Annual Report

Clear FocusRedefine Properties International Limited ("RIN") is a property investment group focusedon sustainable and growing income returns through investment in commercial real estateand real estate securities. RIN's sole investment is in its subsidiary, Redefine InternationalP.L.C. ("RI PLC").The RI PLC investment portfolio is geographically diversified across the UK, Europe andAustralia with a focus on the retail, commercial and hotel sectors. The Group’s portfolio isindependently valued in excess of £1bn and is externally managed by Redefine InternationalProperty Management Limited.Group StructureRIN is listed on the JSE and itssubsidiary, RI PLC, is listed on themain market of the LSE. The Group’smajor shareholder, Redefine PropertiesLimited ("Redefine Properties"), islisted on the JSE with a marketcapitalisation of approximatelyR26 billion (£1.8 million).R17.1 billion(£1.2 billion)Portfolio market valueRedefine Properties Limited(Listed on JSE)49.3%Redefine PropertiesInternational Limited(Listed on the JSE)65.8%Public Shareholders50.7%RedefineInternational P.L.C.(Listed on the LSE)Effective as at 30 November 2012Public Shareholders34.2%Timeline2002 2003RI PLC foundedas the CorovestInternationalReal Estate Fund(“Ciref”), an openended propertyinvestment fundWichfordfounded asa limitedpartnershipinvestmentfund

StrongbalancesheetStrongtenantcovenantsThe RIN Annual Report should be read together with theRI PLC Annual Report for the year ended 31 August 2012,which have been released simultaneously with this report,as combined they provide a complete overview of the Group’sperformance and prospects.IncomefocusedreturnsOverview– At a glance 01– Operational & financialhighlights 02– Chairman’s statement 04– Managing risk 06Governance– Board of Directors 08– Financial review 10– Corporate governance report 11– Corporate social responsibilitystatement 18– Directors’ responsibilitystatement 20– Declaration by CompanySecretary 20– Report of the audit andrisk committee 21– Directors’ report 22– Directors’ remuneration report 25Overview2004 2005 2006 2007 2008 2009 2010 2011Wichford floatedon AIM in LondonCiref floated onAIM in LondonR3.39 billion(£237.8 million)Market cap at 30 November 2012Wichfordexpandsinto Europeand movesits listingto the mainmarket ofthe LSECiref changes its nameto RI PLC, after RedefineProperties takes amajority shareholdingRI PLC acquires an initialstake in WichfordRedefine Propertiesacquires a controllingstake in RI PLC’sInvestment Adviser,and becomes a majorshareholder in RI PLCRedefine Propertiesincreases its holdingin RI PLC to over 50%RIN floatedon the JSEWichford andRI PLC mergeto create asubstantialincome focusedmid-tierpropertyinvestmentcompanyFinancial Statements– Independent auditors’ report 27– Consolidated income statement 28– Consolidated statementof comprehensive income 29– Consolidated statement offinancial position 30– Consolidated statement ofchanges in equity 31– Consolidated statement ofcash flows 32– Notes to thefinancial statements 33– Property portfolio 81Company Information– Linked unitholders’ information 89– Shareholder information 90– Special resolutions andmembers’ diary 91– Glossary 92– Corporate Governance –King III Review 93– Notice of annual general meetingof shareholders and debentureholders 95– Form of proxy forshareholders 105– Notes to the form of proxyfor shareholders 106– Form of proxy of debentureholders 107– Notes to the form of proxy fordebenture holders 108The Annual Report has beenprepared under the supervisionof Andrew Rowell CA(SA), RIN’sFinancial Director.The interpretations and defintionsfound in the glossary on page 92 ofthis report have, where appropriate,been used throughout the document.Redefine Properties International LimitedAnnual Report 201201

Overviewoperational & FINANCIAL highlightsSustainable GrowthOperationalHighlightsFinancialHighlights• Successful restructuring orrepayment of over £250 millionof legacy financing facilities• Full integration of RI PLC andWichford businesses completed• Strong operating performancefrom Cromwell and the HotelPortfolio• Leases on the Malthurst portfolio(petrol filling stations) re-gearedto 2025, extending the lease termfor an additional five years• Full planning approval receivedfor 287 residential units at Lyonand Equitable House, Harrow• Sale of the Group’s 94%shareholding in the Justice Centrein Halle, Germany• Earnings available for distributionof £18.2 million (31 August 2011:£14.6 million), an increase of 24.7%• Distribution of 2.29 pence per linkedunit for the six-month period ended31 August 2012 an increase of 9.6%over the interim distribution• Total distribution of 4.38 penceper linked unit for the year(31 August 2011:4.11 pence),an increase of 6.6%• Headline earnings per linkedunit of 7.23 pence (31 August 2011:6.35 pence), an increase of 13.9%• Adjusted net asset value of36.20 pence per linked unit(31 August 2011:44.50 pence),a decrease of 18.7%• Capital Raising successfullycompleted post year end, raisingover R1 billion (£75 million)02 Redefine Properties International LimitedAnnual Report 2012

Overview+6.6%Earnings available for distribution per linked unitEarnings available fordistribution per linked unit20114.1120124.38Adjusted NAVper linked unit201144.50201236.2036.20 penceAdjusted NAV per linked unit+6.6%LTV (pro-forma)(18.7%)WAULT51.0%LTV (pro-forma)201182%201251%20119.320128.68.6 yearsWAULTdown 31.2%Occupancy201197%201295.5%(0.7) yearsIndexation201150.2%201252%95.5%Occupancy(1.5%)+1.8%52.0%Indexation and fixed increasesRedefine Properties International LimitedAnnual Report 201203

OverviewCHAIRMAN’s statementSignificant progressI am pleased to report that the Group has madesignificant progress towards achieving its strategicobjectives, despite a challenging year for RI PLC,the Company’s LSE-listed subsidiary.The reverse acquisition of Wichford exposed RI PLC toa high level of short-term debt in the context of a UKbanking industry that is largely closed to new real estatelending. In this constrained environment the Group wasable to restructure or repay more than £250 million oflegacy financing facilities, significantly improving itsfinancial position.The capital raisings undertaken by both RIN andRI PLC post year end were extremely successful andfurther boosted the Group’s balance sheet, enablingit to reduce levels of gearing. The RI PLC firm placingand open offer completed on 9 October 2012 and raised£127.5 million before costs, well in excess of the initialtarget of £100 million. RIN raised just over R1 billion(£75 million) through the issue of 218 141 257 new linkedunits at a price of R4.60 each in terms of the pro rata offer.The pro rata offer was partially underwritten by RedefineProperties but, given the demand for new RIN linkedunits and in order to broaden the RIN linked unitholderbase, Redefine Properties made available a portion of theRIN linked units taken up by it under the pro rata offerfor placement with third party placees. This resulted inRedefine Properties’ beneficial interest in RIN decreasingto 49.34% following the capital raise.RIN can now look forward with confidence to meetingits objective of being a leading diversified mid-cap cashflow focused property group, that provides hard currencyincome returns to unitholders.Earnings available for distribution by RIN for the yearwere 4.38 pence per linked unit. In a period in whichthere were significant challenges for the UK retail andregional office environment and austerity measuresthroughout the Eurozone and the UK, it is particularlypleasing to have achieved a strong operating andincome performance.The Group’s adjusted net asset value (“NAV”) comprisesthe IFRS net asset value adjusted for, inter alia, thenegative equity associated with certain non-recoursefinancing facilities, principally the Delta, Gamma andVBG portfolios. The restructurings of both the Deltaand VBG portfolios were concluded post year end.The adjusted NAV at 31 August 2012 was 36.20 penceper linked unit, down 16.0% from 29 February 2012. NAVper linked unit, excluding deferred tax and derivatives,decreased to 21.21 pence (36.33 pence at 29 February2012). The decrease was largely as a result of significantdeclines in the values of regional offices across the UK,which impacted our former Wichford properties.04 Redefine Properties International LimitedAnnual Report 2012

Overview+4.7%increase in Hotels underlyingRevPAR to £71.76(2011: £68.53)20110.7220120.75+4.2%increase in Cromwell securityprice (AUD)The performance of the portfolio varied substantiallyacross our business segments. Overall, occupancyand income returns were stable despite tough tradingconditions, particularly for UK Retail. In a market withsuch divergent performances, the benefit of havingdiversified sources of income with strong covenants hasbeen demonstrated.The Hotel portfolio performed strongly in a year thatincluded both the Queen’s Diamond Jubilee and theOlympics. The underlying hotel properties benefited fromnear full occupancy over the Olympic and Paralympicperiod and demand has remained robust post theOlympics, which is encouraging.Our investment in Cromwell remains an important partof the business and we are confident that the quality of theunderlying portfolio and recent investments will continueto provide strong income returns for our shareholders.Following the successful capital raisings, the Group cannow shift its focus from restructuring the balance sheetto enhancing and growing the property portfolio.The Group is in a strong position to take advantage ofdistressed property offerings and banks being forced todispose of assets to reduce leverage. The Group continuesto engage with regulatory authorities to agree a simplifiedownership and listing structure in place of the currentcomplicated and somewhat unwieldy structure.Significant changes to the UK REIT legislation wereenacted in July 2012, paving the way for RI PLC to convertto a UK REIT. We have been informed that the SA REITlegislation is imminent. The Group is, in consultation withits tax advisers, reviewing the possibility of conversion toeither a UK REIT or SA REIT and further announcementswill be made in due course.Lastly, I would like to thank our unitholders for theirsupport and my Board colleagues and the managementteam for their commitment and dedication to the Groupduring this challenging and busy period.Gavin TipperChairmanRedefine Properties International LimitedAnnual Report 201205

OverviewMANAGING RISKWhile it is not possible to identify or anticipate every risk due to the changing business environment, the Companyhas an established risk management process to manage and mitigate those key risks which it believes could havean impact on its well-being. The Company’s process for identifying and managing risk is set by the Board. The Boardhas delegated the management of risk to the Audit and Risk Committee. The Audit and Risk Committee reviews therisk management plan annually with the design, implementation and monitoring being the responsibility of RI PLC'sInvestment Adviser (on a day-to-day basis). The key risks facing the Company, the potential impact of these risk and themitigating actions and controls in place are as follows:RISK IMPACT MITIGATIONStrategicFailure to execute appropriate • Net asset value• Defined investment strategyproperty investment strategies and • Total property return• Defined asset appraisal processtake advantage of opportunities in the (income and capital)• Investment Committee reviewscurrent economic climate• Shareholder earnings (dividends) all opportunities against predeterminedcriteria• Monitoring of macroeconomicand property market trendsFinancial 1Shortage of financing and refinancingat acceptable costAdverse interest rate movements• Inability to fund propertyinvestments or developmentprogramme• Increased cost of finance• Increased cost of borrowingand hedging1Additional details on financial risks are set out in Note 3 to the consolidated financial statements.• Spread of sources and maturitiesof facilities• Sufficient cash balancesmaintained for spendingcommitments• Continuing and extensive capitalmarket and bank relationshipmanagement• Interest rate hedging policyAdverse foreign currency movements • Decreased asset investment values • Geographically diversified portfolio• Debt facilities are secured in thecurrency of the related investmentChanges in taxation laws andregulations• Non-compliance with tax laws canlead to penalties and interest• Regular monitoring of taxationchanges by Audit and Riskcommittee and assessmentof impact on the Group• Active ongoing engagementswith tax professionals06 Redefine Properties International LimitedAnnual Report 2012

Governanceboard of directorsStrong TeamGavin TipperChairman and Independent Non-Executive DirectorMr Tipper is a Chartered Accountant with BComm andBAcc degrees and a Masters in Business Administration.He has been involved in the financial services industry forover 20 years. Prior to joining the Coronation Group in 2001where he spent ten years as chief operating officer, he wasa technical partner at KPMG. Mr Tipper holds directorshipsin a number of listed South African companies.Member of the Investment, Nominations, Remunerationsand Social and Ethics CommitteesMichael WattersChief Executive OfficerMr Watters is a qualified engineer with a BSc Eng. (Civil)Degree and an MBA. He has over 25 years’ experiencein the investment banking and real estate industries. Hehas held directorships of some of South Africa’s top ratedlisted property funds including Sycom Property Fund andHyprop Investments Limited as well as the Sapphire RetailFund in the United Kingdom.Member of the Investment and Social andEthics CommitteesAndrew RowellFinancial DirectorMr Rowell is a chartered accountant with aBComm (Hons) Degree. He spent four years withPricewaterhouseCoopers in South Africa, and in theUSA. Mr Rowell was group accountant for MvelaphandaGroup Limited, a listed investment company in SouthAfrica, prior to joining the Group.Member of the Social and Ethics Committee08 Redefine Properties International LimitedAnnual Report 2012

GovernancePeter ToddIndependent Non-Executive DirectorMr Todd is a qualified lawyer with a BComm/LLB degreeand a higher diploma in taxation. He worked for ArthurAndersen in their tax department before establishingTWS Consulting and Osiris International Trustees Limited.The main focus of his practice was property related andhe has many years of experience in consulting to majorplayers in the property industry.Chairman of the Audit and Risk Committee and memberof the Nominations CommitteeBernard NackanNon-Executive DirectorMr Nackan has been involved in the investment/financialservices field for over 40 years, initially as Financial Editorof the Rand Daily Mail and, from 1974, as a senior executiveand director of the Sage Group. He was Managing Directorof Sage Unit Trusts and a director of Sage’s financialservices and property management subsidiaries in SouthAfrica and internationally. Mr Nackan retired from the SageGroup in 2003 and is an independent consultant. He is amember of the Collective Investment Schemes AdvisoryCommittee appointed by the Minister of Finance and a nonexecutivedirector of Redefine Properties Limited.Marc WainerNon-Executive DirectorMr Wainer has more than 35 years experience in theproperty industry in South Africa, including foundingInvestec Property Group, Investec Bank’s property division.Marc is Chief Executive Officer and an Executive Director ofRedefine Properties Limited, which he founded. He also isa Non-executive Director of Hyprop Investments Limited.Member of the Investment and Nominations CommitteesGreg HeronNon-Executive DirectorMr Heron is a qualified Chartered Accountant withsignificant banking experience in structured and propertyfinance and in private equity. He is a non-executivedirector of Redefine Properties Limited, the majorityshareholder of RIN. Greg has also held directorshipsof various listed and unlisted South African companiesinvolved across a broad range of industry sectors and iscurrently the Managing Director of Cruden Bay Capital,a privately-owned investment company.Member of the Audit and Risk andRemuneration CommitteesMember of the Audit and Risk andRemuneration CommitteesRedefine Properties International Limited Annual Report 201209

GovernanceFinancial ReviewOverviewThese results reflect the first full year of trading for the enlarged RIN Group following the acquisition of Wichford on23 August 2011. Consequently, gross rental income was £76.2 million, up 184.3% on the comparable period. Earningsavailable for distribution by RIN were £18.20 million, up 24.7% on the prior year. The earnings available for distributionare set out in Note 15 to the financial statements.Notwithstanding the increased earnings available for distribution, the Group delivered a statutory loss attributable toRIN shareholders of £59.25 million for the twelve months ended 31 August 2012. The key driver of this loss was a netdecrease in the fair value of the Group’s investment property and assets held for sale, of £126.9 million. £94.6 million ofthe fair value loss relates to the historic “Wichford” UK portfolio, including assets in the Gamma and Delta portfolios.The debt facility secured against the Delta portfolio has been successfully restructured subsequent to the financialyear end and the Gamma facility is currently under negotiation with the loan servicer. As both of these facilities arenon-recourse to the Group, the negative equity associated with the portfolios of £44.4 million or 10.68 pence per linkedunit, has been excluded in the calculation of Adjusted NAV per linked unit.Additional items impacting the results of the Group for the year include:• A £25.9 million increase in finance costs due to the amortisation of the fair value adjustment which arose on the VBG,Gamma and Delta facilities at the date of the reverse acquisition of Wichford. This is a non-cash, IFRS adjustment,which will reverse upon sale or re-structuring of the underlying assets on which the non-recourse loans are secured.• A net increase in the fair value of the interest rate derivatives held by the Group, of £10.0 million. The gain wasprincipally due to the near-term expiry of the Delta and Gamma interest rate swaps.• An unrealised profit of £6.3 million from equity accounted entities, mainly due to the continued strong performanceof Cromwell.The items mentioned above have contributed to a decrease in NAV per linked unit, from 44.70 pence in the prior year to18.34 pence per linked unit. The NAV as at 31 August 2012 includes items which, in the opinion of the Board, should beadjusted in order to better reflect the underlying value of the Group. An “Adjusted NAV” has therefore been calculatedas follows:Pence perNote linked unitIFRS NAV per linked unit as at 31 August 2012 18.34Adjusted for derivatives and deferred tax 2.87EPRA 5 NAV per linked unit as at 31 August 2012 21.21Write back of VBG negative equity 1 3.00Write back of Delta negative equity 2 3.09Write back of Gamma negative equity 3 7.59Cromwell fair value write-up 4 1.31Adjusted EPRA 5 NAV per linked unit 36.20Notes1. The net VBG portfolio debt value as at 31 August 2012 was in excess of the current investment property value. Following the restructuring which wascompleted subsequent to the year end, the negative net asset value position has been reversed, leading to a positive effect on net asset value perlinked unit of 3.00 pence per linked unit.2. Following the successful completion of the Delta restructuring announced on 15 October 2012, the negative net asset value position of 3.09 pence perlinked unit is expected to reverse over the remaining term of the loan.3. The Gamma portfolio debt values were in excess of the current investment property values at the year end. Following a proposed restructuring andtaking into account the non-recourse nature of the portfolio, the negative net asset value position is anticipated to reverse in the foreseeable future,leading to a positive effect on net asset value per linked unit of 7.59 pence.4. Cromwell has been equity accounted at a net asset value of AUD 69.8 cents per security at 31 August 2012. The market price of Cromwell at 31 August2012 was 75.0 cents per stapled security and hence, should the Cromwell investment have been accounted for at fair value at this date, it would haveled to a write-up of 1.31 pence per linked unit.5. The European Public Real Estate Association (“EPRA”) publish best practice recommendations for Europe’s Stock Exchange listed real estate sector.In order to enhance comparability and transparency, RI PLC and RIN has adopted the EPRA performance measures within its reporting. The EPRAadjusted rents include the write-back of derivative instruments and deferred tax liabilities.10 Redefine Properties International LimitedAnnual Report 2012

CORPORATE GOveRnance REPORTThe Board of Directors is accountable to the Company shareholders for the management and control of the Company’sactivities and is committed to high standards of corporate governance, which they consider critical for businessperformance and for maintaining investor confidence.The Directors recognise the importance of sound corporate governance and have substantially complied with theprovisions of the third King Report on Governance for South Africa 2009 based on the Code of Governance Principles forSouth Africa 2009 (collectively referred to as “King III”). Further to the implementation of King III on 1 March 2010 theBoard regularly reviews its corporate governance framework and processes against King III and, in accordance withthe “apply or explain" principle, it has outlined the areas of non-compliance, along with any proposed remedial action, onpage 17.Board of Directors and its CommitteesBoard composition, independence and operationDetails of the Directors are set out on pages 8 and 9.GovernanceRIN is managed by a Board of Directors which comprises the independent non-executive chairman, four non-executivedirectors and an executive Financial Director and Chief Executive Officer.All the non-executive directors are individuals of calibre and credibility and have the necessary skills and experienceto 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 executive Financial Director and Chief Executive Officer are also directors of the Investment Adviser to RI PLC, threenon-executives are Directors of Redefine Properties Limited, the Company’s largest shareholder, and the remainingtwo non-executives meet the independence criteria of the King III provisions. The constitution of the Board thusprovides an appropriate balance of power and authority, such that no one individual or block of individuals can dominatethe Board’s majority decision making.The Board is responsible for the continued success of the Company and follows a schedule of matters covering strategy, risk,performance and ethics. The Company’s strategy is appraised annually and reviewed against key performance and risk areas.The Board meets at least quarterly and prior to each meeting, the directors receive up-to-date financial andcommercial information in respect of the activities, in particular, quarterly management accounts and schedules ofincome and outgoings (each with comparisons against budget), schedules of acquisitions and disposals and relevantappraisals (prior Board approval being required for large transactions) and cash flow forecasts, details of fundingavailability and matters relating to corporate governance.Board approval is required from the majority of its members for all significant or strategic decisions including majoracquisitions, disposals and financing transactions. Other matters are delegated to the committees of the Board, whichhave been established in accordance with King III, to provide detailed attention of the Board’s responsibilities and whichoperate within defined, written terms of reference.The Company maintains Directors’ and Officers’ liability insurance cover and provides the Directors with indemnity,the level of which is reviewed annually.Redefine Properties International Limited Annual Report 201211

GovernanceCORPORATE GOveRnance REPORT continuedBoard of Directors and its Committees continuedAttendanceThe number of meetings of the RIN Board and its Committees held during the year and individual attendance byDirectors are set out below.DirectorBoardMeetingsAudit and RiskMeetingsInvestmentMeetingsNominationsMeetingsRemunerationMeetingsSocial and EthicsMeetingsGavin Tipper 6 1* 0 0 1 0Michael Watters 6 – 0 – – 0Andrew Rowell 5 3* – – – 0Marc Wainer 6 – 0 0 – –Peter Todd 6 3 – 0 – –Greg Heron 5 3 – – 1 –Bernard Nackan 5 3 – – 1 –Total meetings held 6 3 0 0 1 0*By invitationAppointment and Directors’ service contractsDates of Appointment and current Letters of Appointment, for all those directors who served throughout the year, canbe found in the Directors’ Report on page 23.Under the Administrative Services Agreement dated 13 July 2011 (the “Agreement”), Redefine International FundManagers Limited has agreed to second and otherwise procure the services of an appropriately qualified individuals,with all due skill and experience, to the Company to fulfil the role of (i) chief executive officer and (ii) financial director.Accordingly, under the terms of the Agreement, Michael Watters was appointed chief executive officer and AndrewRowell was appointed financial director.The executive appointments commenced on 1 June 2010 and shall be terminable by either party giving three calendarmonths written notice to the other party, provided that no such notice may be given by the executive or RIN during thethree-year period commencing from 1 June 2010. After such time the agreement shall continue in perpetuity subject tothe right of either party to terminate same by giving three calendar months written notice to the other party.The non-executive directors have been appointed for an unspecified term which expires when either the Director is:• not re-appointed following retirement in accordance with Memorandum of Incorporation (the “MoI”);• removed or vacates office;• resigns or does not offer himself for re-election; or• 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 andits key business and risks, given the latest financial information for the Group, the Terms of Reference of the Board andits Committees and a list of matters reserved for the Board.Following an evaluation of the Board the Chairman reviews the training and development for each Director andencourages them to update their skills, knowledge and familiarity with the Company to fulfil their roles on the Boardand on Board Committees.The Company Secretary and Sponsor provide the Board and Directors individually with detailed guidance as to howtheir responsibilities should be properly discharged in the best interest of the Company. The Sponsor provides acentral source of guidance and advice to the Board, and within the Company, on matters of ethics and ensures that theCompany adheres to applicable laws and non-binding rules, codes and standards.A procedure for Directors to take independent professional advice, if necessary, has been agreed by the Board andformally confirmed to all Directors.12 Redefine Properties International LimitedAnnual Report 2012

Evaluation of the BoardAn evaluation of the Board, its Committees and of the individual Directors will be conducted post year end with theperformance of the Chief Executive and Financial Director being measured against specified criteria. At the subsequentBoard meeting, the results of the evaluation will be analysed and the performance of the Board and each director willbe reviewed accordingly. The Chairman will ensure that each Director continues to demonstrate commitment to theirrole and responsibly fulfil their functions on the Board and its Committees.Retirement and re-electionAll non-executive directors are subject to the re-election provisions of the Mol which require one third to offerthemselves for re-election at least once every three years and, on appointment, at the first AGM thereafter. Executiveofficers are not taken into account in determining the rotation or retirement of directors.GovernanceAccordingly, Mr Peter Todd, Chairman of the Audit and Risk Committee, and Mr Marc Wainer, offer themselvesfor re-election at the AGM of RIN.No new directors were elected to the Board this year.The biographical details of the Directors can be found on pages 8 and 9.Directors’ dealingsThe Company adheres to a strict Share Dealing Code in accordance with the JSE Listing Requirements, whichprohibits transactions in securities relating to the company by directors, officers and associates for a designatedperiod preceding the announcement of its annual and interim financial results, interim distributions or any other periodconsidered price sensitive. Directors proposing to deal in linked units must first receive clearance from the Chairman,with the details of any subsequent trades reported to the market.Information regarding directors shareholdings can be found on page 26.CommitteesAudit and Risk CommitteeThe members of the Audit and Risk Committee (“the Committee”) are:Peter Todd (Chairman) – Independent Non-executive DirectorGreg Heron – Non-executive DirectorBernard Nackan – Non-executive DirectorThe Board considers that the members of the Audit and Risk Committee as a whole have sufficient qualificationsand relevant experience to carry out the functions of the Committee and more specifically has identified Peter Toddas having such experience.A procedure for members of the Committee to take specialist advice, if necessary, has been agreed by the Board.The Committee operates within Terms of Reference, a copy of which can be found on the Group’s website.The Committee will be re-appointed by the shareholders at the RIN AGM in accordance with s61 of the CompaniesAct 71 of 2008 (the “Act”).The Committee’s objective is to provide the Board with additional assurance regarding the efficacy and reliability ofthe financial information used by the directors to assist them in the discharge of their duties relating to corporateaccountability and the associated risk in terms of management, assurance and reporting. The Committee isresponsible for reviewing and assessing the integrity of the risk control systems and for ensuring that the risk policiesand strategies are effectively managed.Redefine Properties International Limited Annual Report 201213

GovernanceCORPORATE GOveRnance REPORT continuedBoard of Directors and its Committees continuedCommittees continuedAudit and Risk Committee continuedThe Committee is therefore responsible for monitoring the independence and for reviewing the quality andeffectiveness of the external auditor and in recommending its re-appointment at the AGM. In this regard the Committeehas proposed that KPMG be re-appointed as the external auditors for the year ahead.The Committee meets at least twice a year. The Financial Director and the external auditors are in attendance. TheCommittee is responsible for ensuring that the Group’s financial performance is properly monitored, controlled andreported. The Committee also meets the auditors and review reports from the auditors relating to accounts andinternal control systems. The Committee 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 oncorporate accountability and associated risk, taking account of reports by advisers and the Committee to the Boardon financial, business and strategic risk. Risk includes strategic, financial, operational, legal and other risk. Details ofthese risks have been set out in Managing Risk on page 6 and in Note 3 of the Financial statements on pages 44 to 46.The Committee may authorise engaging, for non-audit services, with the appointed external auditors or anyother 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 wouldconstrue as being detrimental to good corporate governance or in conflict with that normally undertaken by theaccountancy profession;• the nature of the work being performed will not affect the independence of the appointed external auditors inundertaking the normal audit assignments;• the work being done may not conflict with any requirement of generally accepted accounting practice or principles ofgood corporate governance;• the operational structure, internal standards and processes that were adopted by the audit firm in order to ensurethat audit independence is maintained in the event that such audit firm is engaged to perform accounting or othernon-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 willlater 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 toexpress 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 apercentage of the total fee for audit services, may not exceed 35% without the approval of the Board; and• a firm of auditors will not be engaged to perform any management functions (e.g. acting as curator) withoutthe 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 Companyand 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 adviserswhen the cumulative total budgeted cost for an assignment or assignments does not exceed £100 000 from the dateof the last report-back of the use of the appointed external auditors or any other practising firm of auditors, to theCommittee. The Investment Adviser to RI PLC shall report back on the use of the appointed external auditors or anyother practising firm of auditors at meetings of the Committee.Information relating to the use of non-audit services from the appointed external auditors of the Group shall be disclosed inthe notes to the annual financial statements. Separate disclosure of the amounts paid to the appointed external auditors fornon-audit services as opposed to audit services, shall be made in the annual financial statements.There were three RIN Audit and Risk Committee meetings during the 2011/2012 financial year.14 Redefine Properties International LimitedAnnual Report 2012

Investment CommitteeThe members of the Investment Committee are:Marc Wainer (Chairman) – Non-executive DirectorGavin Tipper – Independent Non-executive DirectorMichael Watters – Executive DirectorThe Investment Committee will meet when necessary to consider acquisitions, development and sales of investmentproperties and acquisitions and disposals of listed property securities. It will approve acquisitions, disposals andcapital expenditure in line with limits delegated to it and strategy determined by the Board. All members of theInvestment Committee have extensive experience and technical expertise in the commercial property industry.GovernanceThe Investment Committee held no meetings during the year.Nomination CommitteeMembers of the Nomination Committee are:Gavin Tipper (Chairman) – Independent Non-executive DirectorPeter Todd – Independent Non-executive DirectorMarc Wainer – Non-executive DirectorThe 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 theNomination Committee, free from any dominance of any one particular shareholder.There were no appointments to the Board during 2011/2012 and no meetings were held by the Nomination Committee.Remuneration CommitteeMember of the Remuneration Committee are:-Greg Heron (Chairman) – Non-executive DirectorBernard Nackan – Non-executive DirectorGavin Tipper – Independent Non-executive DirectorThe Remuneration Committee operates within Terms of Reference, a copy of which can be found on the website.The Remuneration Committee met once during the year.For the coming year, it was recommended that there be a 5% increase in the non-executive directors fees. This is withinthe limits approved by unitholders last year, which allows for a 10% annual increase of the fees for the non-executivefor a period of two years. Therefore no resolution is proposed regarding this matter at the forthcoming AGM.The Directors Remuneration Report can be found on page 25.Social and Ethics CommitteeMembers of the Social and Ethics Committee are:Gavin Tipper (Chairman) – Independent Non-executive DirectorMichael Watters – Executive DirectorAndrew Rowell – Executive DirectorThe Social and Ethics Committee was set up on 10 October 2011, in accordance with s72 (4) of the Companies Act 2008.The Social and Ethics Committee will seek to promote the Company as a good ‘Corporate Citizen’ and to this end hasestablished a Code of Ethics, which has been adopted throughout the Group.Redefine Properties International Limited Annual Report 201215

GovernanceCORPORATE GOveRnance REPORT continuedBoard of Directors and its Committees continuedUnitholder relationsRIN is accountable to its unitholders: by providing clear communication; by meeting regularly with major unitholders;by acting with integrity towards all current and prospective unitholders and by ensuring that all unitholders are treatedfairly.The Group reports to the unitholders on its stewardship of the Company through the publication of half-yearly andannual financial statements.The Group maintains regular dialogue and update meetings with institutional and major unitholders, at least twicea year, following the announcement of half year and annual results and as requested. All investor presentations arepublished on the Company's website. Feedback from investors is conveyed to the Board for consideration and, ifappropriate, acted upon.The Board supports the principle that the Annual General Meeting be used to communicate with private unitholders andencourages them to attend and participate. Notices of meetings are sent to unitholders at least 22 business days before the dateof the meeting and unitholders are given a full explanation of each resolution. Directors attend the Annual General Meeting,where practicable, with the Chairman in particular being accessible to all unitholders. Enquiries from individual unitholders onmatters relating to the business of the Company are welcomed and addressed.Announcements are made in accordance with the JSE Listings Requirements and a website is maintained onwhich the Annual Report, unitholder presentations and announcements are available to view athttp://www.redefineint.com/Administrative services provider and Investment Adviser to RI PLCRedefine International Fund Managers Limited ("RIFM") provides certain administrative services to the Company.The remuneration payable by RIN to RIFM for the administrative services rendered by it under the terms of theAdministrative Services Agreement, dated 6 July 2011, is 0.2% per annum of the market capitalisation of RIN on the lasttrading day of the month.In accordance with the Investment Advisory Agreement dated 13 July 2011 (the “IAA”), RI PLC will pay to RIPML an assetmanagement fee of 0.5 per cent on the aggregate gross value of the Group’s assets (including cash) and a commissionof 0.75 per cent in respect of sales and acquisitions, or 1 per cent where sub-agent costs are incurred or a joint agent isappointed. RIPML will also receive a fee of 3 per cent of the annual rents in respect of multi-let retail property and 1 percent for any other properties.In addition to the asset management fee, an incentive fee is payable by RI PLC to RIPML, and will be satisfied by theissue of ordinary shares in RI PLC at no cost to RIPML. The number of ordinary shares to be issued in terms of theaward will be determined by reference to their average middle market price for the 20 working days prior to the finalday of the relevant award period. The amount of any award is calculated as 20 per cent of the amount by which the totalreturn on the Ordinary Shares in RI PLC exceeds 12 per cent for the first award under the contract and 10 per cent forsubsequent awards. A separate calculation of the amount of the annual award is made in relation to each separatetranche of Ordinary Shares in RI PLC issued during the relevant three-year period.The award of shares will only vest if RI PLC’s EPRA earnings per share in respect of the relevant award period is equal to orgreater 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.No shares have been issued, or deemed to have been issued, in respect of this fee for the period ended 31 August 2012, asthe performance related conditions had not been met.16 Redefine Properties International LimitedAnnual Report 2012

Financial reportingThe Group’s Annual Report includes a detailed review of the business, together with a detailed review of the financialresults and financing positions. In this way, and as required by King III, the Board seeks to present, as the performancerelated conditions have not been met, a balanced and understandable assessment of the Group’s position and prospectsto all shareholders.The Group has established comprehensive management reporting disciplines which include the preparation of quarterlymanagement accounts, detailed budgets and forecasts. Quarterly results, the financial position and cash flows ofoperating units are reported against approved budgets and compared to the prior period. Profit and cash flow forecastsare 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 accordinglyappointed an internal auditor. It has established procedures for identifying, evaluating and managing risks to which thatthe Group is exposed and has identified risk management controls in the key areas of strategic, financial, operationaland legal as areas for extended review. These procedures have operated throughout the year and up to the date ofapproval of the Annual Report. It has, however, to be understood that systems of internal control, no matter howcarefully designed, operated and supervised, can only provide reasonable and not absolute assurance against materialmisstatement or loss.GovernanceKing III gap summaryThe table below outlines the key areas where RIN does not currently comply with King III.King III Governance PrincipleThe Board should appreciate thatstrategy, risk, performance andsustainability are inseparable.The majority of non-executivesshould be independent.The Audit and Risk Committee should consistof at least three members all of whom shouldbe independent non-executive directors.The majority of the members ofthe Remuneration Committee shouldbe independent.The Board should be responsible forinformation technology governance.RIN ComplianceNo sustainability report has been compiled as the Company’s sole asset is theinvestment in RI PLC.The board comprises five non-executives. Of these, only the Chairman and onenon-executive are considered independent in accordance with the criteria of theKing III provisions. However the members of the Board provide an appropriatebalance of power that ensures no one individual or block of individuals can dominatethe Board’s majority decision making.The Audit and Risk Committee comprises the independent Chairman and two nonindependentnon-executives. The Board consider the qualifications and experience ofthe committee members to be sufficient in undertaking the responsibilities involved.Only one of the members is independent.However the remuneration of the executives is paid by the Investment Adviser andis not determined by this committee.As the Company’s sole asset is the investment in RI PLC, the internal utilisation ofIT resources is not required in order to meet the company’s objectives.The King III corporate governance check list can be found on pages 93 and 94.Redefine Properties International Limited Annual Report 201217

