Final Results

1 NOVEMBER 2011

REDEFINE INTERNATIONAL P.L.C.

('Redefine International' or the 'Company')

RESULTS FOR THE PERIOD ENDED 31 AUGUST 2011

REDEFINE INTERNATIONAL'S ENLARGED PLATFORM POSITIONS IT STRONGLY FOR GROWTH

Redefine International P.L.C., formerly Wichford P.L.C., today announces its results for the period ended 31 August 2011*.

Financial 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)

Operational Highlights

·; Successful reverse takeover between Wichford P.L.C. and Redefine International plc to create an enlarged diversified income focused property company with circa £1.27 billion of assets. Anticipated cost savings going forward expected to be £0.3 million per annum

·; Acquisition of the St George's Shopping Centre, Harrow for £65.9 million and the 122 bed Crowne Plaza Hotel, Reading for £12.8 million

·; Following the period end, the Company announced the appointment of Greg Clarke as Chairman designate

·; Good progress made in planning for 2012 refinancing strategy

Philippe de Nicolay, Chairman, said:

"With the benefit of our strong platform of income-generating assets, comprising holdings spread across sectors and geographies, our experienced management team and the support of our largest shareholder, we look forward to a year in which we can take advantage of improved access to capital and explore a wide potential spectrum of accretive and strategic acquisitions for the benefit of all our shareholders."

\* The results for the period ended 31 August 2011 reflect the first set of results for the enlarged group following the merger. As a result of the application of reverse takeover accounting, the results reflect those of Redefine International for the period ended 31 August 2011 and do not give a true reflection of the enlarged Group's underlying distributable earnings for the period.

Meeting and conference callA meeting for analysts and institutional investors will take place today at 09.00 at Redefine International, 2nd Floor, 30 Charles II Street, London, SW1Y 4AE. The meeting can also be accessed via a conference call dial in facility, starting at 09.15, using the details below and the analyst's presentation will made available on the Company's website http://www.redefineinternational.com/investor-relations/financial-reports/

Dial in number: + 44 (0)20 7784 1036 UK Local

+27 11 019 7076 South Africa Local

Confirmation Code: 5218494

For further information, please contact:

Group Overview

Introduction

Redefine International P.L.C. ("Redefine International" or the "Company" and together with its subsidiaries the "Group") 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.

Investment strategy

The 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.

Investment markets

The 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.

Group structure

Redefine International is listed on the main market of the London Stock Exchange (the "LSE") and is part of the Redefine Properties Limited group. The ultimate holding company, Redefine Properties Limited ("Redefine Properties"), is listed on the Johannesburg Stock Exchange (the "JSE") and has a market capitalisation of approximately £2billion.

Board and Management

The 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 Boards have 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.

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.

Chairman's statement

The 2011 financial period has been a landmark one. The successful reverse acquisition between Redefine International plc (subsequently renamed Redefine International Holdings Limited ("RIHL")) and Wichford P.L.C. ("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.

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 alongside, 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 London Stock Exchange's Main Market for listed securities.

In a period of such intensive 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 results

Earnings 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 April 2011 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 the RIHL shareholders for the period to 4.13 pence and reflects a 100% payout of earnings available for distribution.

Operations

I 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 a yield of 8.5% 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 stable income returns underpinned 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.

Board

The 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 Redefine International 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.

Retirement

It 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 fulfill 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 November. 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.

Prospects

Following 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 £1.2 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 is considering 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). The authority 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 Nicolay

Chairman

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. 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 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.

This announcement makes various references to companies within the Redefine Group which are summarised below.

Rationale behind the reverse acquisition

The 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 67% shareholding.

The income stream from the property portfolio is complemented by a 22.7% interest in the Group's associate, Cromwell Property Group ("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 shareholders

Following the reverse acquisition, the cancellation of RIHL's previously equity accounted investment in Wichford (refer note 14 to 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 hold approximately 14.07% and previous Wichford shareholders (other than RIHL shareholders) hold approximately 20.34% of the shares in the Company.

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

ISIN: IM00B4JZYL28

TIDM: RDI

SEDOL: B4JZYL2

Effect on the financial statements

Following the adoption of reverse takeover 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.

Top 15 properties by value

Notes:

1)Figures reflect 100% ownership

2)Redefine Hotel Management Limited

Business review

Overview

Against 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, comprising five assets for £112.0 million (including transaction costs);

·; The acquisition of the St George's Shopping Centre in Harrow, North London, for £65.9 million (including transaction costs);

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

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

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

Performance

The portfolio has changed substantially following the reverse acquisition and the acquisition of the Hotel portfolio. In a difficult economic environment, the portfolio has benefitted 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 has 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 close to a third of rental income provides for defensive income returns.

Business Segments

Business segments at 31 August 2011

Notes:

1) UK Retail lettable area excludes the APCOA parking space of 326,315 sqft

2) Cromwell's portfolio occupancy was 99.6% as at June 2011

3) Includes Grand Arcade Wigan, held through a joint venture entity

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.

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 sqft at Sapphire House, Telford, in return for a £5.0 million surrender premium.

Key activity during the period included:

Lyon House & Equitable House, Harrow

Preparation for 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 sqft. Significant progress has been made in securing a social housing landlord for the affordable housing element of the scheme.

Sapphire House, Telford

The 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, Southwark

A £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, Crawley

A comprehensive refurbishment of this 106,000 sqft 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 focussed 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 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. 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 Company 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 Company 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 Retail at a glance

Figures assume 100% ownership

1 Excludes Crewe

Definitions:

Estimated Rental Value (ERV); the estimated market rental value of lettable space which could reasonably be expected to be obtained on a new letting or rent review

ITZA; 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.

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.

