REG-RAK Real Estate Ltd: Annual Financial Report

RAK REAL ESTATE LTD

REPORT OF THE DIRECTORS
AND
FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2008

CHAIRMAN'S STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2008

RAK Real Estate Ltd. was formed as a cash shell in March 2008 and
floated on PLUS in August 2008 where it remained a cash shell until post year
end. Subsequent to that year end of December 31, 2008, the Company completed a
reverse take over transaction and vendor placing.

The Acquisition of Trade

On 25 February 2009, the Company agreed to acquire ("the
Acquisition") the entire beneficial interest in and the economic benefit of
the Rafco International Real Estate Company K.S.C.C. ("Rafco") business. Its
principal assets are currently the Salmiyah Commercial Complex and the Khorafi
Commercial Complex building projects ("Projects").

The total consideration paid for the Acquisition was $927,129,210
satisfied by the issue of the consideration shares being 185,425,842 Shares,
at an issue price per Share of $5.00. The Board had received a valuation
report in respect of the Rafco business dated 30th June 2008 indicating a net
present value for the Rafco projects and business of $927,129,210. For the
reasons described below, the Board was satisfied that the valuation remained
valid as at the date of the Acquisition. It is the view of the Board that the
Acquisition will add significant value to the Company when the Projects are
completed.

In addition, in advance of completion of the Acquisition,
Securities Group CO KSCC acquired the legal and beneficial ownership from the
principal shareholder, Mr Rafed Al Khorafi, of 18,357,158 shares by way of a
vendor placing representing 9.88 per cent of the Enlarged Share Capital at a
price per share of $5.00 amounting to an aggregate consideration of
$91,785,790.00.

The Company also entered into an Outsourcing Agreement where Rafco
was appointed to provide project and construction management and design/build
services to clients within MENA Countries. Existing and proposed Rafco key
service offerings, which vary by geography, include design and build,
construction management, project and programme management, design management,
design engineering, procurement and asset and facilities management. All
relevant services will be conducted by Rafco with respect to the Projects and
will include the management of the contracts. In providing each of the
services, Rafco shall at all times, amongst other things, provide the services
in accordance with best industry practice as detailed in the Outsourcing
Agreement and, in particular, perform all of the obligations applicable either
to the Company or Rafco and manage those contracts including, but not limited
to, protecting the interests of the Company or Rafco in a manner to promote
the best interests of the Company.

Information on the Salmiyah Commercial Complex and the Khorafi
Commercial Complex

The Salmiyah Commercial Complex is located on land adjoining the
Gulf Road and Salem Al Mubarak in Salmiyah, Kuwait City, Kuwait, and will
comprise a twenty floor tower in one of Kuwait's prime locations. Demolition
is currently ongoing on the site of the Salmiyah Commercial Complex. The
Company estimates that construction will take four years from its
commencement. This complex is presently intended to comprise of the
following:-

* basements (1&2) for parking facilities and recreation
restaurants;

* ground floor for stores and health clubs;

* mezzanine for stores, pool and cinema;

* second floor for recreation centres;

* third floor for administration and miscellaneous let outs; and

* floors 4 to 20 for rooms, suites, apartments and offices.

CHAIRMAN'S STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2008

The Khorafi Commercial Complex is located in the area of Sharq, in
the vicinity of the Al Raya Complex and Hotel and many other distinguished
real estate projects with a nationwide reputation. The construction of the
Khorafi Commercial Complex is estimated to be completed within two years from
the start date of construction and it is presently intended that it will
comprise the following:-

* two basements;

* the ground floor;

* the first floor;

* the second floor;

* the third floor;

* three utility floors; and

* 26 office floors.