GovernanceCorporate Social ReSPOnSIBILITy StatementRIN believes the Company should provide an effective leadership based on an ethical foundation, whilst taking accountof its stakeholders and society as a whole.As a listed property company, RIN is committed to conducting its business activities in a responsible manner withdue consideration to unitholders, Group employees, contractors, suppliers, tenants, local communities and to thesustainability of the environment for the future.Corporate social responsibility (“CSR”) 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 businesspractices both in the workplace and in the market place.The Group has adopted a code of ethics in line with that of the Group to ensure honesty and integrity in businessdealings and conduct befitting the reputation of the Company.Directors and employees of the Group are encouraged to report any instances of unethical behaviour using theWhistleblowing Policy.Performance: During the year there were no occasions when poor business ethics were reported to have occurred.• Compliance: The Board is regularly advised by the Sponsor of updates on regulatory rules and corporate governancematters.• Anti-Bribery: The Group operates a zero tolerance policy to any form of bribery. The RIN and RI PLC Boards andthe Investment Adviser to RI PLC have all completed anti-bribery training.• Unit Dealing Code: The Board adheres to a policy in line with the JSE Listing Requirements.TenantsPolicy: The Group aims to be a considerate and receptive landlord ensuring our tenants are given clear and adequatelines for reporting. All complaints or suggestions are given full and due consideration.Performance: The Group is continuously working to improve communication with its tenants. Tenants are encouragedto give feedback which is monitored, considered and if appropriate, acted upon.Health and Safety (“H&S”)Policy: The Group is committed to complying with all H&S legislation and regulations, maintaining a safe place of workfor our tenants and our contractors, customers and employees within the Group.Performance:• UK Stable Income: For the majority of the Portfolio, H&S is the responsibility of each of the tenants. For theremaining properties, the property managing agents undertake the responsibilities in respect of H&S under thedirection of RIPML. Assessment of the competency of the property managing agent is undertaken before theirappointment and monitoring of the agents is undertaken by way of quarterly reviews of the portfolio.Where there are multi-let properties which have communal areas requiring management, the appointed propertymanaging agent is responsible for ensuring all necessary audits and risk assessments are undertaken. The propertymanaging agent is responsible for ensuring any matters raised during the assessments are undertaken and whereappropriate these are reported through the Investment Adviser to RI PLC.• Hotels: Redefine Hotel Management Limited use an H&S system called Saeker which is outsourced and administeredby Leisure Safe. Leisure Safe carry out full H&S audits, including fire assessment, and Food Safety and Hygiene audits.They provide quarterly reporting on such matters and notify the Company of any concerns as appropriate.• Shopping Centres: All H&S management is carried out by the centre managing agents together with the on-site staffunder the direction of RIPML. The centre managing agents ensure that the H&S management system is consistentand practical at all levels and, above all, complies with H&S legalisation. The centre managing agents monitor andassist H&S on all sites, both in-house and with the use of external consultants. These consultants are instructedbased on their ability to deliver a high level of service, demonstrating the highest commitment.18 Redefine Properties International LimitedAnnual Report 2012

Active policies and legislative compliance• H&S Policy• Annual H&S Audits• Emergency and Disaster Plan• Fire Safety Reviews and spot checks carried out by the local fire service• Police reviews and advice on an ‘ad hoc’ basisEnvironment and SustainabilityPolicy: The Company is committed to sustainability and protecting the environment for future generations. Tenants,customers, contractors and employees within the Group are encouraged to consider and promote energy efficientpractices and to recycle and use sustainable products where possible.Performance: The Group promotes recycling and energy efficiency throughout each of the sectors.• Recycling: The Group has a number of successful recycling schemes operating across the UK portfolio. Three of theshopping centres already operate on a zero landfill policy, where all waste is either recycled or incinerated in localEnergy from Waste plants.• Energy efficiency: There is a rolling programme of works to introduce LED lighting across the Hotel and Retailportfolio in the UK, substantially reducing energy consumption and reducing costs.At some of the retail sites solar panels are being considered and consultation with the UK Carbon Trust has beensought in order to reduce consumption.CommunityPolicy: The Group is mindful of its wider role in the community and endeavours to engage with the local community inwhich it operates.Performance: The UK Hotels and Retail centres are particularly active in the community engaging with local groupsand schools.• Hotels: Brentford is an active member of both the Hounslow and Brentford Chamber of Commerce. It works withActive 360 to promote water sports on the lock and held 2 lock challenge events between Brentford and Camden,an event it hopes to expand next summer. The Hotel has worked with a regeneration group, ISIS, on a programmeto clean up Brentford and ISIS is also advising on a roof vegetable garden at the hotel.• Retail: All of RI PLC’s shopping centres have extensive links with local communities developed over many years.The community links and events are both varied and imaginative. At Grand Arcade Shopping Centre in Wigan there arestrong links with a number of local schools and colleges, assisting with Young Enterprise mock interviews and OFSTEDinspections. Birchwood Shopping Centre, Warrington partners with the Birchwood Lions, the local arm of theLions International organisation, raising funds for various local charities and holding events such as book sales andseasonal competitions.WhistleblowingPolicy: the Group is committed to a culture of openness in which legitimate concerns can be reported without fear of penaltyor punishment. Incidents involving the following should be reported: a criminal offence, miscarriage of justice, failureto comply with a legal obligation, failure to comply with RI PLC's regulations, danger to health or safety, damage to theenvironment, financial malpractice, bribery and actions likely to harm the reputation of the Group.Concealment of any of these reportable issues should also be reported. All allegations should be made in good faithand be reported anonymously via the whistle blowing procedure. Any misconduct or malpractice within the workplaceis taken extremely seriously. Any knowingly false or malicious allegations will result in actions against the individualmaking them. The principles and procedure are in line with the UK Public Interest Disclosure Act 1998 (PIDA) and applyto all contractors of the Group.Performance: During the past year there were no whistleblowing reports received.GovernanceRedefine Properties International Limited Annual Report 201219

GovernanceDirecTORS’ ReSPOnSIBILITy StatementFinancial statementsThe Directors are responsible for the preparation and fair presentation of the consolidated and separate annualfinancial statements of RIN, comprising the statements of financial position at 31 August 2012, and the incomestatements and the statements of comprehensive income, changes in equity and cash flows for the year then ended,and the notes to the financial statements which include a summary of significant accounting policies and otherexplanatory notes in accordance with International Financial Reporting Standards, the AC 500 Series as issued bythe Accounting Practices Board and its successor, the Listings Requirements of the JSE Limited, and in the mannerrequired by the Companies Act of South Africa, 2008. In addition, the directors are responsible for preparing thedirectors’ report.The Directors are also responsible for such internal controls as they determine are necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or error, and formaintaining adequate accounting records and an effective system of risk management as well as the preparation of thesupplementary schedules included in these financial statements.The Directors have made an assessment of the ability of the Group and the Company to continue as going concerns andhave no reason to believe that the businesses will not be going concerns in the year ahead.The auditor is responsible for reporting on whether the consolidated and separate annual financial statements arefairly presented in accordance with the applicable financial reporting framework.Approval of the annual financial statementsThe Group and separate annual financial statements of RIN, as identified in the first paragraph, were approved by theBoard of Directors on 29 October 2012 and are signed on their behalf by:P Todda RowellDirectorDirector29 October 2012 29 October 2012SandtonSandtonDeclaraTIOn by Company SecretaryIn terms of section 88(2)(e) of the Companies Act, 71 of 2008, as amended, I hereby certify that the Company has filedthe required returns and notices in terms of the Act for the financial year ended 31 August 2012 and that, to the best ofmy knowledge and belief, all such returns and notices are true, correct and up to date.Probity Business Services (Proprietary) Limited29 October 2012Sandton20 Redefine Properties International LimitedAnnual Report 2012

RePORT of the Audit and risk Committee FOR the year ended 31 AUGUST 2012The Audit and Risk Committee (“the Committee”) considers that it has adequately performed its functions in terms ofits mandate, the King Code of Governance Principles for South Africa 2009 and the Companies Act 2008, as amended.The Committee carried out its duties by reviewing the following on a quarterly basis or as required:• Financial Management reports;• Investment Adviser reports;• Company Secretarial reports;• Independent Tax Adviser reports;• External Audit reports; and• Board minutes.The aforementioned information, together with the interactions with persons attending the meetings in an ex officiocapacity, collectively enabled the Committee to conclude that the systems of internal financial control had beendesigned adequately and were operating effectively during the financial period under review.GovernanceFurthermore, the Committee is satisfied:• with the independence of the external auditor, including the provision of non-audit services and compliance withRIN’s policy in this regard, which is reviewed annually;• with the terms, nature, scope and proposed fee of the external auditor for the financial year ended 31 August 2012;• with the financial statements and the accounting practices utilised in the preparation thereof and has recommendedthe financial statements for approval to the Board;• with RIN’s continuing viability as a going concern, which it has reported to the Board for its deliberation; and• that RIN’s Financial Director has the necessary expertise and experience to carry out his duties in terms of theListings Requirements of the JSE Limited.No concerns and complaints of the JSE Limited were received from within or outside the Group relating to accountingpractices and internal financial controls, and the content or auditing of the company’s financial statements.The Committee has performed its duties in accordance with its terms of reference and assesses its performanceon an annual basis to determine whether or not it has delivered on its mandate.P ToddAudit and Risk Committee Chairman29 October 2012Redefine Properties International Limited Annual Report 201221

GovernanceDirecTORS’ RePORTThe Directors present their report together with the audited consolidated financial statements for the year ended31 August 2012.Principal activityThe principal activity of RIN is managing its investment in RI PLC. RI PLC is focused on real estate investment inlarge, well developed economies with established and transparent real estate markets. The investment portfolio isgeographically diversified across the UK, Europe and Australia providing exposure to the office, retail, industrial andhotel sectors. The Company’s parent company is Redefine Properties Limited, whose registered office is located atRedefine Place, 2 Arnold Road, Rosebank, Johannesburg, 2196, South Africa.Business reviewThe RIN Group performed solidly at an operational level and met the earnings available for distribution target forthe year. The success in strengthening the Group’s financial position will allow a shift in focus from restructuringthe balance sheet to enhancing the property portfolio. The market continues the process of recapitalising assetsfinanced prior to the credit crisis and the Group is now in a considerably stronger position to take advantage of theseopportunities. An analysis of the portfolio is included on pages 81 to 88.Principal risks and uncertaintiesThe principal risks pertaining to the Group and the way in which it manages and controls these risks are outlined onpage 6 and in Note 3 to the consolidated financial statements.Results and proposed distributionsThe consolidated income statement is set out on page 28 and shows a loss attributable to equity holders of the parentof £59.3 million.The Directors of RIN resolved to declare an interest distribution of 2.29 pence per linked unit for the six month periodended 31 August 2012. The distribution was paid to shareholders on Monday, 3 December 2012. This brought the totaldebenture interest paid for the year to 4.38 pence per linked unit.Share and debenture capitalDetails of the authorised and issued share capital, together with details of the movements in RIN’s issued share capitaland debentures during the period are shown in Note 26 and Note 27 respectively. As at 31 August 2012, RIN had oneclass of share with all linked units ranking equally and fully paid.However, pursuant to the Pro Rata Offer, which offered new linked units to existing RIN linked unitholders in proportionto their existing holdings, 218 141 257 new RIN linked units were issued on 3 October 2012 in the form of convertiblesecurities under the abbreviated name: “REDI CONV”, JSE share code: RINC and ISIN code: ZAE000170262. Upon issue,these convertible securities ranked pari passu in all respects with the existing RIN linked units in issue save that theywere not entitled to the interest distribution in respect of the six-month period ending 31 August 2012 (“the August 2012distribution”). These convertible securities converted to new RIN linked units on Monday, 3 December 2012, followingthe August 2012 distribution to existing RIN linked units.There are no specific restrictions on the size of a holding nor on the transfer of linked units. The Directors are notaware of any agreements between holders of RIN linked units that may result in restrictions on the transfer ofsecurities or on voting rights.An analysis of major unitholders and unitholders’ spread is included on page 89.22 Redefine Properties International LimitedAnnual Report 2012

Going concernThese consolidated financial statements have been prepared on a going concern basis as after considering the relevantfactors, the Directors have a reasonable expectation that the Group has adequate resources to continue in operationfor the foreseeable future. The principal issues the Board considered in its enquiries included, inter alia, the maturityof the Delta and Gamma facilities which total £314.29 million in October 2012 and the maturities of the VBG1 and VBG2facilities totalling £91.94 million and the equity raised post year end as part of the equity raising exercise.Significant progress has been made on the refinancing discussions over the year and post year end. These have beenoutlined in Note 2.2 to the consolidated financial statements.Discussions are still on-going with respect to the Gamma facility of £199.7 million which matured on 15 October 2012.This facility is non-recourse in nature. There can be no guarantee as to the outcome of current negotiations; howeverthe Board remains of the view that there would be limited impact on the continued operations of the Group shouldagreement not be reached if and the servicer enforced its security rights.The Board has also had regard for the funds raised as part of the equity raising which completed post year end andsaw the Company raise gross proceeds of £75 million, which formed part of the RI PLC capital raising of £127.5million. This additional capital will allow the Group to further reduce its leverage.GovernanceThe Board has also considered the working capital forecast for the Group and believes that based on a detailed analysisof cashflow projections, the level of capital raised post year end and the progress made on loan refinancing that theGroup has adequate resources to continue in operation for the foreseeable future.DirectorsThe Directors of RIN, who served during the year, were as follows:Director Date of Appointment Appointment LetterGavin Tipper 01/06/2010 02/08/2010Gregory Heron 22/08/2011 22/08/2011Bernard Nackan 15/07/2010 02/08/2010Andrew Rowell 01/06/2010 02/08/2010Peter Todd 01/06/2010 02/08/2010Marc Wainer 01/06/2010 02/08/2010Michael Watters 01/06/2010 02/08/2010Details of the interests of the current Directors in the linked units of RIN are set out in the Directors’ RemunerationReport on page 25.RIN maintains insurance for the Directors in respect of liabilities arising from the performance of their duties.Redefine Properties International Limited Annual Report 201223

GovernanceDirecTORS’ RePORT continuedLinked unit optionsThere are no linked unit options granted to Directors.An incentive fee is payable by RI PLC to RIPML and will be satisfied by the issue of ordinary shares in RI PLC. Noshares have been issued, or deemed to have been issued, in respect of this fee for the year ended 31 August 2012.Charitable donationsDuring the year RIN made no charitable donations.Payment of suppliersThe policy of the Group is to settle supplier invoices within the terms of trade agreed with individual suppliers. Whereno specific terms have been agreed, payment is usually made within one month of receipt of the goods or service.Stakeholder pensions and employee share schemesAs there are no employees, no pension plan or employee linked unit schemes are in place.AuditorsKPMG have expressed their willingness to continue in office and a resolution to re-appoint them may be proposed atthe Annual General Meeting.Included in net operating income in the consolidated statement of comprehensive income are the following fees paidto KPMG during the year:Year ended31 August2012£’000Year ended31 August2011£’000Audit fees 228 160Disbursements 20 19Total 248 179Non-audit feesTaxation 75 72Total 75 7224 Redefine Properties International LimitedAnnual Report 2012

DIRecTORS’ remuneraTIOn rePORTRemuneration policyThe remuneration of the directors (other than alternate directors) shall from time to time be determined by theCompany in a general meeting by special resolution of unitholders approved within the last two years. Any such sumsshall be distinct from any salary, remuneration or other amounts payable to a Director pursuant to other provisions ofthe Memorandum of Incorporation.The Directors are entitled to be paid all reasonable travelling, hotel and other expenses properly incurred in attendingmeetings of the Board, committees of the Board, general meetings or otherwise in connection with the business of RIN.Basic feesThe table below shows the actual fees paid to each of the Directors.2012 2011BasicRI PLCDirectors’RINDirectors OtherBasicRI PLCDirectors’RINDirectors Othersalaries* fees fees # fees^ Total salaries* fees fees # fees^ TotalDirector£ £ £ £ £ £ £ £ £ £Executive directors*Michael John Watters – 30 000 – – 30 000 – 20 000 – – 20 000Andrew Rowell – – – – – – 20 000 – – 20 000Non-executivedirectorsGavin Robert Tipper – 40 000 11,947 – 51 947 – 20 000 – – 20 000Gregory Heron – – 8,960 27 626 36 586 – 20 000 – 22 900 42 900Bernard Nackan – – 8,960 23 520 32 480 – – – 22 100 22 100Peter McAllister Todd – – 10,453 – 10 453 – 25 000 – – 25 000Marc Wainer – 30 000 – 423 156 453 126 – 20 000 – 365 000 385 000John Ruddy – – – – – – 25 000 – – 25 000Michael Farrow – – – – – – 25 000 – – 25 000Total – 100 000 40 320 474 302 614 622 – 175 000 – 410 000 585 000Governance* The Financial Director and Chief Executive Officer are remunerated by the administrative service provider to RIN and the investment adviser toRI PLC. The fees for their services for the year ended 31 August 2012 were £203,000 and £384,000 respectively. These amounts are inclusive of thefees earned above.#The fees earned by each of the RIN directors are set in Rand. The GBP equivalent has been disclosed using GBP:ZAR exchange rate of £1.00:R13.393,which is the closing rate at 31 August 2012.^ Mr Heron, Mr Nackan and Mr Wainer served as directors of Redefine Properties and earned R370 000, R 315 000 and R5 667 368 respectively for theirservices to that company, for the year ended 31 August 2012. The GBP equivalent has been disclosed using GBP:ZAR exchange rate of £1.00:R13.393,which is the closing rate as at 31 August 2012.Redefine Properties International Limited Annual Report 201225

GovernanceDIRecTORS’ remuneraTIOn rePORT continuedDirectors’ interests in linked unitsSet out below are the names of the directors (including those directors who have resigned in the last 18 months) of RINthat, directly or indirectly, are beneficially interested in RIN linked units in issue as at 31 August 2012 and 31 August 2011.2012Beneficially held2011Beneficially heldDirectors Directly Indirectly Total Directly Indirectly TotalGavin Tipper – – – – – –Michael Farrow – – – – – –Bernard Nackan 10 600 752 11 352 8 793 675 9 468Andrew Rowell – – – – – –John Ruddy – – – – – –Peter Todd – – – – – –Marc Wainer – 2 413 899 2 413 899 – 2 248 272 2 248 272Michael Watters – – – – – –Gregory Heron – 7 520 7 520 – 348 132 348 132Total 10 600 2 422 171 2 432 771 8 793 2 597 079 2 605 872Save for their acquisition of RIN linked units shown in the tables above, no directors (including directors who haveresigned in the last 18 months) of the Company has or had any interest, direct or indirect, in transactions entered intoby the company during the current or immediate preceding financial year or during any earlier financial year and whichremain in any respect outstanding or unperformed.26 Redefine Properties International LimitedAnnual Report 2012

Financial StatementsIndependent Auditor’s ReportTo the members of Redefine Properties International LimitedReport on Financial StatementsWe have audited the consolidated and separate annual financial statements of Redefine Properties InternationalLimited which comprise the statements of financial position at 31 August 2012, the income statements and thestatements of comprehensive income, changes in equity and cash flows for the year then ended and the notes to thefinancial statements which include a summary of significant accounting policies and other explanatory notes, as setout on pages 33 to 80.Directors’ responsibility for the financial statementsThe Company’s directors are responsible for the preparation and fair presentation of these financial statements inaccordance with International Financial Reporting Standards and the requirements of the Companies Act of SouthAfrica, and for such internal control as the Directors determine is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with International Standards on Auditing. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements arefree from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by management,as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion, these financial statements present fairly, in all material respects, the consolidated and separatefinancial position of Redefine Properties International Limited at 31 August 2012, and its consolidated and separatefinancial performance and consolidated and separate cash flows for the year then ended in accordance withInternational Financial Reporting Standards, and the requirements of the Companies Act of South Africa.Financial StatementsOther Reports required by the Companies ActAs part of our audit of the financial statements for the year ended 31 August 2012, we have read the Directors’Report, the Report of the Audit and Risk Committee and the Declaration by the Company Secretary for the purpose ofidentifying whether there are material inconsistencies between these reports and the audited financial statements.These reports are the responsibility of the respective preparers. Based on reading these reports we have not identifiedmaterial inconsistencies between these reports and the audited financial statements. However, we have not auditedthese reports and accordingly do not express an opinion on these reports.KPMG IncRegistered AuditorPer Peter MacDonaldChartered Accountant (SA)Registered AuditorDirector29 October 201285 Empire RoadParktownJohannesburgRedefine Properties International Limited Annual Report 201227

Financial StatementsConSOLIDated INCOME Statement FOR the year ended 31 AUGUST 2012NotesYear ended31 August2012£’000GroupRestatedYear ended31 August2011£’000Year ended31 August2012£’000CompanyYear ended31 August2011£’000RevenueGross rental income 5 76 150 26 823 – –Investment income 6 – 3 875 16 886 7 558Other income 7 2 028 1 592 111 –Total revenue 78 178 32 290 16 997 7 558ExpensesAdministrative expenses (1 788) (899) (149) (125)Investment management and professional fees 8 (9 545) (4 688) (539) (24)Property operating expenses (4 707) (2 368) – –Net operating income 62 138 24 335 16 309 7 409Gain/(loss) from financial assets andliabilities (including debentures) 9 50 423 17 398 7 130 (42 131)Redemption of loans and borrowings 10 6 080 8 – –Loss on disposal of subsidiaries 39 (2 195) (334) – –Equity accounted profit/(loss) 11 6 325 (1 749) – –Net fair value loss on investmentproperty and assets held for sale 17/20 (126 871) (10 627) – –Impairment of intangible assets – (591) – –(Loss)/profit from operations (4 100) 28 440 23 439 (34 722)Interest income 12 9 777 8 175 1 41Interest expense 13 (82 090) (25 312) – (43)Foreign currency (loss)/gain (580) 9 (38) 1 233(Loss)/profit for the year before debenture interest (76 993) 11 312 23 402 (33 491)Debenture interest 15 (18 200) (14 580) (18 200) (14 580)(Loss)/profit for the year before tax (95 193) (3 268) 5 202 (48 071)Taxation 14 (3 370) (1 360) – 5 076(Loss)/profit for the year after tax (98 563) (4 628) 5 202 (42 995)(Loss)/profit attributable to:RIN shareholders (59 254) (3 612) 5 202 (42 995)Non-controlling interest (39 309) (1 016) – –(Loss)/profit for the year (98 563) (4 628) 5 202 (42 995)Actual number of linked units in issue (‘000) 415 507 372 306Weighted number of linked units in issue (‘000) 399 690 345 686Earnings available for distribution per linked unit (pence) 15 4.38 4.11Basic (loss)/earnings per linked unit (pence)* 16 (10.27) 3.17Headline earnings per linked unit (pence)* 16 7.23 6.35* The Company does not have any dilutionary instruments in issueThe accompanying notes form an integral part of the financial statements.28 Redefine Properties International LimitedAnnual Report 2012

ConSOLIDated Statement of ComprehenSIve Income FOR the year ended 31 AUGUST 2012NotesYear ended31 August2012£’000GroupRestatedYear ended31 August2011£’000Year ended31 August2012£’000CompanyYear ended31 August2011£’000(Loss)/profit for the year after tax (98 563) (4 628) 5 202 (42 995)Other comprehensive incomeTransfer of FCTR to income statement on disposalof foreign operation 39 (381) – – –Foreign currency translation on foreign operations –subsidiaries 618 1 865 – –Foreign currency translation on foreign operations –associates and jointly controlled entities 21, 22 (1 546) 4 882 – –Total comprehensive income for the year (99 872) 2 119 5 202 (42 995)Total comprehensive income attributable to:RIN shareholders (59 979) 1 922 5 202 (42 995)Non-controlling interest (39 893) 197 – –Total comprehensive income for the year (99 872) 2 119 5 202 (42 995)The accompanying notes form an integral part of the financial statements.Financial StatementsRedefine Properties International Limited Annual Report 201229

Financial StatementsConSOLIDated Statement of Financial POSITIOn As AT 31 AUGUST 2012AssetsNon-current assetsNotes2012£’000Group2011£’000Company2012£’000Investment property 17 631 278 986 654 – –Long-term receivables 18 98 470 104 080 – –Investments designated at fair value 19 399 1 123 – –Investments in jointly controlled entities 21 2 159 2 607 – –Investments in associates 22 124 507 104 680 – –Investment in subsidiaries 23 – – 124 133 152 162Total non-current assets 856 813 1 199 144 124 133 152 162Current assetsAssets held for sale 20 136 009 – – –Trade and other receivables 24 23 429 23 716 105 –Cash at bank 25 18 150 51 815 424 447Total current assets 177 588 75 531 529 447Total assets 1 034 401 1 274 675 124 662 152 609Equity and liabilitiesCapital and reservesShare capital 26 36 33 36 332011£’000Retained loss (63 057) (4 650) (27 095) (32 297)Non-distributable reserve (7 833) (7 833) – –Foreign currency translation reserve 4 959 5 684 – –Total equity attributable to equity shareholders (65 895) (6 766) (27 059) (32 264)Non-controlling interest 53 551 106 543 – –Total equity (12 344) 99 777 (27 059) (32 264)Non-current liabilitiesDebenture capital 27 142 098 173 199 142 098 173 199Borrowings 28 353 115 810 958 – –Derivatives 29 4 244 6 824 – –Deferred taxation 14 2 489 1 334 – –Total non-current liabilities 501 946 992 315 142 098 173 199Current liabilitiesBorrowings 28 400 455 117 041 – –Liabilities held for sale 28 91 935 – – –Provisions for liabilities and commitments 30 12 079 – – –Trade and other payables 31 34 951 49 251 9 623 11 674Derivatives 29 5 379 16 291 – –Total current liabilities 544 799 182 583 9 623 11 674Total liabilities 1 046 745 1 174 898 151 721 184 873Total equity and liabilities 1 034 401 1 274 675 124 662 152 609The accompanying notes form an integral part of the financial statements.These financial statements were approved by the Board of Directors on 29 October 2012 and signed on its behalf by:P ToddDirectora RowellDirector30 Redefine Properties International LimitedAnnual Report 2012

ConSOLIDated Statement of Changes in EqUITy FOR the year ended 31 AUGUST 2012Sharecapital£’000Retainedearnings£’000Otherreserve£’000Currencytranslationreserve£’000Totalattributableto equityshareholders£’000Noncontrollinginterest£’000Totalequity£’000GroupBalance at 1 September 2010 15 (1 680) (1 289) 150 (2 804) 35 631 32 827Total loss for the year – (3 612) – – (3 612) (1 016) (4 628)Foreign currency translation effect – – – 5 534 5 534 1 213 6 747Total comprehensive income for the year – (3 612) – 5 534 1 922 197 2 119Shares issued 18 – – – 18 – 18Group acquisition of non-controlling interest – (103) – – (103) (326) (429)Acquisition of stake in RIHL – – (3 028) – (3 028) 1 678 (1 350)Acquisition of non-controlling interest – – (3 516) – (3 516) 3 516 –Issue of capital instrument by RIHL – – – – – 13 768 13 768Shares issued tonon-controlling shareholders – – – – – 50 401 50 401Dividends paid tonon-controlling shareholders – – – – – (3 000) (3 000)Scrip dividend paid tonon-controlling shareholders – – – – – (239) (239)Contributions fromnon-controlling shareholders – – – – – 4 757 4 757Reported balance as at 31 August 2011 33 (5 395) (7 833) 5 684 (7 511) 106 383 98 872Change in accounting policy for deferred tax – 745 – – 745 160 905Restated balance at 31 August 2011 33 (4 650) (7 833) 5 684 (6 766) 106 543 99 777Balance at 1 September 2011 33 (4 650) (7 833) 5 684 (6 766) 106 543 99 777Total loss for the year – (59 254) – – (59 254) (39 309) (98 563)Foreign currency translation effect – – – (725) (725) (584) (1 309)Total comprehensive income for the year – (59 254) – (725) (59 979) (39 893) (99 872)Shares issued 3 – – – 3 – 3Decrease in non-controlling interest – (426) – – (426) 426 –Decrease in non-controlling interestson disposal of subsidiaries – – – – – 3 171 3 171Acquisition of non-controlling interests – 1 273 – – 1 273 (10 261) (8 988)Issue of capital instrument by RIHL – – – – – 768 768Dividends paid tonon-controlling shareholders – – – – – (7 203) (7 203)Balance at 31 August 2012 36 (63 057) (7 833) 4 959 (65 895) 53 551 (12 344)Financial StatementsCompanyBalance at 1 September 2010 15 10 698 – – 10 713 – 10 713Total comprehensive income for the year – (42 995) – – (42 995) – (42 995)Shares issued 18 – – – 18 – 18Balance at 31 August 2011 33 (32 297) – – (32 264) – (32 264)Balance at 1 September 2011 33 (32 297) – – (32 264) – (32 264)Total comprehensive income for the year – 5 202 – – 5 202 – 5 202Shares issued 3 – – – 3 – 3Balance at 31 August 2012 36 (27 095) – – (27 059) – (27 059)The accompanying notes form an integral part of the financial statements.Redefine Properties International Limited Annual Report 201231

Financial StatementsConSOLIDated Statement of CaSH FLOws FOR the year ended 31 AUGUST 2012Cash flows from operating activitiesNotesYear ended31 August2012£’000GroupYear ended31 August2011£’000Year ended31 August2012£’000CompanyYear ended31 August2011£’000(Loss)/profit for the year before tax (95 193) (3 268) 5 202 (48 071)Adjusted for:Straight lining of rental income 504 169 – –Impairment of intangible assets – 591 – –Net fair value loss on investment property and assets held for sale 17/20 126 871 10 627 – –Foreign currency loss/(gain) 580 (9) 38 (1 233)(Gain)/loss from financial assets and liabilities 9 (50 423) (17 398) (7 130) 42 131Redemption of loans and borrowings 10 (6 080) (8)Loss on sale of subsidiaries 2 195 334Equity accounted loss/(profit) 11 (6 325) 1 749 – –Investment income – (3 875) (16 886) (7 558)Interest income 12 (9 777) (8 175) (1) (41)Interest expense (including debenture interest) 13 100 290 39 892 18 200 14 623Cash generated by operations 62 642 20 629 (577) (149)Changes in working capital 38.1 (10 804) 551 (3 891) 521Cash generated by operations 51 838 21 180 (4 468) 372Interest income 7 908 4 581 1 41Interest paid(including debenture interest) (70 478) (29 709) (16 466) (6 842)Taxation paid (1 412) (152) – –Distributions received – 3 875 16 886 7 558Distributions from associates and jointly controlled entities 11 263 5 986 – –Net cash (utilised in) / generated by operating activities (881) 5 761 (4 047) 1 129Cash flows from investing activitiesPurchase of investment properties 17 (3 893) (211 083) – –Investment in associates and jointly controlled entities 21/22 (25 863) (18 586) – –Cash acquired on reverse acquisition – 32 340 – –Acquisition of subsidiaries 38.2 – (307) – –Disposal of subsidiaries 39 (181) (477) – –Decrease in loans to related parties (2 600) 4 060 – –Purchase of financial assets – (1 565) – –Decrease/(increase) in restricted cash balances – 14 616 – –Investment in subsidiary – – (13 321) (69 755)Net cash utilised in investing activities (32 537) (181 002) (13 321) (69 755)Cash flows from financing activitiesProceeds from loans and borrowings 19 443 152 831 – –Repayment of loans and borrowings (20 826) (54 852) – (33 006)Repayment of amounts to shareholders – (3 488) – –Dividends paid to non-controlling interests (7 203) (3 000) – –Proceeds from issue of linked units 38.3 18 419 102 033 18 419 102 033Linked unit issue and reverse acquisition costs 38.3 (1 036) (3 993) (1 036) –Acquisition of non-controlling interest (8 988) 8 687 – –Net cash (utilised in) / generated from financing activities (191) 198 218 17 383 69 027Net (decrease)/ increase in cash (33 609) 22 977 15 401Effect of exchange rate fluctuations on cash held (56) 438 (38) 46Restricted cash balances – 11 431Net cash at the beginning of the year 51 815 16 969 447 –Net cash at the end of the year 18 150 51 815 424 447The accompanying notes form an integral part of the financial statements.32 Redefine Properties International LimitedAnnual Report 2012

