INGENIA COMMUNITIES GROUP — Annual Report 2007

Aug 30, 2007

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ING Real Estate Investment Management Australia Pty Ltd ABN 91 096 136 202

Level 6, 345 George Street Sydney NSW 2000

Telephone (02) 9033 1012 Facsimile (02) 9033 1060

31 August 2007

The Manager Company Notices Section Australian Securities Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Dear Sir

Please find attached the Appendix 4E – Preliminary Financial Report for ING Real Estate Community Living Fund for the year ended 30 June 2007.

Yours faithfully

Anna Crawford Company Secretary

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APPENDIX 4E PRELIMINARY FINAL REPORT YEAR ENDED 30 JUNE 2007

Name of Entity: ING Real Estate Community Living Group ARSN: 089 038 175

Results for announcement to the market

Results for announcement to the	market	market
	$'000
Revenues from ordinary activities	up 233% to 41,250
Net profit for year	up 116% to 86,798
Net realised income distributable to unitholders	up 112% to 34,358
Net assets per stapled unit (excluding outside equity interest)	30 June 2007	30 June 2006
	$1.22	$1.13

Distributions

Distributions
	Amount per unit (cents)	$'000
Quarter ended 30 September 2006 Quarter ended 31 December 2006 Quarter ended 31 March 2007 Quarter ended 30 June 2007 Total Previous corresponding period	2.675 2.675 2.675 2.675	8,201 8,279 8,360 11,518
	10.70	36,358
	9.78	17,997
Record date for determining entitlements to the distribution	29 June 2007

The ING Real Estate Community Living Group was formed on 11 January 2007 by the stapling of the units in two property trusts, ING Real Estate Community Living Fund and ING Real Estate Community Living Management Trust (collectively the “Trusts”). In accordance with AASB Interpretation 1002 Post-Date-of-Transition Stapling Arrangements , this stapling arrangement is regarded as a business combination and ING Real Estate Community Living Fund has been identified as the parent for preparing consolidated financial reports. Consequently, the consolidated financial statements of the ING Real Estate Community Living Fund present the combined financial results of both Trusts.

In those consolidated financial statements, the interest of the unitholders of ING Real Estate Community Living Management Trust is shown as a minority interest.

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Consolidated income statement

Revenue Rental income Deferred management fee Other property income Interest income Other income Net foreign exchange gain Gain on change in fair value of: Investment properties Derivatives Expenses Property expenses Finance costs Responsible Entity's fees Loss on change in fair value of: Investment properties Derivatives Net foreign exchange loss Other Share of associates' net profit Profit before income tax Income tax expense Net profit for the year Distributions per stapled unit Earnings per stapled unit - basic and diluted Distributable income per stapled unit Net profit attributable to unitholders of ING Real Estate Community Living Management Trust Net profit attributable to unitholders of ING Real Estate Community Living Fund	Consolidated 2007 2006 $'000 $'000 38,158 10,898 481 - 21 139 2,590 1,366
	41,250 12,403 277 - - 4,447 28,882 - (9,759) (874) (13,347) (5,362) (917) - (1,217) - - (761) - (82) (1,324) (464) 79,284 37,682
	123,129 46,989 (36,331) (6,719)
	86,798 40,270 (605) -
	86,193 40,270
	Cents Cents 10.70 9.78 27.0 24.2 10.7 9.8

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ING Real Estate Community Living Group Preliminary final report As at 30 June 2007

Consolidated balance sheet

Current assets Cash and cash equivalents Trade and other receivables Derivatives Non-current assets Trade and other receivables Investment properties Properties under construction Investments in associates Other Total assets Current liabilities Payables Retirement village residents' loans Borrowings Derivatives Provision for distribution Non-current liabilities Borrowings Deferred tax liabilities Total liabilities Net assets Unitholders' interest Issued units Reserves Retained earnings Total unitholders' interest Net asset value per stapled unit Attributable to unitholders of ING Real Estate Community Living Management Trust Attributable to unitholders of ING Real Estate Community Living Fund	Consolidated 2007 2006 $'000 $'000 20,061 52,019 13,899 7,166 28,448 2,269
	62,408 61,454
	17,080 15,272 491,785 271,647 18,972 24,701 321,182 172,042 - 5,025
	849,019 488,687
	911,427 550,141
	20,475 13,217 84,428 - - 91,711 1,173 4,983 11,510 7,548
	117,586 117,459
	228,082 83,373 42,658 6,719
	270,740 90,092
	388,326 207,551
	523,101 342,590
	473,793 316,350 (30,174) 3,031 75,638 23,209
	519,257 342,590 3,844 -
	523,101 342,590
	$1.22 $1.13

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Consolidated cash flow statement

