Page 1 Appendix 4E Preliminary Final Report Year ended 30 June 2009

APPENDIX 4E

Preliminary Final Report Year ended 30 June 2009

Name of Entity:	ING REAL ESTATE COMMUNITY LIVING GROUP
ARSN:	107 459 576

Results for announcement to the market

Results for announcement to the market
	$’000
Revenues from ordinary activities	up 10.2% to 48,800
Net loss for the year	increased 632% to 284,176
Net operating income	down 43.7% to 26,210
Net assets per stapled unit	30 June 2009 $0.40	30 June 2008 $0.94

Page 2 Appendix 4E Preliminary Final Report Year ended 30 June 2009

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Amount per
Distributions unit (cents) $’000
1.5 6,615
Interim - 30 September 2008
Interim - 31 December 2008 - -
Interim - 31 March 2009 - -
Final - 30 June 2009 - -
Total 1.5 6,615
11.0 48,158
Previous Corresponding Period
Record date for determining entitlements
to the distribution n/a
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Note : Franked amount per unit is not applicable

Other significant information and commentary on results See attached press release

For further details, please refer to the following attached documents:

Directors’ report
Audited financial report
Results presentation
Fund review

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Hugh Thomson Company Secretary

26 August 2009

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ING REAL ESTATE COMMUNITY LIVING GROUP

FINANCIAL & ASSOCIATED REPORTS

YEAR ENDED 30 JUNE 2009

ING Real Estate Community Living Group Financial & associated reports Year ended 30 June 2009

	Page
Directors’ report	1
Financial report
Income statements	6
Balance sheets	7
Cash flow statements	8
Statements of changes in unitholders’ interest	9
Note 1 Summary of significant accounting policies	10
Note 2 Accounting estimates and judgements	18
Note 3 Distributions	19
Note 4 Net operating income	20
Note 5 Earnings per unit	21
Note 6 Finance costs	21
Note 7 Income tax	22
Note 8 Cash and cash equivalents	22
Note 9 Trade and other receivables	22
Note 10 Derivatives	23
Note 11 Property investments	23
Note 12 Equity accounted investments	30
Note 13 Payables	31
Note 14 Borrowings	31
Note 15 Deferred tax liabilities	32
Note 16 Issued units	32
Note 17 Reserves	33
Note 18 Retained earnings	34
Note 19 Commitments	34
Note 20 Capital management	34
Note 21 Financial instruments	35
Note 22 Auditor's remuneration	48
Note 23 Related parties	48
Note 24 Subsidiaries	52
Note 25 Segment information	53
Note 26 Notes to the cash flow statements	56
Note 27 Subsequent events	56
Directors’ declaration	57
Auditor’s report	58

The ING Real Estate Community Living Group (“the Group”) has been formed by the stapling of the units in two Australian registered schemes, ING Real Estate Community Living Fund (ARSN 107 459 576) and ING Real Estate Community Living Management Trust (ARSN 122 928 410). ING Management Limited (ABN 15 006 065 032; AFS licence number 237534), the Responsible Entity of both schemes, is incorporated and domiciled in Australia.

A description of the nature of the schemes’ operations and their principal activities is included in the accompanying directors’ report.

The registered office and principal place of business of the Responsible Entity is located at level 6, 345 George Street, Sydney, New South Wales.

The financial report was authorised for issue by the directors of the Responsible Entity on 26 August 2009. The Group has the power to amend and reissue the financial report.

Page 1

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

The ING Real Estate Community Living Group (“the 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”). The Responsible Entity for both trusts is ING Management Limited, which now presents its report together with the financial report for the year ended 30 June 2009 and the auditor’s report thereon.

In accordance with AASB Interpretation 1002 Post-Date-of-Transition Stapling Arrangements , the stapling arrangement discussed above 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.

The directors’ report is a combined directors’ report that covers both Trusts. The financial information given for the ING Real Estate Community Living Group is taken from the consolidated financial statements and notes of the ING Real Estate Community Living Fund.

Directors

The directors of the Responsible Entity at any time during or since the end of the financial year were:

Except as stated, these persons were directors of the Responsible Entity during the whole of the financial year and up to the date of this report.

Principal activity

The principal activity of the ING Real Estate Community Living Fund is investment in real estate. The principal activities of the ING Real Estate Community Living Management Trust are the development, management and operation of the Fund’s real estate assets. There was no significant change in the nature of either Trust’s activities during the financial year.

Review and results of operations

A summary of the Trusts’ result for the financial year is:

Distributable income ($'000) Distributions per stapled unit (cents) Earnings per stapled unit - basic and diluted: Net operating income per stapled unit (cents) Net profit/(loss) for the year	ING Real Estate Community Living Group ING Real Estate Community Living Management Trust 2009 2008 2009 2008
	(284,176) (38,803) 1,276 10,879 26,210 46,567 (6,361) 10,225 1.5 11.0 - - (64.4) (8.9) 0.3 2.5 5.9 10.7 (1.4) 2.3

Page 2

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

The Responsible Entity uses the Fund’s net operating income as an additional performance indicator. Net operating income does not take into account certain items recognised in the income statement including unrealised gains or losses on the revaluation of the Fund’s properties and derivatives.

Net operating income for the financial year has been calculated as follows:

Net loss attributable to unitholders of the Fund Adjusted for: Net foreign exchange loss Net loss on disposal of investment property Net (gain)/loss on change in fair value of: Investment properties Derivatives Retirement village residents' loans Items included in share of net profit of equity accounted investments: Investment properties Derivatives Retirement village residents' loans Gain on revaluation of newly constructed retirement villages Borrowing cost amortisation returned Impairment loss on: Receivables Equity accounted investments Other non-current assets Other items included in share of net profit of equity accounted investments: Non-current asset depreciation and amortisation Discount on deferred purchase consideration Deferred income tax (benefit)/expense Other Net operating income Net operating income is attributable to the unitholders of: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust	Consolidated 2009 2008 $'000 $'000
	(284,176) (38,803) 547 - 1,085 - 71,939 25,188 55,071 (15,505) (7,774) 13,237 178,951 44,478 341 - - 1,937 3,154 6,096 185 217 20,612 - 21,350 3,145 773 - 4,621 4,495 529 1,818 (44,131) 264 3,133 -
	26,210 46,567
	32,571 36,342 (6,361) 10,225
	26,210 46,567

Net operating income for the 2009 financial year decreased by 44% to $26,210,000 from $46,567,000 for the 2008 financial year. The decrease is mainly due to lower Australian Seniors net operating income after the rental portfolio transitioned from master lease income and income guarantee to direct occupancy driven rental income.

Net operating income per stapled unit for the 2009 financial year was down 45% to 5.9 cents, compared to 10.7 cents per stapled unit previously.

The Fund made distributions per stapled unit of 1.5 cents for the financial year, compared with 11.0 cents in 2008.

Page 3

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

Earnings per stapled unit as calculated under applicable accounting standards for the year ended 30 June 2009 were down 55.5 cents to a loss of 64.4 cents, compared to a loss of 8.9 cents per stapled unit for the previous financial year. Investment property devaluations (including share of revaluations of equity accounted investments) and impairments accounted for losses of 56.9 cents and 9.7 cents per stapled unit respectively during the year.

Total assets decreased $246,801,000 or 28% to $632,446,000 over the year primarily due to investment property devaluations. Investment property devaluations during the 2009 financial year were $250,890,000 (including share of revaluations of equity accounted investments), decreasing net asset value per stapled unit by $0.57 or 60%. The basis of the valuations is described in note 1 in the financial report.

Distributions

Details of distributions are given in note 3 in the financial report.

Significant changes in the state of affairs

The directors resolved not to make any distributions for the nine months ended 30 June 2009. Cash retained from this distribution reduction was applied to strengthen the balance sheet. In the opinion of the directors of the Responsible Entity, there were no other significant changes in the state of affairs of either Trust that occurred during the financial year.

Events subsequent to reporting date

On 20 August 2009 the Group announced that one of its equity accounted investments (ING NZ Subsidiary Trust No 1), which owns the New Zealand Students portfolio, finalised negotiations with its lender on terms of a refinance of its existing facility $16,656,000 (New Zealand dollars 20,800,000). The refinance agreement is for an interest only two year term expiring in August 2011.

There has not arisen in the interval between the end of the financial year and the date of this report any other matter or circumstance that has significantly affected, or may significantly affect, the operations of the Trusts, the results of those operations, or the state of affairs of the Trusts, in future financial years.

Likely developments

The Responsible Entity will continue to review capital management initiatives in order to strengthen the balance sheet and the Fund’s position against debt covenants. These initiatives include the ongoing program of asset sales and may include the sale of large portfolios. The Fund may issue equity as part of its capital management strategy.

Environmental regulation

The Trusts’ operations are not subject to any particular and significant environmental regulation under a law of the Commonwealth or of a State or Territory.

Indemnities

The Fund has not indemnified, nor paid any insurance premiums for, a person who is or has been an officer of the Responsible Entity or an auditor of the Fund.

Page 4

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

Interests of directors of the Responsible Entity

Units in the Group held by directors of the Responsible Entity as at 30 June 2009 were:

Number of units

Paul Scully 20,352 Philip Clark 30,000

The other directors of the Responsible Entity did not hold any units in the Fund at that date.

Other information

Fees paid to the Responsible Entity and its associates, and the number of units in the Trusts held by the Responsible Entity and its associates as at the end of the financial year are set out in note 23 in the financial report.

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 5.

Rounding of amounts

The Trusts are of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in this report and in the financial report. Amounts in these reports have been rounded off in accordance with that Class Order to the nearest thousand dollars, unless otherwise stated.

Signed in accordance with a resolution of the directors of the Responsible Entity.

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Richard Colless Chairman Sydney 26 August 2009

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Auditor’s Independence Declaration to the Directors of ING Management Limited as Responsible Entity for ING Real Estate Community Living Fund

In relation to our audit of the financial report of ING Real Estate Community Living Fund and its controlled entities for the financial year ended 30 June 2009, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young

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Douglas Bain Partner

26 August 2009

Liability limited by a scheme approved under Professional Standards Legislation

Page 6

ING Real Estate Community Living Group Income statements Year ended 30 June 2009

Note Rental income Deferred management fee Other property income Distributions receivable from subsidiaries Interest income Net foreign exchange gain/(loss) Net loss on disposal of investment properties Net gain/(loss) on change in fair value of: Investment properties Derivatives Retirement village residents' loans Property expenses Finance costs 6 Responsible Entity's fees 23 Impairment loss on: Receivables 12 Equity accounted investments 12 Investment in subsidiaries 24 Other non-current assets 11(c) Other Share of net loss of equity accounted investments 12 Income tax benefit/(expense) 7 Attributable to unit holders of: ING Real Estate Community Living Fund Distributions per unit 3 Earnings per unit - basic and diluted: Per unit of the Parent 5 Per stapled unit 5 Net operating income per unit: Per unit of the Parent 5 Per stapled unit 5 ING Real Estate Community Living Management Trust Net loss for the year Revenue Other income Expenses Loss before income tax	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
		37,687 33,544 7,352 10,069 3,123 5,356 - - 6,449 2,926 21 3 - - 24,337 28,579 1,541 2,470 2,440 2,161
		48,800 44,296 34,150 40,812 (109) 2,649 746 3,184 (1,085) - (150) - (71,939) (25,188) (7,960) (12,958) (55,071) 15,505 (55,071) 15,505 7,774 (13,237) - - (38,289) (17,472) (3,099) (1,338) (7,979) (6,565) 674 (1,964) (3,355) (3,280) (3,028) (3,280) (20,612) - (43,554) - (21,350) (3,145) (6,203) (3,145) - - (138,105) (99,097) (773) - (773) - (3,751) (1,435) (1,108) (1,289) (160,396) (30,667) - -
		(328,135) (38,539) (223,481) (63,570) 43,959 (264) - -
		(284,176) (38,803) (223,481) (63,570)
		(285,452) (49,682) (223,481) (63,570) 1,276 10,879 - -
		(284,176) (38,803) (223,481) (63,570)
		Cents Cents 1.50 11.00 (64.7) (11.4) (64.4) (8.9) 7.4 8.3 5.9 10.7