Grand Arcade, Wigan

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 sqft 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

Byron Place performed well and at period end was fully occupied.

It showed footfall growth of 2% over the previous year.

West Orchards, Coventry

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.

Birchwood, Warrington

1 Current (before refurbishment)

2 Retail units vacated for refurbishment programme

Planning consent has been granted for the redevelopment of 46,000 sqft 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 sqft anchor and two 9,000 sqft sub-anchors. The balance of the space provides five smaller units ranging in size from 1,100 sqft 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

The centre, acquired in July 2011, is already 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, Crewe

A 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.

Hotels

The Group owns six hotel properties 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 revenue per available room ("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.

Key activity during the period included:

Acquisition of Crowne Plaza, Reading

Crowne 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, Southwark

The 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 programme

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

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.

Prospects

There 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 exploring 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 Investment Property Databank, 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.

Europe

Against 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 entered into 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 portfolio

Following 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, Germany

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 review

A 10% rental increase was agreed through the operation of the turn-over clause.

Germany

While 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.

Cromwell

Cromwell 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 AUD1.4billion 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 joining the board of Cromwell, resulted in the investment now 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, and the Group has since increased its shareholding to 22.66%. 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 an excellent 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 outlook

Cromwell 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.

Portfolio summary

Portfolio overview by business segment

Business segments - values

Notes:

1. Cromwell reflects share of market value

2. Cromwell's portfolio consist of 21 assets with a market value of AUD 1,444.9 million as at June 2011

3. Figures reflect 100% ownership of property assets

Business segments - income

Notes:

1. Cromwell income reflects last quarterly dividend of 1.75 Australian cents annualised

2. Total occupancy excludes Cromwell

3. Figures reflect 100% ownership of property assets

Business segments - valuation movement

Notes:

1. Acquisitions reflect purchase price excl. acquisition costs

Portfolio overview by sector

Property sectors at 31 August 2011

Notes:

1. Excludes Cromwell

Financial review

Overview

The 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 2011and 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 ("St George's") 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. £0.91 million of these costs are reflected in the statement of comprehensive income, the balance of £2.1 million is included within Share Premium and Wichford acquired reserves. 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 due to mature in October 2012 which have a nominal value of £314.3 million.

Earnings available for distribution

The 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.

Earnings per share

Basic 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 a loss of 0.67 pence in the prior period.

Net assets

The 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.

Cashflow

The 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 benefitted 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.

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 Capital

The Group's nominal value of its senior debt facilities and working capital facility at 31 August 2011 was £863.1 million and £852.5 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.

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

The €52.8million 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.

The €65.6million 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 18 for details on all banking facilities.

Significant effort is being directed to achieving a stable and sustainable capital structure and to reap the benefits associated with that.

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 VBG2

The 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.

Hedging

The 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 £22.4million. 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.

Taxation

The 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.

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 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 International Financial Reporting Standards (IFRS) as adopted by the EU and as applied in accordance with the Isle of Man Companies Acts 1931-2004 (as amended).

The Group financial statements are required by law and IFRS as adopted by the EU, to present fairly the financial position and performance of the Group. 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 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 with IFRS as adopted by the EU 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 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 a responsibility statement relating to these and other matters, included below.

The Directors are responsible for keeping proper books of accounts that disclose with reasonable accuracy at any time the financial position of the Group 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 IFRS 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 for the period then ended;

·; the Directors' Report together with the Business Review includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that they face.

The Board of Directors

01 November 2011

Financial Statements

Consolidated Statement of Comprehensive Income

For the period ended 31 August 2011

Consolidated Statement of Financial Position

As at 31 August 2011

Consolidated Statement of Changes in Equity

For the period ended 31 August 2011

Consolidated Statement of Cash Flows

For the period ended 31 August 2011

Notes to the Consolidated Financial Statements

For the period ended 31 August 2011

1. General information

Redefine International 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 reverse acquisition, reverse acquisition accounting has been applied under IFRS 3 Business Combinations (2008). Following the adoption of reverse takeover 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 condensed 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 include the valuation of investment property and the application of the going concern principal of accounting.

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

Statement of compliance

These condensed consolidated financial statements have been prepared in accordance with the measurement and recognition criteria of IFRS, and in accordance with the presentation and disclosure requirements of IAS 34. They do not include all of the information required for full annual financial statements. Comparative information has been regrouped on a basis consistent with the current period.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements except for the adoption of new accounting standards as set out below.

The figures for the 12 month period ended 31 August 2011 have been reviewed by the Auditors. The summary financial statements for the eleven month period ended 31 August 2010, as presented in the Preliminary Results, represent an abbreviated version of the Group's full accounts for that period, on which independent auditors issued an unqualified audit report. The financial information presented herein does not amount to statutory financial statements.

2. Significant Accounting policies

Except as described below, the accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its audited financial statements as at and for the year ended 31 August 2010.

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

Amendment to IAS 24 - Related Party Disclosures

This 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 issues

The 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 Instruments

This 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 2010

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

The adoption of the following amendments resulted in changes to accounting policies, but 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 adopted

The 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.

Accounting for business combinations

The 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 re-measured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

Capital instrument

A 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 17 for further details

Restructured Debt

A 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.

Finance Leases

Finance 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.

Service charges

Where 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.

3. Significant accounting judgements, estimates and assumptions

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 accounting

These 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 will 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 no 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 Company and Group have adequate resources to continue in operation for the foreseeable future as outlined in the Directors Report.

Investment Property Valuation

The 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.

Determination of the fair value of the liabilities of Wichford on acquisition

In 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 12 for further details.

Taxation

The 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 Taxation

The 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.

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 Chief Operating Decision Makers, can be classified in the following segments:

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

i. Information about reportable segments