Cash flows from operating activities Rental and other property income Property and other expenses Distributions received from associates Interest received Borrowing costs paid Goods and services taxes paid from investing and financing activities Cash flows from investing activities Purchase of and additions to investment properties and properties under construction Investment in associates Loans to associates Other loans made Cash flows from financing activities Proceeds from issue of units Unit issue costs Distributions to unitholders Proceeds from borrowings Repayment of borrowings Net increase/(decrease) in cash Cash at the beginning of the year Effects of exchange rate changes on cash Cash at the end of the year	Consolidated 2007 2006 $'000 $'000 42,062 8,622 (12,109) (1,340) 6,003 5,628 1,429 2,197 (13,556) (6,166) 639 17
	24,468 8,958
	(156,422) (184,866) (96,410) (137,489) (2,100) (14,980) 110 -
	(254,822) (337,335)
	155,048 264,062 (4,046) (9,063) (20,162) (8,553) 174,860 185,824 (106,558) (56,876)
	199,142 375,394
	(31,212) 47,017 52,019 5,002 (746) -
	20,061 52,019

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Consolidated statement of changes in unitholders’ interest

Total unitholders' interest at the beginning of the year Adjustment on adoption of financial instruments accounting standards AASB 132 and AASB 139 Restated unitholders' interest at the beginning of the year Exchange differences on translation of foreign operations Net income recognised directly in unitholders' interest Profit for the year Transactions with unitholders in their capacity as equity holders: Issue of units: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust Distributions paid or payable Distribution of capital Total recognised income and expense for the year is attributable to: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust Total recognised income and expense for the year Total unitholders' interest at the end of the year	Consolidated 2007 2006 $'000 $'000 342,590 60,545 - (1,292)
	342,590 59,253
	(33,205) 3,031
	(33,205) 3,031 86,798 40,270
	53,593 43,301
	162,537 258,033 3,239 - (36,358) (17,997) (2,500) -
	126,918 240,036
	523,101 342,590
	54,198 43,301 (605) -
	53,593 43,301

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Distributable income

Distributable income for the Group is calculated as follows: Net profit for year attributable to unit holders Adjusted for: Lease revenue received from property under construction Gain on revaluation of newly constructed retirement villages (Gain)/loss on change in fair value of: Investment properties Derivatives Gain on change in fair value of investment properties included in share of associates' net profit Borrowing costs amortisation returned Loss on change in fair value of derivatives Net foreign exchange loss Deferred income tax expense Distributable income Distributable income is attributable to unitholders of: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust Distributable income brought forward Transfer from issued units (i) Transfer from retained profits (ii) Distributions paid or payable Distributable income carried forward Distributable income - ING Real Estate Community Living Fund: Distributable income for the year	Consolidated 2007 2006 $'000 $'000 86,798 40,270 508 1,936 1,022 - 1,217 (4,447) (28,882) - (63,285) (31,013) 555 811 - 1,421 94 535 36,331 6,719
	34,358 16,232
	33,753 16,232 605 -
	16,232 -
	33,753 16,232 145 100 2,039 1,810 605 - (36,358) (17,997)
	184 145

(i) Transfer from issued units

The transfer from issued units represents the portion of distributions paid to holders of new units for that part of the period to which the distribution relates that occurred before the issue of the units.

(ii) Transfer from retained profits

The transfer from retained profits represents distributable income earned by the ING Real Estate Community Living Management Trust and distributed by the Fund.

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Earnings and net assets per unit

	Consolidated	Consolidated
	2007	2006
Per stapled unit
Distributable income - $'000	34,358	16,232
Profit attributable to unitholders - $'000	86,798	40,270
Weighted average number of units outstanding - thousands	321,957	166,310
Distributable income per unit - cents	10.7	9.8
Basic and diluted earnings per unit - cents	27.0	24.2
Net assets attributable to stapled unitholders - $'000	523,101	342,590
Number of issued units at end of year - thousands	430,267	304,373
Net assets per unit	$1.22	$1.13

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Segment information

Year ended 30 June 2007 Segment revenue Rental income Deferred management fee Other property income Total segment revenue Interest income Total consolidated revenue Segment result Segment result Share of associates' net profit Interest income Gain on change in fair value of derivatives Finance costs Other expenses Consolidated profit before income tax Segment assets Unallocated Consolidated assets Segment liabilities Unallocated Consolidated liabilities Other segment information Acquisition of investment properties and other non-current assets Carrying amount of investment in associates	Australia North America New Zealand Total $'000 $'000 $'000 $'000	Australia North America New Zealand Total $'000 $'000 $'000 $'000
	15,845 22,313 - 481 - - 21 - -	38,158 481 21
	16,347 22,313 -	38,660 2,590
	14,736 12,308 - (208) 79,180 312
		41,250
		27,044 79,284
	14,528 91,488 312	106,328 2,590 28,882 (13,347) (1,324)
	371,718 489,010 11,925
		123,129
		872,653 38,774
	121,422 47,385 -
		911,427
		168,807 219,519
	151,808 90,299 - 12,180 297,077 11,925
		388,326
		242,107 321,182