Notes to the Financial StatemenTS FOR the year ended 31 AUGUST 2012General informationRedefine Properties International Limited (“RIN”) wasincorporated on 11 May 2010 under the laws of theRepublic of South Africa. The consolidated financialstatements for the year ended 31 August 2012 comprisethe Company and its subsidiaries (together referred to asthe “Group”) and the Group’s interest in associates andjointly controlled entities. The preparation of the financialstatements was supervised by the Finance Director,Andrew Rowell CA(SA).The principal activity of RIN is managing its investmentin RI PLC. RI PLC is focused on real estate investmentin large, well developed economies with established andtransparent real estate markets. The investment portfoliois geographically diversified across the UK, Europe andAustralia providing exposure to the office, retail, industrialand hotel sectors. The Company’s parent company isRedefine Properties Limited, whose registered officeis located at Redefine Place, 2 Arnold Road, Rosebank,Johannesburg, 2196, South Africa.The preparation of financial statements requiresmanagement to make judgments, estimates andassumptions that affect the application of policies andreported amounts of assets and liabilities, income andexpenses. Actual results may differ marginally fromthese estimates. In preparing these financial statements,the significant judgments made by management inapplying the Company’s accounting policies and the keysources of estimation are discussed further in Note 2.2basis of preparation.2. Significant accounting policies2.1 Statement of complianceThe Group and Company financial statements have beenprepared in accordance with International FinancialReporting Standards (IFRS) as issued by the IASB, the AC500 series issued by the Accounting Practices Board andthe requirements of the South African Companies Act,No. 71 of 2008, as amended, the Companies Regulations2011, and incorporate the principal accounting policiesset out below.The accounting policies have been applied consistentlyto all periods presented in these financial statementsexcept for the adoption of new accounting standards asset out below.IAS 12In December 2010, the IASB released amendments to IAS12 effective from 1 January 2012. The Group has electedto early adopt the amendment of IAS 12. Deferred taxationis now recognised on the revaluation of the buildingcomponent of investment properties at the capital gainsrate on the presumption that the investment will berecovered through disposal and will therefore attractcapital gains tax. The Group has applied the amendmentretrospectively as required by IAS 8.It is the view of the board that the adoption of this policyresults in more accurate and meaningful information.The effect of the change in the accounting policyis a reduction of the deferred tax balance, with acorresponding increase in reserves as reflected in thestatement of changes in equity.The early adoption had the effect of reducing the 2011deferred taxation balance by £0.9m with a correspondingincrease of opening 2012 reserves of £0.75 million and anincrease in non-controlling interest of £0.16 million.Amendments to IFRS 7, Disclosures –Transfers of Financial AssetsIn October 2010, the IASB issued amendments to IFRS7 Financial Instruments: “Disclosures –Transfers ofFinancial Assets”. These amendments, were adoptedby the Group during the year and result in additionaldisclosures on transfer transactions of financial assets(for example, securitisations), including the possibleeffects of any risks that may remain with the transferor ofthe assets. The adoption of this amendment did not have asignificant impact on the Group.Financial StatementsFor reference made to the Group, it should be interpretedas referring to the consolidated financial statements orthe separate financial statements as the context requires.Redefine Properties International Limited Annual Report 201233

Financial Statementsnotes to the conSOLIDated financial statemenTS continued2. Significant accounting policies continued2.2 Basis of preparationThe consolidated and company financial statements arepresented in Great British Pounds, which is the functionalcurrency of the Company and the presentation currencyof the Group, rounded to the nearest thousand pounds.They are prepared using the historical cost basis exceptfor investment property, derivative financial instrumentsand financial instruments designated at fair value throughprofit or loss.Critical judgements and estimatesThe preparation of financial statements in conformity withIFRS requires the use of judgements and estimates thataffect the reported amounts of assets and liabilities atthe reporting date and the reported amounts of revenuesand expenses during the period reported. Although theseestimates are based on the Directors’ best knowledge ofthe amount, event or actions, actual results may differfrom those estimates.The principal areas where such judgementsand estimates have been made are:Application of the going concern basis of accountingThese consolidated financial statements have beenprepared on a going concern basis as after consideringthe relevant factors, the Directors have a reasonableexpectation that the Group has adequate resources tocontinue in operation for the foreseeable future. Theprincipal issues the Board considered in its enquiriesincluded, inter alia, the maturity of the Delta and Gammafacilities which total £314.29 million in October 2012 andthe maturities of the VBG2 and VBG1 facilities totalling£91.94 million and the equity raised post year end.Significant progress has been made on the refinancingdiscussions over the year and post year end including:• The announcement on 3 August 2012 regarding theagreed restructuring of the VBG holding companies, thesale of the VBG assets and restructuring/repayment ofthe related debt and its subsequent completion post yearend on 8 October 2012. The restructuring was finalisedpost year end with the proceeds from the disposal of theproperties of approximately €80.0 million used to settlethe VBG facilities in full. The facilities had, at the time ofrestructuring, an outstanding balance of €116.0 million.• The Group announced on 15 October 2012 that theagreement to extend and restructure the £114.6 millionDelta facility had been completed. The restructure seesthe Group repaying £33.5 million of debt associatedwith the release from charge of seven assets in theportfolio. The maturity date of the facility was extendedto 15 April 2015 subject to the Group meeting annualdisposal targets.• The settlement of the Aviva Crewe facility.• The finalisation of the sale of the companies whichheld a 94% shareholding in the Justice Centre in Hallein June 2012 resulting in property, with a value of€36.3 million and debt amounting to €37.1 million,being removed from the Group’s Statement of FinancialPosition and the derecognition of a liability in respectof the 6% non controlling interest.Discussions are still on-going with respect to theGamma facility of £199.7 million which matured on15 October 2012. This facility is non-recourse in nature.There can be no guarantee as to the outcome of currentnegotiations; however the Board remains of the view thatthere would be limited impact on the continued operationsof the Group should agreement not be reached and if theservicer enforced security rights.The Board have also had regard for the funds raised aspart of the equity raising which completed post year endand saw the Company’s subsidiary, RI PLC raise grossproceeds of £127.5 million. This additional capital willallow RI PLC to further reduce its leverage.The Board have also considered the working capitalforecast for the Group and believe that based on a detailedanalysis of cashflow projections, the level of capital raisedpost year end and the progress made on loan refinancingthat the Group has adequate resources to continue inoperation for the foreseeable future.Investment Property ValuationThe Group uses the valuation performed by itsindependent valuers as a fair value of its investmentproperties. The valuation is based upon assumptionsincluding estimated rental values, future rental income,anticipated maintenance costs, future development costsand appropriate discount rates. The valuers also makereference to market evidence of transaction prices forsimilar properties. See Notes 3 and 17 for further details.Classification of Investment PropertyThe hotel properties are held for capital appreciation andto earn rental income. The properties have been let toRedefine Hotel Management Limited (“RHML”) for a fixedrent which is subject to annual review. RHML operatesthe hotel business on its own account and is exposed tothe fluctuations in the underlying trading performanceof the hotels. It is responsible for the day to day upkeepof the properties and retains the key decision makingresponsibility for the business. Aside from the paymentof rental income to the Group there are limited or notransactions between the two entities. As a result, in linewith guidance in IAS 40, the Group classifies the hotelproperties as investment properties.TaxationThe Group is exposed to the risk of changes to taxlegislation in the various countries in which the Groupoperates. It is also exposed to different interpretations oftax regulations between the tax authorities and the Group.34 Redefine Properties International LimitedAnnual Report 2012

As a property loan stock company in South Africa,RIN distributes all of its earnings on the basis thatthe debenture interest is tax deductible. The wordingof current taxation legislation is such that there is analternative view. The Board has taken advice on thematter from its legal advisors and on the basis of theadvice received believes that the deduction of debentureinterest is appropriate.The Board of Directors is satisfied that is hassufficient shareholder funds in the unlikely eventthat the liability arises.Deferred TaxationThe Group considers that the value of the property portfoliois likely to be realised through sale. The Group bases itsdeferred taxation provision on the assumption that theresidual value of the investment properties is not lessthan the present value as provided by its external valuers.In determining the debenture valuation of 34.20 penceper debenture consideration was also given to the linkedunit price of the Company and the share price of RedefineInternational P.L.C. at the year end i.e. R5.30 or 39.57pence sterling and 29.88 pence respectively; and therecent equity raising at both the Company and RI PLClevel which saw unitholders subscribe post year end forlinked units at a value of R4.60 Rand or 34.54 pence perunit. The debenture valuation of 34.20 pence falls withinthe range of the share price of RI PLC and the linked unitprice of the Company and approximates the price at whichunits were issued to the market post year end.2.3 Basis of consolidation2.3.1 Investment in subsidiariesSubsidiaries are entities controlled by the Group. Controlexists when the Group has the power, directly or indirectly,to govern the financial and operating policies of an entityso as to obtain benefits from its activities.The recoverability of any deferred tax asset is assessedand, where it is thought unlikely that a recovery will bemade, is not included in the Group’s provision.Fair value of debenturesThe debentures have been designated on initial recognitionas held at fair value through the profit or loss with thedetermination of the valuation of the debentures both oninitial recognition and at year end a key judgment. As thedebentures themselves are not quoted consideration isgiven to similar quoted instruments. The linked units issuedby the Company are deemed to be a similar instrument tothe debenture because they are comprised of one shareand one debenture indivisibly linked.Given the low trading volumes of the linked units, theunit price was not deemed to be reflective of an activemarket price. As a result a fair value for the debentureswas established using a valuation technique. Thevaluation has been determined by reference to theunderlying characteristics of the debentures andexpected discounted cashflows.The NAV of RI PLC as adjusted for the impact of theagreed and announced debt refinancing is considered tobe a good approximation of the future operating cashflowsof the Group as:• The investment property valuation is considered a fairapproximation of the expected rental flows.• The carrying amount of the associate is consideredan appropriate approximate for further cashflowsfrom associates.• The remaining financial assets and liabilitiesare considered close approximates of the otheroperating cashflows.The results of subsidiaries are included in the Groupresults from the effective dates of acquisition to theeffective dates of disposal. Any difference between thepurchase price of a subsidiary and the Group’s share ofthe fair value of the identifiable net assets acquired istreated in accordance with the Group’s accounting policyfor intangible assets.The financial statements of the subsidiaries are preparedfor the same reporting period as the parent companyusing consistent accounting policies.The initial interest of non-controlling interests is stated atthe non-controlling interest’s proportion of the net assetvalue of the Company or the fair value.Transactions with non-controlling interests areaccounted for as transactions with equity holders intheir capacity as equity holders and therefore neithergoodwill nor profit or loss is recognised as a result ofsuch transactions.2.3.2 Transactions eliminated on consolidationIntragroup balances, transactions and any unrealisedgains and losses or income and expenses arising fromintragroup transactions, are eliminated in preparing theconsolidated financial statements. Unrealised losses areeliminated in the same way as unrealised gains, but onlyto the extent that there is no evidence of impairment.Financial StatementsRedefine Properties International Limited Annual Report 201235

Financial Statementsnotes to the conSOLIDated financial statemenTS continued2. Significant accounting policies continued2.3 Basis of consolidation continued2.3.3 Investment in associates and jointly controlled entitiesAssociates are entities over whose financial and operatingpolicies the Group has the ability to exercise significantinfluence but not control and which are neither subsidiariesnor jointly controlled entities. Jointly controlled entities arethose entities over which the Group exercises joint controlin terms of a contractual agreement.Investments in associated undertakings and jointlycontrolled entities are initially recorded at cost andincreased (or decreased) each year by the Group’sshare of the post-acquisition net income (or loss), andother movements reflected directly in the equity of theassociated undertaking.Where the Group acquires an additional shareholding orwhere it obtains significant influence such that an investmentwhich was previously accounted for as a simple investmentunder IAS39 is now deemed to be an associate undertaking,the Group’s previously held interest is re-measured to fiarvalue through profit or loss for the period. The costs of theassociate is determined as the fair value of the originalinvestment plus the fair value of any additional considerationgiven to achieve significant influence.Goodwill arising on the acquisition of an associatedundertaking or jointly controlled entity is included in thecarrying amount of the investment. When the Group’sshare of losses in an associate or jointly controlled entityhas reduced the carrying amount to zero, includingany other unsecured receivables, the Group doesnot recognise further losses, unless it has incurredobligations to make payments on behalf of the associateor joint venture.The Group’s share of the results of associated orjointly controlled entities after tax reflects the Group’sproportionate interest in the relevant undertaking andis based on financial statements made up to a date notearlier than three months before the year end reportingdate, adjusted to conform with the accounting policies ofthe Group.Since goodwill that forms part of the carrying amountof the investment in an associate or joint venture isnot recognised separately, it is therefore not tested forimpairment separately. Instead, the entire amount ofthe investment in an associate or joint venture is testedfor impairment as a single asset when there is objectiveevidence that the investment in an associate or jointlycontrolled entities may be impaired.Reversals of impairments are recorded as an adjustmentto the investment balance to the extent that the recoverableamount of the associate or jointly controlled entity increases.Associates and jointly controlled entities are carried at costless impairments in the company financial statements.Unrealised gains and losses arising from transactions withassociates and jointly controlled entities are eliminated tothe extent of the Group’s interest in the entities.2.3.4 Accounting for business combinationsThe Group applies IFRS 3 Business Combinations (2008)in accounting for business combinations.Business combinations are accounted for using theacquisition method as at the acquisition date, which is thedate on which control is transferred to the Group. Controlis the power to govern the financial and operating policiesof an entity so as to obtain benefits from its activities. Inassessing control, the Group takes into considerationpotential voting rights that currently are exercisable.Judgement is applied in determining the acquisition dateand determining whether control is transferred from oneparty 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 interestsin the acquiree; plus• if the business combination has been achieved instages, the fair value of the existing equity interest inthe acquiree; less• the net recognised amount (generally fair value) of theidentifiable assets acquired and liabilities assumed.When the excess is negative, a bargain purchase gain isrecognised immediately in profit or loss.Consideration transferred includes the fair values of theassets transferred, liabilities incurred by the Group tothe previous owners of the acquiree, and equity interestsissued by the Group. Consideration transferred alsoincludes the fair value of any contingent consideration.If a business combination results in the termination ofpre-existing relationships between the Group and theacquiree, then the lower of the termination amount, ascontained in the agreement, and the value of the offmarketelement is deducted from the considerationtransferred and recognised in other expenses.A contingent liability of the acquiree is assumed in abusiness combination only if such a liability representsa present obligation and arises from a past event, andits fair value can be measured reliably.The Group measures any non-controlling interest atits proportionate interest in the identifiable net assetsof the acquiree.Costs related to the acquisition, other than thoseassociated with the issue of debt or equity securitiesthat the Group incurs in connection with a businesscombination, are expensed as incurred.36 Redefine Properties International LimitedAnnual Report 2012

Costs associated with the issue of equity securities arerecorded directly in equity.Any contingent consideration payable is recognisedat fair value at the acquisition date. If the contingentconsideration is classified as equity, it is not remeasuredand settlement is accounted for within equity. Otherwise,subsequent changes to the fair value of the contingentconsideration are recognised in profit or loss.2.3.5 Property acquisitionsWhere properties are acquired through the acquisitionof corporate interests, the Directors have regard to thesubstance of the assets and activities of the acquiredentity in determining whether the acquisition representsthe acquisition of a business.In this regard, the Directors consider the nature ofthe transaction and assess whether the acquisitionrepresents the acquisition of an integrated set of activitiesand assets. An assessment is made as to what is beingacquired and to what extent the acquisition representsthe acquisition of inputs and processes rather thansimply the purchase of an asset. This determination ismade on a case by case basis having regard to the factsand circumstances of each acquisition and in light of theguidance in IFRS 3 Business Combinations relating to theidentification of a business.Where acquisitions are not judged to be an acquisitionof a business the transactions are accounted for as ifthe Group had acquired the underlying property directly.Accordingly, no goodwill arises, rather the cost of thecorporate entity is allocated between the identifiableassets and liabilities of the entity based on their relativefair values at the acquisition date.Otherwise corporate acquisitions are accounted for asbusiness combinations.2.3.6 Goodwill and intangible assetsGoodwill and intangible assets are carried at cost lessaccumulated impairment losses. In respect of equityaccounted investments the carrying amount of goodwill isincluded in the carrying amount of the investment and animpairment loss on such an investment is not allocatedto any asset, including goodwill that forms part of thecarrying amount of the investee.Amortisation of intangible assets is recognised in profitor loss on a straight-line basis over their estimated usefullife, from the date that they are available for use.2.4 Currency translation reserve2.4.1 Foreign currency transactionsTransactions in foreign currencies are translated at theforeign exchange rate ruling at the date of the transaction.Monetary assets and liabilities denominated in foreigncurrencies at the reporting date are translated to thefunctional currency at the foreign exchange rate rulingat that date. Foreign exchange differences arising ontranslation are recognised in the income statement. Nonmonetaryassets and liabilities denominated in foreigncurrencies that are stated at fair value are translated tothe functional currency at the rates at the dates of thetransaction or at an average rate for the period where thisis a reasonable approximation.2.4.2 Foreign operationsExchange differences arising from the translation of thenet investment in foreign operations are taken to thecurrency translation reserve (CTR). They are released intothe income statement upon disposal. On consolidation,the statements of financial position of foreign subsidiariesand associates are translated at the closing rate and theincome statement and the statement of comprehensiveincome are translated at the average rate for the period.2.5 Investment propertyInvestment properties are those which are held either toearn rental income or for capital appreciation or for both.Investment properties are stated at fair value. External,independent valuation companies, having professionallyqualified valuers and recent experience in the locationand category of property being valued, value the portfolioson an annual basis. The fair values are based on marketvalues, being the estimated amount for which a propertycould be exchanged on the date of valuation betweena willing buyer and a willing seller in an arm’s lengthtransaction after proper marketing wherein the partieshad each acted knowledgeably and without compulsion.The valuations are prepared by considering comparablemarket transactions for sales and letting and havingregard for the current leases in place. In the case oflettings this includes considering the aggregate of the netannual market rents receivable from the properties andwhere relevant, associated costs. A yield which reflectsthe risks inherent in the net cash flows is applied to thenet annual rentals to arrive at the property valuation.As the fair value model is applied, property underconstruction or redevelopment for future use asinvestment property is measured at fair value. However,where the fair value of investment property underredevelopment is not reliably measurable, the propertyis measured at cost.Property held under leases for the same purpose isalso classified as investment property, accounted foras held under a finance lease and initially recognisedat the sum of any premium paid on acquisition and thepresent value of any further minimum lease payments.The corresponding liability to the superior leaseholderis included in the consolidated statement of financialposition as a finance lease obligation.Financial StatementsRedefine Properties International Limited Annual Report 201237

Financial Statementsnotes to the conSOLIDated financial statemenTS continued2. Significant accounting policies continued2.5 Investment property continuedThereafter 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 incomeand expense resulting from the spreading of leaseincentives and/or minimum lease payments; and• increased by the carrying amount of any liabilityto the superior leaseholder included in theconsolidated statement of financial position asa finance lease obligation.The annual valuations of investment property are basedupon estimates and subjective judgements that mayvary from the actual values and sales prices that may berealised by the Group upon ultimate disposal. The criticalassumptions made relating to valuations have beendisclosed in Note 3 and Note 17 to the financial statements.Gains or losses arising from changes in the fair valueof investment property are included in the profit orloss in the year in which they arise. Profits or losses onthe disposal of investment property are recognised atcontract completion for the disposal.Disposals of investment properties are recognised oncompletion and the profit or loss on disposal is calculatedas the difference between the sale proceeds and the latestcarrying value of the property after adding attributablecosts of the disposal.2.5.1 Borrowing costs and cost of constructionAll costs directly associated with the purchase andconstruction of a property are capitalised.Borrowing costs are capitalised if they are directlyattributable to the acquisition, construction or productionof a qualifying asset. Capitalisation of borrowing costscommences when the activities to prepare the asset arein progress and expenditures and borrowing costs arebeing incurred. Capitalisation of borrowing costs maycontinue until the assets are substantially ready for theirintended use. If the resulting carrying amount of the assetexceeds its value, an impairment loss is recognised. Thecapitalisation rate is arrived at by reference to the actualrate payable on borrowings for development purposes or,with regard to that part of the development cost financedout of general funds, to the average rate.2.6 Financial instruments – Recognition,classification and measurementNon-derivative financial instrumentsNon-derivative financial instruments compriseinvestments in equity securities, trade and otherreceivables, cash and cash equivalents, loans andborrowings, and trade and other payables.Non-derivative financial instruments are recognisedinitially at fair value plus, for instruments not designatedat fair value through profit or loss, any directlyattributable transaction costs, except as describedbelow. Loan receivables and payables are subsequentlymeasured at amortised cost using the effective interestrate method.A financial instrument is recognised when the Groupbecomes a party to the contractual provisions of theinstrument. Financial assets are derecognised if theGroup’s contractual rights to the cash flows from thefinancial assets expire or if the Group transfers thefinancial assets to another party without retaining controlor substantially all risks and rewards of the asset.Regular way purchases and sales of financial assets areaccounted for at trade date, i.e. the date that the Groupcommits itself to purchase or sell the asset. Financialliabilities are derecognised if the Group’s obligationsspecified in the contract expire.Investments at fair value through profit or lossAn instrument is classified at fair value through profit orloss if it is held for trading or is designated as such uponinitial recognition. Financial instruments are designatedas fair value through profit or loss if the Group managessuch investments and makes purchase and sale decisionsbased on their fair value. Upon initial recognition,attributable transaction costs are recognised in profitor loss when incurred. Financial instruments at fairvalue through profit or loss comprise equity securitiesand are measured at fair value, and changes thereinare recognised in the income statement. Fair values aredetermined by reference to their quoted bid price at thereporting date, where such a price is available. Investmentin investment property funds are recorded at the net assetvalue 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 tomanage its interest rate risk exposures. Embeddedderivatives are separated from the host contractand accounted for separately if the economiccharacteristics and risks of the host contract and theembedded derivative are not closely related, a separateinstrument with the same terms as the embeddedderivative would meet the definition of a derivative, andthe combined instrument is not measured at fair valuethrough profit or loss.Derivatives are recognised initially at fair value;attributable transaction costs are recognised in profitor loss when incurred. Subsequent to initial recognition,derivatives are measured at fair value, and changestherein are accounted for in profit or loss and disclosedin losses/gains from financial assets and liabilities.38 Redefine Properties International LimitedAnnual Report 2012

2.7 Finance leasesFinance leases, which are the ground rents payable to thesuperior landlord on leasehold properties, are capitalisedat the inception of the lease at the fair value of the leasedproperty or, if lower, at the present value of the minimumlease payments. Lease payments are apportionedbetween the finance charges and the reduction of thelease liability so as to achieve a constant rate of intereston the remaining balance of the liability. Finance chargesare charged through profit or loss as they arise.2.8 ImpairmentA financial asset not carried at fair value through profitor loss is assessed at each reporting date to determinewhether there is objective evidence that it is impaired. Afinancial asset is impaired if objective evidence indicatesthat a loss event has occurred after the initial recognitionof the asset, and that the loss event had a negative effecton the estimated future cash flows of that asset that canbe estimated reliably.Objective evidence that financial assets (includingequity securities) are impaired can include default ordelinquency by a debtor, restructuring of an amount dueto the Group on terms that the Group would not considerotherwise, indications that a debtor or issuer will enterbankruptcy, adverse changes in the payment status ofborrowers or issuers in the Group, economic conditionsthat correlate with defaults or the disappearance of anactive market for a security.An impairment loss in respect of a financial assetmeasured at amortised cost is calculated as thedifference between its carrying amount and the presentvalue of the estimated future cash flows discounted atthe asset’s original effective interest rate. Losses arerecognised in profit or loss and reflected in an allowanceaccount against loans and receivables. Interest on theimpaired asset continues to be recognised. When asubsequent event (e.g. repayment by a debtor) causes theamount of impairment loss to decrease, the decrease inimpairment loss is reversed through profit or loss.2.9 Cash and cash equivalentsCash and cash equivalents comprise cash balances onhand, cash deposited with financial institutions and shorttermcall deposits. Cash and cash equivalents have amaturity of less than three months.Restricted cash comprises cash deposits which arerestricted until the fulfilment of certain conditions.2.10 Share capitalOrdinary share capitalOrdinary shares are classified as equity. External costsdirectly attributable to the issue of new shares are shownas a deduction from equity, net of tax.Treasury sharesWhen share capital recognised as equity is repurchased,the amount of the consideration paid, which includesdirectly attributable costs, net of any tax effects, isrecognised as a deduction from equity. The shares areavailable for reissue in the future.2.11 Leasehold propertyLeasehold properties that are leased out to tenants underoperating leases are classified as investment propertiesas appropriate, and included in the statement of financialposition at fair value.Land interests held under an operating lease are classifiedand accounted for as investment property on a propertyby property basis when they are held to earn rentals or forcapital appreciation on both the land and the property. Anysuch property interest under an operating lease classifiedas investment property is carried at fair value.2.12 Loans and borrowingsInterest-bearing borrowings are recognised initially atfair value less directly attributable transaction costs.Subsequent to initial recognition, interest-bearingborrowings are stated at amortised cost with anydifference between cost and redemption value beingrecognised in the income statement over the period of theborrowings on an effective interest basis.Finance costsFinance costs recognised in the income statementcomprises interest payable on borrowings calculated usingthe effective interest method, net of interest capitalised.Restructured debtA financial liability is derecognised when it isextinguished (i.e. it is discharged, cancelled or expires)which may happen when a payment is made to thelender, the borrower legally is released from primaryresponsibility for the financial liability or where thereis an exchange of debt instruments with substantiallydifferent terms or a substantial modification of the termsof an existing debt instrument.Any difference between the carrying amount of theoriginal liability and the consideration paid is recognisedin profit or loss. The consideration paid includes nonfinancialassets transferred and the assumption ofliabilities, including the new modified financial liability.Any new financial liability recognised is measured initiallyat fair value. Any costs or fees incurred are recognisedas part of the gain or loss on extinguishment and do notadjust the carrying amount of the new liability.2.13 DividendsDividends to unitholders are recognised when theybecome legally payable. In the case of interim dividends,this is when declared by the directors. In the case of finaldividends, this is when approved by the unitholders at ageneral meeting.Financial StatementsRedefine Properties International Limited Annual Report 201239

Financial Statementsnotes to the conSOLIDated financial statemenTS continued2. Significant accounting policies continued2.14 Rental incomeRental income from investment property leased outunder operating leases is recognised in the incomestatement on a straight-line basis over the term of theleases. Lease incentives granted are recognised as anintegral part of the total rental income and amortisedover the term of the leases.Contingent rental income is recognised as it arises.Premiums to terminate leases are recognised in profit orloss as they arise.2.15 Service chargesWhere the Group invoices service charges, these amountsare not recognised as income as the risks in relation tothe provision of these goods and services are primarilyborne by the Group’s customers. Any servicing expensessuffered by the Group are included within propertyoperating expenses in the income statement.2.16 Investment incomeDividends from listed property investments arerecognised on the date the Group’s right to receivepayment is established. Interest earned on cash investedwith financial institutions is recognised on an accrualbasis using the effective interest rate method.2.17 Income taxIncome tax on the profit or loss for the period comprisescurrent and deferred tax. Income tax is recognisedin the income statement except to the extent that itrelates to items recognised directly in equity or othercomprehensive income, in which case it is recognised inequity or other comprehensive income.Deferred tax is provided using the statement of financialposition liability method, providing for temporarydifferences between the carrying amounts of assetsand liabilities for financial reporting purposes and theamounts used for taxation purposes. The followingtemporary differences is not provided for: goodwill notdeductible for tax purposes, those arising from the initialrecognition of assets or liabilities that affect neitheraccounting or taxable profit, nor differences relatingto investments in subsidiaries to the extent describedbelow. The amount of deferred tax provided is based onthe expected manner of realisation or settlement of thecarrying amount of assets and liabilities, using tax ratesenacted or substantively enacted at the reporting date.A deferred tax asset is recognised only to the extent thatit is probable that future taxable profits will be availableagainst which the asset can be utilised and is reduced tothe extent that it is no longer probable that the related taxbenefit will be realised.Deferred tax is not provided on temporary differencesarising on investments in subsidiaries and jointlycontrolled entities where the timing of the reversal can becontrolled and it is probable that the temporary differencewill not reverse in the foreseeable future.Deferred tax is calculated at the tax rates that are expectedto apply to the period when the asset is realised or theliability settled. Deferred tax on the fair value adjustmenton investment properties and listed securities has beenprovided at the capital gains taxation rate based on themanner in which each asset is expected to be realised.Deferred taxation is provided only to the extent that thereare not sufficient tax losses to shield the charge.2.18 Earnings per share and headline earningsper linked unitBasic earnings per linked unit is calculated by dividingthe profit or loss before charging debenture interestattributable to linked unitholders of the Company by theweighted average number of ordinary units outstandingduring the period. Diluted earnings per linked unit isdetermined by adjusting the profit or loss attributable toordinary unitholders (before charging debenture interest)and the weighted average number of ordinary sharesoutstanding adjusted for the effects of all dilutive potentialordinary shares.EPS is calculated by dividing the profit or loss attributableto ordinary shareholders of the Company by the weightedaverage number of ordinary shares outstanding duringthe period. Diluted EPS is determined by adjusting theprofit or loss attributable to ordinary shareholdersand the weighted average number of ordinary sharesoutstanding adjusted for the effects of all dilutive potentialordinary shares.In calculating headline earnings per share headlineearnings include fair value adjustments for financialliabilities and accounting adjustments required to accountfor lease income on a straight-line basis, as well as othernon-cash accounting adjustments that do not affectdistributable earnings.2.19 Segment reportingAn operating segment is a component of the Group thatengages in business activities from which it may earnrevenues and in respect of which it may incur expenses,including revenues and expenses that relate to thetransactions with any of the Group’s other components.An operating segment’s operating results are reviewedregularly by the Chief Operating Decision Maker (“CODM”)to make decisions about resources to be allocated tothe segment and assess its performance, and for whichdiscrete financial information is available. See Note 4 forfurther details.2.20 Accounting for debenturesDebentures are designated as held at fair value throughprofit or loss. These instruments are measured initiallyat fair value and are subsequently measured at fair valuewith movements in fair value reflected in profit or loss.40 Redefine Properties International LimitedAnnual Report 2012

As the debentures are unquoted, fair value isdetermined using valuation techniques and by referenceto similar instruments in a quoted market and or recentmarket transactions. Note 2.2 provides further detailsof the key estimates and judgements in the debenturefair value determination.2.21 Accounting for compound financial instrumentsThe initial carrying amount of a compound financialinstrument is allocated to its equity and liabilitycomponents. The equity component is assigned theresidual amount after deducting from the fair value of theinstrument as a whole the amount separately determinedfor the liability component.Disposal groups and non-current assets held forsale are presented separately from other assets andliabilities on the statement of financial position. Priorperiods are not reclassified.2.23 ProvisionsA provision is recognised if, as a result of a past eventthe Group has a present legal or constructive obligationthat can be estimated reliably and it is probable that anoutflow of economic benefits will be required to settle theobligation. Provisions are determined by discounting theexpected cash flows at a pre tax rate that reflects currentmarket assessments of the time value of money and therisks specific to the liability.2.22 Disposal groups and non-current assets held for saleA non-current asset or a disposal group comprising assetsand liabilities is classified as held for sale if it is expectedthat its carrying amount will be recovered principallythrough sale rather than through continuing use, it isavailable for immediate sale and the sale is highly probableto occur within one year. For the sale to be highly probable,the appropriate level of management must be committed toa plan to sell the asset or disposal group.Where the Group is committed to a sale plan involving theloss of control of a subsidiary it classifies all the assetsand liabilities of that subsidiary as held for sale when thecriteria set out above and detailed in IFRS 5 “Non-currentAssets Held for Sale and Discontinued Operations” aremet, regardless of whether the Group will retain a noncontrollinginterest in its former subsidiary after the sale.On initial classification as held for sale, generally, noncurrentassets and disposal groups are measured at thelower of the previous carrying amount and fair value lesscosts to sell, with any adjustments taken to the incomestatement. The same applies to gains and losses onsubsequent re-measurement. However, certain itemssuch as financial assets within the scope of IAS 39 andinvestment property in the scope of IAS 40 continue to bemeasured in accordance with those standards.Impairment losses subsequent to classification of assetsas held for sale are recognised in the income statement.Increases in fair value less costs to sell assets that havebeen classified as held for sale are recognised in theincome statement to the extent that the increase is notin excess of any cumulative impairment loss previouslyrecognised in respect of the asset. Assets classified asheld for sale are not depreciated.Where it is not probable that an outflow of economicbenefits will be required, or the amount cannot beestimated reliably, the obligation is disclosed as acontingent liability, unless the probability of outflow ofeconomic benefits is remote.2.24 Share based paymentsThe grant date fair value of equity share-based paymentawards granted to the Investment Adviser is recognisedas an expense with the corresponding increase in equity,over the period that the Investment Adviser becomeentitled to the awards. The amount recognised as anexpense is adjusted to reflect the number of awards forwhich the related non market vesting conditions areexpected to be met, such that the amount ultimatelyrecognised as an expense is based on the number ofawards that meet the related non market conditionperformance conditions at the vesting date.2.25 Capital instrumentA financial instrument or its component parts is classifiedon initial recognition as a financial liability, a financialasset or an equity instrument in accordance with thesubstance of the contractual arrangement.An instrument is classified as equity where there is nocontractual obligation to deliver cash or another financialasset to another party, or to exchange financial assets orfinancial liabilities with another party under potentiallyunfavourable conditions (for the issuer of the instrument)or where the instrument will or may be settled for a fixednumber of the entity’s own equity instruments.Equity instruments are recognised initially at their fairvalue with any directly attributable costs allocated to theinstrument. The equity instrument is not re-measuredsubsequent to initial recognition.Financial StatementsGains and losses on re-measurement and impairmentlosses subsequent to classification as disposal groupsand noncurrent assets held for sale are shown withincontinuing operations in the income statement, unlessthey qualify as discontinued operations.Payments in relation to the capital instrument aredeemed to be share based payments and are recordedin the income statement due to the unavoidable nature ofthe obligation.Redefine Properties International Limited Annual Report 201241