As at the date of the Acquisition, the Directors estimated that
capital contributions and expenditures, by Mr. Rafed Al Khorafi, RAFCO and
related entities in respect of the Projects to 31 December 2008 is
KD49,715,545 (equivalent to an exchange rate of US$172,773,451 as of 25 June
2009). It is estimated that to complete the Projects a further KD37,169,024
(US$129,171,279) will be required. The sums provided thus far in relation to
the Projects (for example, service providers, construction engineers etc) have
been supplied directly to such persons by Mr. Al Khorafi and/or related
entities. Should such sums not be available to RAK from any other source, any
sums required will be supplied to RAK by Mr Al Khorafi personally

The Acquisition represents an important opportunity for the Company
to significantly strengthen its growth prospects and accordingly enhance
shareholder value.

New Board Structure

Upon completion of the Acquisition the Board accepted resignations
from Edwin S. Lee, Jason R. Futko, and Spencer J. Wilson. Ahmad Al Omani took
on the additional role as Chief Executive and Rafed Al Khorafi was appointed
as Chairman. The Board also accepted the following new members: Mohammed Nour,
Finance Director; Michael Duncan Chartres O.B.E., FCA, Non Executive Director;
and Mehdi Varzi, Non Executive Director.

Strategy for the Enlarged Company

In the admission document prepared in relation to the initial
admission of the shares to trading on PLUS dated 18 July 2008, it was stated
that the Directors believed that MENA Real Estate Businesses offer material
opportunities for growth and expressed the Company's investment criteria as
the intention to acquire either the whole or part of suitable MENA Real Estate
Businesses and to be an active investor seeking, to the extent permitted by
all applicable laws, to control and operate an acquisition target.

The Acquisition completed post year end is regarded by the Board as
a first step towards pursuing the Company's investment strategy.

After completing this first Acquisition, the Company intends to
finish the Projects and, concurrently, seek appropriate avenues for their
commercial exploitation. In addition, the Company intends to continue to seek
to acquire either the whole or part of suitable MENA Real Estate Businesses as
the Company believes that MENA Real Estate Businesses offer material
opportunities for growth and enhancement in Shareholder value.

CHAIRMAN'S STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2008

It is the Company's intention to become an industry leader in the
real estate investment arena in MENA Countries. The Company will continue to
seek the optimum utilisation of shareholders' funds and of market
opportunities thereby maximising shareholder value. Profit generated from the
Projects along with debt, if deemed appropriate and commercially available, is
intended to be re-invested into other projects meeting RAK's investment
strategy thereby achieving an enhancement in shareholder value.

Rafed Al Khorafi

Chairman

30 June 2009

DIRECTORS' REPORT

FOR THE PERIOD ENDED 31 DECEMBER 2008

The Company was incorporated on 5 March 2008. The Directors present
their report and financial statements from the date of incorporation to 31
December 2008.

PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS

The principal activity of the Company is that of a holding company.
The Company has investigated acquisitive opportunities in the Real Estate
Sector and since the year end, as more fully explained in the PLUS readmission
document dated 16 February 2009, the Company has acquired the entire
beneficial interest in and the economic benefit of two properties, the
business and the assets of Rafco International Real Estate Company K.S.C.C .
Further details are explained in Note 13.

A detailed review of the business of the Company during the year
and an indication of likely future developments may be found in the Chairman's
Report.

RESULTS AND DIVIDENDS

The loss for this period ended 31 December 2008 was £556,880.

The Directors do not recommend the payment of a dividend for the
period.

DIRECTORS

The names of the current Directors of the Company are shown in the
Company information on page 2. Ahmad M Al Omani was appointed on 29 May 2008.
Rafed Al-Khorafi, Mohammed Nour, Mehdi Varzi and Michael Chartres were
appointed on 25 February 2009. Jason R Futko, Spencer J Wilson and Edwin S Lee
were appointed on 6 May 2008 and resigned on 25 February 2009. Gerard Thompson
and John May were appointed on 5 March 2008 and resigned on 6 May 2008.