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Segment information (continued)

Year ended 30 June 2006 Segment revenue Rental income Other property income Total segment revenue Interest income Total consolidated revenue Segment result Segment result Share of associates' net profit Interest income Finance costs Loss on change in fair value of derivatives Net foreign exchange loss Other expenses Consolidated profit before income tax Segment assets Unallocated Consolidated assets Segment liabilities Unallocated Consolidated liabilities Other segment information Acquisition of investment properties and other non-current assets Carrying amount of investment in associates	Australia North America New Zealand Total $'000 $'000 $'000 $'000	Australia North America New Zealand Total $'000 $'000 $'000 $'000
	9,209 1,689 - 139 - -	10,898 139
	9,348 1,689 -	11,037 1,366
	9,842 4,768 - 219 37,343 120
		12,403
		14,610 37,682
	10,061 42,111 120	52,292 1,366 (5,362) (761) (82) (464)
	202,551 283,530 9,772
		46,989
		495,853 54,288
	20,765 6,719 -
		550,141
		27,484 180,067
	49,579 127,605 - 6,345 155,925 9,772
		207,551
		177,184 172,042

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Associates

(a) Details of associates

(a) Details of associates
Name	Principal activity	Ownership	interest
		2007	2006
ING Real Estate CC Trust No 1(1)	Real estate investment	90%	90%
CSH - INGRE LLC	Real estate investment	49%	49%
ING NZ Subsidiary Trust No 1(1)	Real estate investment	90%	90%
SCV Group Limited(2)	Real estate investment	10%	-
Chartwell ING Regency Master LP	Real estate investment	50%	-

• (1) Although the Group has the economic interest shown, it does not hold a controlling interest in the voting rights of these entities. Consequently, the Responsible Entity has determined that the Group’s ownership interest does not give the Group the capacity to control these entities but rather the power to exercise significant influence.

• (2) Notwithstanding that the group’s interest in this company is less than 20%, the Responsible Entity concluded that the Group has significant influence because the Group has board representation and because it provides a significant proportion of the properties managed by the company.

(b) Share of associates' assets and liabilities Total assets Total liabilities Net assets (c) Share of results of associates Revenue Gain on change in fair value of investment properties Expenses Profit before income tax Income tax expense Profit for the year	Consolidated 2007 2006 $'000 $'000
	748,847 506,742 (427,665) (334,700)
	321,182 172,042
	91,346 35,445 63,285 31,013 (75,347) (28,776)
	79,284 37,682 - -
	79,284 37,682

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Issued units

(a) Carrying amounts

(a) Carrying amounts
Issued units of ING Real Estate Community Living Fund At beginning of year Issued during the year: Placements and rights issues Distribution reinvestment plan Unit issue costs Distribution of capital Transfer to distributable income Borrowing cost amortisation returned At end of year Issued units of ING Real Estate Community Living Management Trust At beginning of year Issued during the year: Placements and rights issues Unit issue costs Distribution of capital At end of year (b) Number of issued units At beginning of year Issued during the year: Placements Distribution reinvestment plan At end of year	Note	Consolidated 2007 2006 $'000 $'000
	(i) (ii) (iii) (i)	316,350 60,938 154,111 264,062 12,274 3,036 (3,848) (9,065) (2,500) - (2,039) (1,810) (555) (811)
		473,793 316,350
		- - 937 - (198) - 2,500 -
		3,239 -
		Consolidated 2007 2006 thousands thousands
		304,373 65,220 115,707 236,407 10,187 2,746
		430,267 304,373

(i) Distribution of capital

The stapling of units in the Trusts was effected by a distribution of capital of $2,500,000 from ING Real Estate Community Living Fund made on 11 January 2007 that was applied in subscription for units in ING Real Estate Community Living Management Trust.

(ii) Transfer to distributable income

The transfer to distributable income represents the portion of distributions paid to holders of new units for that part of the period to which the distribution relates that occurred before the issue of the units.

(iii) Borrowing cost amortisation

As set out in the Product Disclosure Statement lodged with the Australian Securities and Investments Commission on 21 May 2004, the Group has distributed amortisation of debt issue costs as shown.