Financial Statementsnotes to the conSOLIDated financial statemenTS continued2. Significant accounting policies continued2.26 New standards and interpretations not yet adoptedThe following new accounting standards and amendmentsto existing standards approved by the IASB in 2011 or prioryears, but not early adopted by the Group, will impact theGroup’s financial reporting in future periods. The Group iscurrently considering the impacts of these amendments.The new accounting standards and amendments whichare more relevant to the Group are detailed below.The following will be applied in 2013 unlessotherwise noted:Amendments to IAS 1 – Presentation of Items in OtherComprehensive IncomeThe amendments to IAS 1 were issued in June 2011 andare applicable to annual periods beginning on or after1 July 2012. These amendments require companiespreparing financial statements in accordance with IFRSs togroup together items within other comprehensive incomethat may be reclassified to the profit or loss section of theincome statement. The amendments also reaffirm existingrequirements that items in other comprehensive incomeand profit or loss should be presented as either a singlestatement or two consecutive statements.The following will be applied in 2014 unlessotherwise noted:Consolidation StandardsIn May 2011, the IASB published a set of five standardsdealing with consolidation, joint ventures and their relateddisclosures. Each of the five standards is effective forannual periods beginning on or after 1 January 2013, withretrospective application required.IFRS 10 Consolidated Financial StatementsIFRS 10 replaces the consolidation guidance in IAS 27Consolidated and Separate Financial Statements and SIC-12 Consolidation – Special Purpose Entities by introducinga single consolidation model for all entities based oncontrol, irrespective of the nature of the investee.IFRS 10 builds on existing principles by identifying theconcept of control as the determining factor in whether anentity should be included within the consolidated financialstatements of the parent company. This new standardwill not change consolidation procedures for the Group,but will require management to assess whether an entityshould be consolidated.IFRS 11 Joint ArrangementsIFRS 11 introduces new accounting requirements forjoint arrangements, replacing IAS 31 Interests in JointVentures, by focusing on the rights and obligations ofthe arrangement, rather than its legal form. The optionto apply the proportional consolidation method whenaccounting for jointly controlled entities is removed. Theimpact on the Group will be dependent on the formation ofnew joint arrangements by the Group.IFRS 12 Disclosure of Interests in Other EntitiesIFRS 12 sets out the required disclosures for entitiesreporting under the two new standards, IFRS 10‘Consolidated financial statements’ and IFRS 11 ‘Jointarrangements’; it also replaces the disclosure requirementscurrently found in IAS 28 ‘Investments in Associates’.The required disclosures aim to provide informationto enable users to evaluate the nature of, and risksassociated with, an entity’s interests in other entitiesand the effects of those interests on the entity’s financialposition, financial performance and cash flows. This basicprinciple is further supported by more detailed disclosureobjectives and requirements. This new standardwill result in enhanced disclosures on the Group’ssubsidiaries and associates as well as unconsolidatedstructured entities.IAS 27 Separate Financial Statements (revised 2011)The requirements relating to separate financialstatements are unchanged and are included in theamended IAS 27. The other sections of IAS 27 are replacedby IFRS 10. IAS 27 is renamed ‘Separate financialstatements’ and is now a standard dealing solely withseparate financial statements. The existing guidance anddisclosure requirements for separate financial statementsare unchanged.IAS 28 Investments in Associates and Joint Ventures(revised 2011)This standard prescribes the accounting for investmentsin associates and sets out the requirements for theapplication of the equity method when accountingfor investments in associates and joint ventures. IAS28 (revised 2011) does not include any disclosurerequirements; these are now included in IFRS 12Disclosure of Interests in Other Entities.IFRS 13 Fair Value MeasurementThis standard, which applies prospectively forannual periods beginning on or after 1 January 2013,establishes a single source of guidance for fair valuemeasurements under IFRSs. IFRS 13 defines fair value,provides guidance on its determination and introducesconsistent requirements for disclosures on fair valuemeasurements. IFRS 13 requires entities to discloseinformation about the valuation techniques and inputsused to measure fair value, as well as information aboutthe uncertainty inherent in fair value measurements. Thisinformation will be required for both financial and nonfinancialassets and liabilities. The impact of the standardis being assessed by the Group and may resultin additional disclosures.42 Redefine Properties International LimitedAnnual Report 2012

Offsetting Financial Assets and Financial Liabilities –Amendments to IAS 32, and Disclosures – OffsettingFinancial Assets and Financial Liabilities – Amendmentsto IFRS 7In December 2011, the IASB issued amendments to IAS32 and IFRS 7 which clarify the accounting requirementsfor offsetting financial instruments and introducenew disclosure requirements that aim to improve thecomparability of financial statements prepared inaccordance with IFRS and US GAAP.The amendments to IFRS 7 will require more extensivedisclosures than are currently required. The disclosuresfocus on quantitative information about recognisedfinancial instruments that are offset in the statement offinancial position, as well as those recognised financialinstruments that are subject to master netting orsimilar arrangements, irrespective of whether they areoffset. The amended offsetting disclosures are to beretrospectively applied, with an effective date of annualperiods beginning on or after 1 January 2013.The amendments to IAS 32 clarify that the right of set-offmust be currently available and legally enforceable for allcounterparties in the normal course of business, as wellas in the event of default, insolvency or bankruptcy. TheIAS 32 changes are effective for annual periods beginningon or after 1 January 2014 and apply retrospectively.The following will be applied in 2015:IFRS 9 Financial instrumentsIn 2009, the IASB commenced the implementation of itsproject plan for the replacement of IAS 39. This consistsof three main phases:Phase 1: Classification and measurementIn November 2009, the IASB issued IFRS 9 FinancialInstruments, covering classification and measurementof financial assets, as the first part of its project toreplace IAS 39 and simplify the accounting for financialinstruments. The new standard endeavours to enhancethe ability of investors and other users of financialinformation to understand the accounting for financialassets and to reduce complexity.IFRS 9 uses a single approach to determine whether afinancial asset is measured at amortised cost or fair value,replacing the many different rules in IAS 39. The approachin IFRS 9 is based on how an entity manages its financialinstruments (its business model) and the contractual cashflow characteristics of the financial assets.In October 2010, the IASB reissued IFRS 9 incorporatingnew requirements on accounting for financial liabilities,and carrying over from IAS 39 the requirements forderecognition of financial assets and financial liabilities.IFRS 9 does not change the basic accounting modelfor financial liabilities under IAS 39.Two measurementcategories continue to exist: fair value through profit orloss (“FVTPL”) and amortised cost. Financial liabilitiesheld for trading are measured at FVTPL, and all otherfinancial liabilities are measured at amortised cost unlessthe fair value option is applied. IFRS 9 requires gains andlosses on financial liabilities designated as at fair valuethrough profit or loss to be split into the amount of changein the fair value that is attributable to changes in thecredit risk of the liability, which should be presented inother comprehensive income, and the remaining amountof change in the fair value of the liability which should bepresented in profit or loss.• The basic premise for the derecognition model in IFRS9 (carried over from IAS 39) is to determine whether theasset under consideration for derecognition is:--an asset in its entirety; or--specifically identified cash flows from an asset (or agroup of similar financial assets); or--a fully proportionate (pro rata) share of the cashflows from an asset (or a group of similar financialassets); or--a fully proportionate (pro rata) share of specificallyidentified cash flows from a financial asset (or agroup of similar financial assets).• A financial liability should be removed from thestatement of financial position when, and only when, it isextinguished, that is, when the obligation specified in thecontract is either discharged or cancelled or expires.• All derivatives, including those linked to unquotedequity investments, are measured at fair value. Valuechanges are recognised in profit or loss unless theentity has elected to treat the derivative as a hedginginstrument in accordance with IAS 39, in which casethe requirements of IAS 39 apply.Phase 2: Impairment methodologyAn exposure draft issued by the IASB in November 2009proposes an ‘expected loss model’ for impairment. Underthis model, expected losses are recognised throughoutthe life of a loan or other financial asset measured atamortised cost, not just after a loss event has beenidentified. The expected loss model avoids what manysee as a mismatch under the incurred loss model –front-loading of interest revenue (which includes anamount to cover the lender’s expected loan loss) whilethe impairment loss is recognised only after a loss eventoccurs. The impairment phase of IFRS 9 is subject to ongoingdeliberations and has not yet been finalised.Financial StatementsRedefine Properties International Limited Annual Report 201243

Financial Statementsnotes to the conSOLIDated financial statemenTS continued2. Significant accounting policies continued2.26 New standards and interpretations notyet adopted continuedPhase 3: Hedge accountingIn December 2010, the IASB issued an exposure draft onhedge accounting which will ultimately be incorporatedinto IFRS 9. The exposure draft proposes a model forhedge accounting that aims to align accounting with riskmanagement activities. It is proposed that the financialstatements will reflect the effect of an entity’s riskmanagement activities that uses financial instrumentsto manage exposures arising from particular risks thatcould affect profit or loss. This aims to convey the contextof hedge instruments to allow insight into their purposeand effect. This phase of IFRS 9 is not yet finalised.The effective date for implementation of IFRS 9 is annualperiods beginning on or after 1 January 2015, which wasextended from 1 January 2013 due to delays in completingphases 2 and 3 of the project as well as the delay in theinsurance project.Since significant aspects of the standard have yet to befinalised, it is impracticable for the Group to quantify theimpact (if any) of IFRS 9 at this stage.3. Financial risk managementThe Group has exposure to the following risks from itsuse of financial instruments:• credit risk• liquidity risk• market riskThis note presents information about the Group’sexposure to each of the above risks, the Group’sobjectives, policies and processes for measuring andmanaging risk, and the Group’s management of capital.Further quantitative disclosures are included throughoutthe consolidated financial statements.The Group’s Board of Directors has overallresponsibility for the establishment and oversight ofthe Group’s risk management framework. The Board isresponsible for developing and monitoring the Group’srisk management policies.The Group’s risk management policies require theidentification and analysis of the risks faced by the Group,the setting of appropriate risk limits and controls, andthe monitoring of risks and adherence to limits. Riskmanagement policies and systems are reviewed regularlyand adjusted to reflect changes in market conditions andthe Group’s activities.The Group Audit Committee oversees management’smonitoring of compliance with the Group’s riskmanagement policies and procedures, and reviews theadequacy of the risk management framework in relationto the risks faced by the Group.Credit riskCredit risk is the risk of financial loss to the Group if acustomer or counterparty to a financial instrument failsto meet its contractual obligations, and arises principallyfrom the Group’s receivables from tenants and oninvestment securities.Trade and other receivablesThe Group is exposed to concentrations of sectoralcredit risk. Concentrations of tenant risk exist in eachindividual property portfolio. The Board of Directorsmonitors the concentration of credit risk with individualtenants and counterparties across the portfolio. Thelevel of concentration is addressed both with regards tothe sector of property, the industry in which the tenantoperates and the credit history of the tenant/customer. Anallowance is made where there is an identified loss eventwhich is evidence of a reduction in the recoverability of thecash flows.Cash and cash equivalentsThe Group limits its exposure to credit risk by onlyinvesting in liquid deposits and securities and onlywith counterparties that have a credit rating of at leastinvestment grade from Standard & Poor’s or Moody’s,except where specific exemptions are granted by theBoard. Given the credit quality, management does notexpect any counterparty to fail to meet its obligations.Cash transactions are limited to high-credit-qualityfinancial institutions. The Board of Directors monitors theexposure of the Group to any one financial institution andensures that this is limited by diversification of depositsand lending from each institution across the portfolio.Loan and hedging counterpartiesThe Group limits its exposure to loan counterparty riskby firstly, diversifying its property related loans over anumber of high credit rated financial institutions andsecondly, only enters into single interest rate swapagreements with the respective financial institutionproviding the loan. Mezzanine counterparties areassessed for suitability prior to entering into loanagreements and are reviewed regularly in line with theGroup’s risk management policies.Long-term receivablesThe Group limits its exposure to credit risk by ensuringall loans are made to high-credit-quality financialinstitutions and counterparties, whose investments aresecured over their underlying property assets. See Note18 for further details.Liquidity riskThe Group’s approach to managing liquidity is to ensure, asfar as possible, that it will always have sufficient liquidityto meet its liabilities when due, under both normal andstressed conditions, without incurring unacceptable lossesor risking damage to the Group’s reputation.44 Redefine Properties International LimitedAnnual Report 2012

The Group’s approach to managing liquidity is to ensure,as far as possible, that it will always have sufficientrental income to service its financial obligations whenthey fall due. The monitoring of liquidity risk is assistedby the monthly review of financial covenants imposed byfinancial institutions, such as interest and loan to valuecovenant ratios. Renegotiation of loans takes place inadvance of any potential covenant breaches in so far asthe factors are within the control of the Board. In periodsof increased market uncertainty the Board will ensuresufficient cash resources are available for potential loanrepayments/cash deposits as may be required by financialinstitutions. Refer Note 2.2 for further details on the goingconcern assumption adopted by the Board and Note 43 forrefinancing developments post year end.Market riskMarket risk is the risk that changes in market prices,such as foreign exchange rates, interest rates and equityprices will affect the Group’s income or the value ofits investments in financial instruments. The objectiveof market risk management is to manage and controlmarket risk exposures within acceptable parameters,while optimising the return on risk.The Group enters into derivative financial instrumentsin the ordinary course of business, and incurs financialliabilities, in order to manage market risks. The Boardof Directors receives reports on a quarterly basis withregards to currency exposures as well as interest ratespreads and takes the necessary steps to hedge/limitthe risk the Group is exposed to. The Group does notapply hedge accounting. See Note 29, 31, 33 and 34 forfurther details.Currency riskThe Group operates internationally and is exposed toforeign exchange risk arising from various currencyexposures, primarily with respect to the Euro (“EUR”),Australian Dollar (“AUD”), United States Dollar (“USD”),Swiss Franc (“CHF”) and South African Rand (“ZAR”).Foreign exchange risk arises from current exposuresthe Group has to foreign currencies, Rand denominateddebentures, recognised monetary assets and liabilitiesand net investments in foreign operations.The Group’s investments in foreign subsidiaries are nothedged as the currency positions are considered to belong-term in nature. See Note 35 for further details.Interest rate riskThe Group’s exposure to the risk of the changes in marketinterest rates relates primarily to the Group’s long-termdebt obligations with floating interest rates. The Groupuses interest rate derivatives to mitigate its exposure tointerest rate fluctuations. At the period end, as a result ofthe use of interest rate swaps, the majority of the Group’sborrowings were at fixed interest rates.The Group’s profit before tax has limited exposure tointerest rate fluctuations until the repayment dates ofthe loans for which the interest rate swaps have beenarranged. Refer Note 29 for further details on the Group’sinterest rate swap agreements.Debenture interest is also payable twice yearly with theinterest entitlement on each debenture in aggregate being100% of the Group’s net operating income (excludingcapital items and the effects of straight-lining of leases)for that distribution period.Equity price riskEquity price risk arises from investment securities held bythe Group. These investments are held at fair value. Theirperformance is actively monitored and managed on a fairvalue basis.Debenture riskDebentures are designated as financial liabilities heldat fair value through profit or loss. It is believed thatthis method results in the most relevant measure ofthe debenture liability as it represents the net assetvalue attributable to debenture holders after all otherliabilities and tangible assets are reflected at fair values.In addition, this method eliminates possible measurementinconsistencies that may arise by valuing the debentureliability on some other basis.Commercial property price riskThe Directors draw attention to the risks associated withcommercial property investments. Although over the longterm property is considered a low risk asset, investorsmust be aware that significant short and medium termrisk factors are inherent in the asset class.Investments in property are relatively illiquid and usuallymore difficult to realise than listed equities or bonds andthis restricts the Group’s ability to realise value in cash inthe short-term.Financial StatementsRedefine Properties International Limited Annual Report 201245

Financial Statementsnotes to the conSOLIDated financial statemenTS continued3. Financial risk management continuedMarket risk continuedEstimates 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 theabsence of such information, the Group determines the amount within a range of reasonable estimates. The Groupconsiders 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 anyexisting lease and from external evidence such as current market rents for similar properties in the same locationand condition, and using discount rates that reflect current market assessments.Further details of the portfolio by business segment and yields applied is provided in the Property Portfolio section ofthe financial statements.Capital managementThe Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidenceand to sustain future development of the business. The Board of Directors monitors both the demographic spreadof unitholders, as well as the return on capital, which the Group defines as total unitholders’ equity, excluding noncontrollinginterests, and the debenture interest paid to debenture holders.The Company has the necessary unitholder authorisation to purchase its own linked units on the market. The timing ofthese purchases will depend on market conditions and purchase and sale decisions will be made on a transaction bytransaction basis by the Board of Directors. No linked unit purchases took place in the period. The Group does not havea defined linked unit buy-back plan. Neither the Company nor any of its subsidiaries are subject to externally imposedregulatory capital requirements.However the Company’s subsidiary Redefine International P.L.C.’s borrowings, 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 theaggregate of:i. the amount paid up on the issued share capital of the Companyii. the total of capital and revenue reservesDebenture interest is payable twice yearly with the interest entitlement on each debenture in aggregate being 100%of the Group’s net operating income (excluding capital items and the effects of straight-lining of leases) for thatdistribution period. The Group is expected by certain creditors in the ordinary course of business to maintain adequatecapital levels.4. Segmental reportingThe Group’s identified reportable segments are set out below. These segments are generally managed by separatemanagement teams. 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:Europe:Hotels:Wichford:Cromwell:Consists of the Group’s major UK shopping centres.Consists of the Group’s properties in Continental Europe, located in Germany, Switzerland andthe Netherlands.Consists of all the Group’s hotel properties. The hotels are let to Redefine Hotel ManagementLimited on a fixed rental basis with annual reviews.Consists of the Group’s investment in Wichford, up to the date of the reverse acquisition.Relates to the Group’s investment in the Cromwell Property Group, Australia.46 Redefine Properties International LimitedAnnual Report 2012

Relevant revenue, assets and capital expenditure information is set out below:i. Information about reportable segmentsUK StableIncome£’000UKRetail£’000Europe£’000Hotels 1£’000Wichford£’000Cromwell£’000Total£’000At 31 August 2012Rental income 40 856 9 303 16 591 9 400 – – 76 150Net fair value loss on investment property (101 215) (20 213) (5 102) (341) – – (126 871)Gain/(loss) from financial assets and liabilities 11 969 (8 391) (233) (1 463) – 61 1 943Redemption of loans and borrowings – 6 080 – – – – 6 080(Loss) from sale of subsidiaries (51) (1 323) (821) – – – (2 195)Equity accounted (loss)/profit (858) – (914) – – 8 097 6 325Interest income 1 628 4 866 122 3 128 – 32 9 776Interest expense – bank debt (23 755) (9 645) (30 624) (3 672) – (2 360) (70 056)Property operating expenses (2 112) (1 696) (899) – – – (4 707)Investment property 309 489 110 669 87 395 123 725 – – 631 278Assets held for sale 61 450 – 74 559 – – – 136 009Investments designated at fair value 222 118 59 – – – 399Investments in jointly controlled entities 1 552 – 607 – – – 2 159Investment in associates – – – – – 124 507 124 507Loans and receivables 17 208 49 790 84 31 388 – – 98 470Borrowings – bank loans (389 080) (73 191) (159 902) (74 961) – (24 740) (721 874)Liabilities held for sale – – (91 935) – – – (91 935)At 31 August 2011Rental income 3 965 10 656 5 816 6 386 – – 26 823Investment income – – – – – 3 875 3 875Net fair value (loss)/gain on investmentproperty (354) (8 485) (2 298) 510 – – (10 627)Gain/(loss) from financial assetsand liabilities 3 361 519 816 (2 225) – 10 046 12 517Redemption of loans and borrowings 8 – – – – – 8(Loss) / gain from sale of subsidiaries (334) – – – – – (334)Equity accounted loss 173 (2 137) 473 – (2 885) 2 627 (1 749)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)Financial StatementsInvestment property 467 426 82 796 312 657 123 775 – – 986 654Investments designated at fair value 361 592 170 – – – 1 123Investments in jointly controlled entities 823 – 1 784 – – – 2 607Investment in associates – – – – – 104 680 104 680Loans and receivables 29 889 42 804 – 31 387 – – 104 080Borrowings – bank loans (378 793) (139 818) (186 511) (75 778) – (17 344) (798 244)1All hotel income is derived from leases with Redefine Hotel Management Limited.Redefine Properties International Limited Annual Report 201247

Financial Statementsnotes to the conSOLIDated financial statemenTS continued4. Segmental reporting continuedii. Reconciliation of reportable segment profit or lossYear ended31 August2012£’000Year ended31 August2011£’000Rental incomeTotal rental income for reported segments 76 150 26 823Profit or lossInvestment income 3 875Net fair value loss on investment property (126 871) (10 627)Gain from financial assets and liabilities 1 943 12 517Redemption of loans and borrowings 6 080 8(Loss from sale of subsidiaries (2 195) (334)Equity accounted gain/(loss) 6 325 (1 749)Interest income 9 776 8 061Interest expense (70 056) (15 061)Property operating expenses (4 707) (2 368)Total gain per reportable segments (103 555) 21 145Other profit or loss – unallocated amountsOther income 2 028 1 592Gain from financial assets and liabilities 48 480 4 881Administrative expenses (1 788) (899)Investment management and professional fees (9 545) (4 688)Amortisation of intangible assets – (591)Interest income 1 114Interest expense (12 034) (10 251)Debenture interest (18 200) (14 580)Foreign exchange (loss) / gain (580) 9Consolidated loss before tax (95 193) (3 268)5. Gross rental incomeGroupYear ended31 August2012£’000Year ended31 August2011£’000Gross lease payments collected/accrued from third parties 66 750 20 437Gross lease payments collected/accrued from related parties (refer Note 37) 9 400 6 386Gross rental income 76 150 26 823The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:Not later than 1 year 71 472 72 505Later than 1 year not later than 5 years 253 949 263 536Later than 5 years 341 133 389 167666 554 725 2086. Investment incomeGroupYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000CompanyYear ended31 August2011£’000Dividends received from equity securities designated at fairvalue through profit or loss – 3 875 16 886 7 558Total investment income – 3 875 16 886 7 55848 Redefine Properties International LimitedAnnual Report 2012

7. Other incomeGroupCompanyYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000Year ended31 August2011£’000Fee income from related parties (refer Note 37) 677 1 010 111 –Other property income 1 351 582 – –Total other income 2 028 1 592 111 –8. Investment management & professional feesThe following items have been charged in arriving at Net Operating Income:GroupYear ended31 August2012£’000Year ended31 August2011£’000Investment adviser’s fees 6 085 2 431Independent Auditor’s remuneration– for audit 248 179– for tax compliance and advisory work 75 72Reverse acquisition costs – 914Legal fees 593 115Other professional fees 2 446 866Under the Investment Advisory Agreement dated 13 July 2011 (the “IAA”), the Company’s subsidiary, RI PLC, will payto Redefine International Property Management Limited (“RIPML”) an asset management fee of 0.5 per cent on theaggregate gross value of the Group’s assets (including cash) and a commission of 0.75 per cent in respect of sales andacquisitions, or 1 per cent where sub-agent costs are incurred. RIPML will also receive a fee of 3 per cent of the annualrents 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 RI PLC to RIPML, and will be satisfied by the issueof ordinary shares in RI PLC at no cost to RIPML. The number of ordinary shares to be issued in terms of the award will bedetermined by reference to their average middle market price for the 20 working days prior to the final day of the relevantaward period. The amount of any award is calculated as 20 per cent of the amount by which the total return on the OrdinaryShares in RI PLC exceeds 12 per cent for the first award under the contract and 10 per cent for subsequent awards.Redefine International Fund Managers (“RIFM”), RIN also provides certain administrative services to the Company. Theremuneration payable by Redefine International to RIFM for the administrative services rendered by it under the terms ofthe administration agreement is 0.2% per annum of the market capitalisation of RIN on the last trading day of every month.No incentive fee has been accrued for the years ended 31 August 2012 or 31 August 2011 as the performance relatedconditions had not been met.9. Gain/(loss) from financial assets and liabilitiesGroupCompanyYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000Year ended31 August2011£’000Fair value through profit or lossEquity investments – unrealised (141) 10 351 – –Derivative financial instruments – realised – 3 540 – –Derivative financial instruments – unrealised 10 001 (857) – –Financial StatementsFinancial assets carried at amortised costImpairment of loans and receivables (7 917) (517) – –Debenture fair value adjustment (refer Note 27) 1 48 480 4 881 48 480 4 881Movement in fair value of subsidiary (refer Note 23) – – (41 350) (47 012)Net gain/(loss) from financial assets and liabilities 50 423 17 398 7 130 (42 131)1Debentures are adjusted to fair value which represents the net asset value attributable to debenture holders. Debentures have been valued at 34.20pper unit (2011: 46.52p per unit). Further details on the key judgements and estimates in respect of this valuation is provided in Note 2.2.Redefine Properties International Limited Annual Report 201249

Financial Statementsnotes to the conSOLIDated financial statemenTS continued10. Redemption of loans and borrowingsYear ended31 August2012£’000Year ended31 August2011£’000Redemption of loans and borrowings 6 080 8In May 2012, agreement was reached with Aviva Commercial Finance Limited with respect to the loan facility forDelamere Place, Crewe. The outstanding loan balance of £17.15 million in Delamere Place Crewe Limited wasreplaced by Mezzanine Capital Limited and subsequently settled with Aviva for a £11.0 million cash payment.11. Equity accounted profit / (loss)Equity accounted losses consists of the following:Year ended31 August2012£’000Year ended31 August2011£’000Investment in jointly controlled entities (refer Note 21) (1 772) (1 491)Investments in associates (refer Note 22) 8 097 6 068Investments in associates – impairment (refer Note 22) – (6 326)Total equity accounted profits/(loss) 6 325 (1 749)12. Interest incomeThe following table details the interest income earned during the year:GroupCompanyYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000Year ended31 August2011£’000Interest income on bank deposits 251 136 1 –Interest income from related parties (refer Note 37) – 41 – 41Interest income from mezzanine financing 9 526 7 998 – –Total interest income 9 777 8 175 1 4113. Interest expenseThe following table details the interest expense incurred during the period:GroupCompanyYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000Year ended31 August2011£’000Interest expense on secured bank loans (70 802) (16 024) – –Finance lease interest (693) (386) – –Interest expense on other financial liabilities (509) (868) – –Interest expense on mezzanine financing (10 086) (7 991) – –Interest expense to related parties (refer Note 37) – (43) – (43)Total interest expense (82 090) (25 312) – (43)Interest expense on secured bank loans includes £25.93 million in finance costs due to the amortisation of the fairvalue adjustment of the VBG, Gamma and Delta loan facilities arising due to the reverse acquisition of Wichford. Swapinterest expense and the share based payment charge of £768k has also been included in interest expense above.14. TaxationRI PLC and some of RI PLC’s subsidiaries are classified as controlled foreign entities for tax purposes in South Africa.Accordingly RIN is taxed on its proportionate share of RI PLC and these subsidiaries’ net income regardless of thedividend that is in fact distributed by RI PLC.50 Redefine Properties International LimitedAnnual Report 2012

The Company has been structured as a property loan stock company. One of the key characteristics of property loanstock companies is that they do not pay tax on their income, but instead distribute their entire pre-tax income asdebenture interest to their linked unitholders.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. As a propertyloan stock company in South Africa, RIN distributes all of its earnings on the basis that the debenture interest is taxdeductible. The wording of current taxation legislation is such that there is an alternative view. The Board has takenadvice on the matter from its legal advisors and on the basis of the advice received believes that the deduction ofdebenture interest is appropriate. The Board of Directors is satisfied that it has sufficient shareholder funds in theunlikely event that the liability arises.The Group is exposed to the risk of changes to tax legislation in the various countries in which the Group operates. It isalso exposed to different interpretations of tax regulations between the tax authorities and the Group.a) Tax recognised in profit or lossGroupCompanyYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000Year ended31 August2011£’000Current income taxIncome tax in respect of current year 1 950 563 – –Withholding tax 265 174 – –Deferred taxOrigination and reversal of temporary differences 1 155 623 – (5 076)Total income tax expense/(income) 3 370 1 360 – (5 076)No tax was recognised on equity or other comprehensive income during the year (2011: nil).b) Recognised deferred liability and movement during the yearDeferred tax liabilityDeferred tax movement for the year is attributable to the following:Deferred tax liabilityOpening balance – – – –Deferred tax liability acquired – investment properties 1 334 1 616 – –Change in accounting policy – (905) – –Restated deferred tax on investment properties 1 334 711Deferred tax liability recognised on investment properties (55) – – –Deferred tax liability recognised on associates 1 210 623 – –Closing balance 2 489 1 334 – –Financial StatementsIn December 2010, the IASB released amendments to IAS12 effective January 2012. These amendments impact the rateat which deferred tax is recognised, specifically on the fair value movements of the building component of investmentproperty as it establishes a presumption that it will be recovered through disposal and hence will attract deferred tax atthe capital gains tax rate. RIN has elected the early adoption of these amendments and applied them retrospectively asrequired by IAS 8.It is the view of the Board that the adoption of this policy results in more accurate and meaningful information.The effect of the change in the accounting policy is a reduction of the deferred tax balance as stated above, with acorresponding increase in reserves as reflected in the statement of changes in equity.The early adoption had the effect of reducing the 2011 deferred taxation balance with a corresponding increase ofopening 2012 reserves of £0.75 million and an increase in non-controlling interest of £0.16 million.Redefine Properties International Limited Annual Report 201251

Financial Statementsnotes to the conSOLIDated financial statemenTS continued14. Taxation continuedc) Factors affecting the tax charge in the yearAs the Group is taxable as a CFC in South Africa, the Group regards South Africa’s tax rate of 28% (2011: 28%), aspayable under the South Africa’s CFC Scheme, to be most relevant tax rate for the reconciliation of the theoretical taxcharge on accounting profits to the tax charge for the year shown through the profit or loss.The Group invests in UK properties held in companies registered in the Isle of Man or in the British Virgin Islands. Thisincome is taxable at the UK’s income tax rate of 20% (2011: 20%), as payable under the UK’s Non Resident Landlord Scheme.The Group invests in Swiss property and therefore is liable to cantonal and federal taxes in Switzerland. The ratesdepend largely on the canton in which the property is situated and the property value. The effective rate of tax rangesfrom 22% to 23.23%.The Group also invests in German properties held either in corporates or partnerships. The effective rate of tax rangesfrom 15.8% to 25%.The Group’s investment in the Australian resident Cromwell Group is held through an Irish company. Unfrankeddividends received from the Cromwell Group were subject to an Australian withholding tax of 7.5%.The tax charge is higher (lower in 2010) than the 28% payable under South Africa’s CFC Scheme. The differences areexplained below:GroupYear ended31 August2012£’000Year ended31 August2011£’000Year ended31 August2012£’000CompanyYear ended31 August2011£’000(Loss)/profit before tax (95 193) (3 268) 5 202 (48 071)(Loss)/profit before tax at 28% (26 654) (915) 1 457 (13 460)Effect of:– exempt property revaluation of investment property 35 522 2 975 –– profits subject to tax at overseas tax rates (2 505) (670) –– gain/(loss) in financial assets and liabilities (15 229) (4 904) 330 6 721– income not taxable in South Africa – – (4 748) (2 462)– expenses not deductible in South Africa 3 621 4 125 3 621 4 125– losses in overseas jurisdictions 9 350 575 – –– withholding tax 265 174 – –Total tax charge/(credit) for the year 3 370 1 360 – (5 076)From the reconciliation above, the effective tax rate of the Group was 3.54% (2011: 41.62%). The effective tax rate for theCompany was nil (2011: 10.56%).d) Unrecognised deferred tax assets and liabilitiesDeferred tax has not been recognised in respect of the following items:Deferred tax assetFair value adjustment – investment property 45 437 31 691 – –Fair value adjustment – derivatives 2 061 4 695 – –Fair value adjustment – investment in subsidiary – – 19 666 13 163Deferred tax asset not recognized 47 498 36 386 19 666 13 163Deferred tax liabilityFair value adjustment – investment property – 146 – –Fair value adjustment – borrowings 3 752 6 081 – –Fair value adjustment – debentures – – 14 686 1 367Deferred tax liability not recognized 3 752 6 227 14 686 1 367The deferred tax in the Company accounts relates to the movement in the fair value of the investment in RI PLC(refer Note 23).The deferred tax liability noted above has not been recognised due to existence of deferred tax assets which can beutilised against the deferred tax liability. The remaining deferred tax assets have not been recognised because it is notprobable that future taxable profits will be available against which the Group can utilise the benefits.The fair value adjustment – borrowings relates to the fair value adjustments which occurred on the acquisition ofWichford’s debt facilities in accordance with IFRS3.52 Redefine Properties International LimitedAnnual Report 2012

15. Debenture interest and earnings available for distributionGroupYear ended31 August2012£’000Year ended31 August2011£’000Calculation of debenture interestNet operating income 62 138 24 335Operating income from equity accounted entities 12 314 7 183Straightline rental income accrual 496 169Non-distributable expenses (including reverse acquisition costs in 2011) 214 1 277Gains on redemption of loans and borrowings – 840Interest income 252 8 175Interest expense (44 118) (23 791)Foreign exchange loss (278) (283)Taxation (2 216) (291)Non-distributable income from VBG (1 916) –Effect of reverse acquisition – 565Earnings available for distribution 26 886 18 179Attributable to non-controlling interest (8 686) (3 599)Earnings available for distribution attributable to linked unitholders 18 200 14 580Interim debenture interest (8 684) (6 799)Earnings available for distribution to linked unitholders at 31 August 9 516 7 781Earnings available for distribution per linked unit (pence) 4.38 4.11Interim distribution per linked unit (pence) ** 2.09 2.02Year end distribution per linked unit (pence)** 2.29 2.09** Calculated based on linked units in issue at the date of distribution and at the year end date respectively.The Board has declared a distribution for the year ended 31 August 2012 of 2.29 pence per linked unit. The distributionwas paid to linked unitholders on 3 December 2012. An interim distribution of 2.09 pence per linked unit was paid tolinked unitholders on 27 May 2012.16. Basic (loss) / earnings and headline earnings per linked unitYear ended31 August2012£’000Year ended31 August2011£’000(Loss) / profit attributable to shareholders (before debenture interest) (41 054) 10 968Financial StatementsWeighted average number of ordinary shares 399 690 345 686Number of ordinary shares– In issue 415 507 372 306– Weighted average 399 690 345 686Number of linked units– In issue 415 507 372 306– Weighted average 399 690 345 686Basic (loss) / earnings per linked unit (pence) (10.27) 3.17Headline earnings per linked unit (pence) 7.23 6.43Basic profit / (loss) is reconciled to headline earnings as follows:(Loss) / profit attributable to shareholders (before debenture interest) (41 054) 10 968Loss for the year attributable to linked unitholders (59 254) (3 612)Debenture interest 18 200 14 580Impairment of intangible assets – 396Impairment of loans – 298Changes in fair value of investment property 116 869 15 154Loss on disposal of subsidiaries 1 574 –Fair value adjustment – debentures (48 480) (4 881)Headline earnings attributable to linked unitholders 28 909 21 935Redefine Properties International Limited Annual Report 201253