Page 7

ING Real Estate Community Living Group Balance sheets As at 30 June 2009

Current assets Cash and cash equivalents Trade and other receivables Investment properties Derivatives Non-current assets Trade and other receivables Investments in subsidiaries Investment properties Properties under construction Plant and equipment Equity accounted investments 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 Accumulated losses *Attributable to unit holders of:* ING Real Estate Community Living Fund: Issued units Reserves Retained earnings Net asset value per unit Total unitholders' interest ING Real Estate Community Living Management Trust	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	8 9 11 10 9 24 11 11 12 13 1(r) 14 10 3 14 15 16 17 18 16 17	13,233 31,525 8,099 21,853 9,830 15,091 6,562 7,733 33,922 - 1,640 - 301 26,674 301 26,674
		57,286 73,290 16,602 56,260
		2,087 21,558 37,356 62,943 - - 187,431 332,248 429,009 504,910 92,977 101,711 8,575 12,742 641 1,413 743 - - - 134,746 266,747 - -
		575,160 805,957 318,405 498,315
		632,446 879,247 335,007 554,575
		25,983 21,768 7,333 5,764 119,569 113,961 - - 167,219 9,452 132,500 - 28,699 - 28,699 - - 10,640 - 10,640
		341,470 155,821 168,532 16,404
		108,094 269,816 - 141,600 5,214 37,928 - -
		113,308 307,744 - 141,600
		454,778 463,565 168,532 158,004
		177,668 415,682 166,475 396,571
		490,186 490,371 486,835 487,020 (11,552) (64,329) - - (300,966) (10,360) (320,360) (90,449)
		177,668 415,682 166,475 396,571
		486,835 487,020 486,835 487,020 (9,407) (65,878) - - (313,726) (21,844) (320,360) (90,449)
		163,702 399,298 166,475 396,571 13,966 16,384 - -
		177,668 415,682 166,475 396,571
		$0.40 $0.94

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ING Real Estate Community Living Group Cash flow statements Year ended 30 June 2009

Cash flows from operating activities Rental and other property income Property and other expenses Proceeds from residents' loans Repayment of residents' loans Distributions received from equity accounted investments Interest received Borrowing costs paid Goods and services taxes received from investing and financing activities Cash flows from investing activities Purchase of and additions to investment properties and properties under construction Proceeds from sale of investment properties Purchase of equity accounted investments Loans to subsidiaries Cash flows from financing activities Unit issue costs Distributions to unitholders Proceeds on restructure of derivatives 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	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	26 16 3	53,842 37,680 15,841 11,643 (41,952) (21,888) (4,725) (4,387) 13,740 22,887 - - (403) (1,235) - - 18,046 34,174 - - 1,278 931 1,314 832 (9,162) (6,541) (244) (2,777) 215 281 34 379
		35,604 66,289 12,220 5,690
		(18,416) (55,624) (3,113) (585) 30,994 - 2,250 - (15,612) (46,242) - - - - - (2,773)
		(3,034) (101,866) (863) (3,358)
		- (82) - (79) (17,255) (35,249) (17,255) (35,249) 1,244 15,000 1,244 15,000 12,244 86,033 - 27,000 (47,369) (18,479) (9,100) -
		(51,136) 47,223 (25,111) 6,672
		(18,566) 11,646 (13,754) 9,004 31,525 20,061 21,853 12,849 274 (182) - -
		13,233 31,525 8,099 21,853

Page 9

ING Real Estate Community Living Group Statements of changes in unitholders’ interest Year ended 30 June 2009

Note Total unitholders' interest at the beginning of the year Exchange differences on translation of foreign operations 17 Share of revaluations of property, plant and equipment made/(reversed) by equity accounted investment 17 Net income recognised directly in unitholders' interest Net loss for the year Transactions with unitholders in their capacity as equity holders: Issue of units 16 Distributions paid or payable 3 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 end of the year Total unitholders' interest at the	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
		415,682 523,101 396,571 494,714
		56,424 (37,802) - - (3,647) 3,647 - -
		52,777 (34,155) - - (284,176) (38,803) (223,481) (63,570)
		(231,399) (72,958) (223,481) (63,570)
		- 13,697 - 13,585 (6,615) (48,158) (6,615) (48,158)
		(6,615) (34,461) (6,615) (34,573)
		177,668 415,682 166,475 396,571
		(228,981) (85,386) (223,481) (63,570) (2,418) 12,428 - -
		(231,399) (72,958) (223,481) (63,570)

Page 10

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies

(a) The Group

The ING Real Estate Community Living Group (“the 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”). ING Real Estate Community Living Fund and ING Real Estate Community Living Management Trust were constituted on 22 November 2003 and 24 November 2006, respectively.

The Responsible Entity for both trusts is ING Management Limited. ING Management Limited is an Australian domiciled company and is a wholly owned company within the ING Groep NV group of companies.

The two Trusts have common business objectives and operate as an economic entity collectively known as ING Real Estate Community Living Group.

The constitutions of the Trusts ensure that, for as long as the Trusts remain jointly quoted on the Australian Stock Exchange, the number of units in each trust shall remain equal and that unitholders in each trust shall be identical.

The stapling structure will cease to operate on the first to occur of:

(a) either of the Trusts resolving by special resolution in accordance with its constitution to terminate the stapling provisions; or
(b) the commencement of the winding up of either of the Trusts.

(b) Basis of preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards ("AASB"), Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (the “Board”) and the Corporations Act 2001.

In accordance with AASB Interpretation 1002 Post-Date-of-Transition Stapling Arrangements , the stapling arrangement discussed above is regarded as a business combination and ING Real Estate Community Living Fund (the “Parent” or “Parent Entity”) has been identified as the parent for preparing consolidated financial reports. The consolidated financial statements present the combined financial results of both Trusts.

The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

The financial report is presented in Australian dollars.

The financial report is prepared on the historical cost basis, except for investment properties, retirement village residents’ loans and derivative financial instruments, which are measured at fair value.

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ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(c) Going concern

At 30 June 2009, the carrying amount of the Group's Australian secured bank debt was $132,500,000 under a fully drawn facility. As at 26 August 2009, there was no change to this amount. This debt is due for repayment on 22 December 2009 and is secured by mortgages over the Group’s Australian investment properties and properties under construction.

The fair value of liabilities to that bank under interest rate and foreign currency derivative agreements at 30 June 2009 was $28,398,000. That fair value is sensitive to movements in foreign exchange and interest rates. Payments under these agreements extend to 1 November 2012, but may be accelerated in the circumstances described below.

The Group's ability to refinance the Australian bank debt on or before its expiry is dependent on future market conditions including the state of credit and real estate markets, foreign currency exchange rates and interest rates. The Group may be able to reduce the amount of the debt to be refinanced by asset sales or by a capital raising. However, there can be no assurance that these could be achieved. If this debt was not refinanced on its expiry, the bank would have the right to require immediate repayment of the debt and settlement of the derivatives entered into with it. If the bank exercised that right, it is likely that assets would not be realised, and liabilities would not be discharged, in the ordinary course of business.

Compliance with any revised facility agreement for the Australian bank debt is also dependent on future market conditions including fair values of investment properties and interest rates. If changes in future market conditions result in a breach of any revised facility agreement, the breach could be waived by the bank or the breach may be able to be rectified or prevented by a capital raising or by asset sales. However, there can be no assurance that these could be achieved. If a breach occurred and was not waived or rectified, the bank would have the right to require immediate repayment of the debt and settlement of the related derivatives. If the bank exercised that right, it is likely that assets would not be realised, and liabilities would not be discharged, in the ordinary course of business.

The Fund has guaranteed its share of a deferred purchase obligation of a joint venture entity. The Fund’s share amounts to $7,291,000 (United States dollars 5,880,000) and the obligation is due on February 2010. In the normal course of business, the obligation would be satisfied by the joint venture partners contributing additional capital to the equity accounted investment. The Fund expects to be able to contribute as required. If the Fund does not contribute, its joint venture partner may contribute on its behalf, with an appropriate adjustment to the partners’ shares in the joint venture. However, there can be no assurance that the Fund’s cash flow will be sufficient to meet its contribution, or that its partner will contribute on its behalf if required. If the obligation is not met, the beneficiary of the Fund’s guarantee would have the right to sue the Fund. In addition, failure to meet the guarantee would constitute an event of default under any revised facility agreement for the Australian bank debt, giving the bank concerned the right to require immediate repayment of the debt and settlement of the related derivatives. In these circumstances, it is likely that assets would not be realised, and liabilities would not be discharged, in the ordinary course of business.

Despite these significant uncertainties, the directors have concluded that there are reasonable grounds to believe that the going concern basis is appropriate.

(d) Adoption of new and revised accounting standards

In the current year the Group has adopted all of the new and revised standards and interpretations issued by the Board that are relevant to its operations and effective for the current annual reporting period. There was no material effect on the financial statements.

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ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(e) Principles of consolidation

The consolidated financial statements comprise the Parent and its subsidiaries as at 30 June 2009 (the “Group”). Subsidiaries are all those entities (including special purpose entities) whose financial and operating policies the Group has the power to govern, which generally accompanies a shareholding of more than one-half of the voting rights.

The financial statements of the subsidiaries are prepared for the same reporting period as the Parent, using consistent accounting policies. Adjustments are made to bring into line dissimilar accounting policies. Inter-company balances and transactions including unrealised profits have been eliminated.

Subsidiaries are consolidated from the date on which control is transferred to the Parent. They are de-consolidated from the date that control ceases.

Minority interests represent the interests in subsidiaries not held by the Group.

Investments in subsidiaries are carried at cost in the Parent’s financial statements.

(f) Distribution policy

A provision for distribution for any distribution declared on or before the end of the reporting period is recognised on the balance sheet in the reporting period to which the distribution pertains.

(g) Foreign currency

(i) Functional and presentation currencies

The functional currency and presentation currency of the Group (with the exception of its foreign subsidiaries) is the Australian dollar.

(ii) Translation of foreign currency transactions

Transactions in foreign currency are initially recorded in the functional currency at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are retranslated at the rate of exchange prevailing at the balance date. All differences in the consolidated financial report are taken to the income statement with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment at which time they are recognised in the income statement.

A non-monetary item that is measured at fair value in a foreign currency is translated using the exchange rates at the date when the fair value was determined.

(iii) Translation of financial statements of foreign subsidiaries

The functional currency of certain subsidiaries is not the Australian dollar. At reporting date, the assets and liabilities of these entities are translated into the presentation currency of the Group at the rate of exchange prevailing at balance date. Financial performance is translated at the average exchange rate prevailing during the reporting period. The exchange differences arising on translation are taken directly to the foreign currency translation reserve in equity.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that foreign operation is recognised in the income statement.

Page 13

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(h) Leases

Leases where the lessor retains substantially all the risk and benefits of ownership are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are capitalised into the value of investment property. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the term of the lease.

(i) Financial assets and liabilities

Current and non-current financial assets and liabilities within the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as at fair value through profit or loss; loans and receivables; held-to-maturity investments; or as available-for-sale. The Group determines the classification of its financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value, plus directly attributable transaction costs unless their classification is at fair value through profit or loss. They are subsequently measured at fair value or amortised cost using the effective interest method. Changes in fair value of available-for-sale financial assets are recorded directly in equity. Changes in fair values of financial assets and liabilities classified as fair value through profit or loss are recorded in the income statement.

(i) Financial assets and liabilities (continued)

The fair values of financial instruments that are actively traded in organised financial markets are determined by reference to quoted market bid prices at the close of business on the balance sheet date. For those with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm's length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum.

(j) Impairment of non-financial assets

Assets other than investment property and financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Non-financial assets that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(k) Cash and cash equivalents

Cash and cash equivalents in the balance sheet and cash flow statement comprise cash at bank and in hand and short-term deposits that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

(l) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. A provision for impairment is made when there is objective evidence that collection of the full amount is no longer probable.

Page 14

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(m) Derivative financial instruments

The Group uses derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks associated with foreign currency and interest rate fluctuations. The Group may also invest in derivatives related to listed property equities and indices and may issue derivatives related to its own units. Such derivative financial instruments are initially recognised at fair value on the date in which the derivative contract is entered into and are subsequently remeasured to fair value.

For hedge accounting, hedges are classified as fair value hedges when they hedge the exposure to changes in the fair value of a recognised asset or liability; cash flow hedges where they hedge exposure to variability in cash flows that is attributable either to a particular risk associated with a recognised asset or liability or to a forecast transaction; or hedges of a net investment in a foreign operation.

Any gain or loss arising from measuring fair value hedges that meet the conditions for hedge accounting is recognised in the income statement. Any gain or loss on the hedged item attributable to the hedged risk is adjusted against the carrying amount of the relevant financial instrument.

Any gain or loss arising on cash flow hedges which hedge firm commitments and which qualify for hedge accounting are recognised directly in equity. Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss.

(m) Derivative financial instruments (continued)

Any gain or loss arising on hedges of a net investment in a foreign operation, which qualify for hedge accounting, are recognised directly in equity. On disposal of the foreign operation, the cumulative amount of any such gains and losses is transferred to profit or loss.

For derivatives that do not meet the documentation requirements to qualify for hedge accounting and for the ineffective portion of qualifying hedges, any gains or losses arising from changes in fair value are recognised in the income statement.

Hedge accounting is discontinued when the hedge instrument expires, is sold, exercised, terminated or no longer deemed effective. Any cumulative gains or losses relating to the hedge that were previously recognised in equity are transferred to the income statement.

(n) Investment property

Land and buildings have the function of an investment and are regarded as composite assets. In accordance with applicable accounting standards, the buildings, including plant & equipment, are not depreciated.