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Retained earnings

Balance at beginning of year Adjustment on adoption of financial instruments accounting standards AASB 132 and AASB 139 Net profit for the year Transfer from issued units Borrowing cost amortisation returned Distributions paid or payable Balance at end of year The balance at the end of the year comprises: Lease revenue received from property under construction Gain/(loss) on change in fair value of: Investment properties Derivatives Gain on change in fair value of investment properties included in share of associates' net profit Net foreign exchange loss Deferred income tax expense Transfer to distributable income Distributable income	Note	Consolidated 2007 2006 $'000 $'000
	(i)	23,209 (393) - (1,292) 86,193 40,270 2,039 1,810 555 811 (36,358) (17,997)
		75,638 23,209
		(4,591) (4,083) 3,862 6,101 26,169 (2,713) 94,298 31,013 (629) (535) (43,050) (6,719) (605) -
		75,454 23,064 184 145
		75,638 23,209

(i) Change in accounting policy

Under the accounting policies that applied before 1 July 2005, the fair values of derivative financial instruments were not recognised. Under present accounting policies, these instruments are included in the balance sheet at their fair value, with changes in fair value recognised in the income statement. The effect of this change was recognised in retained profits at 1 July 2005.

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Business combinations

(a) Acquisition of subsidiaries – 2007 financial year

On 27 April 2007 the Group acquired all of the issued units of Settlers Co Pty Limited as trustee for Settlers Ownership Trust (“Settlers”). At the date of acquisition, Settlers owned the following investment properties:

• (a) 5 Martens Street Mount Warren park, QLD;

• (b) Ridgewood Blvd & Whitsunday Avenue, Ridgewood, WA;

• (c) Lot 601 Old Mandurah Road, Ravenswood, WA; and

• (d) 21 & 43 Oakmont Avenue, Meadow Springs, WA.

The fair value of the assets and liabilities arising from the acquisition were:

Cash Property investments Retirement village residents' loans Payables Net assets	Fair values $'000
	3,244 139,179 (82,157) (7,056)
	53,210

The resulting outflow of cash was:

Purchase consideration: Cash paid Cash included in net assets Outflow of cash	$'000
	53,210 (3,244)
	49,966

The acquisition of Settlers contributed $900,000 to the net profit attributable to unitholders of the Group for the financial year. The quantitative impact of Settlers were it held for the full financial year has not been disclosed as it would be impractical to determine.

(b) Acquisition of subsidiaries – 2006 financial year On 20 February 2006 the Group acquired all of the units of SunnyCove Gladstone Unit Trust (“Gladstone”). At the date of acquisition, Gladstone owned land with buildings under construction. Gladstone did not contribute to revenue or profit of the Group for the 2006 financial year as the assets remained under construction at 30 June 2006.

The fair values of the assets and liabilities arising from the acquisition, and their carrying amounts in the financial statements of Gladstone immediately prior to the acquisition were:

Property investments	Fair Carrying values amounts $'000 $'000
	2,951 2,951

The purchase consideration, including acquisition costs, was $2,951,000.

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Business combinations (continued)

On 30 June 2006 the Group acquired all of the units of SunnyCove Rockhampton Unit Trust (“Rockhampton”). At the date of acquisition, Rockhampton owned land with buildings under construction. Rockhampton did not contribute to revenue or profit of the Group for the 2006 financial year as the assets remained under construction at 30 June 2006.

The fair values of the assets and liabilities arising from the acquisition, and their carrying amounts in the financial statements of Rockhampton immediately prior to the acquisition were:

Property investments	Fair Carrying values amounts $'000 $'000
	1,325 1,325

The purchase consideration, including acquisition costs, was $1,325,000.

Notes to the cash flow statement

(a) Reconciliation of profit to net cash flows from operations

Notes to the cash flow statement (a) Reconciliation of profit to net cash flows from operations
Adjustments for: Loss/(gain) on change in fair value of: Investment properties Derivatives Excess of share of profits of associates over distributions received Loss on change in fair value of derivatives Borrowing costs amortisation returned Unrealised foreign exchange loss Deferred income tax expense Operating profit for the year before changes in working capital Changes in working capital: (Increase)/decrease in receivables Increase/(decrease) in payables Increase/(decrease) in interest payable Net cash used by operating activities Net profit for the year (b) Non-cash financing and investing activities Re-investment of distributions pursuant to Distribution Investment Plan	Consolidated 2007 2006 $'000 $'000
	86,798 40,270 1,217 (4,447) (28,882) - (73,281) (31,013) - 1,956 555 811 163 - 36,331 6,719
	22,901 14,296 (4,333) (5,463) 4,863 125 1,037 -
	24,468 8,958
	Consolidated 2007 2006 $'000 $'000
	12,274 3,036

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ING Real Estate Community Living Group Preliminary final report Year ended 30 June 2007

Other significant information and commentary on results

See attached press release, results presentation and fund review.

Audit

The preliminary final report is based on accounts that are in the process of being audited.

Anna Crawford Company Secretary

31 August 2007