Financial Statementsnotes to the conSOLIDated financial statemenTS continued17. Investment propertyThe cost of properties as at 31 August 2012 was £1.07 billion (31 August 2011: £1.19 billion). The carrying amount ofinvestment property, is the fair value of the property as determined by a registered independent appraiser having anappropriate recognised professional qualification and recent experience in the location and category of the propertybeing valued (together referred to as “valuers”).The fair value of each of the properties has been assessed by the valuers in accordance with the Appraisal andValuation Standards of the Royal Institution of Chartered Surveyors (“Red Book”). In particular, the Market Value hasbeen assessed in accordance with PS 3.2. Under these provisions, the term “Market Value” means “the estimatedamount for which a property should exchange on the date of valuation between a willing buyer and a willing seller inan arms-length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently andwithout compulsion”.In undertaking the valuations on the basis of Market Value, the valuers have applied the interpretative commentarywhich has been settled by the International Valuation Standards Committee and which is included in PS 3.2. The RICSconsiders that the application of the Market Value definition provides the same result as Open Market Value, a basis ofvalue 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 anycosts associated with disposals incurred by the owner. No allowance has been made to reflect any liability to repay anygovernment 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 onarm’s-length terms and an assessment of market sentiment. The aggregate of the net annual rents receivable fromthe properties and, where relevant, associated costs, have been valued at an average yield of 8% which reflect the risksinherent in the net cash flows. Valuations reflect, where appropriate, the type of tenants actually in occupation or likelyto be in occupation after letting of vacant accommodation and the market’s perception of their creditworthiness and theremaining useful life of the property.In terms of IAS 40 Investment property: Paragraph 14, judgement is needed to determine whether a property qualifiesas an investment property. The Group has developed criteria so that it can exercise its judgement consistently inrecognising investment properties. These include inter alia; property held for long-term capital appreciation, propertyowned (or under finance leases) and leased out under one or more operating leases; and property that is beingconstructed or developed for future use as an investment property. The recognition and classification of property asinvestment property principally assures that the Group does not retain significant exposure to the variation in cashflows arising from the underlying operations of properties. Investment property comprises a number of commercialand retail properties that are leased to third parties. . All investment properties are income generating, as are any ofthe investment properties which are earmarked for development.The hotel properties are held for capital appreciation and to earn rental income. The properties have been let toRedefine Hotel Management Limited (“RIHML”) for a fixed rent which is subject to annual review. RHML operates thehotel business on its own account and is exposed to the fluctuations in the underlying trading performance of thehotels. It is responsible for the day to day upkeep of the properties and retains the key decision making responsibilityfor the business. Aside from the payment of rental income to Redefine International there are limited or no transactionsbetween the two entities. As a result, in line with guidance in IAS 40, Redefine International classifies the hotelproperties as investment properties.54 Redefine Properties International LimitedAnnual Report 2012

Property operating expenses in the consolidated income statement relate solely to income generating properties.31 August2012£’000Group31 August2011£’000Opening balance on 1 September 986 654 227 675Properties acquired during the year 349 197 424Capitalised expenditure 3 893 13 659Disposals (44 626) (6 543)Impact of reverse acquisition (refer Note 41) – 546 900Impact of acquisition of subsidiaries – 2 381Foreign exchange movement in foreign operations (17 081) 6 073Recognition of finance leases – 9 712Net fair value losses on investment property (127 230) (10 627)Reclassification to assets held-for-sale (refer Note 20) (170 681) –Closing balance on 31 August 631 278 986 654AcquisitionsTrito Petersfield Limited 349 –Ciref Kwik-fit Stafford Limited – 1 456Ciref Kwik-fit Stockport Limited – 925349 2 381DisposalsBanstead Property Holdings Limited (1 015) –Ciref Coventry Limited (37 000) –Ciref Reigate Limited (3 150) –Finance leases (3 461) –Ciref Streatham Limited – (6 543)(44 626) 6 543A reconciliation of investment property valuations to the consolidated statement of financial position are shown below:Financial StatementsGroup31 August2012£’00031 August2011£’000Investment property at market value as determined by external valuers 757 468 956 167Freehold 580 203 714 430Freehold and long leasehold 15 350 17 900Leasehold 161 915 223 837Investment property at directors’ valuation – 17 150Adjustments for items presented separately on the consolidated statement of financial position:– Add minimum payment under head leases separately included under borrowings 9 819 13 337– Investment property classified as held for sale (refer Note 20) (136 009) –Consolidated statement of financial position carrying value of investment property 631 278 986 654Redefine Properties International Limited Annual Report 201255

Financial Statementsnotes to the conSOLIDated financial statemenTS continued18. Long term receivables31 August2012£’000Group31 August2011£’000Amounts due from related parties (refer Note 37) 158 116Amounts due from Mezzanine Capital Limited 98 312 103 500Loans 106 689 104 877Impairment (8 377) (1 377)Security deposits with banks – 46498 470 104 080The loans from jointly controlled entities are unsecured, bear interest at rates between 0% and 7% and are repayableon demand, but the expectation is that the term will be greater than 12 months.The loans from Mezzanine Capital Limited are secured, bear interest at rates between 10% and 12% and are repayablebetween 1 and 3 years.Included in amounts due from Mezzanine Capital Limited is rolled up interest in respect of the year of £7.6 million(2011: £6.0 million).19. Investments designated at fair valueGroup31 August2012£’00031 August2011£’000Derivative financial instruments (refer Note 29) 178 761Other investments 221 362Closing balance 399 1 12320. Assets and liabilities held for saleDiscussions are on-going regarding the sale of a number of assets with disposals expected to be finalised within thenext 12 months. As a result the assets have been reclassified to held for sale in the period.In addition the Group is committed to a sale plan involving the loss of control of a number of subsidiaries and as a resultall the assets and liabilities of those subsidiaries are classified as held for sale.Group31 August2012£’00031 August2011£’000Opening balance – –Transfers in (refer Note 17) 170 681 –Disposals* (29 378) –Foreign exchange movement in foreign operations (5 653) –Net fair value gains on assets held for sale 359 –Total 136 009 –*Halle was disposed of during the year, see Note 39 for further details.Assets held for sale during the year include the following:Group31 August2012£’00031 August2011£’000VBG 74 559 –Delta 61 450 –Total 136 009 –56 Redefine Properties International LimitedAnnual Report 2012

Liabilities held for sale31 August2012£’000Group31 August2011£’000Opening balance – –Transfers in from borrowings (refer Note 28) 91 935 –Total 91 935 –As the Group is committed to the sale of the VGB1 and VGB2 subsidiaries the related loan liabilities totalling £91.94million have been included in liabilities held for sale.21. Investments in jointly controlled entitiesThe Group’s investments in jointly controlled entities currently consist of the following:(i)(ii)(iii)(iv)(v)50% in Pearl House Swansea Limited, a jointly controlled entity with Sandgate Properties Limited, which owns along leasehold retail interest in Swansea, Wales.50% in Swansea Estates Limited, a jointly controlled entity with Sandgate Properties Limited, which owns a longleasehold retail interest in Swansea, Wales.50% in Ciref NEPI Holdings Limited, a joint venture with New Europe Property Investments, which ultimately ownsproperty in Germany, Western Europe.50% in 26 The Esplanade No 1 Limited, a joint venture with Rimstone Limited which ultimately owns an officebuilding in St. Helier, Jersey.50% in Ciref Crawley Limited, a joint venture with Graymont Limited which owns 3 blocks of offices in Crawley, Surrey.(vi)50% in Redefine Wigan Limited, a jointly controlled entity with Sandgate Properties Limited, which ultimatelyowns a shopping centre in Wigan, Greater Manchester.(vii) 50% in Ciref Coventry Limited, a jointly controlled entity with Sandgate Properties Limited, which ultimatelyowns the West Orchards Shopping Centre in Coventry.(viii) a 50.5% interest in RI Menora German Holdings S.a.r.l, a joint venture with Menora Mivtachim which ultimatelyowns a property in Waldkraiburg, Germany.Financial StatementsGroup31 August2012£’00031 August2011£’000Opening balance 2 607 2 041Increase in investment 1 641 2 137Equity accounted loss (1 772) (1 491)Change in fair value due to foreign currency translation (317) (80)Closing balance 2 159 2 607Redefine Properties International Limited Annual Report 201257

Financial Statementsnotes to the conSOLIDated financial statemenTS continued21. Investments in jointly controlled entities continuedSummarised financial informationThe summarised financial information derived from the gross statements of financial position of the jointly controlledentities are set out below:Group31 August2012£’00031 August2011£’000Investment property 185 189 156 193Current assets 8 601 6 213Total assets 193 790 162 406Capital and reserves (19 119) (6 236)Long term liabilities 199 482 159 212Current liabilities 13 427 9 430Total equity and liabilities 193 790 162 406Revenue 19 097 12 996Net loss (12 880) (2 306)Investment in jointly controlled entities includes investments at nil value in the balance carried forward on1 September 2011. These include a 50% holding in Redefine Wigan Limited which owns Grand Arcade Wigan Limitedand Standishgate Wigan Limited and which was acquired out of administration in September 2010 as part of theGroup’s debt restructuring with Aviva.Jointly controlled entities also include CIREF Coventry Limited. The Group disposed of a 31.25% shareholding in thiscompany effective 31 August 2012, resulting in a loss of control for the Group and the investment being re-classified from an81.25% held subsidiary to a 50% jointly controlled entity as at that date. At the date control was lost, the fair value of Group’sremaining 50% investment was deemed to be nil as the liabilities of the jointly controlled entity exceeded its assets.Loan facilities with a nominal value of £142 million to Redefine Wigan Limited and facilities with a nominal value of£55.97 million to Ciref Coventry Limited have been cross collateralised against properties held directly by the Group.The loan liabilities of Redefine Wigan Limited and Ciref Coventry Limited are in excess of the value of the propertiesultimately held by these companies. As a result a provision has been created in the current year based on the estimatedpotential future cash outflows for the Group related to this cross collateralisation. See Note 30 for further details.22. Investments in associatesGroup31 August2012£’00031 August2011£’000Opening balance 104 680 18 923Investment at cost 24 222 16 449Reclassified from investments designated at fair value – 85 128Impact of foreign currency translation (1 229) 4 963Equity accounted profits 8 097 6 068Distribution received from associates (11 263) (5 986)Impairment of investment – (6 326)Cancellation of investment at fair value – (14 539)Closing balance 124 507 104 680With effect from 4 March 2011 the Group’s shareholding in Cromwell was reclassified from investments designated atfair value to an investment in an associate.The Company further increased its holding in Cromwell through the AUD 35 million (£22.6 million), participation in theCromwell entitlement offer in December 2011. Additional acquisitions of Cromwell shares over the period totalling£1.6 million increased the Company’s interest to 23.08% from 22.36% as at 31 August 2011.The Company’s holding in Cromwell was diluted post year end to 22.08% following further share placements andfollowing the merger of Cromwell with the Cromwell Property Fund which was announced on 3 October 2012.58 Redefine Properties International LimitedAnnual Report 2012

The closing price of Cromwell on 31 August 2012 was 75 Australian cents per security and the total fair value of sharesheld is AUD 202.9 million (£132.1 million).During the year ended 31 August 2012, the Group received AUD 17 266 471 (31 August 2011: AUD 7 062 222) as adistribution, before withholding tax of AUD 400 279 (31 August 2011: AUD 196,730), resulting in a net distribution ofAUD 16 866 192 (31 August 2011: AUD 6 865 492). The GBP equivalent of the above gross distribution is £11.26 million(31 August 2011: £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.The comparative numbers, including distributions received from associates include RIHL’s previous shareholding of230 772 000 (21.73%) in Wichford PLC which following the reverse acquisition was deemed to be disposed of.Summarised financial informationThe summarised financial information derived from the gross statements of financial position of the associates, is setout below. The financial information represents those as reported by Cromwell in their June 2012 and 2011 auditedfinancial statements.Group30 June2012£’00030 June2011£’000Investment property 1 122 656 1 444 850Other non-current assets 19 982 35 126Current assets 53 717 59 452Total assets 1 196 355 1 539 428Capital and reserves 513 665 705 160Long term liabilities 630 799 780 865Current liabilities 51 891 53 403Total equity and liabilities 1 196 355 1 539 428Revenue 121 681 181 976Net profit 15 024 88 10223. Investment in subsidiariesCompany31 August2012£’00031 August2010£’000Opening balance 152 162 126 047Shares at cost 13 321 73 127Fair value adjustment (41 350) (47 012)Closing balance 124 133 152 162Financial StatementsThe total cost of the investment is £194.37 million (2011: £181.22 million).Redefine Properties International Limited Annual Report 201259

Financial Statementsnotes to the conSOLIDated financial statemenTS continued24. Trade and other receivables31 August2012£’000Group31 August2011£’00031 August2012£’000Company31 August2011£’000Interest receivable 494 299 – –Deposits and prepayments (net of a provision of £407k, 2011: £73k) 1 298 2 253 – –Service charges recoverable from tenants 1 719 1 787 – –Amounts receivable from related parties (refer Note 37) 4 070 4 324 35 –Net receivables – Mezzanine Capital Limited 5 989 5 947 – –Gross receivables 6 906 5 947Impairment (917) –VAT recoverable 298 578 – –Consideration outstanding on disposed subsidiaries 5 219 5 374 – –Sundry receivables 4 342 3 154 70 –23 429 23 716 105 –Short term loans to jointly controlled entities are unsecured, bear no interest and are expected to mature within12 months. All other trade receivables are current, with no receivables past due.25. Cash at bankGroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Cash and cash equivalents consist of the following:Unrestricted cash balances 6 127 40 384 424 447Bank balances 6 118 36 189 424 447Call deposits 9 4 195 – –Restricted cash balances 12 023 11 431 – –18 150 51 815 424 447As at 31 August 2012 there was £12.0 million (31 August 2011:£11.43 million) of the cash at bank to which the Group didnot have instant access. The principle reason for this is that rents received are primarily held in locked bank accountsas interest and other related expenses are paid from these monies on the interest payment dates. Also included in therestricted cash balance is £1.6 million held with Aviva with regards to development in Birchwood Warrington Limited26. Share capital and reservesShare capital and share premiumGroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Authorised1 000 000 000 ordinary shares of R0.001 each(2011: 1 000 000 000 ordinary shares of R0.001 each) 87 87 87 87Issued415 507 157 ordinary shares of R0.001 each(2011: 372 305 640 ordinary shares of R0.001 each) 36 33 36 3336 33 36 33The unissued shares are under the control of the Directors. This authority remains in force until the next AGM. Theissue of each share is irrevocably linked to one debenture, together comprising one linked unit (refer to Note 27).Currency translation reserveThe translation reserve comprises all foreign currency differences arising from the translation of the financialstatements of foreign operations.60 Redefine Properties International LimitedAnnual Report 2012

Other reservesOther reserves are non distributable reserves related to the movement in holdings of the underlying subsidiary.27. Debenture capitalGroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Authorised1,000,000,000 ordinary debentures of R5 each(2011: 1,000,000,000 ordinary debentures of R5 each) 437 484 437 484 437 484 437 484Issued415,507,157 ordinary debentures of R5 each(2011: 372,305,640 ordinary debentures of R5 each) 194 639 176 919 194 639 176 919194 639 176 919 194 639 176 919Debenture capitalOpening balance 173 199 76 065 173 199 76 065Debentures issued at par value 17 631 90 047 17 631 90 047(Discount)/premium on debentures issued (252) 11 968 (252) 11 968Fair value adjustment (48 480) (4 881) (48 480) (4 881)Closing balance 142 098 173 199 142 098 173 199On 9 September 2011, the Company issued 8 100 000 linked units at R5.75 each (GBP equivalent 49.76p per linked unit) fora total consideration of £4.03 million. The consideration includes 8 100 000 shares issued at par value of R0.001 each.On 21 September 2011, the Company issued 2 000 000 linked units at R5.75 each (GBP equivalent 46.81p per linked unit) fora total consideration of £0.94 million. The consideration includes 2 000 000 shares issued at par value of R0.001 each.On 17 November 2011, the Company issued 6 200 000 linked units at R5.60 each (GBP equivalent 43.41p per linked unit) fora total consideration of £2.69 million. The consideration includes 6 200 000 shares issued at par value of R0.001 each.On 25 November 2011, the Company issued 939 000 linked units at R5.34 each (GBP equivalent 40.53p per linked unit) for atotal consideration of £0.38 million. The consideration includes 939 000 shares issued at par value of R0.001 each.On 31 January 2012, the Company issued 15 962 517 linked units at R4.90 each (GBP equivalent 40.87p per linked unit) for atotal consideration of £6.52 million. The consideration includes 15 962 517 shares issued at par value of R0.001 each.Financial StatementsOn 11 May 2012, the Company issued 10 000 000 linked units at R4.95 each (GBP equivalent 38.57p per linked unit) for atotal consideration of £3.86 million. The consideration includes 10 000 000 shares issued at par value of R0.001 each.(a)(b)(c)(d)The debentures are irrevocably linked to the issued ordinary shares of the Company and can only be sold togetherwith the relevant linked shares.The debentures are unsecured and are subordinated in favour of the Company’s other creditors.Interest accrues to the debenture holders twice yearly. The interest entitlement on each debenture will inaggregate be 100% of the Group’s net operating income for that distribution period. The net operating income asdefined in the debenture Trust Deed excludes capital items and the effects of straight-lining of leases.In terms of the Trust Deed, the debentures are redeemable by special resolution at the instance of the debentureholders, within 90 days after 31 August 2040 or every tenth anniversary thereafter. Full details and the terms andconditions of the debentures are set out in the Trust Deed which is available for inspection.(e) Debentures are adjusted to fair value. The valuation methodology is explained further in Note 2.2.Redefine Properties International Limited Annual Report 201261

Financial Statementsnotes to the conSOLIDated financial statemenTS continued28. BorrowingsNon-current31 August2012£’000Group31 August2011£’00031 August2012£’000Company31 August2011£’000Bank loans 345 227 800 061 – –Less: deferred finance costs (1 926) (2 440) – –Finance leases 9 814 13 337 – –Total non-current borrowings 353 115 810 958 – –CurrentBank loans 401 330 117 792 – –Less: deferred finance costs (875) (751) – –Total 400 455 117 041 – –Liabilities held for sale (secured loans) (refer Note 20) 91 935 – – –Total borrowings 845 505 927 999 – –a) LoansThis note provides information about the contractual terms of the Group’s loans and borrowings, which are measuredat amortised cost.Secured borrowingsThe terms and conditions of outstanding loans are as follows:Group 2012 2011Property Amortising LenderGamma No WindermereVIII CMBSDelta No WindermereXI CMBSRedefine HotelHoldings LimitedLoanInterestrateLIBOR +0.75%LIBOR +0.75%Yes Aareal LIBOR +2.45%VBG1***** Yes Talisman 3 EURIBOR +1.1%VBG2***** Yes Talisman 4 EURIBOR +1.1%Zeta No Lloyds TSB LIBOR +1.15%St George’sHarrow LimitedRedefine AustralianInvestments LimitedBirchwoodWarringtonLimited***YesLandesbankBerlinHague Yes SNSPropertyFinanceByron Place SeahamLimited***Ciref Berlin 1LimitedKalihora HoldingsLimitedPrinces StreetInvestments LimitedGibson PropertyHoldings LimitedITB HerzogenrathB.V.Newington HouseLimitedLIBOR +2.5%MaturityCurrency dateGBP October2012GBP October2012GBP November2015EUR January2012No Investec BBSY + 4% AUD February2013No Aviva 6.1%* GBP September2035EURIBOR +2.3%Yes Aviva 6.44%* GBP September2031Yes RBS EURIBOR +1.2%Yes UBS LIBOR +1.25%Yes HSBC LIBOR +2.50%NominalvalueCarryingamountNominalvalueCarryingamount199 678 199 678 199 678 197 791114 608 114 608 114 608 113 75974 961 74 961 75 778 75 77850 585 50 585 58 063 37 984EUR April 2011 41 350 41 350 46 770 45 882GBP May 2013 46 000 46 000 46 000 46 000GBP April 2016 41 170 41 170 41 630 41 63024 740 24 740 17 344 17 34429 150 16 856 29 150 16 629EUR July 2014 17 194 15 576 19 309 16 879EUR September2014CHF October2018GBP September201616 831 15 165 16 907 15 18214 262 14 262 16 242 16 24211 820 11 820 13 522 13 52211 590 11 590 – –Yes Aviva 6.37%* GBP June 2029 10 900 10 341 11 053 10 332Yes Bayern LB EURIBOR +1.3%Yes AIB LIBOR +2.5%EUR October2017GBP September20136 989 6 989 6 593 6 5936 304 6 304 6 509 6 50962 Redefine Properties International LimitedAnnual Report 2012

Group 2012 2011Property Amortising LenderLoanInterestrateITB Schwandorf B.V. Yes Bayern LB EURIBOR +1.3%CEL PortfolioLimited & Co. KGInkstoneGrundstucksverwaltungLimited & Co.KGInkstoneZwei GrundstucksverwaltungLimited & Co.KGCiref German PortfolioLimitedCurrencyMaturitydateEUR October2017Yes Valovis 4.95%* EUR November2014Yes Barclays 5.75%* EUR December2012Yes Barclays 5.91%* EUR December2012Yes RBS EURIBOR +1.2%Halle No WindermereXIV CMBSDelamere PlaceCrewe LimitedWest OrchardsCoventry Limited***EURIBOR +0.85%NominalvalueCarryingamountNominalvalueCarryingamount5 781 5 781 7 971 7 9713 851 3 843 4 427 4 4183 173 3 173 3 603 3 9213 482 3 482 3 986 3 986EUR September 3 033 3 033 3 447 3 4472014EUR April 2014 – – 32 849 25 975No Aviva 6.49%* GBP November– – 17 150 17 1202011Yes Aviva 6.29%* GBP July 2027 – – 55 970 49 227Ciref Reigate Limited No RBS LIBOR +2.5%Ciref Kwik-fitStafford LimitedCiref Kwik-fitStockport LimitedNo KBC LIBOR +2.5%No KBC LIBOR +2.5%GBP June 2015 – – 2 500 2 500GBP April 2012 – – 718 718GBP April 2012 – – 463 463Total bank loans 737 452 721 307 852 240 797 802Mezzanine Capital Limited**** 7.10% – 10%* GBP 2012 108 825 108 825 107 847 107 847Coronation Capital Limited** 4%* GBP 2012 7 768 7 768 10 910 10 910Loans secured by cash deposits 7.00%* GBP 2011 – – 650 650CEL Portfolio Limited & Co. KG 0%* GBP 2029 617 592 689 644Total secured loans 854 662 838 492 972 336 917 853All bank loans are secured over investment property, and bear interest at the specified interest rates.* Fixed rates** Loan secured over Redefine Australian Investments Limited which holds the Group’s shares in Cromwell.*** These facilities are cross collateralised against each other and against facilities to Redefine Wigan Limited. See Note 40 for details.**** Loans are extendable at the request of the Company.***** The Group has committed to the sale of the VGB1 and VGB2 subsidiaries and so the related loan liabilities totalling £91.94 million have beenincluded in liabilities held for sale, see Note 20 for details.There have been a number of covenant breaches within the Group during the year. Material covenants under discussionor subject to waivers are summarised below:Financial StatementsFacility Lender MaturityPrincipal£’000ICR covenant%ICR ratio%LTV covenant%LTV ratio%VBG1 Talisman 3 Jan–12 50 585 120 229 n/a n/aVBG2 Talisman 4 Apr–11 41 350 115 343 n/a n/aRedefine Properties International Limited Annual Report 201263

Financial Statementsnotes to the conSOLIDated financial statemenTS continued28. Borrowings continueda) Loans continuedSecured borrowings continuedVBG 1 and VBG 2The VBG1 facility matured on 15 January 2010 and was subsequently extended to 15 January 2012. The VBG2 facilitymatured on 21 April 2011. Both facilities were not repaid on the original or extended maturity dates and were furtherextended to April 2012. Following the extended standstill period expiry, the Group announced on 3 August 2012, the agreedrestructuring of the VBG holding companies, sale of the VBG assets and restructuring/repayment of the related debt. Therestructuring was finalised post year end with the loans repaid in October 2012. Please see Note 43 for further details.GroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Non-current liabilitiesSecured loans 345 227 800 061 – –Total non-current loans and borrowings 345 227 800 061 – –The maturity of non-current borrowings is as follows:Between one year and five years 282 969 685 581 – –More than five years 62 258 114 480 – –345 227 800 061 – –Current liabilitiesSecured loans 401 330 117 792 – –Liabilities held for sale (refer Note 20) 91 935 – – –Total current loans and borrowings 493 265 117 792 – –Total loans and borrowings 838 492 917 853 – –Exposure to credit, interest rate and currency risks arise in the normal course of the Group’s business. Derivativefinancial instruments are used to reduce exposure to fluctuations in interest rates. Refer Note 34 for further details.b) Finance LeasesObligations under finance leases at the reporting dates are analysed as follows:Group31 August2012£’00031 August2011£’000Gross finance leases liabilities repayable:Not later than 1 year 460 680Later than 1 year not later than 5 years 1 840 2 720Later than 5 years 32 354 48 34434 654 51 744Less: finance charges allocated to future periods (24 840) (38 407)Present value of minimum lease payments 9 814 13 337Present value of finance lease liabilities repayable:Not later than 1 year 313 511Later than 1 year not later than 5 years 1 124 1 821Later than 5 years 8 377 11 005Present value of minimum lease payments 9 814 13 33764 Redefine Properties International LimitedAnnual Report 2012

29. DerivativesThe Group enters into interest rate swaps and interest rate cap agreements. The purpose is to manage the interest raterisks 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 twocategories, 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 aredetailed in b) below.It is the Group’s policy that no economic trading in derivatives shall be undertaken.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 employedinterest rate swaps to eliminate future exposure to interest rate fluctuations as well as being charged fixed rate intereston 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 Groupentity as a counter-party, instead the lender is the counter-party with the commercial banking entity providing theinterest rate swap. These arise where the loan agreements call for interest rate swaps to be taken out to allow a fixedinterest charge to be made to the borrowing subsidiaries and these borrowers have given indemnities to the lenders inrespect to these interest rate swaps.The interest rate swaps for the Delta and Gamma facilities, from which the Group benefits by both eliminating anyinterest rate fluctuations in the market over the course of the facilities and also from any benefit (or cost) of closingthese 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 onthese 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 valueNominal value hedgedFacility Effective date Maturity date Swap rate2012£’0002011£’0002012£’0002011£’000Gamma 23/05/2005 20/10/2012 4.77% (921) (8 426) 199 678 199 678Delta 21/07/2006 15/10/2012 4.95% (557) (5 062) 114 608 114 608Halle* 19/02/2007 22/04/2014 4.19% – (2 325) – 32 849(1 478) (15 813) 314 286 347 135Financial Statements* Justizzentrum Halle mbh & Co. KG was disposed of effective 29 June 2012.Redefine Properties International Limited Annual Report 201265

Financial Statementsnotes to the conSOLIDated financial statemenTS continued29. Derivatives continuedii) Borrower level interest rate swap agreementsBorrower level interest rate swap agreements are those that have a Group company as the counter-party to thecommercial bank providing the interest rate swap. As a result of the use of interest rate swaps, the fixed rate profileof the Group was:Fair valueNominal value hedgedFacility Effective date Maturity date Swap rate2012£’0002011£’0002012£’0002011£’000SubsidiariesCiref Reigate Limited 23/09/2010 30/06/2015 2.03% – (68) – 2 500NewingtonHouse Limited 03/09/2010 19/09/2013 1.54% (62) (82) 6 304 6 509Princes StreetInvestments Limited 30/09/2011 30/09/2016 1.69% (422) – 11 590 –Ciref Berlin 1 Limited 05/06/2007 15/04/2014 4.61% (534) (735) 7 599 8 591Ciref Berlin 1 Limited 31/07/2007 15/04/2014 4.20% (427) (569) 6 745 7 681Ciref GermanPortfolio Limited 31/07/2007 15/04/2014 4.20% (192) (256) 3 061 3 452Redefine HotelHoldings Limited 30/11/2010 30/11/2015 2.45% (3 278) (2 105) 67 695 68 145Redefine HotelHoldings Limited 30/06/2011 30/11/2015 2.32% (409) (290) 7 599 7 633Redefine InternationalHoldings Limited 04/03/2011 04/03/2013 5.45% (244) (305) 16 733 16 293Hague 01/08/2008 01/08/2014 4.89% (1 569) (1 751) 17 193 19 309Zeta 20/07/2010 09/05/2013 2.73% (677) (1 141) 46 000 46 000Matterhorn Brig SARL 30/01/2012 08/10/2018 0.73% (103) – 3 794 –Matterhorn Vich SARl 30/01/2012 08/10/2018 0.73% (228) – 8 265 –(8 145) (7 302) 202 578 186 113Held in jointly controlled entitiesCiref Jersey Limited 31/07/2007 30/07/2027 5.48% (7 484) (5 532) 18 500 18 500Ciref Jersey Limited 30/01/2008 30/07/2027 4.80% (503) (371) 1 800 1 800Premium PortfolioLimited & Co. KG 31/03/2008 31/12/2014 4.23% (536) (435) 4 918 5 544Premium PortfolioLimited & Co. KG 31/03/2008 31/12/2014 4.13% (1 175) (1 486) 16 129 18 182Churchill Court Limited 10/04/2008 10/04/2018 5.08% (1 620) (1 554) 9 487 9 863(11 318) (9 378) 50 834 53 889b) 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 atthe same time protecting the Group against any significant increases in these interest rates. The current interest ratecap agreements are detailed below:Fair valueNominal value hedgedFacility Effective date Maturity date Cap rate2012£’0002011£’0002012£’0002011£’000VBG1 15/07/2010 15/01/2012 2.50% – – – 58 063St George’sHarrow Limited 27/04/2011 27/04/2016 2.85% 118 591 41 400 41 630ITB Herzogenrath B.V. 31/05/2011 31/05/2017 4.50% 41 93 6 989 6 593ITB Schwandorf B.V. 31/05/2011 31/05/2017 4.50% 19 77 5 781 7 971178 761 54 170 114 25766 Redefine Properties International LimitedAnnual Report 2012

c) Summary of fair value of interest rate swaps and interest rate caps2012£’0002011£’000Fair value of lender level interest rate swaps (1 478) (15 813)Fair value of borrower level interest rate swaps (8 145) (7 302)(9 623) (23 115)Fair value of interest rate cap agreements* 178 761Fair value of the Group’s derivative instruments (9 445) (22 354)*Interest rate cap assets are included in investments designated at fair value (refer Note 19).30. Provision for liabilities and commitments31 August2012£’00031 August2010£’000Opening balance – –Increase in provisions 12 079 –Closing balance 12 079 –External loan facilities to the jointly controlled entities Redefine Wigan Limited and Ciref Coventry Limited, which have anominal value of £197.97 million are cross collateralised against properties held directly by the Group. These external loanliabilities are in excess of the value of the properties held by the jointly controlled entities. A provision has been created inthe current year based on the estimated potential future cash outflows for the Group related to this cross collateralisation.Ciref Coventry Limited was sold during the year. As the acquirer may benefit from the cross collateralisation ofthe Ciref Coventry loan facilities, the provision was considered in calculating the loss on sale of the subsidiary, seeNote 39 for further details.31. Trade and other payablesGroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Rent received in advance 2 789 3 274 – –Trade creditors 40 4 246 – –Accrued interest 5 546 6 007 – –Short-term loans from jointly controlled entities 16 16 – –Amount owing to related parties (refer to Note 37) 2 467 4 842 107 521Amount owing to Mezzanine Capital Limited 6 574 6 019 – –Amounts payable to stock broker – 3 372 – 3 372VAT payable 1 863 2 306 – –Income tax payable 1 988 586 – –Accrued debenture interest 9 515 7 781 9 515 7 781Other accruals 4 153 8 567 1 –Accrued reverse acquisition costs – 2 235 – –34 951 49 251 9 623 11 674Financial StatementsShort term loans from jointly controlled entities are unsecured, bear no interest and are expected to mature within 12 months.Redefine Properties International Limited Annual Report 201267

Financial Statementsnotes to the conSOLIDated financial statemenTS continued32. Credit riskExposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to creditrisk at the reporting date was:GroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Investment in subsidiary – – 124 133 152 162Financial assets 399 1 123 – –Loans and receivables 98 470 104 080 – –Trade and other receivables 23 429 23 716 105 –Cash and cash equivalents 18 150 51 815 424 447140 448 180 734 124 662 152 609The concentration of credit risk per segment is set out below:UK Stable Income 36 308 53 414UK Retail 53 282 48 456Europe 6 132 3 408Hotels 35 086 35 669Australia 963 2 054Other 1 8 677 37 733140 448 180 7341Includes £2.1 million (2011: £31.1 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:2012£’000Gross2012£’000Impairment2012£’000Net2011£’000Gross2011£’000Impairment2011£’000NetNot past due 136 529 (25 092) 111 437 135 520 (18 092) 117 428Past due 0–120 days 1 354 – 1 354 4 588 – 4 588Past due >120 days 12 704 (3 596) 9 108 8 459 (2 679) 5 780Allowance for impairment losses of £407k (2011: £73k) has been booked against trade and other receivables as detailedin Note 24.These provisions are specific to tenants that went into administration.68 Redefine Properties International LimitedAnnual Report 2012

33. Liquidity riskThe following are the contractual maturities of financial liabilities, including interest payments and excluding theimpact of netting agreements:GroupCarryingAmount£’000ContractualCash flows£’0006 monthsor less£’0006 – 12Months£’0001 – 2 Years£’0002 – 5 Years£’000More than5 years£’00031 August 2012Financial liabilities at amortised costSecured loans 746 557 (817 837) (28 346) (327 063) (116 126) (264 910) (81 392)Finance leases 9 814 (34 654) (230) (230) (460) (1 380) (32 354)Liabilities held for sale 91 935 (92 637) (92 637) – – – –Trade and other payables 34 951 (34 951) (34 951) – – – –Financial liabilities at fair value through profit or lossDebentures 142 098 (194 639) – – – – (194 639)Derivative financial liabilities– Interest rate swaps usedfor economic hedging 9 623 (10 356) (3 764) (2 071) (2 520) (1 920) (81)1 034 978 (1 185 074) (159 928) (329 364) (119 106) (268 210) (308 466)31 August 2011Financial liabilities at amortised costSecured loans 917 203 (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 49 251 (49 251) (49 251) – – – –Financial liabilities at fair value through profit or lossDebentures 173 199 (176 919) – – – – (176 919)Derivative financial liabilities– Interest rate swaps usedfor economic hedging 23 115 (25 771) (8 283) (8 283) (5 382) (3 823) –1 176 755 (1 451 700) (193 828) (53 242) (420 401) (351 283) (432 946)Financial StatementsCompanyCarryingAmount£’000ContractualCash flows£’0006 monthsor less£’0006 – 12Months£’0001 – 2Years£’0002 – 5Years£’000More than5 years£’00031 August 2012Financial liabilities at fairvalue through profit or loss –Debentures 142 098 (194 639) – – – – (194 639)Financial liabilities at amortisedcost – Trade and other payables 9 623 (9 623) (9 623) – – – –151 721 (204 262) (9 623) – – – (194 639)31 August 2011Financial liabilities at fairvalue through profit or loss –Debentures 173 199 (176 919) – – – – (176 919)Financial liabilities at amortisedcost – Trade and other payables 11 674 (11 674) (11 674) – – – –184 873 (188 593) (11 674) – – – (176 919)Cash flows on financial liabilities at amortised cost and derivative financial liabilities were based on the respective loaninterest rates as per Note 28. The contractual cashflows on debentures has been assumed to be the nominal value asset out in Note 27.Redefine Properties International Limited Annual Report 201269