It is the Group’s policy to have all investment properties externally valued at intervals of not more than three years and that such valuation be reflected in the financial reports of the Group. It is the policy of the Responsible Entity to review the fair value of each investment property every six months and to cause investment properties to be revalued to fair values whenever their carrying value differs materially to their fair values.

Fair value represents the amount at which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm’s length transaction at the date of valuation. It is based on current prices in an active market for similar property in the same location and condition and subject to similar lease and other contracts, adjusted for any differences in the nature, location or condition of the property, or in the contractual terms of the leases and other contracts relating to the property.

Page 15

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(n) Investment property (continued)

In the absence of current prices in an active market, the Responsible Entity considers information from a variety of sources, including current prices in an active market for properties of different nature, condition or location, adjusted to reflect those differences, recent prices of similar properties on less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred at those prices, and discounted cash flow projections based on reliable estimates of future cash flows, using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

In determining fair values, expected net cash flows are discounted to their present value using a market determined risk adjusted discount rate. The assessment of fair value of investment properties does not take into account potential capital gains tax assessable. Changes in the fair value of an investment property are recorded in the income statement.

(o) Property under construction

Property under construction is carried at historical cost. Cost includes the cost of acquisition and additions and, during development, includes financing charges, related professional fees incurred and other directly attributable costs.

Property under construction is transferred to investment property on completion of the construction. Any difference between the fair value of the property at that date and its previous carrying amount is recognised in profit or loss.

(p) Equity accounted investments

A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entity in which each venturer has an interest. A contractual arrangement between the venturers establishes joint control over the economic activity of the entity. Associates are those entities over which the Group has significant influence, but not control. Jointly controlled entities and associates, and investments in those entities, are referred to as “equity accounted investments”. Equity accounted investments are accounted for in the Parent’s financial statements using the cost method and in the consolidated financial statements using the equity method. The Group’s share of net profit is recognised in the consolidated income statement and its share of any movement in reserves is recognised in reserves in the consolidated balance sheet. The accumulation of postacquisition movements in the Group’s share of net assets is adjusted against the carrying value of the investment. Distributions received or receivable are recognised in the Parent’s income statement and reduce the carrying value of the investment in the consolidated financial statements.

(q) Payables

Trade and other payables are carried at amortised cost and due to their short-term nature are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and are recognised when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 60 days of recognition.

Page 16

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(r) Retirement village residents’ loans

These loans, which are repayable on the departure of the resident, are classified as financial liabilities at fair value through profit and loss with resulting fair value adjustments recognised in the income statement. The fair value of the obligation is measured as the ingoing contribution plus the resident's share of capital appreciation to reporting date. Although the expected average residency term is around eleven years, these obligations are classified as current liabilities, as required by Accounting Standards, because the Group does not have an unconditional right to defer settlement to more than twelve months after reporting date.

This liability is stated net of deferred management fee accrued to reporting date, because the Group’s contracts with residents require net settlement of those obligations.

(s) Borrowings

Borrowings are initially recorded at the fair value of the consideration received less directly attributable transaction costs associated with the borrowings. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. Under this method fees, costs, discounts and premiums that are yield related are included as part of the carrying amount of the borrowing and amortised over its expected life.

(s) Borrowings (continued)

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Borrowing costs are expensed as incurred except where they are directly attributable to the acquisition, construction or production of a qualifying asset. When this is the case, they are capitalised as part of the acquisition cost of that asset.

(t) Issued units

Issued and paid up units are recognised at the fair value of the consideration received by the Group. Any transaction costs arising on issue of ordinary units are recognised directly in unitholders’ interest as a reduction of the units proceeds received.

(u) Revenue

Revenue from rents, interest and distributions is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. Revenue brought to account but not received at balance date is recognised as a receivable.

Rental income from operating leases is recognised on a straight-line basis over the lease term. Contingent rentals are recognised as income in the financial year that they are earned. Fixed rental increases that do not represent direct compensation for underlying cost increases or capital expenditures are recognised on a straight-line basis until the next market review date.

Reflecting this accounting policy, deferred management fee income is calculated as the expected fee to be earned on a resident’s ingoing loan, allocated pro-rata over the resident’s expected tenure, together with any share of capital appreciation that has occurred at reporting date.

Interest income is recognised as the interest accrues using the effective interest method.

Page 17

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(v) Income tax

(i) Current income tax

Under the current tax legislation, the Group is not liable to pay Australian income tax provided that its taxable income (including any assessable capital gains) is fully distributed to unitholders each year. Tax allowances for building and fixtures depreciation are distributed to unitholders in the form of the tax deferred component of distributions.

However, ING Real Estate Community Living Management Trust and its subsidiaries are subject to Australian income tax.

The subsidiaries that hold the Group’s foreign properties may be subject to corporate income tax and withholding tax in the countries in which they operate. Under current Australian income tax legislation, unitholders may be entitled to receive a foreign tax credit for this withholding tax.

(ii) Deferred income tax

Deferred income tax represents foreign tax (including withholding tax) expected to be payable or recoverable by foreign taxable entities on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised through continuing use or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at reporting date. Income taxes related to items recognised directly in equity are recognised in equity and not against income.

(w) Earnings per unit

Basic earnings per unit is calculated as net profit attributable to unitholders of the Group divided by the weighted average number of issued units. As there are no potentially dilutive units on issue, diluted earnings per unit is the same as basic earnings per unit.

(x) Goods and services tax (“GST”)

Revenue, expenses and assets (with the exception of receivables) are recognised net of the amount of GST to the extent that the GST is recoverable from the taxation authority. Where GST is not recoverable, it is recognised as part of the cost of the acquisition, or as an expense.

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from or payable to the tax authority is included in the balance sheet as an asset or liability.

Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from or payable to the tax authorities, are classified as operating cash flows.

(y) Pending Accounting Standards

Accounting Standards AASB 8 Operating Segments , AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 8 , AASB 101 Presentation of Financial Statements (revised) and AASB 2008-8 Amendments to Australian Accounting Standards arising from AASB 101 are applicable to annual reporting periods beginning on or after 1 January 2009. The Group has not adopted these standards early. Application of the standards will not affect any of the amounts recognised in the financial statements, but will affect the type of information disclosed.

Page 18

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(y) Pending Accounting Standards (continued)

Revised Accounting Standards AASB 3 Business Combinations and AASB 127 Consolidated and Separate Financial Statements are applicable to annual reporting periods beginning on or after 1 July 2009. The Group has not adopted these standards early. Application of the standards may affect amounts recognised in respect of future business combinations or on any future loss of control of a subsidiary.

Other new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for the current reporting period. These are not expected to have any material impact on the Group’s financial report in future reporting periods.

2. Accounting estimates and judgements

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the Responsible Entity to exercise its judgement in the process of applying the Group’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 below.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(a) Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates, by definition, will seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

The Group had investment properties with a carrying amount of $462,931,000 (2008: $504,910,000), and retirement village residents’ loans with a carrying amount of $119,569,000 (2008: $113,961,000), representing estimated fair value. In addition, the carrying amount of the Group’s equity accounted investments of $134,746,000 (2008: $266,747,000) also reflects investment properties carried at fair value. These carrying amounts reflect certain assumptions about expected future rentals, rent-free periods, operating costs, appropriate discount and capitalisation rates and, in the case of retirement village residents’ loans, likely turnover rates. In forming these assumptions, the Responsible Entity considered information about current and recent sales activity, current market rents, discount and capitalisation rates and turnover rates for properties similar to those owned by the Group, as well as independent valuations of the Group’s property.

Page 19

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

2. Accounting estimates and judgements (continued)

(b) Critical judgements in applying the entity’s accounting policies

There were no judgements, apart from those involving estimations, that management has made in the process of applying the entity’s accounting policies that had a significant effect on the amounts recognised in the financial report.

3. Distributions

Note (a) Rates and amounts of distributions Distributions have been paid or are payable in respect of the following periods at the following rates (in cents per unit): Quarter ended 30 September Quarter ended 31 December Quarter ended 31 March Quarter ended 30 June The total amounts of these distributions were: Quarter ended 30 September Quarter ended 31 December Quarter ended 31 March Quarter ended 30 June	Note	Consolidated Parent entity 2009 2008 2009 2008
		Cents Cents Cents Cents 1.5000 2.8625 1.5000 2.8625 - 2.8625 - 2.8625 - 2.8625 - 2.8625 - 2.4125 - 2.4125
		1.5000 11.0000 1.5000 11.0000
		$'000 $'000 $'000 $'000 6,615 12,389 6,615 12,389 - 12,505 - 12,505 - 12,624 - 12,624 - 10,640 - 10,640
		6,615 48,158 6,615 48,158

The distribution for the quarter ended 30 June 2008 was recognised in the 2008 financial year and paid on 29 August 2008.

Page 20

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

4. Net operating income

Net operating income is calculated as follows: Net loss attributable to unitholders Adjusted for: Net foreign exchange loss Net loss on disposal of investment property Net (gain)/loss on change in fair value of: Investment properties Derivatives Retirement village residents' loans Items included in share of net profit of equity accounted investments: Investment properties Derivatives Retirement village residents' loans Gain on revaluation of newly constructed retirement villages Borrowing cost amortisation returned Impairment loss on: Receivables Equity accounted investments Investment in subsidiaries Other non-current assets Other items included in share of net profit of equity accounted investments: Non-current asset depreciation and amortisation Discount on deferred purchase consideration Deferred income tax (benefit)/expense Asset manager termination costs Net operating income Net operating income is attributable to the unitholders of: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	(284,176) (38,803) (223,481) (63,570) 547 - 628 - 1,085 - 150 - 71,939 25,188 7,960 12,958 55,071 (15,505) 55,071 (15,505) (7,774) 13,237 - - 178,951 44,478 - - 341 - - - - 1,937 - - 3,154 6,096 - - 185 217 185 217 20,612 - 43,554 - 21,350 3,145 6,203 3,145 - - 138,105 99,097 773 - 773 - 4,621 4,495 - - 529 1,818 - - (44,131) 264 - - 3,133 - 3,133 -
	26,210 46,567 32,281 36,342
	32,571 36,342 32,281 36,342 (6,361) 10,225 - -
	26,210 46,567 32,281 36,342

Page 21

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

5. Earnings per unit

5. Earnings per unit
(a) Per unit of the Parent Net operating income - $'000 Loss attributable to unitholders - $'000 Weighted average number of units outstanding - thousands Net operating income per unit - cents Basic and diluted earnings per unit - cents (b) Per stapled unit Net operating income - $'000 Loss attributable to unitholders - $'000 Weighted average number of units outstanding - thousands Net operating income per unit - cents Basic and diluted earnings per unit - cents	Note Consolidated 2009 2008
	4 32,571 36,342 (285,452) (49,682) 441,029 436,475 7.4 8.3 (64.7) (11.4) 4 26,210 46,567 (284,176) (38,803) 441,029 436,475 5.9 10.7 (64.4) (8.9)

5.
Earnings per unit

(a)
Per unit of the Parent
Net operating income - $'000
Loss attributable to unitholders - $'000
Weighted average number of units outstanding - thousands
Net operating income per unit - cents
Basic and diluted earnings per unit - cents
(b) Per stapled unit
Net operating income - $'000
Loss attributable to unitholders - $'000
Weighted average number of units outstanding - thousands
Net operating income per unit - cents
Basic and diluted earnings per unit - cents

Note
Consolidated
2009
2008

4
32,571
36,342
(285,452)
(49,682)
441,029
436,475
7.4
8.3
(64.7)
(11.4)
4
26,210
46,567
(284,176)
(38,803)
441,029
436,475
5.9
10.7
(64.4)
(8.9)

6. Finance costs

6. Finance costs
Interest paid or payable Less cross currency swap interest received Less interest capitalised	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	17,827 17,400 8,843 11,377 (9,517) (9,413) (9,517) (9,413) (331) (1,422) - -
	7,979 6,565 (674) 1,964

The rate used to capitalise finance costs to qualifying assets was 8.4% (2008: 8.4%).

Page 22

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

7. Income tax

7. Income tax
(a) Income tax (benefit)/expense Current tax Increase/(decrease) in deferred tax liabilities (b) Reconciliation between tax expense and pre-tax net profit Loss before income tax Income tax at the Australian tax rate of 30% (2008: 30%) Tax effect of amounts which are not (deductible)/taxable in calculating taxable income: Australian income Foreign tax law and rate adjustment Income tax (benefit)/expense	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	15	172 - - - (44,131) 264 - -
		(43,959) 264 - -
		(328,135) (38,539) (223,481) (63,570)
		(98,441) (11,562) (67,044) (19,071) 33,174 (1,736) 67,044 19,071 21,308 13,562 - -
		(43,959) 264 - -

8. Cash and cash equivalents

8. Cash and cash equivalents
Cash at bank and in hand Short term deposits	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	21 21	6,856 10,054 2,284 438 6,377 21,471 5,815 21,415
		13,233 31,525 8,099 21,853

9. Trade and other receivables

Current 21 Rental and other amounts due Accrued income, prepayments and deposits Non-current 21 Loan to equity accounted investment 23 Loans to subsidiaries 23 Accrued income, prepayments and deposits	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	6,740 11,542 4,995 5,658 3,090 3,549 1,567 2,075
	9,830 15,091 6,562 7,733
	- 20,342 - 20,342 - - 37,213 42,283 2,087 1,216 143 318
	2,087 21,558 37,356 62,943

Rental and other amounts due are receivable within 30 days.

