hours on any weekday (public holiday excepted) from the date of this Notice of Annual General Meeting and for at least 15 minutes prior to and during the meeting at the registered office of the Company at Top Floor, 14 Athol Street, Douglas, Isle of Man IM1 1JA.

Appendix 1 – Explanation of Resolutions 7 – 11 (Special Business)Resolution 7: Increase in aggregate sum paid to DirectorsShareholder approval is sought to increase the aggregate sum payable to directors by £100,000. It should be noted that following the Merger, the Board has increased from six to nine non-executive directors and the new chairman will be paid £75,000. There has been no increase to the standard non-executive fee of £30,000.

Resolution 8: Allotment of sharesShareholders’ authority is required for the Directors to allot the unissued share capital of the Company. The existing authority given by shareholders to the Directors at the extraordinary general meeting on 4 August 2011, is in respect of unissued Ordinary Shares having an aggregate nominal value of £13,623,450.98. This authority is due for renewal at the Annual General Meeting to be held on 24 January 2012. The Directors consider that this authority should be renewed in respect of unissued Ordinary Shares having an aggregate nominal value of £13,623,450.98, representing 33.33% of the nominal issued ordinary share capital of the Company as at 1 December 2011 and to expire at the Annual General Meeting to be held in 2013. The Directors have no present intention of exercising this authority, however, it is considered prudent to maintain the flexibility it provides. This proposal is consistent with the current recommendations of the Investment Committee of the Association of British Insurers (“ABI”).

The ABI has also stated that it will regard as routine requests to authorise the allotment of a further 33.33% of the issued share capital. This additional share capital may only be applied to fully pre-emptive rights issues and such an authorisation is only valid until the next Annual General Meeting. Where this additional headroom is taken and where the aggregate actual usage of the authority exceeds one third of the nominal amount and also, in the case of fully pre-emptive rights issues, monetary proceeds exceed one third of the pre-issue market capitalisation, the ABI will expect that all of the Directors wishing to remain in office will stand for re-election at the next Annual General Meeting following the decision to make the issue in question. The Company currently has no intention of carrying out a further rights issue. The proposed resolution will give the Directors authority to allot a further 33.33% of the unissued share capital of the Company in the context of a fully pre-emptive rights issue.

Resolution 9: Waiver of pre-emption rightsArticle 10 of the Articles of Association of the Company grants pre-emption rights to existing shareholders in the case of a new allotment of shares. The UK Listing Authority does not require the consent of shareholders to each specific allotment (made other than to existing shareholders on a proportional basis) provided that the authority of shareholders to dis-apply generally these provisions is obtained. Accordingly, the Directors consider that it is in the best interests of the Company for the existing authority granted by shareholders at an extraordinary general meeting on 4 August 2011 to be renewed for a period expiring at the Annual General Meeting to be held in 2013.

It is proposed that the waiver will be limited by value to 5% of the Company’s nominal issued ordinary shares at 1 December 2011 and so will apply to Ordinary Shares having an aggregate nominal value of £2,043,517.65. This waiver will also apply in respect of fractional entitlements and the rights of overseas shareholders arising on a rights issue. This proposal is consistent with the current recommendations of the Investment Committee of the ABI.

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As part of the Aviva restructuring completed in September 2010, RIHL entered into a £13m facility (the “convertible loan”) with Aviva Commercial Finance Limited (“Aviva”). The loan bears interest at 6 per cent. per annum, and all interest is rolled up until payment or conversion. The capital plus rolled up interest is repayable 3 years after the date of the agreement or on any earlier date if there is an event of default. If the drawings together with interest are not repaid, RIHL is required to issue shares (“conversion shares”) to discharge the outstanding amount due, the number of which is to be calculated by dividing the outstanding amount by 50 pence per RIHL Share. A put option between Aviva and RIN was agreed, pursuant to which Aviva could put the conversion shares to RIN within a 10 business day period of the conversion of the outstanding loan into the conversion shares. Following completion of the reverse acquisition, the board of Redefine International have taken steps to replicate this loan with a new facility by Redefine International on equivalent terms (together with the simultaneous recession of the original convertible facility between RIHL and Aviva) whereby Redefine International will have the option to issue new ordinary shares if the facility is not repaid. The replication of this loan is due for completion in February 2012, subject to RIN and Redefine Properties Limited obtaining the necessary shareholder approvals at their Annual General Meetings in 2012.

Resolution 10: Authority to issue shares at less than Net Asset ValueShareholder approval is sought in order to issue shares of a class already listed, including an issue out of Treasury, at a price below net asset value. The Listing Rules require that shares, issued via an open offer, placing, vendor, consideration placing, offer for subscription or an issue out of Treasury, be issued at a price:(i) no less than 10% below the middle market price of those shares at the time of announcing the terms of the issue, in

accordance with Listing Rule 9.5.10; and (ii) above the net asset value per share of those shares, in accordance with Listing Rule 15.4.11 unless authorised by

shareholders. Due to the current market conditions and in order to comply with (i) above, any issue price of shares may fall below the net asset value. The Directors therefore seek shareholder approval to issue the shares at a price below the net asset value.

Resolution 11: Purchase of own sharesThe Articles of Association of the Company empower the Company to purchase its own shares. The Directors consider it desirable and in the Company’s best interests for shareholders to grant the Company authority to exercise this power, within certain limits. The Directors have no present intention of exercising this power. The authority to purchase shares would only be exercised after careful consideration by the Directors and as and when conditions were favourable, with a view to enhancing earnings per share and/or net asset value per share.

Legislation in the Isle of Man was enacted in 2010 which allows companies who buy their own shares to hold them in treasury rather than cancel them up to a maximum of 10%. The Company may now hold such shares as treasury shares which the Company could sell for cash. All rights attaching to shares purchased under this authority including voting rights and rights to dividends would be suspended whilst they are held in treasury.

The Directors propose an authority, to expire at the Annual General Meeting to be held in 2013, for the Company to purchase its own shares up to a total of 56,764,379 Ordinary Shares having an aggregate nominal value of £4,087,035.30, being 10% of the nominal issued ordinary share capital as at 1 December 2011.

RECOMMENDATIONSThe Directors consider that the passing of Resolutions 1 to 11 is in the best interests of the Company and its shareholders as a whole and accordingly recommend that you vote in favour of all the resolutions to be proposed at this year’s Annual General Meeting. The Directors intend to vote in favour of these resolutions in respect of their own share interests, which amount to 2,751,986 Ordinary Shares, representing in aggregate 0.48% of the nominal issued ordinary share capital of the Company.

108 Redefine International P.L.C. Annual Report and Accounts 2011

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