Financial Statementsnotes to the conSOLIDated financial statemenTS continued34. Interest rate riskThe Group’s exposure to the risk of the changes in market interest rates relates primarily to the Group’s long-term debtobligations with floating interest rates. The group uses interest rate derivatives to fully mitigate its exposure to interestrate fluctuations. At the year end, as a result of the use of interest rate swaps, the majority of the Group’s borrowingswere at fixed interest rates.The Group’s profit before tax has limited exposure to interest rate fluctuations until the repayment dates of the loans forwhich the interest rate swaps have been arranged. Please refer Note 29 for further details on the Group’s interest rateswap agreements.35. Currency riskStructural riskThe investments in subsidiaries in Germany, the Netherlands, Switzerland and Australia represent structural currencyrisk as these investments have functional currencies of Euro, Swiss Franc and Australian Dollar respectively.Group31 August2012£’00031 August2011£’000AssetsEUR 145 858 196 880CHF 21 347 24 050AUD 125 470 106 734LiabilitiesEUR 171 577 206 844CHF 12 339 14 130Transactional riskThe Group’s income from income-producing rental properties is denominated in the same currencies as the loansthat are financing those properties. There is a single exception to this where loans have been made by the Group tosubsidiary companies in the foreign currencies as set out below:Group31 August2012£’00031 August2011£’000Swiss Francs 4 000 1 7744 000 1 774As at 31 August 2012 the Group’s transactional risk associated with Cromwell is £24.74m which represents the loanfacility used to finance part of the investment.The Group and Company also has transactional risk on the debentures which are denominated in ZAR. (See Note 27for details).70 Redefine Properties International LimitedAnnual Report 2012

Sensitivity analysisA five per cent strengthening in the GBP£ exchange rate against the following currencies at period end would haveaffected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remainconstant. The analysis is performed on the same basis for 2011.31 August 2012 31 August 2011Equity£’000Profit or loss£’000Equity£’000Profit or loss£’000Euro 3 238 76 (112) 4Swiss Franc 480 (4) (209) 33Australian Dollar (5 907) 1 178 (4 054) 826South African Rand (20) (20) – 6 799A ten per cent weakening in the GBP£ exchange rate against the above currencies at year end would have had the equalbut 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 ratePeriod end rate2012 2011 2012 2011Euro 1.188 1.154 1.262 1.129Swiss Franc 1.451 1.461 1.516 1.309Australian Dollar 1.531 1.534 1.536 1.519South African Rand 12.589 11.088 13.393 11.521Financial StatementsRedefine Properties International Limited Annual Report 201271

The Company uses widely recognised valuation models for determining the fair value of common and more simplefinancial instruments such as interest rate that use only observable market data and require little managementjudgement and estimation. Observable prices and model inputs are usually available in the market for simple over thecounter derivatives, e.g. interest rate swaps. Availability of observable market prices and model inputs reduces theneed for management judgement and estimation and also reduces the uncertainty associated with determination of fairvalues. Availability of observable market prices and inputs varies depending on the products and markets and is proneto 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:Level 1£’000Level 2£’000Level 3£’000TotalFair value£’000Group31 August 2012Financial assetsDesignated at fair value through profit or loss – 399 – 399– 399 – 399Financial liabilitiesDebentures – – 142 098 142 098Derivatives at fair value through profit or loss 9 623 – – 9 6239 623 – 142 098 151 72131 August 2011Financial assetsDesignated at fair value through profit or loss – 1 123 – 1 1231 123 – 1 123Financial liabilitiesDebentures – – 173 199 173 199Derivatives at fair value through profit or loss – 23 115 – 23 115– 23 115 173 199 196 314Company31 August 2012Financial assetsInvestment in subsidiary 124 133 – – 124 133124 133 – – 124 133Financial liabilitiesDebentures – – 142 098 142 098– – 142 098 142 09831 August 2011Financial assetsInvestment in subsidiary 152 162 – – 152 162152 162 – – 152 162Financial liabilitiesDebentures – – 173 199 173 199– – 173 199 173 199Financial StatementsThe financial assets designated at fair value through profit and loss has been categorised as level 2 as the have beenpriced 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, theinstruments are not traded in an active market.Please see Note 27 for details of movement in debentures which is the level 3 instrument. The debenture is valued at34.20 pence per debenture, a ten per cent weakening of this unit price would decrease the liability value by £14.2 million(2011: £15.4 million). A 10% strengthening would have an equal but opposite effect.Redefine Properties International Limited Annual Report 201273

Financial Statementsnotes to the conSOLIDated financial statemenTS continued37. Related party transactionsRelated parties of the Group include subsidiary undertakings, associate undertakings and jointly controlled entities, theInvestment Advisor, Directors and key management personnel and connected parties, the parent undertaking RedefineInternational Properties Limited and the ultimate parent Redefine Properties Limited as well as entities connectedthrough common directors.ShareholdingAs at 31 August 2012, the Company holds 415 507 157 ordinary shares (representing a 71.71% shareholding) in RI PLC.Investment adviserThe investment adviser duties are carried out in accordance with the Investment Adviser’s Agreement (as approved on13 July 2011) between the Company and RIPML. The director Michael Watters is a director of associated companies ofthe investment adviserGroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000Trading transactionsRental income received from Redefine Hotel Management Limited 9 400 6 386 – –Fee income from Redefine Hotel Management Limited – 700 – –Fee income from Redefine International Property Management Limited 111 – 111 –Fee income from the Cromwell Property Group 566 310 – –Portfolio management fees charged by Redefine InternationalProperty Management Limited (3 328) – – –Portfolio management fees charged by Redefine InternationalFund Managers Limited (948) ( 2 028) (338) –Portfolio management fees charged by Redefine InternationalFund Managers Europe Limited (817) (403) – –Portfolio management fees charged by Redefine International Hotels Limited (617) – – –Fee payable to Redefine Properties Limited (130) – – –Administration fees charged by Redefine International Group Services Limited – (153) – –Interest income from Redefine Properties Limited – 41 – 41Interest expense to Redefine Properties Limited – (43) – (43)Dividend income from RI PLC – – 16 886 7 558Amounts receivablePearl House Swansea Limited 74 116 – –ITB FMZ Waldkraiburg B.V. 84 – – –Redefine Hotel Management Limited 3 314 2 922 – –Cromwell Property Group – 1 217 – –Ciref Crawley Investments Limited 104 100 – –Swansea Estates Limited 86 84 – –26 The Esplanade No1 Limited 48 – – –Banstead Property Holdings Limited 518 – – –Osiris Properties International Limited – consideration outstanding 369 – – –Redefine International P.L.C. – – 35 –Amounts PayableRedefine Properties Limited – 451 – 451Redefine International Fund Managers Limited 320 1 688 – –Redefine International Fund Managers Europe Limited 352 260 – –Redefine International Property Management Limited 767 – 107 –Redefine International Hotels Limited 154 – – –Redefine International Group Services Limited – 80 – –Osiris Property Services 6 – – –Corovest Offshore Limited 868 2 363 – –Coronation Group Investments Limited 7 768 10 910 – –Redefine International P.L.C. – – – 7074 Redefine Properties International LimitedAnnual Report 2012

Loans payable to Redefine International Fund Managers Limited, Redefine International Fund Managers Europe Limitedand Redefine International Group Services Limited are not secured, bear no interest and are expected to be repaid incash within 12 months.Mezzanine Capital LimitedDetails of transactions with Mezzanine Capital Limited are provided in Notes 12, 13 18, 24, 28 and 31.DirectorsFees paid to the Directors and their interest in linked units have been disclosed in the Directors’ remuneration report.38. Cash flow information38.1 Changes in working capitalGroupCompany31 August2012£’00031 August2011£’00031 August2012£’00031 August2011£’000(Increase)/decrease in trade receivables (883) (2,087) (105) 3,488Increase/(decrease) in trade payables (9,921) 2,638 (3,786) (2,967)(10 804) 551 (3 891) 52138.2 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:Group31 August2012£’00031 August2011£’000Assets acquiredInvestment property – 2 381Trade and other receivables – 159Cash and cash equivalents – 142Trade and other payables – (742)Loans and borrowings – (998)Total – 942Less: Non-controlling interest – (464)Gain on acquisition recognised in equity – (29) 1Total consideration – 449Less: cash and cash equivalents acquired – (142)Purchase consideration – 307Financial Statements1gain relates to the acquisition of non controlling interests. The gain arose on a transaction between shareholders and as such was treated as a gain in equity.38.3 Proceeds from issue of linked unitsGroup31 August2012£’00031 August2011£’000Proceeds from linked units issued 18 419 102 033Linked unit issue and reverse acquisition costs (1 036) (3 993)17 383 98 040Please see Note 26 and 27 for details of transactions.Redefine Properties International Limited Annual Report 201275

Financial Statementsnotes to the conSOLIDated financial statemenTS continued39. Disposal of subsidiariesThe Group disposed of the following subsidiaries during the financial year ended 31 August 2012:• Ciref Reigate Limited on 29 February 2012• Banstead Property Holdings Limited on 11 June 2012• Justizzentrum Halle mbh & Co. KG on 29 June 2012• Ciref Coventry Limited on 31 August 2012The 2011 disposals relate to the disposals of TYS Holdings and Ciref Streatham on 1 December 2010.The assets and liabilities arising from those disposals were as follows:Group31 August2012£’00031 August2011£’000Assets disposedInvestment property 74 004 6 543Long Term Receivables 5 838Trade and other receivables 1 411 (5 244)LiabilitiesTrade and other payables (5 702) (42)Derivative liabilities (2 108) –Loans and borrowings (87 099) (1 400)Total (13 656) (143)Add 3 210 –Non-controlling interest shareholder loans (1 767) –Non-controlling interest share of net deficit 4 977 –Provision for liabilities and commitments 12 079 –Transfer of FCTR to income statement on disposal of foreign operation 381 –Less net loss on sale of subsidiaries (2 195) (334)Net cash disposed (181) (477)On 31 August 2012, the Group disposed of a 31.25% shareholding in Ciref Coventry Limited for a nominal amount, resultingin the investment being re-classified from an 81.25% held subsidiary to a 50% jointly controlled entity. External loanfacilities to the jointly controlled entities Redefine Wigan Limited and Ciref Coventry Limited, which have a nominal valueof £197.97 million are cross collateralised against properties held directly by the Group. These external loan liabilities arein excess of the value of the properties held by the jointly controlled entities. A provision has been created in the currentyear based on the estimated potential future cash outflows for the Group related to this cross collateralisation.As the acquirer of Ciref Coventry Limited may benefit from the cross collateralisation of the Ciref Coventry loanfacilities, a provision was created of £12.1 million. This provision has been included in calculating the loss on sale ofCoventry of £1.32 million.On 29 June 2012, the Wichford Halle II, III and IV shares in Justizzentrum in Halle, Germany were sold for aconsideration of €1.0 million (GBP: £816k). These shares represented a 94% shareholding, and as a result of thedisposal, property with a value of €36.3m (GBP £29.1million) and borrowings amounting to €37.1 million have beenremoved from the Group’s balance sheet, together with the loans to non-controlling shareholders. The disposalresulted in the recognition of a loss on disposal of £0.82 million.On 29 February 2012, the Group disposed of its 61.36% shareholding in Ciref Reigate Limited for a nominal amount.As at the disposal date, the fair value of the assets exceeded the fair value of the liabilities and hence a loss on saleof £0.10 million was recognised.On 11 June 2012, the Group disposed of its 71.43% shareholding in Banstead Property Holdings Limited for a nominalamount. As at the disposal date, the fair value of the liabilities exceeded the fair value of the assets and hence a gain onsale of £0.05 million was recognised.76 Redefine Properties International LimitedAnnual Report 2012

40. Movement in non-controlling interestRetainedearnings£’0002012 2011Non-controllinginterest£’000Retainedearnings£’000Non-controllinginterest£’000Ciref Europe Limited (426) 426 – –Kalihora Holdings Limited – – 29 (458)Redefine Hotel Holdings Limited – – (132) 132(426) 426 (103) (326)The table above sets out the movement in non-controlling interest at the RI PLC level. With effect from1 September 2011, shares in Ciref Europe Limited were issued to RIHL. As a result of this issue, the non-controllingshareholders diluted from 7.29% to 4.01%.The movements for the year ended 31 August 2011 relate to:• an increase in non controlling interests in Redefine Hotel Holdings Limited due to their injection of additional capitalnot matched by RI PLC; and• the acquisition by the Group of the remaining 19.54% of Kalihora Holdings Limited which it did not already hold.The movement in the non-controlling interest in RI PLC at the RIN level are detailed in the Statement of Changesin Equity.The movement in non controlling interests at the RIN level for the year ended 31 August 2012 relate to:• the purchase by the Company of shares in RI PLC from non controlling interests;• an increase in the capital instrument at the RI PLC level which represents an increase in non controlling interests atthe RIN level; and• the portion of the dividend paid at the RI PLC level which is attributable to non controlling interests of the Group.The movement in non controlling interests at the RIN level for the year ended 31 August 2011 related to:• the issuance of a capital instrument at the RI PLC level which is non controlling interests at the RIN level;• the impact of the reverse acquisition which occurred at the RI PLC level which saw shares with a value of £50 401k(equating to the total consideration transferred as detailed in Note 41 less share issue costs incurred by RI PLC)issued to non controlling interests. As the reverse acquisition was structured as a paper for paper transaction (7.2Wichford P.L.C. shares for each Redefine International Holdings Limited share held) there was no associated cashmovement and so it had no impact on the cashflow information.Financial Statements41. Business combinations – Reverse acquisition of Wichford P.L.C. by RIHLOn 13 July 2011 the Boards of Wichford and RIHL announced that they had reached agreement on the terms of a reverseacquisition. The transaction was undertaken in terms of which Wichford made a recommended all share offer (“theoffer”) for the entire issued ordinary share capital of RIHL (“the reverse acquisition”). Under the terms of the offer RIHLunitholders received 7.2 Wichford shares for each RIHL share. The share register was then consolidated with 1 newshare for every 7.2 shares held. Following the adoption of reverse acquisition accounting in accordance with IFRS, RIHLhas been identified as the accounting acquirer.Following the reverse acquisition, the cancellation of RIHL’s previously equity accounted investment in Wichford (referNote 22) and the subsequent issue of ordinary shares to the RIHL unitholders, RIN became the majority unitholder inthe Company with a shareholding of approximately 65.59%. Non-controlling Interest (“NCI”) unitholders in RIHL heldapproximately 14.07% and previous Wichford unitholders (other than RIHL unitholders) held approximately 20.34% ofthe shares in the Company.Redefine Properties International Limited Annual Report 201277

Financial Statementsnotes to the conSOLIDated financial statemenTS continued41. Business combinations – Reverse acquisition of Wichford P.L.C. by RIHL continueda) Consideration transferredIn accordance with IFRS3.B20, the consideration transferred by RIHL to the Company is based on the number ofshares RIHL would have had to issue to give the unitholders of the Company the same percentage equity interest in thecombined entity that results from the reverse acquisition, ie. a 20.34% equity interest:Previous shareholding of RI PLC 831 323 584 20.3%Shares deemed to be issued to all RIHL shareholders 3 255 711 718 79.7%4 087 035 302Number 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%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 53531 August2011£’000Value of 115,461,609 shares at share price of 45.5p per share on 23 August 2011 52 535Total consideration 52 535b) Identifiable assets acquired and liabilities assumedInvestment property and derivatives were carried at fair value. The most significant fair value adjustment was on loansand borrowings. Key judgements were used in determining the fair value the loans and borrowings, including currentloan-to-value ratios that can be obtained in the market and the cost of additional funding needed to represent existingloan-to-value ratios. The fair value of other assets and liabilities was deemed and assessed on a case-by-case basis.The fair value of the net assets of the Group is set out below:31 August2011£’000Investment 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 05878 Redefine Properties International LimitedAnnual Report 2012

c) GoodwillAt the date of the acquisition Redefine International Holdings Limited held a 21.73% shareholding in Wichford P.L.C.(subsequently renamed Redefine International PLC). This was effectively cancelled at that date with the previouslyequity accounted investment in Wichford P.L.C. of £14 539 000 deemed to be disposed of. The total considerationincluding non controlling interest is represented by the total consideration transferred of £52 535 000 plus the fair valueof the existing interest in the Wichford P.L.C. (subsequently renamed Redefine International PLC).31 August2011£’000Goodwill was recognised as a result of the acquisition as follows:Total consideration transferred 52 535Fair value of existing interest in RI PLC 14 539Fair value of identifiable net assets (67 058)Goodwill 16Goodwill was impaired in the consolidated statement of comprehensive income as no lasting economic benefits couldbe attributed to the goodwill.The financial statements have been prepared assuming an acquisition date of 31 August 2011, with the statement ofcomprehensive income reflecting the income and expenses of RIHL only for the 12 months ended 31 August 2011. Ifthe acquisition had occurred on 1 September 2010, management estimates that consolidated revenue would havebeen £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 thesame if the acquisition occurred on 1 September 2010.42. Contingencies, guarantees and capital commitmentThe Group has capital commitments of £2.6 million (2011: £3 million) in respect of capital expenditure contracted for at thereporting date, but not yet incurred, for future transactions approved by the Board. The Group has entered into a corporateguarantee agreement with IHG Hotels Limited, the contingent liability of which is not expected to exceed £0.3 million.External loan facilities to the jointly controlled entities (Redefine Wigan Limited and Ciref Coventry Limited) witha nominal value of £197.97 million are cross collateralised against properties held directly by the Group. Theseexternal loan liabilities are in excess of the value of the properties held by the jointly controlled entities. A provision of£12.1 million has been created in the current year based on the estimated potential future cash outflows for the Grouprelated to this cross collateralisation. This provision is an estimate of the potential future outflow of resources from theGroup and is based on the underlying fair values of properties against which the loan facilities are cross collateralisedand the current carrying value of those facilities in the Group accounts.Financial StatementsTerms have been agreed to acquire an effective 50% interest in a newly developed retail store in Germany. The grosspurchase price of the property located in Kaiserslatern is €6.4 million.43. Subsequent eventsThe Board declared a distribution of 2.29 pence per linked unit for the six month period ended 31 August 2012. Thedistribution for the six-month period ended 31 August 2012 was only payable in respect of linked units with the JSEcode: RIN and not in respect of linked units with the JSE code: RINC. The last day to trade “cum” interest distributionwas 23 November 2012. The shares commenced trading “ex” dividend on 26 November 2012 and the record date was30 November 2012. The dividend was paid to unitholders on 3 December 2012.VBGThe Company announced that it had completed on the restructuring of all four VBG assets and the associated financingfacilities on 8 October 2012. The restructuring and refinancing of the VBG portfolio and financing facilities resulted inthe Group owning a 50% interest in the VBG assets together with a major pension fund as its joint venture partner.As part of the restructuring the Group agreed to sell, for a nominal amount, 50% of its interest in the VBG holdingcompany to a major pension fund. This newly established joint venture company, together with certain of its subsidiaries,reached agreement with the servicer of the VBG facilities to dispose of the VBG assets to new subsidiary companies withinthe joint venture vehicle. The proceeds from the disposal of approximately €80.0 million at the time of restructuring wasused to settle the original VBG facilities in full. The facilities had an outstanding balance of €116.0 million at the time ofthe restructuring.Redefine Properties International Limited Annual Report 201279

Financial Statementsnotes to the conSOLIDated financial statemenTS continued43. Subsequent events continuedVBG continuedThe gross acquisition cost (inclusive of transaction costs) of approximately €84.9 million was partly funded by the jointventure company with a new five year €57.0 million debt facility secured from a German bank, with both joint venturepartners injecting €14.0 million (£11.7 million) for their 50% interests. The new debt facility was secured at a marginof 1.72% p.a. which, together with the prevailing five year swap rate, provided an indicative all in rate of 2.8% p.a. Thisresulted in an initial yield on equity in excess of 19.0% on the Group’s investment.DeltaThe Company announced on 15 October 2012 the agreement to extend and restructure the £114.6 million Delta facility.The restructure involved repaying £33.5 million of debt associated with a portfolio of seven assets, which comprisesthe Lyon House, Harrow development site and six other assets let to predominantly UK central government occupiers.The seven assets were released from security and will be ungeared going forward. The repayment of debt associatedwith the six income producing assets reflects a net initial yield of 7.6% and a weighted average unexpired lease term inexcess of 17 years.The maturity date of the Delta facility was extended to 15 April 2015 subject to the Company meeting annual disposaltargets, which the Company considers achievable, in respect of the remaining 16 Delta portfolio assets. The disposalproceeds, together with amortisation requirements, were applied to reducing the remaining £81.1 million facilitybalance.GammaThe Company is in discussions with the servicer of the Gamma facility to restructure the facility which matured on15 October 2012. There is currently a standstill agreement in place until 15 November 2012.Equity RaisingOn 13 September 2012, RI PLC announced details of a proposed Firm Placing and Open Offer to raise £127 500 000(£122 475 000 net of expenses) through the issue of 490 384 616 New Ordinary Shares at an Issue Price of 26 pence perNew Ordinary Share. The Open Offer closed for acceptances at 11.00 am on 3 October 2012.RI PLC announced on 4 October 2012, that it had received valid applications under the Open Offer in respect of386,517,950 New Ordinary Shares from Qualifying Shareholders. The remaining 14,643,060 Open Offer Shares wereplaced to institutional and other investors. In addition, 89 223 606 Firm Placed Shares had been placed with certaininstitutional and other investors pursuant to the terms of the Firm Placing. As a consequence RI PLC raised, through itsFirm Placing and Open Offer, gross proceeds of £127 500 000.Admission of the New Ordinary Shares to the Premium Segment of the Official List of the UK Listing Authority and totrading on the London Stock Exchange’s Main Market for listed securities, for which application was made, occurredat 8:00 a.m. on 9 October 2012. These New Ordinary Shares were not eligible for the second interim dividend, asannounced on 20 September 2012, but will rank pari passu in all other respects with the existing ordinary shares asat the date of issue. This placing saw RIN’s shareholding in Redefine International decline to 65.8% post year end from71.7% at 31 August 2012.RIN raised just over R1 billion (£75 million) through the issue of 218 141 257 new linked units at a price of R4.60 eachas a consequence of the RI PLC equity raising, post year end. This resulted in Redefine Properties Limited’s beneficialinterest in RIN decreasing to 49.34%.44. Comparative informationCertain prior year balances in the Income Statement have been reclassified on a basis consistent with the current year.Balances related to the sale of subsidiaries have been reclassified from the Impairment of loans line item and from theGains/(loss) from financial assets and liabilities (including debenture interest) line to the Loss on sale of subsidiary linein the Income Statement.45. Approval of financial statementsThe financial statements were approved by the board on 29 October 2012.80 Redefine Properties International LimitedAnnual Report 2012

PROPeRTy PORTFOLIOPortfolio summaryPortfolio overview by business segmentBusiness segments – market valuesProperties(No.)LettableArea(sqft ’000)MarketValue(£’million)Segmental Splitby Value(%)Net initialYield(%)UK Stable Income 133 3 632 404.7 33.7 9.1UK Retail 6 1 578 224.1 18.6 7.5Europe 37 1 594 190.6 15.9 7.7Hotels 6 268 123.3 10.3 7.2Cromwell (1) 22 1 255 259.1 21.5 8.3Total investment portfolio 204 8 327 1 201.8 100.0 8.5Notes:1. Figures reflect Redefine International’s effective 23.08% share of Cromwell’s property assets and net rental income at 31 August 2012.The value of the investment in Cromwell at 31 August 2012 is £132.1 million based on the year end share price of 75 cents per stapled security.The Cromwell property portfolio consists of 25 assets with a market value of AUD 1.72 billion (£1.12 billion) as at 30 June 2012.Figures (excluding Cromwell) assume 100% ownership of property assets held in subsidiaries and jointly controlled entities.Business segments – gross rental incomeAnnualisedgross rentalincome(£’million)Averagerent per(£/sqft p.a)Weightedaverageunexpiredlease term(years)Occupancy bylettable area(%)Indexation andfixed increases(%)UK Stable Income 39.0 10.8 7.9 93.3 56.9UK Retail 20.5 13.0 11.0 95.2 5.3Europe 15.7 9.9 7.8 99.3 100.0Hotels 9.4 35.1 13.3 100.0 –Cromwell (1) 22.8 18.1 6.2 96.4 74.0Total investment portfolio 107.4 12.9 8.6 95.5 52.0Notes:1. The Cromwell rental income reflects Redefine International’s effective 23.08% share of Cromwell’s property assets and net rental income at31 August 2012.Figures (excluding Cromwell) assume 100% ownership of property assets held in subsidiaries and jointly controlled entities.Financial StatementsBusiness segments – valuation movement since 29 February 2012Proportion ofportfolio by value(%)Market value31 August 2012(£’million)Valuation movement sixmonths ended 31 August2012 (%)UK Stable Income 37.7 404.7 (10.7)UK Retail 20.8 224.1 (9.4)Europe 1 17.0 182.9 (7.1)Hotels 11.5 123.3 (0.0)Cromwell 2 12.3 132.1 (0.4)Total like-for-like portfolio 99.3 1 067.1 (7.5)Acquisitions 3 0.7 7.7 0.8Total investment portfolio 100.0 1 074.8 (7.4)Notes:1. Includes the effects of foreign exchange movements during the period. Values in local currency declined 1.7%.2. Cromwell reflects investment value at a closing share price of 75.0 Australian cents per stapled security.3. Acquisition of Waldkraiburg. Valuation movement reflects foreign exchange movement only.Figures (excluding Cromwell) assume 100% ownership of property assets held in subsidiaries and jointly controlled entities.Redefine Properties International Limited Annual Report 201281

Financial StatementsPROPeRTy PORTFOLIO continuedPortfolio summary continuedPortfolio overview by sectorProperty sectors at 31 August 2012Market value(£’million)Occupancy bylettable area(%)Lettable area(Sq ft ’000)Annualised grossrental income(£’million)Retail 313.6 96.3 2,392 26.5Office 460.3 93.2 3,530 44.2Industrial 40.7 100.0 809 3.0Hotels 123.3 100.0 268 9.4Other 4.8 100.0 73 1.5Total 942.7 95.4 7,072 84.6Note:Excludes Cromwell and assumes 100% ownership of property assets held in subsidiaries and jointly controlled entities.Geographical profileGeographic Profile – gross rental incomeGross rentalincome(£’million) %UK 68.7 81%Germany 12.6 15%Netherlands 1.8 2%Switzerland 1.3 2%84.4 100%Geographic Profile – by lettable areaLettable area(Sq ft) %UK 5 491 985 77%Germany 1 412 423 20%Netherlands 138 618 2%Switzerland 43 250 1%7 086 276 100%Lease expiry profileSectoral lease expiry profile by gross rental incomeLease expiry profile by gross rental income(£ ‘million) 1 year 1–2 years 2–3 years 3–4 years 4–5 years 5+ yearsIndustrial – – – – – 3.0Office 1.1 2.5 2.7 3.2 2.7 32.1Other 0.1 – 0.2 – – 0.2Retail 3.6 1.5 1.0 2.1 1.7 17.8Hotels 9.0Grand Total 4.8 4.0 4.0 5.3 4.3 62.1% of total gross rental income 5.7% 4.7% 4.7% 6.3% 5.1% 73.5%Sectoral lease expiry profile by lettable areaLease expiry profile by lettable area(Sq ft ‘000) 1 year 1–2 years 2–3 years 3–4 years 4–5 years 5+ yearsRetail 284.8 129.4 133.8 202.0 79.3 1 577.2Office 360.7 195.3 181.5 198.0 193.6 2 400.4Industrial – – – – – 808.9Hotels – – – – – 267.9Other 16.5 – 38.0 – – 18.9Grand Total 662.0 324.7 353.3 400.0 272.9 5 073.4% of total area 9.3% 4.6% 5.0% 5.6% 3.9% 71.6%82 Redefine Properties International LimitedAnnual Report 2012

Rental escalations and rentals per square metreWith the exception of the Malthurst portfolio (which escalates every five years to the equivalent of 2.5% per annumcompounded), lease agreements are not subject to annual escalations but are rather reviewed at each rent review dateand adjusted (upwards only), at least every 5 years, in terms of market norms.Vacancy profileVacancy profile by lettable areaArea(Sq ft ‘000)Vacancy(Sq ft ‘000)(Vacancy%)Retail 2 406 71 3%Office 3 530 240 7%Industrial 809 – 0%Hotels 268 – 0%Other 73 – 0%7 086 311 4%Analysis of tenant profileFor the tenant profile tables, the following key is applicable:ABCLarge international and national tenants, large listed tenants and government or smaller tenants in respect ofwhich rental guarantees are issued. These include, inter alia, Debenhams, ASDA, British Home Stores, Tesco,Kwik-Fit, Aldi, Kik, UK and European Central and State government tenants.Smaller international and national tenants, smaller listed tenants, major franchisees and medium to largeprofessional firms. These include, inter alia, Malthurst Limited, Coventry Building Society, Warrington PrimaryCare Trust.Other local tenants and sole proprietors. This comprises approximately 400 tenants.DRedefine Hotel Management Limited, which has franchise agreements with the Intercontinental Hotels Groupand Six Continents Hotels Inc.Tenant profile by gross rental income(£ ‘million) %A 64 501 186 76.0%B 6 480 491 7.6%C 4 482 831 5.3%D 9 400 000 11.1%Vacant – 0.0%84 864 508 100%Financial StatementsTenant profile by area(Sq ft ‘000) %A 5 132 629 72.4%B 987 843 13.9%C 386 552 5.5%D 267 914 3.8%Vacant 311 338 4.4%7 086 276 100%Redefine Properties International Limited Annual Report 201283

Financial StatementsPROPeRTy PORTFOLIO continuedSchedule of propertiesNoPhysical addressUK STABLE INCOME PORTFOLIORentalper sqft(£/sq ft)Rentable area(Sq ft)Valuation as at31 August 2012(£) Shareholding1 Guild Street, Aberdeen AB11 6AR 13.91 55 008 £6 900 000 100%2 Fraser Place, Aberdeen, AB25 3TP 15.55 32 788 £4 800 000 100%3 Wellington Road, Aberdeen, AB12 3LQ 2.24 44 649 £2 225 000 100%4 Armstrong Road, Acton, London, W3 7Jl 16.86 40 792 £7 000 000 100%5 59 Peel Street, Barnsley, S70 2RL 14.11 21 699 £2 500 000 100%6 Great Oaks Road, Basildon SS14 1JE 10.64 54 655 £5 000 000 100%7 30 Cardington Road, Bedford, MK42 0EX 7.51 16 640 £1 950 000 100%8 Manton Lane, Bedford, MK41 7LW 12.58 116 223 £11 500 000 100%9 Kingsway, Billingham, Ts23 2NA 9.22 6 970 £400 000 100%10 Woodside, Birkenhead, CH41 6DA 9.36 83 445 £6 000 000 100%11 Coventry Road, Sheldon, Birmingham B26 3JZ 7.14 28 832 £1 000 000 100%12 Aqueous Business Village, Aston, Birmingham, B6 5RQ 15.99 36 682 £4 000 000 100%13 1 St. Blaise Way, Bradford BD1 4DB 19.16 104 875 £18 000 000 100%14 Rushton Avenure, Thornbury, Bradford, BD3 7BH 11.88 38 070 £3 000 000 100%15 Northgate Street, Bridgwater, TA6 3HG 8.85 20 923 £1 650 000 100%16 31/49 Newfoundland Street & 1 Newfoundland Court, Bristol, BS2 9AP 13.27 31 613 £2 700 000 100%17 Temple Back, Bristol, BS1 6EZ 11.31 88 053 £10 750 000 100%18 28 Elmfield Road, Bromley BR1 1NX 20.78 57 751 £12 000 000 100%19 Fortran Way, St Mellons, Cardiff CF3 OEY 12.00 21 639 £1 750 000 100%20 29 Newport Road, Cardiff, CF24 0TP 12.11 34 458 £3 750 000 100%21 Castle Street, Carlisle, CA3 8RX 8.84 27 393 £2 000 000 100%22 Brunel, Chatham Maritime, Chatham, ME4 4NT 5.26 21 451 £1 650 000 100%23 Hedgerows Business Park, Colchester Road, Chelmsford, CM2 5FP 18.04 13 857 £1 250 000 100%24 55/59 City Road and Crewe Street, Chester, CH1 3AQ 11.28 34 645 £3 900 000 100%25 Avenue La Fleche, Chippenham, SN15 3LH 15.17 12 557 £1 750 000 100%26 20/26 Wellesley Road, Croydon, CR9 2UL 0.00 73 234 £7 000 000 100%27 7/15 Buccleuch Street, Dalkeith EH22 1HB 16.49 7 119 £850 000 100%28 18/30 Ward Road, Dundee, DD1 1QB 9.37 39 527 £2 800 000 100%29 4 Explorer Road, Dundee, DD2 1 DX 13.31 59 224 £6 500 000 100%30 2 Duchess Place, Edgbaston, B16 8NS 12.19 46 377 £4 100 000 100%31 Ladywell Road, Edinburgh, EH12 7TB 13.26 50 890 £5 300 000 100%32 1a Parliament Square, Edinburgh, EH1 1RF 42.03 9 404 £4 600 000 100%33 Lyon Road, Harrow HA1 2DG 0.00 0 £4 250 000 100%34 Astra Park, Courteney Road, Gillingham, ME8 0RY 159.03 1 572 £3 650 000 100%35 2 Derby Street, Grays, RM16 8QQ 13.02 11 967 £1 500 000 100%36 Lyon Road, Harrow HA1 2DG 0.00 0 £8 000 000 100%37 Raby Road, Hartlepool, TS24 8AA 9.67 20 828 £1 200 000 100%38 Princes Street, Ipswich, IP1 1PH 8.42 82 524 £6 250 000 100%39 31 Lisbon Street, Leeds, LS1 4LX 15.97 78 262 £16 500 000 100%40 40 Great George Street, Leeds, LS1 3DL 10.97 45 132 £8 500 000 100%41 21/22 Park Place and 71/77 Park Street, Leeds, LS1 4UR 16.23 39 169 £5 700 000 100%42 Waterside Court, Kirkstall Road, Leeds, LS4 2QB 14.63 35 996 £4 350 000 100%43 36 Dale Street, Liverpool, L2 5UZ 11.61 24 749 £2 500 000 100%44 63/67 Newington Causeway, London, SE1 6LS 17.55 21 899 £4 250 000 100%45 1009 Oldham Road, Newton Heath, Manchester M40 2EP 9.32 15 425 £1 100 000 100%46 1 Waterloo Square, Newcastle Upon Tyne NE1 4DR 20.68 5 607 £900 000 100%47 21–27 St. Katherine’s Street, Northampton, NN1 2LG 10.34 28 037 £1 800 000 100%48 1 Theatre Street, Norwich NR2 1RG 18.66 8 787 £1 900 000 100%49 75 Union Street, Oldham, OL1 1LH 10.52 20 622 £2 000 000 100%50 47/51 High Street, Paisley, PA1 2AN 15.13 13 922 £1 300 000 100%84 Redefine Properties International LimitedAnnual Report 2012