Page 23

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

10. Derivatives

10. Derivatives
Current assets Forward foreign exchange contracts Cross currency swap contracts Current liabilities Forward foreign exchange contracts Cross currency swap contracts 11. Property investments a) Summary of carrying amounts Investment properties: Current Non-current Properties under construction - non-current	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	21 21	301 7,329 301 7,329 - 19,345 - 19,345
		301 26,674 301 26,674
		13 - 13 - 28,686 - 28,686 -
		28,699 - 28,699 -
		Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
		33,922 - 1,640 - 429,009 504,910 92,977 101,711 8,575 12,742 641 1,413
		471,506 517,652 95,258 103,124

11. Property investments

(a) Summary of carrying amounts

Page 24

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

11. Property investments (continued)

(b) Individual valuations and carrying amounts

Property	Cost Latest external Carrying amount to date valuation Date Valuation 2009 2008 2009 2008 $'000 $'000 $'000 $'000 % % Capitalisation rate
*Investment property - current(1)* Garden Villages Bendigo 1 Bendigo 2 Caboolture 2 Salisbury Toowoomba 1 Wynnum 2 US Students 34 Fairview Street 45 Oakwood Ave. Hunting Lodge Apartments The Preserve *Investment property - non-current* Garden Villages Portfolio Yakamia Gardens Mardross Gardens Seville Grove Gardens Hertford Gardens Bendigo 1 Bendigo 2 Carey Park Gardens Jefferis Gardens Caboolture 2	347 30 Jun 09 260 260 - 8.0% - 347 30 Jun 09 260 260 - 8.0% - 251 30 Jun 09 260 260 - 8.0% - 338 30 Jun 09 290 290 - 8.0% - 337 30 Jun 09 285 285 - 8.0% - 280 30 Jun 09 285 285 - 8.0% - 1,444 30 Jun 09 1,240 1,175 - 8.7% - 1,998 30 Jun 09 899 852 - 8.3% - 4,929 30 Jun 09 6,045 5,952 - 8.4% - 28,998 30 Jun 09 24,303 24,303 - 8.8% - 39,269 34,127 33,922 - 8.6% n/a 5,910 30 Jun 09 5,350 5,350 5,100 8.3% 7.3% 5,561 30 Jun 09 5,300 5,300 5,600 8.0% 7.5% 4,027 30 Jun 09 3,800 3,800 3,700 8.0% 7.5% 3,703 30 Jun 09 3,050 3,050 3,300 8.5% 8.0% - - - - 325 - 8.0% - - - - 325 - 8.0% 4,854 30 Jun 09 3,950 3,950 3,900 8.3% 7.8% 5,048 30 Jun 09 3,750 3,750 4,200 8.5% 8.0% - - - - 300 - 8.0%

Property

Cost
Latest external
Carrying amount
to date
valuation
Date
Valuation
2009
2008
2009
2008
$'000
$'000
$'000
$'000
%
%
Capitalisation
rate

Investment property - current(1)
Garden Villages
Bendigo 1
Bendigo 2
Caboolture 2
Salisbury
Toowoomba 1
Wynnum 2
US Students
34 Fairview Street
45 Oakwood Ave.
Hunting Lodge Apartments
The Preserve
Investment property - non-current
Garden Villages Portfolio
Yakamia Gardens
Mardross Gardens
Seville Grove Gardens
Hertford Gardens
Bendigo 1
Bendigo 2
Carey Park Gardens
Jefferis Gardens
Caboolture 2

347
30 Jun 09
260
260
-
8.0%
-
347
30 Jun 09
260
260
-
8.0%
-
251
30 Jun 09
260
260
-
8.0%
-
338
30 Jun 09
290
290
-
8.0%
-
337
30 Jun 09
285
285
-
8.0%
-
280
30 Jun 09
285
285
-
8.0%
-
1,444
30 Jun 09
1,240
1,175
-
8.7%
-
1,998
30 Jun 09
899
852
-
8.3%
-
4,929
30 Jun 09
6,045
5,952
-
8.4%
-
28,998
30 Jun 09
24,303
24,303
-
8.8%
-
39,269
34,127
33,922
-
8.6%
n/a
5,910
30 Jun 09
5,350
5,350
5,100
8.3%
7.3%
5,561
30 Jun 09
5,300
5,300
5,600
8.0%
7.5%
4,027
30 Jun 09
3,800
3,800
3,700
8.0%
7.5%
3,703
30 Jun 09
3,050
3,050
3,300
8.5%
8.0%
-
-
-
-
325
-
8.0%
-
-
-
-
325
-
8.0%
4,854
30 Jun 09
3,950
3,950
3,900
8.3%
7.8%
5,048
30 Jun 09
3,750
3,750
4,200
8.5%
8.0%
-
-
-
-
300
-
8.0%

Page 25

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

11. Property investments (continued)

Property	Cost	Latest	Latest	external	Carrying	amount	Capitalisation	Capitalisation
	to date	valuation					rate
		Date		Valuation	2009	2008	2009	2008
	$'000			$'000	$'000	$'000	%	%
Cessnock Gardens	5,594	30 Jun	09	5,430	5,430	5,500	8.0%	7.5%
Claremont Gardens	4,676	30 Jun	09	3,550	3,550	3,600	8.5%	8.0%
Taloumbi Gardens	4,935	30 Jun	09	4,750	4,750	4,900	8.3%	7.5%
Davenport Gardens	4,205	30 Jun	09	3,150	3,150	3,400	8.8%	8.3%
Dromana	-		-	-	-	440	-	8.0%
Wheelers Gardens	4,611	30 Jun	09	3,900	3,900	4,100	8.3%	7.8%
Elphinwood Gardens	4,546	30 Jun	09	3,800	3,800	3,800	8.5%	8.0%
Glenorchy Gardens	4,346	30 Jun	09	4,000	4,000	3,800	8.0%	7.5%
Chatsbury Gardens	4,968	30 Jun	09	3,800	3,800	4,000	8.3%	7.8%
Grovedale	-		-	-	-	355	-	8.0%
Grovedale Gardens	5,423	30 Jun	09	4,500	4,500	4,800	8.0%	7.5%
Horsham Gardens	4,617	30 Jun	09	4,350	4,350	4,600	8.0%	7.5%
Ipswich Gardens	4,879	30 Jun	09	2,400	2,400	3,700	8.0%	7.5%
Kingston Gardens	4,490	30 Jun	09	2,799	2,799	3,100	8.8%	8.3%
Lovely Banks Gardens	5,927	30 Jun	09	4,100	4,100	5,250	8.5%	8.0%
Sea Scape Gardens	4,472	30 Jun	09	4,300	4,300	3,900	8.5%	8.0%
Marsden Gardens	8,776	30 Jun	09	8,550	8,550	8,840	8.5%	8.0%
Coburns Gardens	4,304	30 Jun	09	3,150	3,150	3,300	8.5%	8.0%
Brooklyn Gardens	4,231	30 Jun	09	3,050	3,050	3,400	8.5%	8.0%
Oxley Gardens	4,569	30 Jun	09	3,550	3,550	3,800	8.5%	8.0%
Salisbury	-		-	-	-	280	-	8.0%
Townsend Gardens	4,971	30 Jun	09	3,500	3,500	4,000	8.5%	8.0%
St Albans Park Gardens	4,975	30 Jun	09	3,850	3,850	4,000	8.5%	8.0%
Swan View Gardens	7,124	30 Jun	09	7,100	7,100	6,400	8.3%	7.8%
Taree Gardens	4,631	30 Jun	09	4,150	4,150	4,100	8.5%	8.0%

Page 26

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

11. Property investments (continued)

Property	Cost	Latest	Latest	external	Carrying	amount	Capitalisation	Capitalisation
	to date	valuation					rate
		Date		Valuation	2009	2008	2009	2008
	$'000			$'000	$'000	$'000	%	%
Toowoomba 1	-		-	-	-	315	-	8.0%
Toowoomba Gardens	3,967	30 Jun	09	3,600	3,600	4,150	8.8%	8.3%
Newtown Gardens	4,413	30 Jun	09	3,950	3,950	4,300	8.8%	8.3%
Glenvale Gardens	3,966	30 Jun	09	2,700	2,700	3,300	8.8%	8.3%
Welcome Inn	-		-	-	-	1,350	-	9.0%
Wynnum	-		-	-	-	335	-	8.0%
Forest Lake Gardens	13,464	30 Jun	09	10,650	10,650	11,100	8.3%	7.8%
South Gladstone Gardens	7,950	30 Jun	09	5,460	5,460	7,000	8.3%	7.8%
Rockhampton Gardens	10,296	30 Jun	09	7,350	7,350	7,600	8.3%	7.8%
US Students
Ashford Hills Apartments	5,021	30 Jun	09	1,550	1,550	2,698	9.4%	7.5%
Campus View	6,683	30 Jun	09	4,805	4,805	3,632	8.7%	7.9%
Clubhouse Apartments	6,098	30 Jun	09	3,968	3,968	4,151	8.7%	7.2%
Kelly Gardens Apartments	5,014	30 Jun	09	2,077	2,077	1,816	10.4%	7.5%
Knollwood Apartments	18,157	30 Jun	09	7,068	7,068	7,886	8.6%	7.4%
Maplewood Apartments	4,850	30 Jun	09	2,573	2,573	2,957	8.7%	7.1%
Millbrook Apartmetns	1,663	30 Jun	09	775	775	1,064	9.3%	7.2%
Oakridge	3,502	30 Jun	09	1,859	1,859	2,415	9.5%	7.5%
Oakwood	970	30 Jun	09	434	434	493	9.1%	7.0%
Orchard Acres Apartments	10,023	30 Jun	09	4,865	4,865	7,865	8.9%	7.3%
Perry Hill estates	5,909	30 Jun	09	2,883	2,883	4,477	8.9%	7.3%
Renwood Apartments	8,212	30 Jun	09	4,338	4,338	6,856	9.2%	7.3%
Ridgeview heights	5,371	30 Jun	09	2,976	2,976	4,251	9.0%	7.3%
Springwood Apartments	7,632	30 Jun	09	3,162	3,162	2,854	10.4%	10.0%
Willington Oaks Apartments	17,895	30 Jun	09	10,818	10,818	14,923	8.9%	7.3%

Page 27

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

11. Property investments (continued)

Property	Cost Latest external Carrying amount to date valuation Date Valuation 2009 2008 2009 2008 $'000 $'000 $'000 $'000 % % Capitalisation rate	Cost Latest external Carrying amount to date valuation Date Valuation 2009 2008 2009 2008 $'000 $'000 $'000 $'000 % % Capitalisation rate
Campus Club Ramz Hall Capital Garage Apartments 34 Fairview Street 45 Oakwood Ave. Hunting Lodge Apartments The Preserve US Seniors Lynbrook, New York Settlers(2) Lakeside Noyea Park Meadow Springs Ridgewood *Consolidated - non-current* *Total investment properties*	16,072 30 Jun 09 - - - - - - - - - - - - 26,990 30 Jun 09 69,645 31 Dec 08 2,463 31 Dec 08 20,200 31 Dec 08 73,849 31 Dec 08 500,648 539,917	11,531 11,531 13,801 8.0% 6.8% - - 16,364 - 6.5% - - 5,396 - 7.4% - - 1,505 - 7.3% - - 1,038 - 7.3% - - 8,128 - 7.0% - - 24,385 - 7.0% 32,238 32,238 21,782 8.3% 7.0% 78,216 73,975 83,221 13.0% 13.0% 2,662 2,497 3,110 13.0% 13.0% 18,350 17,822 19,682 13.0% 13.0% 81,685 86,156 74,595 13.0% 13.5% Discount rate
		429,472 429,009 504,910 4.9% 4.8%
		463,599 462,931 504,910 5.2% 4.8%

Page 28

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

11. Property investments (continued)

11. Property investments (continued)
Property	Cost	Latest external		Carrying	amount
	to date	valuation
		Date	Valuation	2009	2008
	$'000		$'000	$'000	$'000
*Property under construction - non current(3)*
Garden Villages Portfolio
Lovely Banks Gardens - land	862		-	330	862
Wangaratta - land	551		-	311	551
Settlers
Noyea Park	500		-	500	500
Ridgewood	7,037		-	4,037	7,037
Meadow Springs	3,792		-	3,397	3,792
	12,742		-	8,575	12,742
*Total all property investments*	552,659		463,599	471,506	517,652

(1) These properties were disclosed as non current in 2008. Investment properties that are held for sale and are expected to be realised within twelve months after the reporting date are classified as current.
(2) Valuations of retirement villages are provided to the Group net of residents’ loans (after deducting any accrued deferred management fees and maintenance reserve fund liabilities). For presentation in this note, the external valuations shown are stated before deducting this liability to reflect its separate balance sheet presentation. The carrying amounts include the fair value of units completed since the date of the external valuation.
(3) Valuations of these properties under construction were as at an earlier stage of development and thus are no longer comparable to the carrying amounts shown.
(4) Investment property that has not been valued by external valuers at reporting date is carried at the Responsible Entity’s estimate of fair value in accordance with the accounting policy detailed at note 1(n). Properties acquired during the period are held at cost, which is reflective of the estimate of fair value.
(5) Valuations made in a foreign currency have been converted at the rate of exchange ruling at reporting date.