DIRECTORS' INTERESTS

The Directors who served during the period ended 31 December 2008
or prior to the date of this report had, at that time the following beneficial
interests in the shares of the Company:

At the date of 31 December At the date of
appointment 2008 this report
Ordinary Shares Ordinary Shares Ordinary Shares
Ahmad M Al Omani 1,000 1,000 1,000
Jason R Futko 0 0 n/a
Spencer J Wilson 0 0 n/a
Edwin S Lee 0 0 n/a
Rafed Al-Khorafi 309,999 309,999 167,378,683
Mohammed Nour 1,000 1,000 1,000
Michael Chartres 0 0 0
Gerard Thompson 0 0 0
John May 0 0 0
Mehdi Varzi 0 0 0

KEY PERFORMANCE INDICATORS

The Board monitors the activities and performance of the group on a
regular basis. The primary performance indicator applicable to the company is
Return on Investment. This key performance indicator was not significant
during the period ended 31 December 2008 however it will be assessed during
the 2009 year and reported on in the 2009 directors' report.

RISK MANAGEMENT

The management of the business and the execution of the Company's
strategy are subject to a number of risks. The key business risks affecting
the Company are set out below.

Risks are formally reviewed by the Board, and appropriate processes
are put in place to monitor and mitigate them. If more than one event occurs,
it is possible that the overall effect of such events would compound the
possible adverse effects on the Company.

General and economic risks:

- Contractions in the world economies or increases in the rate of
inflation resulting from international conditions.

- Movements in global equity and share markets and changes in
market sentiment towards the property industry.

Foreign exchange risk

The Company's functional and presentational currencies are US
Dollars. The company operates internationally and is exposed to foreign
exchange risk arising from exposure to Sterling and monetary assets and
liabilities held in Sterling. The Company does not undertake hedging
transactions to mitigate this risk.

Financial Risk Management

The Company's operations expose it to a variety of financial risks
that include the effect of changes in debt market prices and foreign currency
exchange rates and interest rate risk. The Company has a risk management
programme in place that seeks to limit the adverse effects on the financial
performance of the Company by monitoring levels of debt finance and the
related finance costs. The Company does not use derivative financial
instruments to manage interest rate costs and, as such, no hedge accounting is
applied.

Details of the Company's financial risk
management policies are set out in Note 1 to the Financial Statements.

Internal Controls

The Board recognises the importance of both
financial and non-financial controls and has reviewed the Company's control
environment and any related shortfalls during the year. Since the Company was
established, the Directors are satisfied that, given the current size and
activities of the Company, adequate internal controls have been implemented.
Whilst they are aware that no system can provide absolute assurance against
material misstatement or loss, in light of the current activity and proposed
future development of the Company, continuing reviews of internal controls
will be undertaken to ensure that they are adequate and effective.

Going Concern

The Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable
future and, therefore, continue to adopt the going concern basis in preparing
the Annual Report and Financial Statements. Further details on their
assumptions and their conclusion thereon are included in the statement on
going concern in the accounting policies.

Post Balance Sheet Events

The Company acquired the entire beneficial interest in and the
economic benefit of two properties, the business and the assets of Rafco
International Real Estate Company K.S.C.C on 25 February 2009. Further details
of this transaction are set out in Note 13 to the Financial Statements.

Policy and Practice on Payment of Creditors

The Company agrees terms and conditions for its business
transactions with suppliers. Payment is then made in accordance with these
terms, subject to the terms and conditions being met by the supplier. As at 31
December 2008, the Company had an average of 35 days' purchases outstanding in
trade payables.

Disclosure of Information to Auditors

So far as each of the Directors is aware at the time the report is
approved:

- there is no relevant audit information of which the company's
auditors are unaware; and

- the Directors have taken all steps that they ought to have taken
to make themselves aware of any relevant audit information and to establish
that the auditors are aware of that information.

Auditors

Littlejohn LLP were appointed auditors to the Company and in
accordance with applicable laws and regulations a resolution proposing that
they be re-appointed will be put to the Annual General Meeting.