NoPhysical addressUK STABLE INCOME PORTFOLIO continuedRentalper sqft(£/sq ft)Rentable area(Sq ft)Valuation as at31 August 2012GBPShareholding51 84 Broadway, and 126/128 Park Road, Peterborough, PE1 1QF 13.69 59 229 £5 600 000 100%52 64 Exeter Street and 63/65 Bretonside, Plymouth, PL4 0AJ 16.22 61 357 £9 400 000 100%53 Brooklands Office Campus, Budshead Road, Plymouth, PL6 5XR 12.53 19 516 £1 350 000 100%54 Ebrington Street, Plymouth, PL4 9RF 12.23 27 693 £3 000 000 100%55 West Dyke Road, Redcar, TS10 1 DH 8.95 9 509 £500 000 100%56 Pilsworth Road, Heywood, Rochdale, OL10 2TA 13.23 98 735 £9 750 000 100%57 Bow Ridge Close, Rotherham, S60 1BW 9.62 14 420 £1 200 000 100%58 South Langworthy Road, Salford Quays M50 2 GF 9.33 16 534 £825 000 100%59 80 Hanover Way, Sheffield, S3 7UF 14.95 54 219 £7 300 000 100%60 High Street, Smethwick, B66 3AD 12.86 12 394 £1 250 000 100%61 18 Bernard Street, Southampton, SO14 3PJ 10.81 42 983 £4 500 000 100%62 10 Stoney Lane, Sparkhill B12 8AF 13.34 11 712 £1 400 000 100%63 St. Asaph Business Park, St. Asaph LL17 0JG 19.71 25 630 £4 000 000 100%64 2 Central Street, St. Helens, WA10 1UF 8.48 30 442 £1 750 000 100%65 Unit 13, Sandringham Park, Swansea SA7 0AA 1.39 30 090 £1 000 000 100%66 Delta Business Park, Great Western Way, Swindon SN5 7XQ 15.03 30 495 £1 700 000 100%67 Stafford Park 10, Telford, TF3 3AB 0.00 89 636 £1 000 000 100%68 501 Uxbridge Road, Uxbridge UB4 8HL 15.68 11 478 £1 600 000 100%69 Kier Park, Cowley Mill Road, Uxbridge UB8 2XW 269.08 1 245 £5 500 000 100%70 Kilspindie Road, Dundee, DD2 3QH 134.17 1 118 £2 100 000 100%71 60 Exchange Road, Watford, WD18 0LL 13.57 62 926 £9 500 000 100%72 Westwey Road, Weymouth, DT4 8TE 3.81 28 856 £2 100 000 100%73 King Stree, Wigan, WN1 1EA 6.86 44 425 £2 500 000 100%74 Gibfield Park Avernue Atherton M46 OSU 97.19 1 852 £3 100 000 100%75 Temple Street, Wolverhampton, WV2 4AN 9.74 32 437 £2 900 000 100%76 Temple Street, Wolverhampton, WV2 4AU 11.18 27 455 £2 850 000 100%77 Kettlestring Lane, Clifton Moor, York, YO30 4XF 12.10 22 055 £2 300 000 100%78 7 Quarry Road, KA12 0TE, Scotland 4.92 4 473 £320 000 84%79 7 Chesser Avenue, EH14 1TB, Scotland 7.33 5 587 £570 000 84%80 Units 1 & 2, 70–90 Dalrymple Street, PA15 1HU, Scotland 4.60 13 468 £900 000 84%81 27–31 Canal Street, PH2 8LF, Scotland 4.38 6 850 £440 000 84%82 50 Union Street, ML3 9AA, Scotland 7.32 6 766 £720 000 84%83 65–67 Main Street, Bridgend, PH2 7HD, Scotland 5.80 6 384 £500 000 84%84 151 forton road, PO12 3HB, England 6.13 4 953 £430 000 84%85 1 Telford Road, G75 0JD, Scotland 5.25 4 977 £385 000 84%86 2196 Paisley Road West, Cardonald, G52 3SJ, England 5.81 5 250 £430 000 84%87 Bearwood Road, B66 4DP, England 6.45 4 338 £390 000 84%88 Bo’Ness Road, FK3 9BJ, England 5.38 4 777 £375 000 84%89 244 Henver Road, TR7 3EH, England 6.91 4 486 £445 000 84%90 Swan Street, PE11 1BT, England 6.62 3 778 £365 000 84%91 123 Causewayend, AB25 3TB, Scotland 5.55 5 770 £435 000 84%92 40 Milburn Road, IV2 3TR, Scotland 5.68 4 562 £355 000 84%93 11–43 Hospital Hill, KY11 3AT, Scotland 7.54 3 378 £375 000 84%94 East Road, IV30 1XU, Scotland 6.03 5 589 £475 000 84%95 Watling street, ME7 2YS, England 8.06 8 992 £1 085 000 84%96 Carmondean Centre, EH54 8PT, Scotland 6.35 7 137 £660 000 84%97 Callander Road, FK1 1XS, Scotland 5.78 5 623 £475 000 84%98 94 Baillieston Road, Mount Vernon, G32 0TH, Scotland 6.39 4 709 £440 000 84%99 47–53 Hull Road, HU10 6SP, England 4.84 4 621 £330 000 84%100 Metropolitan Drive, FY3 9JD, England 10.49 8 457 £1 230 000 84%Financial StatementsRedefine Properties International Limited Annual Report 201285

Financial StatementsPROPeRTy PORTFOLIO continuedSchedule of properties continuedNoPhysical addressUK STABLE INCOME PORTFOLIO continuedRentalper sqft(£/sq ft)Rentable area(Sq ft)Valuation as at31 August 2012GBPShareholding101 Richmond Walk, Devonport, PL1 4LL, England 6.89 3 899 £330 000 84%102 180 Washway Road, Sale, Trafford, M33 6RH, England 7.47 2 877 £300 000 84%103 179 Heaton Lane, SK4 1AR, England 5.94 10 446 £875 000 84%104 Lichfield Road, ST17 4JZ, England 7.77 8 791 £919 133 84%105 Lichfield Road, ST17 4JZ, England 24.10 1 328 £430 867 84%106 Morpeth Road, Ashington, Northumberland NE63 8PX 4.08 24 394 £1 450 000 84%107 A 18 / M180 Interchange, Barnetby, Lincolnshire DN20 0PA, England 3.19 35 477 £1 530 000 84%108 A64 Eastbound, Tadcaster, North Yorkshire LS24 8EG, England 1.90 35 719 £1 000 000 84%109 Penistone Road, Sheffield, South Yorkshire S30 4JB, England 3.13 23 522 £1 130 000 84%110 A40, Eynsham, Oxfordshire OX8 1EN, England 3.11 26 572 £1 270 000 84%111 Sunderland Road, Gateshead, Tyne & Wear NE10 8HE, England 8.08 9 104 £1 130 000 84%112 49 Hounslow Road, Hanworth, Middlesex TW13 6QA, England 3.67 17 903 £890 000 84%113 Lawrence Street, York, North Yorkshire Y01 3EB, England 3.65 13 024 £760 000 84%114 Ickneild Street, Birmingham, West Midlands B18 5AU, England 3.55 25 483 £1 370 000 84%115 Malvern Road, Lower Wick, Worcestershire WR2 4NR, England 5.63 15 464 £1 400 000 84%116 272 Meanwood Road, Leeds, West Yorkshire LS7 2JD, England 5.52 12 371 £440 000 84%117 Keighley Road, Bingley, West Yorkshire BD16 2RD, England 4.43 19 166 £1 200 000 84%118 147 Torquay Road, Paignton, Devon TQ3 2AG, England 3.78 17 947 £1 100 000 84%119 London Road, Beaconsfield, Buckinghamshire HP9 1XA, England 6.47 13 634 £1 440 000 84%120 Yarm Road, Stockton on Tees, Cleveland TS18 3RW, England 1.31 41 818 £780 000 84%121 Nevilles Cross Bank, Stonebridge, County Durham DH1 3RY, England 5.74 19 210 £1 570 000 84%122 Carkeel Roundabout, Saltash, Cornwall PL12 6PA, England 2.29 39 552 £1 220 000 84%123 Telegraph Hill, Exeter, Devon EX6 7XX, England 0.72 102 409 £1 070 000 84%124 Thirsk BY-Pass, Thirsk, North Yorkshire Y07 3HL, England 1.60 56 431 £1 390 000 84%125 Fornham Road, Bury St Edmonds, Suffolk IP32 6AX, England 5.06 14 099 £1 100 000 84%126 Durham Road, Birtley, County Durham DH3 2BE, England 2.59 21 824 £800 000 84%127 Warwick Road, Kenilworth, Warwickshire CV8 1FB, England 5.86 11 587 £1 050 000 84%128 15–17 The Square, Petersfield, GU32 3HP, England 20.31 1 940 £785 000 60%129 Ground & Upper Floors, Substation, 237 Southwark Bridge Road,London, SE1 6NP 20.54 41 875 £9 775 000 77%130 33–47 Princess Way, Swansea, SA1 5HF, Wales 11.74 1 456 £166 000 50%131 41 Kingsway, Swansea, SA1 5HF, Wales 17.71 8 048 £1 290 000 50%132 Vanguard House, Churchill Court, Manor Royal, Crawley,West Sussex, RH10 9LU 13.95 105 629 £14 500 000 25%133 26 The Esplanade, St Helier, Jersey 27.47 59 352 £23 900 000 50%TOTAL UK STABLE INCOME PORTFOLIO 10.77 3 631 658 £404 691 00086 Redefine Properties International LimitedAnnual Report 2012

NoPhysical addressEUROPean PORTFOLIORentalper sqft(£/sq ft)Rentable area(Sq ft)Valuation as at31 August 2012GBPShareholding134 52457 Aldenhoven, Blumenstr. 3 7.84 6 566 £404 136 96%135 63741 Aschaffenburg, Langestr 50 7.40 10 538 £673 560 96%136 144776 Brandenburg, Potsdamerstr 23 6.26 9 214 £380 363 96%137 27751 Delmenhorst, Bremerstr 302 0.00 8 988 £198 106 96%138 74081 Heilbronn-Sonth, Kreuzackerstr 6 8.58 11 410 £974 680 96%139 25709 Marne,westerstr. 30 10.25 4 499 £261 500 96%140 24536 Neumunster, Kielerstr 385 8.64 10 301 £887 514 96%141 24963 Tarp, Wanderuper str 17 3.70 10 549 £237 727 96%142 45663 Recklinghausen, Marienstr 1 B 5.24 9 149 £356 590 96%143 51570 Windeck, Gerhard-Hauptmannstr 2–6 3.07 11 302 £309 045 96%144 48336 Sassenberg, Lappenbrink 53 10.13 9 009 £594 317 96%145 29525 Uelzen, Hauenriede 1 11.19 13 993 £1 917 664 96%146 29525 Uelzen, Hauenriede 17 5.99 22 827 £1 101 468 96%147 32257 Bünde, Lübbecker str 74 10.56 12 389 £2 527 830 96%148 52078 Aachen, Heusstr 4 9.05 29 148 £3 153 844 96%149 27432 Bremervorde, Wesermünder Str. 60 6.48 47 345 £3 550 056 96%150 28237 Bremen-Gropelingen, Lindenhofcenter 10.01 44 322 £5 467 720 96%151 22045 Hamburg, Ahrensburger str 183–187 3.70 25 177 £1 101 468 57%152 22880 Wedel, Rissenerstr 96–100 3.68 61 236 £2 654 618 57%153 32105 Bad Salzuflen, Herforder str 82 9.35 16 053 £1 561 074 57%154 42283 Wuppertal, Unterdörnen 91 5.11 28 018 £1 624 467 57%155 Nordstern-Park 11 52134 Herzogenrath, Germany 6.16 121 578 £9 271 351 48%156 Am Brunnfeld 6 92421 Schwandorf 6.82 87 112 £7 924 232 48%157 04357 Leipzig, Mockauerstr 8.58 63 687 £6 497 870 48%158 04838 Eilenburg, Grenzstr Mittelstr 6.66 40 662 £2 670 466 48%159 81540 Munich, Tegernseer platz 13.68 22 116 £5 546 962 48%160 83052 Bruckmühl,Pettenkoferstr 15 a 6.23 63 496 £4 833 781 48%161 60311 Frankfurt, Batttonstr 12.81 11 711 £1 608 619 48%162 23879 Mölln, Wasserkrügerweg 5.39 54 175 £3 090 450 48%163 84453 Waldkraiburg, Berliner Straße 11 9.67 58 071 £7 686 505 48%164 Markgrafenstrasse 17/18, 10969 Berlin, Germany 14.75 77 207 £14 255 693 100%165 Wiener Platz, 01069 Dresden, Germany 11.63 187 818 £28 360 825 100%166 Kolner Strasse 20, 51429 Bergisch Gladbach, Germany 9.91 88 696 £9 738 881 100%167 Martin-Luther-Strasse 79, 71636 Ludwigsburg, Germany 13.84 134 059 £22 203 697 100%168 Haagse Veste, Saturnusstraatong, The Hague, Netherlands 12.82 138 618 £16 601 265169 3900 Brig, Industriestrasse 3 14.95 35 000 £6 202 573 100%170 1267 Vich, ch. De la Bichette 429, Centre commercial 98.34 8 250 £14 186 737 100%TOTAL EUROPean PORTFOLIO 9.86 1 594 291 £190 617 655Financial StatementsRedefine Properties International Limited Annual Report 201287

Financial StatementsPROPeRTy PORTFOLIO continuedSchedule of properties continuedNoPhysical addressUK RETAIL PORTFOLIORentalper sqft(£/sq ft)Rentable area(Sq ft)Valuation as at31 August 2012GBPShareholding171 West Orchards Shopping Cenre, Smithford Way, Coventry, CV11QX 18.63 210 037 £37 000 000 50%172 Delamere Place Shopping Centre, Delamere Street, Crewe, Cheshire, CW1 4.99 183 742 £9 550 000 100%173 Birchwood Shopping Centre, Dewhurst Road, Warrington, WA3 7PG 6.67 395 749 £28 000 000 100%174 Byron Place Shopping Centre, Seaham, County Durham, SR7 7DR 11.83 115 377 £16 100 000 100%175 Grand Arcade, Wigan 15.79 471 355 £76 400 000 50%176 St George’s Centre, Harrow, North London, HA1 1HS 20.17 216 153 £57 000 000 100%TOTAL UK RETAIL PORTFOLIO 12.96 1 592 413 £224 050 000HOTEL PORTFOLIO177 High Street, Brentford, Middlesex, TW8 8JZ 24.56 61 064 £25 000 000 71%178 469 – 475 The Highway, London E1 3HN 63.90 23 476 £23 390 000 71%179 Victoria Road, North Acton, London W3 6XU 24.25 61 860 £24 070 000 71%180 1 Silvertown Way, London E16 1EA 30.55 49 094 £22 490 000 71%181 103 – 109 Southwark Street, London, SE1 39.09 38 373 £16 380 000 71%182 Caversham Bridge, Richfield Ave, Reading, RG1 8BD 44.06 34 047 £11 970 000 71%TOTAL HOTEL PORTFOLIO 33.59 267 914 £123 300 000TOTAL PROPERTY PORTFOLIO 11.92 7 086 276 £942 658 65588 Redefine Properties International LimitedAnnual Report 2012

Company InformationLinked unITHOLDeRS’ inFORMaTIOnFor the year ended 31 August 2012Number oflinked unitholders% of totallinked unitholdersNumber oflinked units% of issuedcapitalLinked unitholder spread1 – 999 linked units 108 3.69 41 974 0.011 000 – 9 999 linked units 1 278 43.63 5 937 615 1.4310 000 – 99 999 linked units 1 358 46.36 33 788 777 8.13100 000 – 999 999 linked units 147 5.02 42 280 013 10.181 000 000 units and over 38 1.30 333 458 778 80.25Total 2 929 100.00 415 507 157 100.00Distribution of linked unitholdersBanks/Brokers 16 0.55 6 904 767 1.66Close corporations 44 1.50 3 781 676 0.91Endowment Funds 10 0.34 619 100 0.15Individuals 2 277 77.74 33 666 558 8.10Insurance Companies 11 0.38 5 258 144 1.27Medical Schemes 2 0.07 196 068 0.05Mutual Funds 51 1.74 87 356 288 21.02Nominees & Trusts 372 12.70 12 580 310 3.03Other Corporations 22 0.75 456 435 0.11Private Corporations 61 2.08 6 285 681 1.51Retirement Funds 62 2.12 34 106 625 8.21Holding Company 1 0.03 224 295 505 53.98Total 2 929 100.00 415 507 157 100.00Linked unitholder typeNon-public linked unitholders 4 0.14 226 112 428 54.42Directors and associates 3 0.11 1 816 923 0.44Holding Company 1 0.03 224 295 505 53.98Public linked unitholders 2 925 99.86 189 394 729 45.58Total 2 929 100.00 415 507 157 100.00Beneficial linked unitholders with a holding greater than 5% of the issued linked unitsTotal linkedunit holding% of issuedcapitalRedefine Properties Limited 224 295 505 53.98Allan Gray 45 219 280 10.88Total 269 514 785 64.86Linked unit performance – 12 months ended (not reviewed) 31 August 2012Linked units traded 96 511 043Monthly average 8 042 587Linked units in issue 415 507 157Linked units traded as percentage of number of linked units in issue 23.22%Value traded (ZAR) 519 743 860Monthly average (ZAR) 43 311 988Opening price 1 September (ZAR cents) 635Closing price 31 August (ZAR cents) 530High closing price for the period (ZAR cents) 635Low closing price for the period (ZAR cents) 440Company InformationRedefine Properties International Limited Annual Report 201289

Company InformationShareHOLDer inFORMaTIOnRegistered officeRedefine Place2 Arnold Road, RosebankJohannesburg, 2196South AfricaWebsite: www.redefineint.comEmail: info@redefineinternational.comRegistration Number: 2010/009284/06Company secretaryProbity Business Services (Proprietary) Limited(Registration number 2000/002046/07)3rd Floor, The Mall Offices11 Cradock AvenueRosebank, 2196South Africa(PO Box 85392, Emmarentia, 2029)Administrative services providerRedefine International FundManagers Limited(Registration number 605116)Coastal Building, Wickhams Cay IIRoad Town, TortolaBritish Virgin IslandsCorporate advisor and legal advisorJava Capital (Proprietary) Limited(Registration number2002/031862/07)2 Arnold Road, RosebankJohannesburg, 2196South Africa(PO Box 2087, Parklands, 2121,South Africa)Investment Adviser to RI PLCRedefine International PropertyManagement Limited(Registration number 04469376)2nd Floor, 30 Charles II StreetLondon,SW1Y 4AEUKIndependent reporting accountantsand auditorsKPMG Inc.(Registration number1999/021543/21)85 Empire Road, ParktownJohannesburg, 2193South Africa(Private Bag 9, Parkview, 2122)Sponsor and trustee fordebenture holdersJava Capital Trustees and Sponsors(Proprietary) Limited(Registration number2008/005780/07)2 Arnold Road, RosebankJohannesburg, 2196South Africa(PO Box 2087, Parklands, 2121,South Africa)Transfer secretariesComputershare Investor Services(Proprietary) Limited(Registration number2004/003647/07)Ground Floor, 70 Marshall StreetJohannesburg, 2001South Africa(PO Box 61051, Marshalltown, 2107)90 Redefine Properties International LimitedAnnual Report 2012

Special reSOLUTIOns and meMBeRS’ diarySpecial resolutionsThe following Special Resolutions were registered for RIN and its subsidiaries, having been passed during the financialyear ended 31 August 2012:Company Nature of Special ResolutionDate passed byShareholdersDate ofregistrationRIN Amendment of Memorandum of Incorporation 30 January 2012 30 January 2012RI PLC Authority to allot shares 24 January 2012Dis-application of Pre-emption Rights 24 January 2012Authority to Purchase own Shares 24 January 2012To increase the share capital of the Company 8 October 2012Dis-application of Pre-emption Rights 8 October 2012Consolidation of Shares 8 October 2012Members’ diaryFinancial year-end31 AugustAnnual financial statements posted Thursday, 20 December 2012Annual general meeting (10.00am) Tuesday, 29 January 2013Distribution of debenture interest Declared PaidInterim 2.09 2.09Second Interim 2.29 2.29Company InformationRedefine Properties International Limited Annual Report 201291

Company InformationGlossaryAUDthe CompanyCromwellEPRAEurozoneEuro or €fair value movementfinance leaseFCTRGBP or £the GroupIFRSinterest rate swapJSELIBORLSELTVmarket valueNAVRedefine PropertiesREITRevPARRIHLRINRI PLCRIPMLUKWAULTWichfordAustralian Dollar made up of 100 cents.Redefine Properties International Limited.Cromwell Property Group is an Australian Securities Exchange listed stapled security (ASX:CMW)comprising the Cromwell Corporation Limited and Cromwell Property Securities Limited, which actsas the responsible entity of the Cromwell Diversified Property Trust. www.cromwell.com.au.European Public Real Estate Association.The geographic and economic region that consists of all the European Union countries that have fullyincorporated the Euro as their national currency.The lawful common currency of participating member states of the European Monetary Union.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.Foreign Currency Translation Reserve.Great British Pound, the legal currency of the UK.Redefine International P.L.C. The enlarged company following the reverse acquisition betweenWichford and Redefine International plc.International Financial Reporting Standards.A financial instrument where two parties agree to exchange an interest rate obligation for a predeterminedamount of time. These are used by the Group to convert floating-rate debt or investments to fixed rates.JSE Limited, licensed as an exchange and a public company incorporated in terms of the laws of South Africa.The London Interbank Offered Rate, the interest rate charged by one bank to another for lending money.The London Stock Exchange plc.A ratio of debt divided by the market value of investment property.A ratio of debt divided by the market value of investment property.Net Asset Value.Redefine Properties Limited, the ultimate parent company of the Redefine International Group, listed onthe JSE.Real Estate Investment Trust. A REIT must be a publicly quoted company with at least three-quarters of itsprofits and assets derived from a qualifying property rental business. Income and capital gains from theproperty rental business are exempt from tax but the REIT is required to distribute at least 90% of thoseprofits 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).Redefine International Holdings Limited. The previously AIM listed property investment company party to thereverse acquisition with Wichford (previously named Redefine International plc).Redefine Properties International Limited. Listed on the JSE, whose sole asset is its shareholding inRI PLC.Redefine International P.L.C. The enlarged company following the reverse acquisition between Wichford andRIHL. Listed on the LSE.Redefine International Property Management Limited. The Investment Adviser to RI PLC.The United Kingdom of Great Britain and Northern Ireland.Weighted average unexpired lease term.Wichford P.L.C., the previously LSE listed property investment company party to the reverse acquisitionwith RIHL.92 Redefine Properties International LimitedAnnual Report 2012

CORPORATE GOveRnance – KING III RevIewKey: Compliant Non-compliant1. Ethical leadership and corporate citizenship1.1 The board should provide effective leadership basedon an ethical foundation1.2. The board should ensure that the company is and isseen to be a responsible corporate citizen1.3. The board should ensure that the company’s ethicsare managed effectively2. Boards and directors2.1. The board should act as the focal point for and custodian of corporate governance2.2. The board should appreciate that strategy, risk, performance and sustainability are inseparable2.3. The board should provide effective leadership based on an ethical foundation2.4. The board should ensure that the company is and is seen to be a responsible corporate citizen2.5. The board should ensure that the company’s ethics are managed effectively2.6. The board should ensure that the company has an effective and independent audit committee2.7. The board should be responsible for the governance of risk2.8. The board should be responsible for informationtechnology (IT) governance2.9. The board should ensure that the company complies with applicable laws and considers adherence to nonbindingrules, codes and standards2.10. The board should ensure that there is an effective risk-based internal audit2.11. The board should appreciate that stakeholders’ perceptions affect the company’s reputation2.12. The board should ensure the integrity of the company’s integrated report2.13. The board should report on the effectiveness of the company’s system of internal controls2.14. The board and its directors should act in the best interests of the company2.15. The board should consider business rescueproceedings or other turnaround mechanisms assoon as the company is financially distressed asdefined in the Act2.16. The board should elect a chairman of the board who is an independent non-executive director. TheCEO of the company should not also fulfil the role ofchairman of the board (Note 1)2.17. The board should appoint the chief executive officer and establish a framework for the delegation ofauthority2.18. The board should comprise a balance of power, with a majority of non-executive directors.The majority of non-executive directors shouldbe independent2.19 Directors should be appointed through aformal process2.20. The induction of and on-going training anddevelopment of directors should be conductedthrough formal processes2.21 The board should be assisted by a competent, suitablyqualified and experienced company secretary2.22 The evaluation of the board, its committees and theindividual directors should be performed every year2.23. The board should delegate certain functions to wellstructuredcommittees but without abdicating its ownresponsibilities2.24. A governance framework should be agreed betweenthe group and its subsidiary boards (Note 2)2.25. Companies should remunerate directors andexecutives fairly and responsibly2.26. Companies should disclose the remuneration of eachindividual director and certain senior executives2.27. Shareholders should approve the company’sremuneration policy3. Audit committees3.1. The board should ensure that the company has an effective and independent audit committee3.2. Audit committee members should be suitably skilled and experienced independent non-executive directors3.3. The audit committee should be chaired by an independent non-executive director3.4. The audit committee should oversee integrated reporting3.5. The audit committee should ensure that a combined assurance model is applied to provide a coordinatedapproach to all assurance activities3.6. The audit committee should satisfy itself of the expertise, resources and experience of the company’sfinance function3.7. The audit committee should be responsible for overseeing of internal audit3.8. The audit committee should be an integralcomponent of the risk management process3.9. The audit committee is responsible forrecommending the appointment of the externalauditor and overseeing the external audit process3.10. The audit committee should report to the board andshareholders on how it has discharged its duties4. The governance of risk4.1. The board should be responsible for the governanceof risk4.2. The board should determine the levels of risktolerance4.3. The risk committee or audit committee should assistthe board in carrying out its risk responsibilitiesCompany InformationRedefine Properties International Limited Annual Report 201293

Company InformationCORPORATE GOveRnance – KING III RevIew continued4.4. The board should delegate to management theresponsibility to design, implement and monitor therisk management plan4.5. The board should ensure that risk assessments areperformed on a continual basis4.6. The board should ensure that frameworks andmethodologies are implemented to increase theprobability of anticipating unpredictable risks4.7. The board should ensure that management considersand implements appropriate risk responses4.8. The board should ensure continual risk monitoringby management4.9. The board should receive assurance regarding theeffectiveness of the risk management process4.10. The board should ensure that there are processes inplace enabling complete, timely, relevant, accurateand accessible risk disclosure to stakeholders5. The governance of information technology5.1. The board should be responsible for informationtechnology (IT) governance5.2. IT should be aligned with the performance andsustainability objectives of the company5.3. The board should delegate to management theresponsibility for the implementation of an ITgovernance framework5.4. The board should monitor and evaluatesignificant IT investments and expenditure5.5. IT should form an integral part of thecompany’s risk management5.6. The board should ensure that informationassets are managed effectively5.7. A risk committee and audit committee should assist theboard in carrying out its IT responsibilities6. Compliance with laws, rules, codes and standards6.1. The board should ensure that the company complieswith applicable laws and considers adherence tononbinding rules, codes and standards6.2. The board and each individual director should have aworking understanding of the effect of the applicablelaws, rules, codes and standards on the company andits business6.3. Compliance risk should form an integral part of thecompany’s risk management process6.4. The board should delegate to management theimplementation of an effective compliance frameworkand processes7. Internal audit7.1. The board should ensure that there is an effectiverisk based internal audit7.2. Internal audit should follow a risk based approach toits plan7.3. Internal audit should provide a written assessment ofthe effectiveness of the company’s system of internalcontrols and risk management7.4. The audit committee should be responsible foroverseeing internal audit7.5. Internal audit should be strategically positioned toachieve its objectives8. Governing stakeholder relationships8.1. The board should appreciate that stakeholders’ perceptions affect a company’s reputation8.2. The board should delegate to management to proactively deal with stakeholder relationshipsstakeholders and the outcomes of these dealings.8.3. The board should strive to achieve the appropriate balance between its various stakeholder groupings,in the best interests of the company8.4. Companies should ensure the equitable treatment of shareholders8.5. Transparent and effective communication with stakeholders is essential for building and maintainingtheir trust and confidence8.6. The board should ensure that disputes are resolvedas effectively, efficiently and expeditiously as possible9. Integrated reporting and disclosure9.1. The board should ensure the integrity of the company’s integrated report9.2. Sustainability reporting and disclosure should be integrated with the company’s financial reporting9.3. Sustainability reporting and disclosure should beindependently assured (Note 3)A table commenting on the areas with which RIN is non-compliant can be found on page 17.94 Redefine Properties International LimitedAnnual Report 2012

Notice of Annual General MeeTIng ofShareholders and DebenTURe HOLDersRedefine Properties International LimitedRegistration Number 2010/009284/06(“RIN” or “the company”)Share Code: RINISIN Code: ZAE 000149282Notice is hereby given that the annual general meeting of shareholders and debenture holders (“unitholders”) of RINwill be held at the offices of the company at 2 Arnold Road, Rosebank Johannesburg on Tuesday, 29 January 2013 at10:00am for the purposes of:A. Presenting the consolidated audited annual financial statements of the company and the Group (as approved bythe Board of Directors of the company), including the reports of the external auditors, Audit and Risk Committeeand Directors for the year ended 31 August 2012, all of which are included in the Annual Report 2012;B. Transacting any other business as may be transacted at an annual general meeting of linked unitholdersof a company:1. Considering and, if deemed fit, adopting with or without modification, the special and ordinary resolutions setout below in the manner required by the Companies Act, 71 of 2008, as amended (the “Companies Act”):Kindly note that:• a unitholder entitled to attend and vote at the annual general meeting is entitled to appoint a proxy to attend,participate in and vote at the meeting in the place of the unitholder;• a proxy need not also be a unitholder of the company;• meeting participants (including proxies) are required to provide reasonably satisfactory identificationbefore being entitled to attend or participate in the annual general meeting; and• the Chairman must be reasonably satisfied that the right of any person to participate in and vote(whether as a unitholder or as a proxy for a unitholder) has been reasonably verified.Forms of identification include valid identity documents, drivers’ licences and passports.1.1. SPecIAL RESOLUTION 1: LINKED UNIT REPURCHASES“Resolved that the directors be authorised in terms of the company’s Memorandum of Incorporation, until this authoritylapses at the next annual general meeting of the company unless it is then renewed at the next annual general meetingof the company and provided that this authority shall not extend beyond 15 months from the date of passing of this specialresolution, to enable the company or any subsidiary of the company to repurchase linked units of the company subject tothe Listings Requirements of the JSE Limited (“JSE”) and the Companies Act No. 71 of 2008, as amended ("the CompaniesAct") on the following basis:a. the acquisition of linked units must be implemented through the order book operated by the JSE trading systemwithout any prior understanding or arrangement between the company and the counterparty;b. the company (or any subsidiary) must be authorised to do so in terms of its Memorandum of Incorporation;c. the number of linked units which may be repurchased pursuant to this authority in any financial year (whichcommenced 1 September 2012) may not in the aggregate exceed 20% (or 10% where the acquisitions are effectedby a subsidiary) of the company’s share capital as at the date of this notice of annual general meeting;d. repurchases may not be made at a price more than 10% above the weighted average of the market value on the JSEof the linked units in question for the five business days immediately preceding the repurchase;Company Informatione. repurchases may not take place during a prohibited period (as defined in paragraph 3.67 of the ListingsRequirements of the JSE) unless a repurchase programme is in place and the dates and quantities of linked unitsto be repurchased during the prohibited period have been determined and full details thereof announced on SENSprior to commencement of the prohibited period;Redefine Properties International Limited Annual Report 201295