Page 29

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

11. Property investments (continued)

(c) Movements in carrying amounts

*Investment property* Carrying amount at beginning of year Exchange rate fluctuations Additions - initial acquisitions Additions - to existing property Transferred from property under construction Disposals Net change in fair value Carrying amount at end of year *Property under construction* Carrying amount at beginning of year Additions Impairment Transferred to investment property Carrying amount at end of year	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	504,910 491,785 101,711 113,991 38,235 (21,769) - - - 25,272 - - 9,524 7,557 3,112 678 13,017 27,253 - - (32,079) - (2,400) - (70,676) (25,188) (7,806) (12,958)
	462,931 504,910 94,617 101,711
	12,742 18,972 1,413 1,509 9,623 21,023 - (96) (773) - (772) - (13,017) (27,253) - -
	8,575 12,742 641 1,413

(d) Leasing arrangements

In 2008 some investment properties were leased to tenants under long-term operating leases and with the restructure of the Garden Villages portfolio no longer exist. Lease terms varied between tenants. Future minimum rentals receivable under these leases were:

Within one year Later than one year but not later than five years Later than five years	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	- 2,663 - - - 11,477 - - - 10,373 - -
	- 24,513 - -

Page 30

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

12. Equity accounted investments

(a) Details of investments

(a) Details of investments
Name					Principal activity	Ownership	interest
						2009	2008
Chartwell ING Regency Master		LP			Real estate investment	50%	50%
CSH - INGRE LLC					Real estate investment	49%	49%
ING NZ Subsidiary Trust No 1	(1)				Real estate investment	90%	90%
ING Real Estate CC Trust No	1	(1, 2)			Real estate investment	90%	90%
Oak Tree Property Holdings Pty Ltd			(3)		Real estate investment	-	50%
Oak Tree Retirement Villages	Pty Ltd			(3)	Retirement village operator	-	50%
Regency LTC Operating LP					Operator of long term care facilities	50%	50%
SCV Group Limited					Real estate investment	-	10%

(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 the entities but rather the power to exercise significant influence.
(2) This trust held the Group’s investment in the Country Club Villages joint venture (“CCV”) and disposed of its interest in CCV in February 2009 for $500,000. During the year, the Group recognised an impairment loss of $6,096,000 on its investment in this trust and an impairment loss of $20,612,000 on a receivable from this trust for a total impairment loss of $26,708,000.
(3) The Group sold its investment in these companies for $2 on 13 February 2009 and recognised an impairment loss of $15,254,000 during the year on its investments in the Oak Tree group.

(b) Share of assets and liabilities Total assets Total liabilities Net assets (c) Share of results Revenue Loss on change in fair value of: Investment properties Derivatives Retirement village residents' loans Other income Expenses Loss before income tax Income tax expense Loss for the year	Consolidated 2009 2008 $'000 $'000
	645,248 798,649 (510,502) (531,902)
	134,746 266,747
	178,582 102,261 (178,951) (44,478) (341) - - (1,937) - - (159,686) (86,513)
	(160,396) (30,667) - -
	(160,396) (30,667)

Page 31

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

13. Payables

Current liabilities Trade payables	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	25,983 21,768 7,333 5,764

14. Borrowings

14. Borrowings
Current liabilities Bank debt Non-current liabilities Bank debt Other external debt	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	21 (a) (a) (b)	167,219 9,452 132,500 -
		73,376 240,761 - 141,600 34,718 29,055 - -
		108,094 269,816 - 141,600

(a) Bank debt

The bank debt of the Group is denominated in Australian and United States dollars.

The Australian dollar denominated debt of $132,500,000 (2008: $141,600,000) is a variable rate facility expiring in December 2009, and has a facility limit of $132,500,000. The principal loan to value ratios to be maintained are 65% of completed properties and 50% for properties under construction. The carrying value at reporting date of the Group’s Australian investment properties and properties under construction pledged as security is $220,400,000 (2008: $356,915,000).

The Unites States dollar denominated current bank debt consists of an unsecured facility of $9,919,000 (2008: $9,452,000). In addition, bank debt of $24,800,000 (2008: nil) maturing in greater than one year secured by investment property classified as current and available for sale has been classified as current.

The United States dollar denominated non-current bank debt of $73,376,000 (2008: $99,161,000) is comprised of a number of fixed rate facilities which are fully drawn and whose terms exceed five years. The current and non current facilities are secured against certain of the Group’s United States investment properties with an aggregate carrying amount at reporting date of $97,964,000 (2008: $138,955,000).

(b) Other external debt

The other external debt comprises two bonds whose terms exceed five years. The bonds are secured against a United States property with a carrying amount of $32,238,000 (2008: $21,782,000).

Page 32

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

15. Deferred tax liabilities

The balance comprises temporary differences attributable to: Investment properties Equity accounted investments Deferred tax (benefit)/expense recognised in the income statement in respect of deferred tax liabilities is attributable to temporary differences arising from: Investment properties Equity accounted investments Deductible temporary differences for which no deferred tax asset has been recognised Potential tax benefit	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	3,608 2,154 - - 1,606 35,774 - -
	5,214 37,928 - -
	1,824 33 - - (45,955) 231 - -
	(44,131) 264 - -
	(67,601) - - -
	(23,660) - - -

16. Issued units

(a) Carrying amounts

16. Issued units a) Carrying amounts
At beginning of year Issued during the year: Distribution reinvestment plan Unit issue costs Transfer to retained profits Borrowing cost amortisation returned At end of year The closing balance is attributable to the unitholders of: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	(d) (e)	490,371 477,032 487,020 473,793 - 13,779 - 13,667 - (82) - (82) - (141) - (141) (185) (217) (185) (217)
		490,186 490,371 486,835 487,020
		486,835 487,020 486,835 487,020 3,351 3,351 - -
		490,186 490,371 486,835 487,020

Page 33

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

16. Issued units (continued)

(b) Number of issued units

At beginning of year Issued during the year: Distribution reinvestment plan At end of year	Consolidated Parent entity 2009 2008 2009 2008 thousands thousands thousands thousands
	441,029 430,267 441,029 430,267 - 10,762 - 10,762
	441,029 441,029 441,029 441,029

(c) Terms of units

All units are fully paid and rank equally with each other for all purposes. Each unit entitles the holder to one vote, in person or by proxy, at a meeting of unitholders.

(d) Transfer to retained profits

The transfer to retained profits 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.

(e) Borrowing cost amortisation

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

17. Reserves

Foreign currency translation Balance at beginning of year Translation differences arising during the year Balance at end of year Share of asset revaluation reserve of equity accounted investment Balance at beginning of year Revaluations made/(reversed) during the year Balance at end of year Total reserves at end of year The closing balance is attributable to the unitholders of: ING Real Estate Community Living Fund ING Real Estate Community Living Management Trust	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	(67,976) (30,174) - - 56,424 (37,802) - -
	(11,552) (67,976) - -
	3,647 - - - (3,647) 3,647 - -
	- 3,647 - -
	(11,552) (64,329) - -
	(9,407) (65,878) - - (2,145) 1,549 - -
	(11,552) (64,329) - -

The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations. The asset revaluation reserve arises on the revaluation of land and buildings held by an equity accounted investment.

Page 34

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

18. Retained earnings

18. Retained earnings
Balance at beginning of year Net loss for the year Transfer from issued units Distributions paid or payable Borrowing cost amortisation returned Balance at end of year	Note	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	16 3 16(e)	(10,360) 76,243 (90,449) 20,921 (284,176) (38,803) (223,481) (63,570) - 141 - 141 (6,615) (48,158) (6,615) (48,158) 185 217 185 217
		(300,966) (10,360) (320,360) (90,449)

19. Commitments

Commitments for capital expenditure on investment property contracted but not provided for at reporting date amounted to $2,816,000 (2008: $15,380,000), all payable within one year (2008: $14,992,000) and $nil payable between one and two years (2008: $389,000).

The Parent Entity has guaranteed the obligations of an equity accounted investment (CSH_INGRE LLC) in respect of deferred purchase consideration in the amount of $7,291,000 (2008: $10,678,000).

20. Capital management

The Group aims to meet its strategic objectives and operational needs and to maximise returns to unitholders through the appropriate use of debt and equity, while taking account of the additional financial risks of higher debt levels.

In determining the optimal capital structure, the Group takes into account a number of factors, including the views of investors and the market in general, the capital needs of its portfolio, the relative cost of debt versus equity, the execution risk of raising equity or debt, and the additional financial risks of debt including increased volatility of earnings due to exposure to interest rate movements, the liquidity risk of maturing debt facilities and the potential for acceleration prior to maturity.

In assessing this risk, the Group takes into account the relative security of its income flows, the predictability of its expenses, its debt profile, the degree of hedging and the overall level of debt as measured by gearing.

The actual capital structure at a point in time is the product of a number of factors, many of which are market driven and to various degrees outside of the control of the Group, particularly the impact of revaluations on gearing levels, the availability of new equity and the liquidity in real estate markets. While the Group periodically determines the optimal capital structure, the ability to achieve the optimal structure may be impacted by market conditions and the actual position may often differ from the optimal position.

Page 35

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

20. Capital management (continued)

The Group’s capital is primarily monitored through its ratio: of debt to total assets (“Gearing Ratio”), calculated on a look-through basis, in which the Group’s interest in its joint ventures and associates are proportionately consolidated based on the Group’s ownership interest. The Group’s medium term strategy is to maintain the Gearing Ratio in the range of 40% - 60%. At 30 June 2009, the gearing ratio was 74.0%, compared to 57.0% at 30 June 2008, calculated as follows:

Total consolidated borrowings Less cash & cash equivalents Net consolidated debt Plus share of net debt of equity accounted investments Net look-through debt Total consolidated assets Less cash & cash equivalents Less retirements village residents loans Less equity accounted investments Plus share of assets of equity accounted investments Less share of retirements village residents loans of equity accounted investments Total look-through assets Gearing ratio	Consolidated 2009 2008 $'000 $'000
	275,313 279,268 (15,123) (31,525)
	260,190 247,743 485,932 458,357
	746,122 706,100
	632,446 879,247 (15,123) (31,525) (119,569) (113,961) (134,746) (266,747) 645,248 798,649 - (27,732)
	1,008,256 1,237,931
	74.0% 57.0%

A range of initiatives to reduce gearing to within the target range in the medium term are being pursued.

21. Financial instruments (a) Introduction

The Group's principal financial instruments comprise receivables, payables, interest bearing liabilities, other financial liabilities, cash and short-term deposits and derivative financial instruments.

The main risks arising from the Group's financial instruments are interest rate risk, foreign exchange risk, credit risk and liquidity risk. The Group manages its exposure to these risks primarily through its Treasury Policy. The policy sets out various targets aimed at restricting the financial risk taken by the Group. Management reviews actual positions of the Group against these targets on a regular basis. If the target is not achieved, or forecast not to be achieved, a plan of action is, where appropriate, put in place to enable the Group to meet the target within an agreed timeframe. Depending on the circumstances of the Group at a point in time, it may be that positions outside of the Treasury Policy are accepted and no plan of action is put in place to meet the Treasury targets, because, for example, the risks associated with bringing the Group into compliance outweigh the benefits. The adequacy of the Treasury Policy in addressing the risks arising from the Group’s financial instruments is reviewed on a regular basis.

Page 36

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

(b) Interest rate risk

While the Group aims to meet its Treasury Policy targets, many factors influence its performance, and it is probable that at any one time it will not meet all its targets. For example, the Group may be unable to negotiate the extension of bank facilities sufficiently ahead of time, so that it fails to achieve its liquidity target. When refinancing loans it may be unable to achieve the desired maturity profile or the desired level of flexibility of financial covenants, because of the cost of such terms or their unavailability. Hedging instruments may not be available, their cost may outweigh the benefit of risk reduction or they may introduce other risks such as mark to market risk. Changes in market conditions may limit the Group’s ability to raise capital through the issue of units or sale of properties.

The Group’s exposure to the risk of changes in market interest rates arises primarily from its use of borrowings. The main consequence of adverse changes in market interest rates is higher interest costs, reducing the Group’s profit. In addition, one or more of the Group’s loan agreements may include minimum interest cover covenants. Higher interest costs resulting from increases in market interest rates may result in these covenants being breached, providing the lender the right to call in the loan or to increase the interest rate applied to the loan.