This report was approved by the Board on 30 June 2009 and signed on
its behalf by.

Rafed Al Khorafi

Director

STATEMENT OF DIRECTORS' RESPONSIBILITIES

FOR THE PERIOD ENDED 31 DECEMBER 2008

Directors' responsibilities

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

The PLUS Market Rules as published by PLUS Markets plc (the "PLUS"
Rules) requires the Directors to prepare Financial Statements for each
financial year. Under the PLUS Rules the Directors have prepared the Financial
Statements in accordance with International Financial Reporting Standards
(IFRS). The Financial Statements are required by the PLUS Rules to give a true
and fair view of the state of affairs of the Company at 31 December 2008 and
of the profit or loss for the period then ended. In preparing these Financial
Statements the Directors are required to:

- select suitable accounting policies and then apply them
consistently;

- make judgments and estimates that are reasonable and prudent;

- state that the Financial Statements comply with IFRS, subject to
any material departures disclosed and explained in the Financial Statements;
and

- prepare the Financial Statements on the going concern basis,
unless it is inappropriate to presume that the Company will continue in
business, in which case there should be supporting assumptions or
qualifications as necessary.

The Directors confirm that they have complied with the above
requirements in preparing the Financial Statements.

The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial position of
the Company, and enable them to ensure that the Financial Statements comply
with applicable laws and regulations. They are also responsible for
safeguarding the assets of the Company, and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF RAK REAL ESTATE LIMITED

We have audited the Financial Statements of RAK Real Estate Ltd for
the period ended 31 December 2008 which comprise the Income Statement, the
Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement ,
the accounting policies and the related notes. These Financial Statements have
been prepared in accordance with the accounting policies set out therein.

This report is made solely to the Company's shareholders, as a body
in compliance with the PLUS Market Rules as published by PLUS Markets plc (the
"PLUS Rules"). Our audit work has been undertaken so that we might state to
the Company's shareholders those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the
Company and the Company's shareholders as a body, for our audit work, for this
report, or for the opinions we have formed.

Management's Responsibilities for the Financial Statements

Management is responsible for the preparation and fair presentation
of these Financial Statements in accordance with International Financial
Reporting Standards. This responsibility includes: designing, implementing and
maintaining internal controls relevant to the preparation and fair
presentation of the Financial Statements that are free from material
misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.

Auditor's Responsibilities

Our responsibility is to audit the Financial Statements, in
accordance with relevant legal and regulatory requirements including the PLUS
Rules and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the Financial Statements
give a true and fair view, and have been properly prepared in accordance with
the PLUS Rules. We also report to you whether, in our opinion, the information
given in the directors' report is consistent with the Financial Statements.
The information given in the Directors' report includes that specific
information presented in the Chairman's statement that is cross referred from
the Business Review section of the Directors' report.

In addition we report to you if, in our opinion, the company has
not kept proper accounting records, if we have not received all the
information and explanations that we require for our audit, or if information
specified by law regarding directors' remuneration and other transactions is
not disclosed.

We read the other information contained in the annual report, and
consider whether it is consistent with the audited Financial Statements.The
other information comprises only the directors' report, and the chairman's
statement. We consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the Financial
Statements. Our responsibilities do not extend to any other information.

Basis of Audit Opinion

We conducted our audit in accordance with International Standards
on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the Financial Statements. It also includes an assessment of the
significant estimates and judgments made by the Directors in the preparation
of the Financial Statements, and of whether the accounting policies are
appropriate to the Company's circumstances, consistently applied and
adequately disclosed.

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

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF RAK REAL ESTATE LIMITED

Opinion

In our opinion:

- the Financial Statements give a true and fair view, in accordance
with IFRS, of the state of the Company's affairs as at 31 December 2008 and of
its loss and cash flows for the period then ended;

- the information given in the directors' report is consistent with
the Financial Statements.