Company InformationNotice of Annual General MeeTIng ofShareholders and DebenTURe HOLDers1.1. SPecIAL RESOLUTION 1: LINKED UNIT REPURCHASES continuedf. after the company has repurchased linked units which constitute, on a cumulative basis, 3% of the number of linkedunits in issue (at the time that authority from linked unitholders for the repurchase is granted), the company shallpublish an announcement to such effect, or any other announcements that may be required in such regard in termsof the JSE Listings Requirements applicable from time to time;g. a resolution by the board of directors must be passed that the board of directors of the company authorises therepurchase, that the company and the relevant subsidiaries have passed the solvency and liquidity test as set out insection 4 of the Companies Act and that, since the test was performed, there have been no material changes to thefinancial position of the group;h. the Company (or any subsidiary) shall appoint only one agent to effect repurchases on its behalf.”In accordance with the Listings Requirements of the JSE the directors record that:Although there is no immediate intention to effect a repurchase of the linked units of the company, the directors wouldutilise the general authority to repurchase linked units as and when suitable opportunities present themselves, whichmay require immediate action.The directors undertake that, after considering the maximum number of linked units that may be repurchased and theprice at which the repurchases may take place pursuant to the general authority to repurchase securities, for a periodof 12 months after the date of notice of this annual general meeting:• the company and the Group will, in the ordinary course of business, be able to pay its debts;• the consolidated assets of the company and the Group fairly valued in accordance with International FinancialReporting Standards, will be in excess of the consolidated liabilities of the company and the group fairly valued inaccordance with International Financial Reporting Standards; and the company’s and the Group’s share capital,reserves and working capital will be adequate for ordinary business purposes.The following additional information, some of which may appear elsewhere in the Annual Report of which this noticeforms part, is provided in terms of the Listings Requirements of the JSE for purposes of this general authority:• Directors – pages 8 and 9;• Major beneficial unitholders – page 89;• Directors’ interests in linked units – page 26; and• Capital structure of the company – pages 60 and 61.Litigation statementIn terms of section 11.26 of the Listings Requirements of the JSE, the directors, whose names appear on pages 8 and9 of the Annual Report of which this notice forms part, are not aware of any legal or arbitration proceedings includingproceedings that are pending or threatened, that may have or have had in the recent past (being at least the previous12 months) a material effect on the Group’s financial position.Directors’ responsibility statementThe directors whose names appear on pages 8 and 9 of the Annual Report of which this notice forms part, collectivelyand individually accept full responsibility for the accuracy of the information pertaining to this special resolution andcertify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make anystatement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that thespecial resolution contains all information required by the Companies Act, and the Listings Requirements of the JSE.Material changesOther than the facts and developments reported on in the Annual Report of which this notice forms part, there havebeen no material changes in the affairs or financial position of the company and its subsidiaries since the date ofsignature of the audit report for the financial year ended 31 August 2012 and up to the date of this notice.96 Redefine Properties International LimitedAnnual Report 2012

Reason for and effect of special resolution 1The reason for Special Resolution 1 is to afford directors of the company a general authority for the company (or asubsidiary of the company) to effect a buy-back of the company’s linked units on the JSE. The effect of the resolutionwill be that the directors will have the authority, subject to the Listings Requirements of the JSE and the CompaniesAct, to effect acquisitions of the company’s linked units on the JSE.This resolution will require the support of at least 75% of the voting rights exercised on it in order for it to be adopted.1.2 SPecIAL RESOLUTION 2: FInancIAL ASSISTance FOR SUBSCRIPTION OF SecURITIESSpecial resolution 2: Financial assistance“Resolved that to the extent required by the Companies Act, 71 of 2008 (“Companies Act”), the board of directors ofthe company may, subject to compliance with the requirements of the company’s memorandum of incorporation, theCompanies Act and the JSE Listings Requirements, each as presently constituted and as amended from time to time,authorise the company to –(a) provide financial assistance, as contemplated in section 44 of the Companies Act, by way of loan, guarantee, theprovision of security or otherwise, to:(i)a financier of and to a related or inter-related company or corporation of the company (including any of itssubsidiaries), or to a member of a related or inter-related corporation, or to a person related to any suchcompany, corporation or member; and(ii) a director or prescribed officer of the company or of a related or inter-related company (or any person relatedto any such company, director or prescribed officer) or to any other person who is a participant in any of thecompany’s or a related or inter-related company’s share or other employee incentive scheme where suchfinancial assistance is provided in terms of any such scheme that does not satisfy the requirements of section97 of the Companies Act,for the purpose of, or in connection with, the subscription of any option or any securities issued or to be issuedby the company or a related or inter-related company, or for the purchase of any securities of the company or arelated or inter-related company; and(b) provide direct or indirect financial assistance in terms of section 45 of the Companies Act by way of loans,guarantees, the provision of security or otherwise, to any of its present or future subsidiaries and/or any othercompany or corporation that is or becomes related or inter-related (as defined in the Companies Act) to thecompany for any purpose or in connection with any matter.Such authority/ies to endure until the next annual general meeting of the company.Any term used in this special resolution which has been defined in the Companies Act shall bear the same meaning inthis special resolution as that defined term of the Companies Act.”Reason for and effect of special resolution 2Section 44 of the Companies Act provides, inter alia, that the particular financial assistance must be provided onlypursuant to a special resolution of the shareholders, adopted within the previous 2 (two) years, which approved suchassistance either for the specific recipient, or generally for a category of potential recipients, and the specific recipientfalls within that category and the board of directors must be satisfied that:• immediately after providing the financial assistance, the company would satisfy the solvency and liquidity test; and• the terms under which the financial assistance is proposed to be given are fair and reasonable to the company.The company would like the ability to provide financial assistance, if required in terms of section 44 of the Companies Act.Company InformationRedefine Properties International Limited Annual Report 201297

Company InformationNotice of Annual General MeeTIng ofShareHOLDeRS and DebenTURe HoldeRS continuedIn addition the company would like the ability in appropriate circumstances to continue to provide financial assistance,as may be required from time to time, in accordance with section 45 of the Companies Act. Under the Companies Act,the company will, however, require the special resolution referred to above to be adopted. The granting of such financialassistance is also subject to, the Board of directors of the company being satisfied that:• the terms under which the financial assistance is proposed to be given are fair and reasonable to the company;• immediately after providing the financial assistance, the company would satisfy the solvency and liquidity testcontemplated in the Companies Act; and• all applicable requirements in respect of financial assistance as set out in the Company’s Memorandum ofIncorporation have been complied with.In the circumstances and in order to, inter alia, ensure that the company’s subsidiaries and other related and interrelatedcompanies and corporations have access to financing and/or financial backing from the company (as opposed tobanks), it is necessary to obtain the approval of unitholders, as set out in special resolution number 1.Therefore, if approved the company shall be authorised to provide financial assistance in accordance with the provisionsof sections 44 and 45 of the Companies Act to the persons/entities referred to in special resolution number 2 above.This resolution will require the support of at least 75% of the voting rights exercised on it in order for it to be adopted.1.3 SPecIAL RESOLUTION 3 – ISSUE OF SHARES TO A RELATED OR INTER-RELATED COMPanyTo consider and if deemed fit pass the following special resolution:“Resolved that shares issued or to be issued by the company to a related or inter-related company, as such terms aredefined in the Companies Act 71 of 2008 as amended (“Companies Act”), be and are hereby approved in accordance withthe provisions of section 41(1) of the Companies Act, provided that any such issue is in accordance with the provisions ofthe Listings Requirements of the JSE from time to time and provided further that the approval granted in terms hereofshall be valid until the company’s next annual general meeting of shareholders and debenture holders”.The reason and effect for special resolution 3:The company periodically, as the need arises, funds its activities through the issue of linked units, including to itscontrolling shareholder. Under the provisions of the newly enacted Companies Act, any such issue to its controllingshareholder requires approval by way of a special resolution. Accordingly, the company is proposing this specialresolution number 3.This resolution will require the support of at least 75% of the voting rights exercised on it in order for it to be adopted.98 Redefine Properties International LimitedAnnual Report 2012

1.4 SPecIAL RESOLUTION 4: ADOPTION OF NEW MEMORanDUM OF INCORPORATION“Resolved that the Company’s existing Memorandum of Incorporation shall be and is hereby substituted in its entirety withthe Memorandum of Incorporation tabled at this annual general meeting and initialled by the Chairman for identificationpurposes (the “new Memorandum of Incorporation”). The new Memorandum of Incorporation will take effect from thedate of filing of the new Memorandum of Incorporation with the Companies and Intellectual Properties Commission”.Reason for and effect of special resolution 4The board of directors of the Company has passed a resolution proposing that Special Resolution Number 4 be putto unitholders for the purpose of ensuring that the company adopts a new memorandum of incorporation which iscompliant with the Companies Act 71 of 2008 as amended and the JSE Listings Requirements.The new Memorandum of Incorporation is available for inspection at the Company’s registered office, being 3rd Floor,Redefine Place, 2 Arnold Road, Rosebank, Johannesburg, 2196 from 20 December 2012 to 28 January 2013.This resolution will require the support of at least 75% of the voting rights exercised on it in order for it to be adopted.1.5 ORDInaRY RESOLUTION 1: RE-ELecTION OF DIRecTOR“Resolved that M. Wainer who retires in terms of the company’s Memorandum of Incorporation and who, being eligible,offers himself for re-election, be re-elected as a director of the company.”An abridged curriculum vitae is included in the Annual Report of which this notice forms part.This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.1.6 ORDInaRY RESOLUTION 2: RE-ELecTION OF DIRecTOR“Resolved that P.M. Todd who retires by rotation in terms of the company’s Memorandum of Incorporation and whobeing eligible, offers himself for re-election, be re-elected as a director of the company.”An abridged curriculum vitae is included in the Annual Report of which this notice forms part.This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.1.7 ORDInaRY RESOLUTION 3: RE-APPOINTMenT OF AUDIT COMMITTee MEMBERS“Resolved that P. Todd, G. Heron and B. Nackan be re-appointed as members of the Audit Committee”.This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.1.8 ORDInaRY RESOLUTION 4: RE-APPOINTMenT OF AUDITORS“Resolved that KPMG Inc. be re-appointed as the auditors of the company from the conclusion of this annual generalmeeting until the conclusion of the next annual general meeting of the company.”This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.1.9 ORDInaRY RESOLUTION 5: UNISSUED LINKED UNITS“Resolved that all authorised but unissued linked units of the company be placed under the control of the directorsof the company until the next annual general meeting, with the authority to allot and issue all or part thereof in theirdiscretion, subject to the provisions of the Companies Act 71 of 2008 as amended, and the Listings Requirements ofthe JSE Limited.”This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.Company InformationRedefine Properties International Limited Annual Report 201299

Company InformationNotice of Annual General MeeTIng ofShareHOLDeRS and DebenTURe HoldeRS continued1.10 ORDInaRY RESOLUTION 6: ISSUE OF LINKED UNITS FOR CASH“Resolved that, subject to the Memorandum of Incorporation of the company and the debenture trust deed, thedirectors of the company be and are hereby authorised until this authority lapses at the next annual general meetingof the company, provided that this authority shall not extend beyond 15 months, to allot and issue linked units for cashsubject to the Listings Requirements of the JSE Limited (“JSE”) and the Companies Act 71 of 2008 as amended, on thefollowing basis:a. the allotment and issue of linked units for cash shall be made only to persons qualifying as public unitholders andnot to related parties, as defined in the Listings Requirements of the JSE;b. the number of linked units issued for cash shall not in the aggregate in the financial year of the company (whichcommenced 1 September 2012) exceed 3% of the company’s issued linked units. The number of linked units whichmay be issued for cash shall be based on the number of linked units in issue at the date of the application, addedto those that may be issued in future (arising from the conversion of options/convertibles) at the date of suchapplication, less any linked units issued, or to be issued in future arising from options/convertible linked unitsissued during the current financial year; plus any linked units to be issued pursuant to a rights issue which hasbeen announced, is irrevocable and is fully underwritten, or an acquisition which has had final terms announced;c. the maximum discount at which linked units may be issued for cash is 10% of the weighted average price on theJSE of those linked units over 30 days prior to the date that the price of the issue is agreed between the companyand the party subscribing for the linked units;d. after the company has issued linked units for cash which represent, on a cumulative basis within a financial year5% or more of the number of linked units in issue prior to that issue, the company shall publish an announcementcontaining full details of the issue, including the effect of the issue on the net asset value, net tangible asset value,earnings, headline earnings, and if applicable diluted earnings and diluted headline earnings per linked unit of thecompany; ande. the linked units which are the subject of the issue for cash must be of a class already in issue, or where this is notthe case, must be limited to such linked units or rights as are convertible into a class already in issue.”In terms of the Listings Requirements of the JSE a 75% majority of the votes cast by unitholders present or representedby proxy at the annual general meeting must be cast in favour of Ordinary Resolution 6 for it to be approved.1.11 ORDInaRY RESOLUTION 7: SIGnaTURE OF DOCUMenTATION“Resolved that a director of the company or the company secretary be and is hereby authorised to sign all suchdocumentation and do all such things as may be necessary for or incidental to the implementation of OrdinaryResolution numbers 1, 2, 3, 4, 5, and 6 and Special Resolution numbers 1, 2, 3, 4 and 5 which are passed by the linkedunitholders with and subject to the terms thereof”.This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.C. Transacting any other business as may be transacted at an annual general meeting of debenture holders of acompany; and1. Considering and, if deemed fit, adopting with or without modification, the debenture holder special and ordinaryresolutions set out below:1.1. DEBenTURE SPecIAL RESOLUTION 1: LINKED UNIT REPURCHASES“Resolved that the directors be authorised in terms of the company’s Memorandum of Incorporation and the provisionsof the RIN Debenture Trust Deed, until this authority lapses at the next annual general meeting of the company,provided that this authority shall not extend beyond 15 months, to enable the company or any subsidiary of the companyto acquire linked units of the company subject to the Listings Requirements of the JSE Limited and the Companies Act71 of 2008 as amended, on the following basis:a. the acquisition of linked units must be implemented through the order book operated by the JSE trading systemwithout any prior understanding or arrangement between the company and the counterparty;b. the company (or any subsidiary) must be authorised to do so in terms of its Memorandum of Incorporation;100 Redefine Properties International LimitedAnnual Report 2012

c. the number of linked units which may be acquired pursuant to this authority in the financial year (whichcommenced 1 September 2012) may not in the aggregate exceed 20% (or 10% where the acquisitions are effectedby a subsidiary) of the company’s issued linked units as at the date of this notice of annual general meeting;d. repurchases may not be made at a price more than 10% above the weighted average of the market value on the JSEof the linked units in question for the five business days immediately preceding the repurchase;e. repurchases may not take place during a prohibited period (as defined in paragraph 3.67 of the ListingsRequirements of the JSE) unless a repurchase programme is in place and the dates and quantities of linked unitsto be repurchased during the prohibited period have been determined and full details thereof announced on SENSprior to commencement of the prohibited period;f. after the company has acquired linked units which constitute, on a cumulative basis, 3% of the number of linkedunits in issue (at the time that authority from linked unitholders for the repurchase is granted), the company shallpublish an announcement to such effect, or any other announcements that may be required in such regard in termsof the JSE Listings Requirements applicable from time to time.g. a resolution by the board of directors must be passed that the board of directors of the company authorises therepurchase, that the company and the relevant subsidiaries have passed the solvency and liquidity test as set out insection 4 of the Companies Act and that, since the test was performed, there have been no material changes to thefinancial position of the group;h. the company (or any subsidiary) shall appoint only one agent to effect repurchases on its behalf.”In accordance with the Listings Requirements of the JSE the directors record that:Although there is no immediate intention to effect a repurchase of the linked units of the company, the directors wouldutilise the general authority to repurchase linked units as and when suitable opportunities present themselves, whichmay require immediate action.The directors undertake that, after considering the maximum number of linked units that may be repurchased and theprice at which the repurchases may take place pursuant to the buyback general authority, for a period of 12 monthsafter the date of this annual general meeting:• the company and the Group will, in the ordinary course of business, be able to pay its debts;• the consolidated assets of the company and the Group fairly valued in accordance with International FinancialReporting Standards, will be in excess of the consolidated liabilities of the company and the Group after thebuyback; and• the company’s and the Group’s share capital, reserves and working capital will be adequate for ordinarybusiness purposes.The following additional information, some of which may appear elsewhere in the Annual Report of which this noticeforms part, is provided in terms of the Listings Requirements of the JSE for purposes of this general authority:• Directors – pages 8 and 9;• Major beneficial linked unitholders – page 89;• Directors’ interests in linked units – page 26; and• Capital structure of the company – pages 60 and 61.Litigation statementIn terms of section 11.26 of the Listings Requirements of the JSE, the directors, whose names appear on pages 8 and9 of the Annual Report of which this notice forms part, are not aware of any legal or arbitration proceedings includingproceedings that are pending or threatened, that may have or have had in the recent past (being at least the previous12 months) a material effect on the company’s financial position.Company InformationRedefine Properties International Limited Annual Report 2012101

Company InformationNotice of Annual General MeeTIng ofShareHOLDeRS and DebenTURe HoldeRS continued1.1. DEBenTURE SPecIAL RESOLUTION 1: LINKED UNIT REPURCHASES continuedDirectors’ responsibility statementThe directors whose names appear on pages 8 and 9 of the Annual Report of which this notice forms part, collectively andindividually accept full responsibility for the accuracy of the information pertaining to this debenture resolution and certifythat, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statementfalse or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the debentureresolution contains all information required by the Companies Act, and the Listings Requirements of the JSE.Material changesOther than the facts and developments reported on in the Annual Report of which this notice forms part, there havebeen no material changes in the affairs or financial position of the company and its subsidiaries since the date ofsignature of the audit report for the financial year ended 31 August 2012 and up to the date of this notice.In terms of the RIN Debenture Trust Deed, the resolution is classed as a debenture special resolution and as such isrequired to be passed by a majority consisting of not less than 75% of the votes cast by debenture holders present inperson or represented by proxy at the meeting.1.2 DEBenTURE SPecIAL RESOLUTION 2: ISSUE OF LINKED UNITS FOR CASH“Resolved that, pursuant to the Memorandum of Incorporation of the company and the RIN Debenture Trust Deed, thedirectors of the company be and are hereby authorised until this authority lapses at the next annual general meetingof the company, provided that this authority shall not extend beyond 15 months, to allot and issue linked units for cashsubject to the Listings Requirements of the JSE Limited and the Companies Act, on the following bases:a. the allotment and issue of linked units for cash shall be made only to persons qualifying as public unitholders andnot to related parties, as defined in the Listings Requirements of the JSE;b. the number of linked units issued for cash shall not in the aggregate in the financial year of the company (whichcommenced 1 September 2012) exceed 3% of the company’s issued linked units. The number of linked units whichmay be issued for cash shall be based on the number of linked units in issue at the date of the application, addedto those that may be issued in future (arising from the conversion of options/convertibles) at the date of suchapplication, less any linked units issued, or to be issued in future arising from options/convertible linked unitsissued during the current financial year; plus any linked units to be issued pursuant to a rights issue which hasbeen announced, is irrevocable and is fully underwritten, or an acquisition which has had final terms announced;c. the maximum discount at which linked units may be issued for cash is 10% of the weighted average price on theJSE of those linked units over 30 days prior to the date that the price of the issue is agreed between the companyand the party subscribing for the linked units;d. after the company has issued linked units for cash which represent, on a cumulative basis within a financialyear,5% or more of the number of linked units in issue prior to that issue, the company shall publish anannouncement containing full details of the issue, including the effect of the issue on the net asset value, nettangible asset value, earnings, headline earnings, and if applicable diluted earnings and diluted headline earningsper linked unit of the company; ande. the linked units which are the subject of the issue for cash must be of a class already in issue, or where this is notthe case, must be limited to such linked units or rights as are convertible into a class already in issue.”In terms of the Listings Requirements of the JSE a 75% majority of the votes cast by debenture holders present inperson or represented by proxy at the annual general meeting must be cast in favour of Debenture Special Resolution 2for it to be approved.102 Redefine Properties International LimitedAnnual Report 2012

1.3 DEBenTURE ORDInaRY RESOLUTION 1: UNISSUED LINKED UNITS“Resolved that all authorised but unissued linked units of the company be placed under the control of the directorsof the company until the next annual general meeting, with the authority to allot and issue all or part thereof in theirdiscretion, subject to the provisions of the Companies Act No. 71 of 2008 as amended, and the Listings Requirements ofthe JSE Limited.”This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.1.4. DEBenTURE ORDInaRY RESOLUTION 2: SIGnaTURE OF DOCUMenTATION“Resolved that a director of the company or the company secretary be and is hereby authorised to sign all suchdocumentation and do all such things as may be necessary for or incidental to the implementation of Debenture SpecialResolution numbers 1 and 2 and Debenture Ordinary Resolution number 1, which are passed by the linked unitholderswith and subject to the terms thereof.”This resolution will require the support of more than 50% of the voting rights exercised on it in order for it to be adopted.Voting, proxies and related matters – statement in terms of section 62(3)(e) of the Companies ActEach of RIN’s linked units comprises one ordinary share and one debenture. Certificated and own-name dematerialisedunitholders are therefore advised that they must complete a separate form of proxy for unitholders and for debentureholders in order for their vote/s to be valid. The form of proxy for certificated and own-name dematerialised unitholdersis set out on page 105 of the Annual Report and the form of proxy for certificated and own-name dematerialiseddebenture holders is set out on page 107 of the Annual Report.A unitholder of the company entitled to attend, speak and vote at the annual general meeting is entitled to appoint aproxy or proxies to attend, speak and to vote in his stead. The proxy need not be a unitholder of the company.On a show of hands, every unitholder of the company present in person or represented by proxy shall have one voteonly. On a poll, every unitholder of the company present in person or represented by proxy shall have one vote for everylinked unit in the company by such unitholder.A form of proxy is attached for the convenience of certificated and own-name dematerialised unitholders holding linkedunits in the company who cannot attend the annual general meeting but wish to be represented thereat.Such unitholders must complete and return the attached form of proxy and lodge it with the transfer secretaries of thecompany.Dematerialised unitholders who have not elected own-name registration in the sub-register of the company through aCentral Securities Depository Participant (“CSDP”) and who wish to attend the annual general meeting, must instructthe CSDP or broker to provide them with the necessary authority to attend.Dematerialised unitholders who have not elected own-name registration in the sub-register of the company througha CSDP and who are unable to attend, but wish to vote at the annual general meeting, must timeously provide theirCSDP or broker with their voting instructions in terms of the custody agreement entered into between that unitholderand the CSDP or broker. Such unitholders are advised that they must provide their CSDP or broker with separate votinginstructions in respect of the shares and the debentures in terms of their linked units.Forms of proxy may also be obtained on request from the company’s registered office. The completed forms of proxymust be deposited at, posted or faxed to the transfer secretaries Computershare Investor Services (Proprietary)Limited, Ground Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107), to be received atleast 48 hours prior to the meeting. Any unitholder who completes and lodges a form of proxy will nevertheless beentitled to attend and vote in person at the annual general meeting should the unitholder subsequently decide to do so.Company InformationRedefine Properties International Limited Annual Report 2012103

Company InformationNotice of Annual General MeeTIng ofShareHOLDeRS and DebenTURe HoldeRS continued1.4. DEBenTURE ORDInaRY RESOLUTION 2: SIGnaTURE OF DOCUMenTATION continuedPlease note that section 63(1) of the Companies Act, requires that persons wishing to participate in the general meeting(including the aforementioned representative) must provide satisfactory proof of identification before they may soparticipate.Important dates• Record date for purposes of receiving this notice: Friday, 14 December 2012• Record date for purposes of voting at the meeting: Friday, 18 January 2013By order of the board.Probity Business Services (Proprietary) LimitedCompany SecretaryRegistered office3rd FloorRedefine Place2 Arnold RoadRosebank2196Transfer SecretariesComputershare Investor Services (Proprietary) LimitedGround Floor70 Marshall StreetJohannesburg2001104 Redefine Properties International LimitedAnnual Report 2012

FORM of PROxy for shareHOLDeRSRedefine Properties International LimitedRegistration Number 2010/009284/06(“RIN” or “the company”)Share Code: RINISIN Code: ZAE 000149282Each of RIN’s linked units comprises one ordinary share and one debenture. Certificated and own-name dematerialisedunitholders are therefore advised that they must complete a separate form of proxy for certificated and own-namedematerialised unitholders and a separate form of proxy for certificated and own-name dematerialised debentureholders in order for their vote/s to be valid. The form of proxy for certificated and own-name dematerialised debentureholders is included in the Annual Report.This form of proxy is for use by the holders of the company’s certificated linked units (“certificated unitholders”) and/or dematerialised linked units held through a Central Securities Depository Participant (“CSDP”) or broker who haveselected own-name registration and who cannot attend but wish to be represented at the annual general meeting of thecompany at 3rd Floor, Redefine Place, 2 Arnold Road, Rosebank, 2196 on Tuesday, 29 January 2013 at 10:00am, or anyadjournment if required. Additional forms of proxy are available at the company’s registered office.Not for the use by holders of the company’s dematerialised linked units who have not selected own-name registration.Such unitholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual generalmeeting and request that they be issued with the necessary authorisation to do so, or provide the CSDP or brokertimeously with their voting instructions should they not wish to attend the annual general meeting but wish to berepresented thereat, in order for the CSDP or broker to vote in accordance with their instructions.I/We (NAME IN BLOCK LETTERS)of (address)being the registered holder oflinked unitshereby appointofor failing him/her,ofor failing him/her, the chairperson of the general meeting as my/our proxy to vote for me/us on my/our behalf at theannual general meeting of the company to and at any adjournment thereof.Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. Unless this is done the proxywill vote as he/she thinks fit.In favour of Against Abstain1.1 Special Resolution 1: General authority to enable the company (or any subsidiary) to repurchaselinked units of the company1.2 Special Resolution 2: Financial Assistance1.3 Special Resolution 3: Authority for the company to issue shares to a related or inter-related company1.4 Special Resolution 4: Adoption of New Memorandum of Incorporation1.5 Ordinary Resolution 1: To re-elect M. Wainer as a director of the company1.6 Ordinary Resolution 2: To re-elect P.M. Todd as a director of the company1.7 Ordinary Resolution 4: To re-appoint Audit Committee members1.8 Ordinary Resolution 5: To re-appoint KPMG as auditors1.9 Ordinary Resolution 6: Authority to place unissued linked units under control of the directors1.10 Ordinary Resolution 7: General authority to enable the company to issue linked unitsfor cash up to 3% of the authorised but unissued linked units1.11 Ordinary Resolution 8: To authorise the signature of documentationCompany InformationSigned this day of 2012/13Signature assisted by (if applicable)Redefine Properties International Limited Annual Report 2012105

Company InformationNOTES TO THE FORM OF PROxy FOR shareHOLDeRS1. Each of RIN’s linked units comprises one ordinary share and one debenture. Certificated and own-name dematerialisedunitholders are therefore advised that they must complete a separate form of proxy for certificated and own-namedematerialised unitholders and a separate form of proxy for certificated and own-name dematerialised debentureholders in order for their vote/s to be valid. The form of proxy for certificated and own-name dematerialised debentureholders is included in the Annual Report.2. This form of proxy is to be completed only by those members who are:3. holding linked units in certificated form; or4. recorded in the sub-register in electronic form in their “ownname”.5. Each unitholder is entitled to appoint one or more proxies (none of whom need to be a unitholder of the company) toattend, speak and vote in place of that unitholder at the annual general meeting.6. Unitholders that are certificated or own-name dematerialised unitholders may insert the name of a proxy or the namesof two alternate proxies of the unitholder’s choice in the space/s provided, with or without deleting “the chairperson ofthe general meeting”, but any such deletion must be initialled by the unitholders. The person whose name stands firston the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusionof those whose names follow. If no proxy is named on a lodged form of proxy, the chairperson shall be deemed to beappointed as the proxy.7. A unitholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable bythe unitholder in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy,in the case of any proxy other than the chairperson, to vote or abstain from voting as deemed fit and in the case of thechairperson to vote in favour of the resolution.8. A unitholder or his/her proxy is not obliged to use all the votes exercisable by the unitholder, but the total of the votes castor abstained from may not exceed the total of the votes exercisable in respect of the linked units held by the unitholder.9. Forms of proxy must be lodged at, posted or faxed to the transfer secretaries, Computershare Investor Services(Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107), to bereceived at least 48 hours prior to the meeting.10. The completion and lodging of this form of proxy will not preclude the relevant unitholder from attending the annualgeneral meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof,should such unitholder wish to do so. Where there are joint holders of linked units, the vote of the first joint holder whotenders a vote as determined by the order in which the names stand in the register of unitholders, will be accepted.In addition to the aforegoing, a unitholder may revoke the proxy appointment by (i) cancelling it in writing, or making alater inconsistent appointment of a proxy; and (ii) delivering a copy of the revocation instrument to the proxy, and to thecompany. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authorityto act on behalf of the unitholder as at the later of the date stated in the revocation instrument, if any; or the date onwhich the revocation instrument was delivered in the required manner.11. Where there are joint holders of any linked units, only that holder whose name appears first in the register in respect ofsuch linked units needs sign this form of proxy.12. The chairperson of the annual general meeting may reject or accept any form of proxy which is completed and/or receivedotherwise than in accordance with these notes, provided that, in respect of acceptances, the chairperson is satisfied as tothe manner in which the unitholder concerned wishes to vote.13. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacitymust be attached to this form of proxy unless previously recorded by the company or Computershare Investor Services(Proprietary) Limited or waived by the chairperson of the annual general meeting.14. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.15. A minor must be assisted by his/her parent/guardian unless the relevant documents establishing his/her legal capacityare produced or have been registered by Computershare Investor Services (Proprietary) Limited.16. The aforegoing notes contain a summary of the relevant provisions of section 58 of the Companies Act No. 71 of2008, as amended.106 Redefine Properties International LimitedAnnual Report 2012

FORM of PROxy of DebenTURe HOLDeRSProperties International LimitedRegistration Number 2010/009284/06(“RIN” or “the company”)Share Code: RINISIN Code: ZAE 000149282Each of RIN’s linked units comprises one ordinary share and one debenture. Certificated and own-namedematerialised debenture holders are therefore advised that they must complete a separate form of proxy forcertificated and own-name dematerialised unitholders and a separate form of proxy for certificated and own-namedematerialised debenture holders in order for their vote/s to be valid. The form of proxy for certificated and ownnamedematerialised unitholders is included in the Annual Report.This form of proxy is for use by the holders of the company’s certificated linked units (“certificated unitholders”) and/or dematerialised linked units held through a Central Securities Depository Participant (“CSDP”) or broker who haveselected own-name registration and who cannot attend but wish to be represented at the annual general meeting of thecompany at 3rd Floor, Redefine Place, 2 Arnold Road, Rosebank, 2196 on Tuesday, 29 January 2013 at 10:00am, or anyadjournment if required. Additional forms of proxy are available at the company’s registered office.Not for the use by dematerialised unitholders who have not selected own-name registration. Such unitholders mustcontact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and request thatthey be issued with the necessary authorisation to do so, or provide the CSDP or broker timeously with their votinginstructions should they not wish to attend the annual general meeting but wish to be represented thereat, in order forthe CSDP or broker to vote in accordance with their instructions.I/We (NAME IN BLOCK LETTERS)of (address)being the registered holder ofdebentures in the companyhereby appointofor failing him/her,ofor failing him/her, the chairperson of the general meeting as my/our proxy to vote for me/us on my/our behalf at theannual general meeting of the company to and at any adjournment thereof.Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. Unless this is done the proxywill vote as he/she thinks fit.In favour of Against Abstain1.1 Debenture Special Resolution 1: General authority to enable the company (or any subsidiary)to re-purchase linked units of the company1.2 Debenture Special Resolution 2: General authority to enable the company to issue for cash up to3% of the authorised but unissued linked units1.3 Debenture Ordinary Resolution 1: To place the unissued linked units under the control of directors1.4 Debenture Ordinary Resolution 2: To authorise the signature of documentationSigned this day of 2012/13Company InformationSignature assisted by (if applicable)Redefine Properties International Limited Annual Report 2012107

Company InformationNOTES TO THE FORM OF PROxy FOR DEBenTURE HOLDERS1. Each of the linked units comprises one ordinary share and one debenture. Certificated and own-name dematerialiseddebenture holders are therefore advised that they must complete a separate form of proxy for certificated and ownnamedematerialised unitholders and a separate form of proxy for certificated and own-name dematerialised debentureholders in order for their vote/s to be valid. The form of proxy for certificated and own-name dematerialised unitholdersincluded in the Annual Report.2. This form of proxy is to be completed only by those members who are:3. holding linked units in certificated form; or4. recorded in the sub-register in electronic form in their “own-name”.5. Each unitholder is entitled to appoint one or more proxies (none of whom need to be a unitholder of the company) toattend, speak and vote in place of that unitholder at the annual general meeting.6. Unitholders that are certificated or own-name dematerialised unitholders may insert the name of a proxy or the namesof two alternate proxies of the unitholder’s choice in the space/s provided, with or without deleting “the chairperson of thegeneral meeting”, but any such deletion must be initialled by the unitholders. The person whose name stands first on theform of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of thosewhose names follow. If no proxy is named on a lodged form of proxy, the chairperson shall be, deemed to be appointed asthe proxy.7. A unitholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable bythe unitholder in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy,in the case of any proxy other than the chairperson, to vote or abstain from voting as deemed fit and in the case of thechairperson to vote in favour of the resolution.8. A unitholder or his/her proxy is not obliged to use all the votes exercisable by the unitholder, but the total of the votes castor abstained from may not exceed the total of the votes exercisable in respect of the linked units by the unitholder.9. Forms of proxy must be lodged at, posted or faxed to the transfer secretaries, Computershare Investor Services(Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107) to bereceived at least 48 hours prior to the meeting.10. The completion and lodging of this form of proxy will not preclude the relevant unitholder from attending the annualgeneral meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, shouldsuch unitholder wish to do so. Where there are joint holders of linked units, the vote of the first joint holder who tenders avote as determined by the order in which the names stand in the register of unitholders, will be accepted.11. Where there are joint holders of any linked units, only that holder whose name appears first in the register in respect ofsuch linked units needs sign this form of proxy.12. The chairperson of the annual general meeting may reject or accept any form of proxy which is completed and/or receivedotherwise than in accordance with these notes, provided that, in respect of acceptances, the chairperson is satisfied as tothe manner in which the unitholder concerned wishes to vote.13. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacitymust be attached to this form of proxy unless previously recorded by the company or Computershare Investor Services(Proprietary) Limited or waived by the chairperson of the annual general meeting.14. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.15. A minor must be assisted by his/her parent/ guardian unless the relevant documents establishing his/her legal capacityare produced or have been registered by Computershare Investor Services (Proprietary) Limited.108 Redefine Properties International LimitedAnnual Report 2012

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