The Group manages the risk of changes in market interest rates by maintaining an appropriate mix of fixed and floating rate borrowings. Fixed rate debt is achieved either through fixed rate debt funding or through derivative financial instruments permitted under the Treasury Policy. The policy sets minimum and maximum levels of fixed rate exposure over a five-year time horizon.

At 30 June 2009, after taking into account the effect of interest rate swaps, approximately 99% of the Group's borrowings are at a fixed rate of interest (2008: 91%) (Parent: 97%; 2008: 89%).

Exposure to changes in market interest rates also arises from financial assets such as cash deposits and loan receivables subject to floating interest rate terms. Changes in market interest rates will also change the fair value of any interest rate hedges.

Page 37

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

(c) Interest rate risk exposure

The Group’s exposure to interest rate risk and the effective interest rates on financial instruments at reporting date was:

30 June 2009			Consolidated	Consolidated
	Floating	Fixed interest maturing in:			Total
	interest	Less than	1 to 5	More than
	rate	1year	years	5years
Principal amounts $'000
*Financial assets*
Cash at bank	6,856	-	-	-	6,856
Short term deposits	6,377	-	-	-	6,377
*Financial liabilities*
Bank debt denominated in AUD	132,500	-	-	-	132,500
Bank debt denominated in USD	-	34,719	-	73,376	108,095
Other external debt denominated in
USD	-	-	-	34,718	34,718
Cross currency swaps - receive AUD	(128,226)	-	(172,063)	-	(300,289)
Cross currency swaps - pay USD	-	-	292,919	-	292,919
Cross currency swaps - pay CAD	-	-	44,723	-	44,723
Weighted average interest rates
*Financial assets*
Cash at bank	0.3%	-	-	-	na
Short term deposits	2.8%	-	-	-	na
*Financial liabilities*
Bank debt denominated in AUD	3.6%	-	-	-	na
Bank debt denominated in USD	-	5.3%	-	5.6%	na
Other external debt denominated in
USD	-	-	-	6.4%	na
Cross currency swaps - receive AUD	5.2%	-	6.9%	-	na
Cross currency swaps - pay USD	-	-	2.6%	-	na
Cross currency swaps - pay CAD	-	-	5.1%	-	na

Other financial instruments of the Group not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk.

Page 38

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

The Group’s exposure to interest rate risk and the effective interest rates on financial instruments at the end of the previous financial year was:

30 June 2008			Consolidated	Consolidated
	Floating	Fixed interest maturing in:			Total
	interest	Less than	1 to 5	More than
	rate	1year	years	5years
Principal amounts $'000
*Financial assets*
Cash at bank	10,054	-	-	-	10,054
Short term deposits	21,471	-	-	-	21,471
Loans to equity accounted investments	-	-	20,342	-	20,342
*Financial liabilities*
Bank debt denominated in AUD	141,600	-	-	-	141,600
Bank debt denominated in USD	9,452	-	-	99,161	108,613
Other external debt denominated in
USD	-	-	-	29,055	29,055
Cross currency swaps - receive AUD	(128,226)	-	(172,063)	-	(300,289)
Cross currency swaps - pay USD	-	-	236,239	-	236,239
Cross currency swaps - pay CAD	-	-	41,919	-	41,919
Weighted average interest rates
*Financial assets*
Cash at bank	2.4%	-	-	-	na
Short term deposits	7.5%	-	-	-	na
Loans to equity accounted investments	-	-	9.0%	-	na
*Financial liabilities*
Bank debt denominated in AUD	8.3%	-	-	-	na
Bank debt denominated in USD	4.6%	-	-	-	na
Other external debt denominated in
USD	-	-	-	6.4%	na
Cross currency swaps - receive AUD	9.8%	-	6.9%	-	na
Cross currency swaps - pay USD	-	-	2.6%	-	na
Cross currency swaps - pay CAD	-	-	5.1%	-	na

Page 39

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

The Parent’s exposure to interest rate risk and the effective interest rates on financial instruments at reporting date was:

30 June 2009			Parent entity	Parent entity
	Floating	Fixed interest maturing in:				Total
	interest	Less than	1 to 5	More than
	rate	1year	years		5years
Principal amounts $'000
*Financial assets*
Cash at bank	2,284	-	-		-	2,284
Short term deposits	5,815	-	-		-	5,815
*Financial liabilities*
Bank debt denominated in AUD	132,500	-	-		-	132,500
Cross currency swaps - receive AUD	(128,226)	-	(172,063)		-	(300,289)
Cross currency swaps - pay USD	-	-	292,919		-	292,919
Cross currency swaps - pay CAD	-	-	44,723		-	44,723
Weighted average interest rates
*Financial assets*
Cash at bank	0.3%	-	-		-	na
Short term deposits	3.0%	-	-		-	na
*Financial liabilities*
Bank debt denominated in AUD	3.6%	-	-		-	na
Cross currency swaps - receive AUD	5.2%	-	6.9%		-	na
Cross currency swaps - pay USD	-	-	2.6%		-	na
Cross currency swaps - pay CAD	-	-	5.1%		-	na

Page 40

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

The Parent’s exposure to interest rate risk and the effective interest rates on financial instruments at the end of the previous financial year was:

30 June 2008			Parent entity	Parent entity
	Floating	Fixed interest maturing in:				Total
	interest	Less than	1 to 5	More than
	rate	1year	years		5years
Principal amounts $'000
*Financial assets*
Cash at bank	438	-	-		-	438
Short term deposits	21,415	-	-		-	21,415
Loans to equity accounted investments	-	-	20,342		-	20,342
*Financial liabilities*
Bank debt denominated in AUD	141,600	-	-		-	141,600
Cross currency swaps - receive AUD	(128,226)	-	(172,063)		-	(300,289)
Cross currency swaps - pay USD	-	-	236,239		-	236,239
Cross currency swaps - pay CAD	-	-	41,919		-	41,919
Weighted average interest rates
*Financial assets*
Cash at bank	1.9%	-	-		-	na
Short term deposits	7.5%	-	-		-	na
Loans to equity accounted investments	-	-	9.0%		-	na
*Financial liabilities*
Bank debt denominated in AUD	8.3%	-	-		-	na
Cross currency swaps - receive AUD	9.8%	-	6.9%		-	na
Cross currency swaps - pay USD	-	-	2.6%		-	na
Cross currency swaps - pay CAD	-	-	5.1%		-	na

(d) Interest rate sensitivity analysis

The impact of an increase or decrease in average interest rates of 1% (100 basis points) at reporting date, with all other variables held constant, is illustrated in the tables below. This analysis is based on the interest rate risk exposures in existence at balance sheet date. As the Group has no derivatives that meet the documentation requirements to qualify for hedge accounting, there would be no impact on unitholders’ interest (apart from the effect on profit).

Page 41

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

(i) Increase in average interest rates of 1%

The effect on net interest expense for one year would have been:

Variable interest rate instruments denominated in: Australian dollars United States dollars Canadian dollars	Effect on profit after tax Consolidated Parent entity Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	34 160 16 85 (51) (76) 15 - 7 - 7 -
	(10) 84 38 85

The effect on change in fair value of derivatives would have been:

Variable interest rate instruments denominated in: Australian dollars United States dollars Canadian dollars	Effect on profit after tax Consolidated Parent entity Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	(4,439) (2,156) (4,439) (2,156) 6,065 3,714 6,065 3,714 1,296 1,708 1,296 1,708
	2,922 3,266 2,922 3,266

(ii) Decrease in average interest rates of 1%

The effect on net interest expense for one year would have been:

Variable interest rate instruments denominated in: Australian dollars United States dollars Canadian dollars	Effect on profit after tax Consolidated Parent entity Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	(34) (160) (16) (85) 51 76 (15) - (7) - (7) -
	10 (84) (38) (85)

Page 42

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

The effect on change in fair value of derivatives would have been:

Variable interest rate instruments denominated in: Australian dollars United States dollars Canadian dollars	Effect on profit after tax Consolidated Parent entity Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	4,578 2,246 4,578 2,246 (6,246) (3,863) (6,246) (3,863) (1,317) (1,788) (1,317) (1,788)
	(2,985) (3,405) (2,985) (3,405)

(e) Foreign exchange risk

By acquiring properties in offshore markets, the Group is exposed to the risk of movements in foreign exchange rates. Foreign exchange rate movements may reduce the Australian dollar equivalent of the carrying value of the Group’s offshore properties, and may result in lower Australian dollar equivalent proceeds when an offshore property is sold. In addition, foreign exchange rate movements may reduce the Australian dollar equivalent of the earnings from the offshore properties while they are owned by the Group.

The Group reduces its exposure to the foreign exchange risk inherent in the carrying value of its offshore properties and interests in offshore investments by partly or wholly funding their acquisition using borrowings denominated in the particular offshore currency, and by using derivatives. The Treasury Policy sets a target for minimum and maximum hedging of the carrying value of its offshore properties.

The Group’s exposure to the impact of exchange rate movements on its earnings from its offshore properties is partly mitigated by the foreign denominated interest expense of its foreign denominated borrowings and any derivative hedges. The Group reduces any residual exposure to its earnings arising because of its investment in offshore markets by using forward exchange contracts. The Treasury Policy sets out targets of minimum and maximum hedging of its earnings from offshore properties over a five-year time horizon.

(f) Net foreign currency exposure

The Group’s net foreign currency monetary exposure, after taking into account the effect of foreign exchange derivatives, as at reporting date is shown in the following table. The net foreign currency exposure reported is of foreign currencies held by entities whose functional currency is the Australian dollar. It excludes assets and liabilities of entities, including the Group’s North American and New Zealand subsidiaries and equity accounted investments, whose functional currency is not the Australian dollar.

United States dollars Canadian dollars New Zealand dollars	Net foreign currency asset/(liability) Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	1,536 1,821 1,536 1,821 693 2 693 2 - 333 - 333
	2,229 2,156 2,229 2,156

Page 43

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

(g) Foreign exchange sensitivity analysis

The impact of an increase or decrease in average foreign exchange rates of 10% at reporting date, with all other variables held constant, is illustrated in the tables below. This analysis is based on the foreign exchange risk exposures in existence at balance sheet date. In these tables, the effect on unitholders’ interest excludes the effect on profit after tax.

(i) Effect of appreciation in Australian dollar of 10%:

Foreign exchange risk exposures denominated in: United States dollars Canadian dollars New Zealand dollars	Consolidated Effect on profit after tax Effect on unitholders' interest Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	24,624 11,536 - - 4,989 5,281 - - 113 1,069 - -
	29,726 17,886 - -

The effect on the Parent entity would have been the same as on the consolidated entity.

(ii) Effect of depreciation in Australian dollar of 10%:

Foreign exchange risk exposures denominated in: United States dollars Canadian dollars New Zealand dollars	Consolidated Effect on profit after tax Effect on unitholders' interest Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	(30,241) (14,100) - - (5,751) (6,455) - - (136) (1,307) - -
	(36,128) (21,862) - -

The effect on the Parent entity would have been the same as on the consolidated entity.

The Responsible Entity believes that the reporting date risk exposures are representative of the risk exposure inherent in the Group’s financial instruments.

These tables do not show the effect on equity that would occur from the translation of the financial statements of foreign operations because of the assumed 10% change in exchange rates.

(h) Foreign exchange derivatives held

The following tables detail the forward exchange contracts, options and foreign exchange swaps outstanding at reporting date. These have been taken out to mitigate the effect of foreign exchange movements on the financial statements. As all of these instruments are held by the Parent, figures for the Parent are the same as for the consolidated entity.

Page 44

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

At balance sheet date, none of the following foreign exchange derivatives qualifies for hedge accounting and gains and losses arising from changes in fair value have been taken to the income statement. The consolidated loss for the year ended 30 June 2009 was $55,071,000 (2008: $15,505,000 gain).

Forward foreign exchange contracts to receive Australian dollars and pay United States dollars were:

Maturing Weighted average exchange rate 2009 2008	Principal amount 2009 2009 2008 2008 AUD $'000 USD $'000 AUD $'000 USD $'000
Within one year - 0.7606 Later than one year but not later than five years - 0.7606	Consolidated
	- - 10,157 7,725 - - 43,258 32,902
	- - 53,415 40,627

Forward foreign exchange contracts to receive Australian dollars and pay Canadian dollars were:

Maturing Weighted average exchange rate 2009 2008	Principal amount 2009 2009 2008 2008 AUD $'000 CAD $'000 AUD $'000 CAD $'000
Within one year 0.8693 0.8763 Later than one year but not later than five years 0.8693 0.8693	Consolidated
	2,280 1,982 3,676 3,221 7,335 6,376 10,761 9,354
	9,615 8,358 14,437 12,575

Forward foreign exchange contracts to receive Australian dollars and pay New Zealand dollars were:

Maturing Weighted average exchange rate 2009 2008	Principal amount 2009 2009 2008 2008 AUD $'000 NZD $'000 AUD $'000 NZD $'000
Within one year 1.1830 1.2385 Later than one year but not later than five years 1.1785 1.1801	Consolidated
	922 1,091 10,575 13,096 424 500 2,619 3,091
	1,346 1,591 13,194 16,187

Cross currency exchange contracts to receive Australian dollars and pay United States dollars were:

Maturing Weighted average exchange rate 2009 2008	Principal amount 2009 2009 2008 2008 AUD $'000 USD $'000 AUD $'000 USD $'000
Later than one year but not later than five years 0.9300 0.9300	Consolidated
	254,021 236,239 254,021 236,239

Page 45

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

Cross currency exchange contracts to receive Australian dollars and pay Canadian dollars were:

Maturing Weighted average exchange rate 2009 2008	Principal amount 2009 2009 2008 2008 AUD $'000 CAD $'000 AUD $'000 CAD $'000
Later than one year but not later than five years 0.9060 0.9060	Consolidated
	46,268 41,919 46,268 41,919

(i) Credit risk Credit risk refers to the risk that a counterparty defaults on its contractual obligations resulting in a financial loss to the Group.