Littlejohn LLP 1 Westferry Circus
Chartered Accountants Canary Wharf
and Registered Auditors London E14 4HD

30 June 2009

INCOME STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2008

Income statement

Period ended
31 December
2008
Notes $

Revenue -

Administrative expenses 4 (556,880)

Operating loss (556,880)

Income tax expenses -

Loss for the period (556,880)

Attributable to:

Equity holders of the company (556,880)

Loss per share 5 (1.74)

The income statement has been prepared on the basis that all
operations are continuing operations.

BALANCE SHEET

At 31 DECEMBER 2008

As at 31
December
2008
Notes $

Assets

Current assets

Trade and other receivables 9 46,006
Cash and cash equivalents 6 790,414

Total assets 836,420

Capital and reserves attributable to
Equity holders of the Company

Ordinary shares 7 320,000
Share premium 943,718
Retained earnings (556,880)

Total Equity 706,838

Trade and other payables 8 129,582

Total Equity and Liabilities 836,420

The Financial Statements were approved by the Board of Directors on
30 June 2009 and were signed on its behalf by:

Rafed Al Khorafi

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 DECEMBER 2008

Notes Ordinary Share Retained Total
shares earnings
Premium
$ $ $ $

Balance at 5 March 2008 - - - -

Issue of ordinary shares 7 320,000 1,280,000 - 1,600,000

Issue costs - (336,282) - (336,282)

Loss for the period - - (556,880) (556,880)

Balance at 31 December 2008 320,000 943,718 (556,880) 706,838

CASH FLOW STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2008

Period ended
31 December
2008
Notes $

Cash flows from operating activities

Loss for the period (556,880)
Increase in trade and other receivables (46,006)
Increase in trade and other payables 129,582

Net cash generated from operations (473,304)

Cash flows from financing activities

Proceeds from issuance of ordinary shares 6 1,263,718

Net cash generated from financing activities 1,263,718

Net increase in cash and cash equivalents 790,414

Cash and cash equivalents at the beginning of the period -

Cash and cash equivalents at end of period 5 790,414

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2008

1 ACCOUNTING POLICIES

GENERAL INFORMATION

The Company was incorporated in the British Virgin Islands on 5 March 2008 as
a private limited company with the name RAK Real Estate Limited.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to the period presented, unless otherwise stated.

a) Basis of Preparation

The Financial Statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations. The Financial Statements
have also been prepared under the historical cost convention.

The financial statements are presented in US Dollars ($) rounded to the
nearest dollar.

The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the Financial
Statements are disclosed in Note 2.

b) Standards and Interpretations in Issue but not yet effective or
not yet endorsed

IFRS 8 "Operating Segments" requires companies to adopt a
management approach to reporting on their operating segments. This standard is
effective for periods beginning on or after 1 January 2009 and is not expected
to have an impact on the Company's Financial Statements.

A revised version of IAS 1 "Presentation of Financial Statements"
will require information in financial statements to be aggregated on the basis
of shared characteristics, and introduce a statement of comprehensive income.
This standard is effective for periods beginning on or after 1 January 2009
and is not expected to have an impact on the Company's Financial Statements.

A revised version of IAS 23 "Borrowing Costs" removes the option of
immediately recognising as an expense borrowing costs that relate to assets
that take a substantial period of time to get ready for use or sale. This
standard is effective for periods beginning on or after 1 January 2009. The
expected impact of this amendment is being assessed by management.

An amendment to IFRS 2 "Share-based Payment" clarifies that vesting
conditions are service conditions and performance conditions only, and
specifies that all cancellations, whether by the entity or by other parties,
should receive the same accounting treatment. This standard is effective for
periods beginning on or after 1 January 2009 and is not expected to have an
impact on the Company's Financial Statements.