The major credit risk for the Group is default by tenants, resulting in a loss of rental income while a replacement tenant is secured and further loss if the rent level agreed with the replacement tenant is below that previously paid by the defaulting tenant. In addition, a default of one the Group’s major tenants may trigger the right for one or more of the lenders to the Group to review or call in its loan.

The Group assesses the credit risk of prospective tenants, the credit risk of in-place tenants when acquiring properties and the credit risk of existing tenants renewing upon expiry of their leases. Factors taken into account when assessing credit risk include the aggregate exposure the Group may have to the prospective tenant if the counterparty is already a tenant in the Group’s portfolio; the strength of the prospective tenant’s business; the level of its commitment to locating in the Group’s property; and any form of security, for example a rental bond, to be provided.

The decision to accept the credit risk associated with leasing space to a particular tenant is balanced against the risk of the potential financial loss of not leasing up vacant space.

Rent receivable balances are monitored on an ongoing basis and arrears actively followed up in order to reduce, where possible, the extent of any losses should the tenant subsequently default.

The Responsible Entity believes that the Group’s receivables that are neither past due nor impaired do not give rise to any significant credit risk.

Credit risk also arises from deposits placed with financial institutions and derivatives contracts that may have a positive value to the Group. The Group’s Treasury Policy sets target limits for credit risk exposure with financial institutions and minimum counterparty credit ratings. Counterparty exposure is measured as the aggregate of all obligations of any single legal entity or economic entity to the Group, after allowing for appropriate set offs which are legally enforceable.

The Group’s maximum exposure to credit risk at reporting date in relation to each class of financial instrument is its carrying amount as reported in the balance sheet.

(j) Liquidity risk

The main objective of liquidity risk management is to reduce the risk that the Group does not have the resources available to meet its financial obligations and working capital and committed capital expenditure requirements. The Group’s Treasury Policy sets a target for the level of cash and available undrawn debt facilities to cover future committed expenditure in the next year, loan maturities within the next six months and an allowance for unforeseen events such as tenant default. At times, the Group has fallen below this target.

Page 46

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

The Group may also be exposed to contingent liquidity risk under its term loan facilities, where term loan facilities include covenants which if breached give the lender the right to call in the loan, thereby accelerating a cash flow which otherwise was scheduled for the loan maturity. The Group monitors adherence to loan covenants on a regular basis, and the Treasury Policy sets targets based on the ability to withstand adverse market movements and remain within loan covenant limits.

The Group monitors its debt expiry profile and aims to achieve staggered maturities, where possible, to reduce refinance risk in any one year. At present, the Group has not achieved the desired level of staggered maturities.

The contractual maturities of the Group's financial liabilities at reporting date are reflected in the following table. It shows the undiscounted contractual cash flows required to discharge the liabilities, and related derivative assets, including interest at market rates.

Although the expected average residency term is around eleven years, retirement village residents’ loans are classified as current liabilities, as required by Accounting Standards, because the Group does not have an unconditional right to defer settlement to more than twelve months after reporting date.

Trade & other payables Retirement village residents loans Borrowings Derivatives that are liabilities Trade & other payables Retirement village residents loans Borrowings Cross currency swaps that are assets	Consolidated 2009 Less than 1 to 5 More than Total 1 year years 5 years $'000 $'000 $'000 $'000
	25,983 - - 25,983 119,569 - - 119,569 154,132 42,012 207,795 403,939 - (8,775) (52,384) (61,159)
	299,684 33,237 155,411 488,332
	Consolidated 2008 Less than 1 to 5 More than Total 1 year years 5 years $'000 $'000 $'000 $'000
	21,768 - - 21,768 113,961 - - 113,961 30,516 187,053 199,624 417,193
	166,245 187,053 199,624 552,922
	- (15,687) (23,890) (39,577)

Page 47

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

The contractual maturities of the Parent's financial liabilities at reporting date, on the same basis, were:

Trade & other payables Borrowings Derivatives that are liabilities Trade & other payables Borrowings Cross currency swaps that are assets	Parent entity 2009 Less than 1 to 5 More than Total 1 year years 5 years $'000 $'000 $'000 $'000
	7,333 - - 7,333 134,933 - - 134,933 - (8,775) (52,384) (61,159)
	142,266 (8,775) (52,384) 81,107
	Parent entity 2008 Less than 1 to 5 More than Total 1 year years 5 years $'000 $'000 $'000 $'000
	5,764 - - 5,764 12,413 148,859 - 161,272
	18,177 148,859 - 167,036
	- (15,687) (23,890) (39,577)

(k) Other financial instrument risk

The Group carries retirement village residents’ loans at fair value with resulting fair value adjustments recognised in the income statement. The fair value of these loans is dependent on market prices for the related retirement village units. The impact of an increase or decrease in these market prices of 10% at reporting date, with all other variables held constant, is shown in the table below. The effects reported are the changes in the fair value of these loans net of the corresponding changes in the fair values of the investment properties that are leased to the residents. This analysis is based on the retirement village residents’ loans in existence at reporting date.

Increase in market prices of investment properties of 10% Decrease in market prices of investment properties of 10%	Effect on profit after tax Consolidated Parent entity Higher/(lower) Higher/(lower) 2009 2008 2009 2008 $'000 $'000 $'000 $'000
	1,255 1,104 - -
	(1,255) (1,104) - -

The effect on unitholders’ interest would have been the same as the effect on profit.

Page 48

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

21. Financial instruments (continued)

(l) Fair value of financial assets and liabilities

The carrying amounts of the Group’s financial instruments approximate their fair values, except for fixed rate debt as follows:

Bank debt Other external debt	Consolidated 2009 2008 Fair Carrying Fair Carrying value amount value amount $'000 $'000 $'000 $'000
	86,178 108,095 122,969 99,161 28,663 34,718 24,440 29,055
	114,841 142,813 147,409 128,216

These fair values have been calculated by discounting the expected future cash flows at prevailing market interest rates.

22. Auditor's remuneration

22. Auditor's remuneration
Amounts received or receivable by Ernst & Young for: Audit or review of financial reports of the Fund and any other entity in the consolidated entity Other services - assurance related	Consolidated Parent entity 2009 2008 2009 2008 $ $ $ $
	228,145 200,000 228,145 200,000 82,314 105,000 82,314 105,000
	310,459 305,000 310,459 305,000

23. Related parties

(a) Responsible Entity

The Responsible Entity of both Trusts is ING Management Limited (“IML”), a member of the ING group of companies for which the ultimate holding company is ING Groep NV, a company incorporated in the Netherlands.

Page 49

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

23. Related parties (continued)

(b) Fees of the Responsible Entity and its related parties

ING Management Limited: Asset management fees		Consolidated Parent entity 2009 2008 2009 2008 $ $ $ $
		3,355,487 3,280,220 3,028,487 3,280,220

Asset management fees on United States and Canadian investment properties were waived for the period 1 October 2006 to 30 June 2007. Asset management fees before 1 October 2006 were waived on all investment properties. In addition, the Responsible Entity has waived $1,306,290 of its fee for the year ended 30 June 2008 and $724,458 of its fee for the year ended 30 June 2009.

(c) Holdings of the Responsible Entity and its related parties

Holdings of the Responsible Entity and its related parties (including managed investment schemes for which a related party is the Responsible Entity) as at 30 June 2009, and distributions received and receivable for the year then ended, were:

Name	Number Distributions Receivable of units Consolidated Parent entity held 2009 2009 $ $
ING (NZ) Limited ING Real Estate International Investments III BV	- 27,675 27,675 28,193,963 422,909 422,909
	28,193,963 450,584 450,584

Holdings of those parties as at 30 June 2008, and distributions receivable for the year then ended, were:

Name	Number Distributions Receivable of units Consolidated Parent entity held 2008 2008 $ $
ING Community Property Mangement Pty Ltd ING Clarion ING (NZ) Limited ING Real Estate Investment Management Australia Pty Ltd ING Real Estate International Investments III BV	- 438,323 438,323 237,000 24,563 24,563 1,845,013 73,136 73,136 - 238,317 238,317 28,111,342 2,413,011 2,413,011
	30,193,355 3,187,350 3,187,350

(d) Other transactions with the Responsible Entity and its related parties

In prior periods, some of the Group’s investment properties were leased to a related party of the Responsible Entity at commercial rates. The lease expired on 30 June 2008. The group has not received any rental income from related parties during the year. Rental income recognised for the year ended 30 June 2008 was $13,200,000.

(e) Key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director of the Responsible Entity.

Page 50

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

23. Related parties (continued)

(e) Key management personnel (continued)

The names of the directors of the Responsible Entity, and their dates of appointment or resignation if they were not directors for all of the financial year, are:

Richard Colless AM Chairman Philip Clark AM Michael Easson AM Philip Redmond Paul Scully David Blight Resigned 1 December 2008 Hugh Thomson Alternate director for David Blight – ceased 1 December 2008 Adrian Astridge Alternate director for David Blight – ceased 1 December 2008 The names of other key management personnel, are: Hugh Thomson Group Chief Executive Officer Ian Muir Chief Investment Officer David Hunt Chief Financial Officer

Key management personnel do not receive any remuneration directly from the Group. They receive remuneration from the Responsible Entity in their capacity as directors or employees of the Responsible Entity or its related parties. Consequently, the Group does not pay any compensation as defined in Accounting Standard AASB 124 Related Parties to its key management personnel.

Units held directly, indirectly or beneficially in the Group by each key management person, including their related parties, were:

Paul Scully Held at the beginning of the financial year Acquisitions Held at the end of the financial year Hugh Thomson Held at the beginning of the financial year Acquisitions Disposals Held at the end of the financial year Adrian Astridge Held at the beginning of the financial year Disposals Held at the date of cessation as a director Ian Muir Held at the beginning of the financial year Acquisitions Held at the end of the financial year David Hunt Held at the beginning of the financial year Acquisitions Held at the end of the financial year	2009 2008
	20,352 19,076 - 1,276
	20,352 20,352
	82,271 - - 82,271 (15,000) -
	67,271 82,271
	20,375 20,375 (20,375) -
	- 20,375
	363,149 340,383 200,000 22,766
	563,149 363,149
	148,645 111,205 130,342 37,440
	278,987 148,645

Page 51

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

23. Related parties (continued)

(e) Key management personnel (continued)

23. Related parties (continued) e) Key management personnel (continued)
Philip Clark Held at the beginning of the financial year Acquisitions Held at the end of the financial year	2009 2008
	- - 30,000 -
	30,000 -

Distributions received and receivable from the Group by each key management person were:

Paul Scully Hugh Thomson Adrian Astridge Ian Muir David Hunt	2009 2008 $ $
	305 2,190 1,234 3,481 - 2,241 5,447 39,260 2,605 13,549
	9,591 60,721

In addition to the above persons, key management personnel as defined in the Accounting Standards includes the Responsible Entity. Details of the remuneration of the Responsible Entity are given at note (b) above. Details of its holdings in the Group are given at note (c) above.