A revised version of IFRS 3 "Business Combinations" and amendments
to IAS 27 "Consolidated and Separate Financial Statements" ensure that the
accounting for business combinations is the same whether an entity is applying
IFRSs or US GAAP. These standards are effective for periods beginning on or
after 1 January 2009 and are not expected to have an impact on the Company's
Financial Statements.

b) Standards and Interpretations in Issue but not yet effective or
not yet endorsed (continued)

Amendments to IFRS 1 "First-time Adoption of International
Financial Reporting Standards" and IAS 27 "Consolidated and Separate Financial
Statements" address concerns that retrospectively determining the cost of an
investment in separate financial statements and applying the cost method in
accordance with IAS 27 on first-time adoption of IFRS cannot, in some
circumstances, be achieved without undue cost or effort. These standards are
effective for periods beginning on or after 1 January 2009 and are not
expected to have an impact on the Company's Financial Statements.

Amendments to IFRS 7 "Financial Instruments: Disclosures" require
enhanced disclosures about fair value measurements and liquidity risk. This
standard is effective for periods beginning on or after 1 January 2009, and is
not expected to have an impact on the Company's Financial Statements.

IFRIC 12 "Service Concession Arrangements" addresses how service
concession operators should apply existing IFRSs to account for the
obligations they undertake and rights they receive in service concession
arrangements. This standard is effective for periods beginning on or after 1
January 2009, and is not expected to have an impact on the Company's Financial
Statements.

IFRIC 13 "Customer Loyalty Programmes" addresses accounting by
entities that grant loyalty award credits to customers who buy goods or
services. This standard is effective for periods beginning on or after 1
January 2009, and is not expected to have an impact on the Company's Financial
Statements.

IFRIC 15 "Agreements for the Construction of Real Estate" provides
guidance on how to determine whether an agreement for the construction of real
estate is within the scope of IAS 11 Construction Contracts or IAS 18 Revenue
and when revenue from the construction should be recognised. This standard is
effective for periods beginning on or after 1 January 2009. The expected
impact of this amendment is being assessed by management.

IFRIC 16 "Hedges of a Net Investment in a Foreign Operation"
clarifies:

- whether risk arises from the foreign currency exposure to the
functional currencies of the foreign operation and the parent entity, or from
the foreign currency exposure to the functional currency of the foreign
operation and the presentation currency of the parent entity's consolidated
financial statements;

- which entity within a group can hold a hedging instrument in a
hedge of a net investment in a foreign operation, and in particular whether
the parent entity holding the net investment in a foreign operation must also
hold the hedging instrument;

- how an entity should determine the amounts to be reclassified
from equity to profit or loss for both the hedging instrument and the hedged
item when the entity disposes of the investment.

This standard is effective for periods beginning on or after 1
October 2008, and is not expected to have an impact on the Company's Financial
Statements.

IFRIC 17 "Distributions of Non-cash Assets to Owners" standardises
practice in the measurement of distributions of non cash assets to owners.
This standard is effective for periods beginning on or after 1 July 2009, and
is not expected to have an impact on the Company's Financial Statements.

IFRIC 18 "Transfers of Assets from Customers" clarifies the
requirements of IFRS for agreements in which an entity receives from a
customer an item of property, plant and equipment that the entity must then
use either to connect the customer to a network or to provide the customer
with ongoing access to a supply of goods or services (such as a supply of
electricity, gas or water). This standard is effective for transfers of assets
from customers received on or after 1 July 2009, and is not expected to have
an impact on the Company's Financial Statements.

c) Financial Assets and Liabilities

Financial assets and liabilities are accounted for as follows:

Financial assets and liabilities are initially recognised on the date at which
the Company becomes a party to the contractual provisions of the instrument.

The company derecognises a financial liability when its contractual
obligations are discharged or cancelled or expire.

d) Cash and Cash Equivalents

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

e) Foreign Currency Translation

Items included in the Financial Statements are measured using the currency of
the primary economic environment in which the entity operates ("the functional
currency"). The Financial Statements are presented in US Dollars ($), which is
the Company's functional and presentational currency.

Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions,
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies, are recognised in the income
statement, except when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges.

f) Share Capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction from the proceeds.

g) Trade Payables

Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective interest method.

h) Related Parties

Parties are considered to be related to the Company if the Company has the
ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice
versa, or here the Company and the party are subject to common control or
common significant influence. Related parties may be individuals (being
members of key management personnel, significant shareholders and/or their
close family members) or other entities and include entities which are under
significant influence of related parties of the Company where those parties
are individuals, and post-employment benefit plans which are for the benefit
of employees of the Company or of any entity that is a related party of the
Company.

i) Going Concern

The Company's directors have considered whether it is appropriate
to prepare the financial statements on the basis that the Company is a going
concern. In considering this matter the directors have reviewed the Company's
budget for 2009 and 2010. This involved consideration of the cash flow
implications of the budget and the plan. The Company also has the continuing
support of Mr Rafed Al-Khorafi, a director and shareholder of the Company who
has agreed to provide adequate funding for the Company to meet its liabilities
if required, as they fall due.

The directors see no reason why the Company should not continue in
operational existence for the foreseeable future. For this reason they have
adopted the going concern basis in preparing the financial statements.

2 FINANCIAL RISK MANAGEMENT

Financial Risk Factors

The Company's activities expose it to a variety of financial risks:
market risk (including currency risk, fair value interest rate risk, cash flow
interest rate risk and price risk), credit risk and liquidity risk. The
Company's overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the
Company's financial performance.

Market Risk

The Company has been exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to the Kuwaiti Dinar.
Foreign exchange risk arises from future commercial transactions denominated
in a foreign currency. The Company maintains bank accounts in these currencies
to reduce its exposure to this risk. The volume of transactions is not deemed
sufficient to enter into forward contracts.

The Company has no exposure to equity securities price risk, as it
has no listed equity investments.

The Company has interest-bearing assets. Interest-bearing assets
include only cash balances.

Credit Risk

Credit risk arises from cash and cash equivalents.

The Company considers the credit ratings of banks in which it holds
funds in order to reduce exposure to credit risk.

Liquidity Risk

To date the Company has relied upon equity funding to finance
operations. The Directors are confident that adequate funding will be
forthcoming with which to finance operations. Controls over expenditure are
carefully managed.

Capital Risk Management

The Company's objectives when managing capital are to safeguard the
Company's ability to continue as a going concern, in order to provide returns
for shareholders and benefits for other stakeholders, and to maintain an
optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company
may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with IFRS
requires Management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.

The valuation of assets & liabilities, and income & expenses of the
Company were not subject to management judgement, estimates or assumptions.

4 OPERATING LOSS

Loss from operations has been arrived at after charging:

Period ended

31 December
2008
$
Auditors remuneration in respect of:
- The audit of the financial statements 10,600
- Other services in relation to corporate finance and 27,607
taxation
38,207

5 LOSS per share

Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period. The Company has no category of dilutive
potential ordinary shares.

Weighted
average
number of Loss per
Loss shares share
$ $
Basic LPS
Loss attributable
to ordinary
shareholders (556,880) 320,000 (1.74)

(556,880) 320,000 (1.74)

6 Cash and Cash Equivalents

As at
31 December
2008
$

Cash at bank 790,414

7 Share capital

As at

31 December
2008
$
Authorised:
10,000,000,000 Ordinary Shares of $1 each 10,000,000,000

Allotted, called up and fully paid:
320,000 Ordinary Shares of $1 each 320,000

320,000 shares with an aggregate nominal value of $320,000 were allotted
during the period. Total consideration received was $1,600,000, and issue
costs of $336,282 were deducted from share premium.

8 Trade and other payables

As at
31 December
2008
$

Trade creditors 101,298
Accruals and deferred income 28,287

129,582

9 Trade and other RECEIVABLES

As at
31 December
2008
$

Other debtors and prepayments 46,006

46,006

Ultimate controlling partY

The Ultimate Controlling Party is deemed to be Mr Al-Khorafi, who
is a director and principal shareholder of the Company.

10 RELATED PARTY TRANSACTIONS

There were no related party transactions other than the directors'
fees as disclosed in Note 12

12 Directors' remuneration

As at
31 December
2008
$
Ahmed M Al Omani (4) 4,355
Jason R Futko (2) 4,344
Spencer J Wilson (2) 4,355
Edwin S Lee (2) 4,355
Gerard Thompson (1) & (3) -
John May (1) & (3) -
17,419

(1) Appointed 5 March 2008 (4) 29 May 2008
(2) Appointed 6 May 2008 (5) 25 February 2009
(3) Resigned 6 May 2008

No pension benefits are provided for any Director.

13 POST BALANCE SHEET EVENTS

Acquisition

As further detailed in the PLUS re-admission document the Company issued
185,425,842 shares at an issue price of $5 per share for the acquisition of
the entire beneficial interest in and the economic benefit of two properties,
the business and the assets of Rafco International Real Estate Company K.S.C.C
a company incorporated and existing under the laws of the State of Kuwait and
controlled by Rafed Al-Khorafi. The total consideration value as stated in the
re-admission document was $927,129,210 and was approved by shareholders on 25
February 2009.

The Company incurred professional fees and share issue costs associated with
the acquisition totalling $683,193. Work was commenced on the acquisition by
the service providers prior to the period end but some of the invoices was not
invoiced until after the 31 December 2008. The Company has shown the costs
invoiced to the balance sheet date relating to the acquisition as a
prepayment. Other costs that have been invoiced after the year end in respect
of the acquisition may include costs for services rendered for the period to
31 December 2008. These costs have not been accrued for as the directors were
unable to determine the split from the invoices received after the year end.
The directors confirmed that these amounts not accrued for would not have been
material as the bulk of the work invoiced in respect of the acquisition
related to the two to three weeks just before the acquisition in February
2009. Additionally, these accruals would not have had an impact to the Income
Statement but merely accrued for and shown as a prepayment. As a result, these
costs have not been accrued for in the financial statements.

As part of the acquisition the Company purchased the economic rights to two
property projects, the Salmiyah Commercial Complex and the Khorafi Commercial
Complex. Together with the two assets the Company also received the intangible
benefits of the customer base and management team associated with the two
projects. The properties and intangible benefits acquired were valued at
KD266,416,441 ($927,129,210) in June 2008 by BDO Burgan Consulting WLL, and
this valuation was used as a basis for the acquisition. This is the most
recent valuation available and is based on the present value of the future
economic flow of these properties and the associated business acquired. The
Directors believe there to have been no material change in value between this
date and the date of acquisition other than movements in foreign exchange.

Bridge Finance Facility

On 25 February 2009 the Company entered into an agreement with Rafed
Al-Khorafi, a director and principal shareholder of the Company. Rafed
Al-Khorafi agreed to make available by loan, if not otherwise agreed, such
sums without limit as the Company shall require in respect of working capital
including but not limited to such sums as shall be necessary to complete the
proposed developments at Sharq and Salmiya in Kuwait City, Kuwait and any rent
or similar sums in respect of either property.

Drawdown on the facility is available by written application from the Company
for a period of 18 months from the date of the agreement. The balance on any
loan resulting from the facility will be repayable no earlier than 25 February
2011.

"THE DIRECTORS TAKE RESPONSIBILITY FOR THIS STATEMENT"

For further information, please contact:

Corporate Adviser:

City & Westminster Corporate Finance LLP
Gerard Thompson & John May
2nd Floor, Stanmore House
29-30 St. James's Street
London
SW1A 1HB
Telephone: 0044 20766 0080

RAK Real Estate Ltd
C/o Newhaven Capital
Spencer J Wilson
The Fairmont Building
Sheikh Zayed Road
PO Box 24459
Dubai
United Arab Emirates
Telephone: 00971 4312 4393