(f) Transactions with equity accounted investments

The Group had a loan receivable with an associate, ING Real Estate CC Trust No.1. During the year, the group impaired the receivable from CC Trust No.1 and recognised an impairment loss of $20,611,931. Amounts recognised were:

Amounts receivable at reporting date Impairment loss Interest income	Note Consolidated Parent entity 2009 2008 2009 2008 $ $ $ $
	- 20,342,000 - 20,342,000 12 20,611,931 - 20,611,931 - 770,075 1,541,412 770,075 1,541,412

(g) Transactions with subsidiaries

The Parent has lent monies to and borrowed from its subsidiaries. Loans are generally interest free and repayable on demand. Certain loans bear interest at commercial rates and are repayable in less than one to later than five years. Amounts recognised were:

Loans to subsidiaries

Amounts receivable at reporting date Interest income	Parent entity 2009 2008 $ $
	37,212,850 36,167,437 1,030,413 -

Page 52

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

24. Subsidiaries

(a) Names of subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(e):

Name	Country	Ownership	interest
	of residence	2009	2008
		%	%
*Subsidiaries of ING Real Estate Community*
*Living Fund:*
Bridge Street Trust	Australia	100	100
Browns Plains Road Trust	Australia	100	100
Casuarina Road Trust	Australia	100	100
Edinburgh Drive Trust	Australia	100	100
ILF Regency Subsidiary Trust	Australia	100	100
ING Community Living Fund Inc	United States of America	100	100
ING Community Living LLC	United States of America	100	100
ING Community Living Oak Tree Subsidiary
Trust No.1	Australia	100	100
ING Community Living Subsidiary Trust No. 1	Australia	100	100
ING Community Living Subsidiary Trust No. 2	Australia	100	100
ING Kiwi Communities Subsidiary Trust No. 1	Australia	100	100
ING Real Estate Community Living Regency
Subsidiary Trust	Australia	100	100
ING Sunny Trust	Australia	100	100
ING US Students No. 1, LLC	United States of America	100	100
ING US Students No. 2, LLC	United States of America	100	100
ING US Students No. 3, LLC	United States of America	100	100
ING US Students No. 4, LLC	United States of America	100	100
ING US Students No. 5, LLC	United States of America	100	100
ING US Students No. 6, LLC	United States of America	100	100
ING US Students No. 7, LLC	United States of America	100	100
ING US Students No. 8, LLC	United States of America	100	100
ING US Students No. 9, LLC	United States of America	100	100

Page 53

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

24. Subsidiaries (continued)

24. Subsidiaries (continued)
Name	Country	Ownership	interest
	of residence	2009	2008
		%	%
ING US Students No. 10, LLC	United States of America	100	100
ING US Students No. 11, LLC	United States of America	100	100
ING US Students No. 12, LLC	United States of America	100	100
ING US Students No. 13, LLC	United States of America	100	100
ING US Students No. 14, LLC	United States of America	100	100
Jefferis Street Trust	Australia	100	100
Lovett Street Trust	Australia	100	100
Settlers Subsidiary Trust	Australia	100	100
SunnyCove Gladstone Unit Trust	Australia	100	100
SunnyCove Rockhampton Unit Trust	Australia	100	100
Taylor Street (1) Trust	Australia	100	100
Taylor Street (2) Trust	Australia	100	100
*Subsidiaries of ING Real Estate Community*
*Living Management Trust:*
CSH Lynbrook GP LLC	United States of America	100	100
CSH Lynbrook LP	United States of America	100	100
ING Community Living II LLC	United States of America	100	100
ING Community Living Lynbrook Trust	Australia	100	100
ING Community Living Oak Tree Subsidiary
Trust No.2	Australia	100	100
ING Real Estate Community Living Regency
Operations Trust	Australia	100	100
Lynbrook Freer Street Member LLC	United States of America	100	100
Lynbrook Management, LLC	United States of America	100	100
Settlers Operations Trust	Australia	100	100

The Group’s voting interest in its subsidiaries is the same as its ownership interest.

A loss on change in fair value of investment properties, together with a loss in impairment of equity accounted investments was recognised by the Parent some of its subsidiaries. Consequently, the Responsible Entity tested the carrying amounts of the investments in these subsidiaries for impairment and recognised an impairment loss of $138,105,000 during the financial year (2008: $99,097,000). The recoverable amount of these investments was fair value less costs to sell, which was estimated by reference to the estimated fair value of the assets and liabilities owned by those subsidiaries.

25. Segment information

(a) Description of segments

The Group operates in the one business segment, investment in real estate utilised as social infrastructure, in three geographical areas, Australia, North America and New Zealand.

(b) Segment accounting policies

Segment accounting policies are the same as the Group’s policies described in note 1. During the financial year, there were no changes in segment policies that had a material effect on segment information.

Page 54

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

25. Segment information (continued)

(c) Primary reporting format - geographical segments

Year ended 30 June 2009 *Segment revenue* Rental income Deferred management fee Other property income Total segment revenue Interest income Total revenue *Segment result* Segment result Share of net loss of equity accounted investments Interest income Net foreign exchange loss Net loss on change in fair value of derivatives Finance costs Impairment loss on: Receivables Equity accounted investment Other non-current assets Other expenses Loss before income tax *Segment assets* Unallocated Consolidated assets *Segment liabilities* Unallocated Consolidated liabilities *Other segment information* Impairment loss on: Receivables Equity accounted investment 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
	16,804 20,883 - 3,123 - - 4,519 1,930 -	37,687 3,123 6,449
	24,446 22,813 -	47,259 1,541
	(19,768) (39,867) - (779) (154,838) (4,779)
		48,800
		(59,635) (160,396)
	(20,547) (194,705) (4,779)	(220,031) 1,541 (109) (55,071) (7,979) (20,612) (21,350) (773) (3,751)
	344,797 266,103 11,466
		(328,135)
		622,366 10,080
	141,789 151,660 -
		632,446
		293,449 161,329
	20,612 - - 21,350 - - 773 - - - 123,331 11,415
		454,778
		20,612 21,350 773 134,746

Page 55

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

25. Segment information (continued)

Year ended 30 June 2008 *Segment revenue* Rental income Deferred management fee Other property income Total segment revenue Interest income Total revenue *Segment result* Segment result Share of net profit/(loss) of equity accounted investments Interest income Net foreign exchange gain Net gain on change in fair value of derivatives Finance costs Other expenses Loss before income tax *Segment assets* Unallocated Consolidated assets *Segment liabilities* Unallocated Consolidated liabilities *Other segment information* Impairment loss on equity accounted investment 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
	16,288 17,256 - 5,356 - - 1,067 1,859 -	33,544 5,356 2,926
	22,711 19,115 -	41,826 2,470
	4,665 (25,034) (127) 1,751 (33,017) 599
		44,296
		(20,496) (30,667)
	6,416 (58,051) 472	(51,163) 2,470 2,649 15,505 (6,565) (1,435)
	394,162 405,851 14,041
		(38,539)
		814,054 65,193
	133,050 40,607 -
		879,247
		173,657 289,908
	3,145 - - 70,949 28,813 5,185 53,012 199,694 14,041
		463,565
		3,145 104,947 266,747

Page 56

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

26. Notes to the cash flow statements

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

Adjustments for: Unrealised foreign exchange gain Net loss on disposal of investment properties Net (gain)/loss on change in fair value of: Investment properties Derivatives Retirement village residents' loans Impairment loss on: Receivables Equity accounted investment Investment in subsidiaries Other non-current assets Excess of distributions received from equity accounted investments over share of profits Deferred income tax (benefit)/expense Operating profit for the year before changes in working capital Changes in working capital: (Increase)/decrease in receivables Increase in retirement village residents' loans Increase/(decrease) in other payables Net cash provided by operating Net loss for the year activities (b) Non-cash financing and investing activities Re-investment of distributions pursuant to Distribution Investment Plan	Adjustments for: Unrealised foreign exchange gain Net loss on disposal of investment properties Net (gain)/loss on change in fair value of: Investment properties Derivatives Retirement village residents' loans Impairment loss on: Receivables Equity accounted investment Investment in subsidiaries Other non-current assets Excess of distributions received from equity accounted investments over share of profits Deferred income tax (benefit)/expense Operating profit for the year before changes in working capital Changes in working capital: (Increase)/decrease in receivables Increase in retirement village residents' loans Increase/(decrease) in other payables Net cash provided by operating Net loss for the year activities (b) Non-cash financing and investing activities Re-investment of distributions pursuant to Distribution Investment Plan	Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000
		(284,176) (38,803) (223,481) (63,570) (602) (54) (520) - 1,085 - 150 - 71,939 25,188 7,960 12,958 55,071 (15,505) 55,071 (15,505) (7,774) 13,237 - - 20,612 - 43,554 - 21,350 3,145 6,203 3,145 - - 138,105 99,097 773 - 773 - 178,442 64,841 (87) - (44,131) 264 - -
		12,589 52,313 27,728 36,125 9,569 (7,454) (15,814) (30,421) 10,848 10,940 - - 2,598 10,490 306 (14)
		35,604 66,289 12,220 5,690
		Consolidated Parent entity 2009 2008 2009 2008 $'000 $'000 $'000 $'000 - 13,779 - 13,667

27. Subsequent events

Page 57

ING Real Estate Community Living Group Directors’ declaration Year ended 30 June 2009

In accordance with a resolution of the directors of ING Management Limited, I state that:

In the opinion of the directors:
(a) the financial statements and notes of ING Real Estate Community Living Fund are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the Parent’s and the Group’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and
- (ii) complying with Accounting Standards and Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that ING Real Estate Community Living Fund will be able to pay its debts as and when they become due and payable.. In reaching this conclusion, the directors considered the matters discussed at note 1(c).
This declaration has been made after receiving the declarations required to be made by the chief executive officer and chief financial officer to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2009.

On behalf of the directors

Richard Colless Chairman Sydney, 26 August 2009

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Independent auditor’s report to the unitholders of ING Real Estate Community Living Fund

Report on the Financial Report

We have audited the accompanying financial report of ING Real Estate Community Living Fund, which comprises the balance sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of ING Management Limited, the Responsible Entity of ING Real Estate Community Living Fund and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of ING Management Limited as Responsible Entity for ING Real Estate Community Living Fund are responsible for the preparation and fair presentation of the financial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is 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. In Note 1(b) the directors also state that the financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors of the Responsible Entity, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Liability limited by a scheme approved under Professional Standards Legislation

Independence

In conducting our audit we have met the independence requirements of the Corporations Act 2001 . We have given to the directors of the Responsible Entity of ING Real Estate Community Living Fund a written Auditor’s Independence Declaration, a copy of which follows the directors’ report. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence.

Auditor’s Opinion

In our opinion:

the financial report of ING Real Estate Community Living Fund is in accordance with the Corporations Act 2001 , including:
i giving a true and fair view of the financial position of ING Real Estate Community Living Fund and the consolidated entity at 30 June 2009 and of their performance for the year ended on that date; and
ii complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 .
the financial report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board as disclosed in Note 1 (b).

Significant Uncertainty as to Going Concern

Without qualifying our conclusion, we draw attention to Note 1 (c) in the financial report which indicates that the Fund needs to refinance its Australian secured bank debt within 12 months; that continued compliance with the terms of the Australian secured bank debt is dependent on future market conditions including fair values of investment properties; and the Fund may have insufficient finances to satisfy a guarantee provided in relation to its share of a deferred purchase obligation of a joint venture. These factors cast doubt over whether the Fund will realise its assets and liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the fund not continue as a going concern.

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Ernst & Young

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Douglas Bain Partner Sydney 26 August 2009

AI assistant

INGENIA COMMUNITIES GROUP — Annual Report 2009

65125_rns_2009-08-25_6410623b-2f7c-49aa-b676-1ea5ea0cafa3.pdf

APPENDIX 4E

Preliminary Final Report Year ended 30 June 2009

For further details, please refer to the following attached documents:

ING REAL ESTATE COMMUNITY LIVING GROUP

FINANCIAL & ASSOCIATED REPORTS

Contents

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

Directors

Principal activity

Review and results of operations

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

Distributions

Significant changes in the state of affairs

Events subsequent to reporting date

Likely developments

Environmental regulation

Indemnities

ING Real Estate Community Living Group Directors’ report Year ended 30 June 2009

Interests of directors of the Responsible Entity

Number of units

Other information

Auditor’s independence declaration

Rounding of amounts

Auditor’s Independence Declaration to the Directors of ING Management Limited as Responsible Entity for ING Real Estate Community Living Fund

ING Real Estate Community Living Group Income statements Year ended 30 June 2009

ING Real Estate Community Living Group Balance sheets As at 30 June 2009

ING Real Estate Community Living Group Cash flow statements Year ended 30 June 2009

ING Real Estate Community Living Group Statements of changes in unitholders’ interest Year ended 30 June 2009

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies

(a) The Group

(b) Basis of preparation

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(c) Going concern

(d) Adoption of new and revised accounting standards

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(e) Principles of consolidation

(f) Distribution policy

(g) Foreign currency

(i) Functional and presentation currencies

(ii) Translation of foreign currency transactions

(iii) Translation of financial statements of foreign subsidiaries

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(h) Leases

(i) Financial assets and liabilities

(i) Financial assets and liabilities (continued)

(j) Impairment of non-financial assets

(k) Cash and cash equivalents

(l) Trade and other receivables

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(m) Derivative financial instruments

(m) Derivative financial instruments (continued)

(n) Investment property

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(n) Investment property (continued)

(o) Property under construction

(p) Equity accounted investments

(q) Payables

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(r) Retirement village residents’ loans

(s) Borrowings

(s) Borrowings (continued)

(t) Issued units

(u) Revenue

ING Real Estate Community Living Group Notes to the financial statements Year ended 30 June 2009

1. Summary of significant accounting policies (continued)

(v) Income tax

(i) Current income tax

(ii) Deferred income tax

(w) Earnings per unit

INGENIA COMMUNITIES GROUP Annual Report 2009