LENDLEASE GROUP — Annual Report 2013

Aug 22, 2013

ASX Announcement

Full Year Financial Report – Lend Lease Trust

23 August 2013

Attached is the Full Year Financial Report for the year ended 30 June 2013 for the Lend Lease Trust.

ENDS

Media and Investors:

Vivienne Bower Suzanne Evans Group Head of Corporate Affairs Head of Investor Relations Tel: 02 9277 2174 Tel: 02 9236 6464

Lend Lease Corporation Limited ABN 32 000 226 228 and Lend Lease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lend Lease Trust ABN 39 944 184 773 ARSN 128 052 595

Millers Point NSW 2000 www.lendlease.com Australia

Level 4, 30 The Bond Telephone +61 2 9236 6111 30 Hickson Road Facsimile +61 2 9252 2192 1

Lend Lease Trust ARSN 128 052 595

Annual Financial Report

June 2013

Lead Lease Responsible Entity Limited ABN 72 122 883 185 AFSL No. 308983 is the responsible entity of the Lend Lease Trust ARSN 128 052 595

Table of Contents

	Directors' Report	1
	Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001	4
	Financial Statements
	Statement of Comprehensive Income	5
	Statement of Financial Position	5
	Statement of Changes in Equity	6
	Statement of Cash Flows	6
	Notes to the Financial Statements
1.	Significant Accounting Policies	7
2.	Distributions	9
3.	Earnings per Unit	9
4.	Cash and Cash Equivalents	9
5.	Equity Accounted Investments	10
6.	Issued Capital	11
7.	Financial Instruments	11
8.	Notes to the Statement of Cash Flows	12
9.	Related Party Disclosures	12
10.	Audit Fees	13
11.	Commitments	13
12.	Contingent Liabilities	13
13.	Events Subsequent to Balance Date	13
	Directors' Declaration	14

Directors' Report

The Directors of Lend Lease Responsible Entity Limited (ABN: 72 122 883 185), the Responsible Entity of Lend Lease Trust ('the Trust'), present their Report together with the Annual Financial Report of the Trust, for the year ended 30 June 2013 and the Auditor's Report thereon.

The Responsible Entity is a wholly owned subsidiary of Lend Lease Corporation Limited ('the Company') and forms part of the consolidated Lend Lease Group ('the Group'). The registered office and principal place of business of the Responsible Entity is Level 4, 30 The Bond, 30 Hickson Road, Millers Point NSW 2000.

1. Governance

a. Board/Directors

The name of each person who has been a Director of the Responsible Entity between 1 July 2012 and the date of this Report are:

D A Crawford, AO	Chairman and Director since 2009
S B McCann	Group Chief Executive Officer & Managing Director since 2009
C B Carter, AM	Appointed April 2012
P M Colebatch	Director since 2009
G G Edington, CBE	Director since 2009
P C Goldmark	Director since 2009
J S Hemstritch	Director since 2011
J A Hill	Retired November 2012
D J Ryan, AO	Director since 2009
M J Ullmer	Director since 2011

b. Company Secretary

Ms Lee was appointed in January 2010.

The qualifications and experience of each person holding the position of Director and Company Secretary of the Responsible Entity at the date of this Report is detailed in the 2013 Lend Lease Group Annual Report.

c. Interest in Capital

The interest of each of the Directors (in office at the date of this Report) in the issued stapled securities of the Group at 23 August 2013 is set out below.

	Securities Held Directly	Securities Held Beneficially/ Indirectly 20131	Total	Securities Held Directly	Securities Held Beneficially/ Indirectly 20121	Total
Director D A Crawford	2013 778	74,773	2013 75,551	2012 741	73,769	2012 74,510
S B McCann	292,961	154,443	447,404	224,153	154,443	378,596
C B Carter		15,000	15,000		15,000	15,000
P M Colebatch	5,023	13,300	18,323	5,023	13,300	18,323
G G Edington	22,998	17,070	40,068	21,165	18,903	40,068
P C Goldmark	6,892	17,902	24,794	4,765	20,029	24,794
J S Hemstritch		20,000	20,000		20,000	20,000
J A Hill2				2,000	12,324	14,324
D J Ryan	15,792	15,481	31,273		31,273	31,273
M J Ullmer		25,000	25,000		25,000	25,000

1 Includes securities beneficially held by Non Executive Directors in the Retirement Plan.

2 J Hill retired on 15 November 2012.

Directors' Report continued

2. Operations

a. Principal Activities

The principal purpose of the Trust is direct and indirect property investments in the Australia region. For the year ended 30 June 2013 the Trust had ownership interests in indirect property investments in the Australia region.

b. Review and Results of Operations

For the year ended 30 June 2013 the Trust reported a profit after tax of A\$10,579,103 (June 2012: loss of A\$81,429).

c. Distributions

For the year ended 30 June 2013 the Trust declared distributions of A\$6,588,864 (June 2012: A\$nil). Distributions of A\$886,990 were paid on 27 March 2013. The remaining distributions of A\$5,701,874 were provided for as at 30 June 2013 and will be paid on 27 September 2013.

d. Significant Changes in State of Affairs

Following stapled securityholders' approval on 15 November 2012, the Company has reallocated capital to the Trust by reducing the Company's share capital by A\$500,300,000 and applying that amount as additional capital to the Trust. This capital reallocation did not affect the number of shares on issue nor the number of units held by each securityholder and did not result in any cash distribution to members.

e. Events Subsequent to Balance Date

Since 30 June 2013, the Trust subscribed for units in Australian Prime Property Fund Commercial ('APPFC') for a total investment of A\$225,000,000.

There were no other material events subsequent to the end of the financial year.

f. Likely Developments

Details of likely developments in the operations of the Trust in subsequent financial years are contained in the likely developments section of the Directors Report in the Lend Lease Group Annual Report.

g. Environmental Regulation

The Group is subject to various state and federal environmental regulations in Australia.

The Directors are not aware of any material non compliance with environmental regulations pertaining to the operations or activities during the period covered by this Report. In addition, the Group is registered and publicly reports the annual performance of its Australian operations under the requirements of the National Greenhouse and Energy Reporting (NGER) Act 2007 and Energy Efficiency Opportunities (EEO) Act 2006.

All Lend Lease businesses continue to operate an integrated Environment, Health and Safety Management System ensuring that non compliance risks and opportunities for environmental improvement are identified, managed and reported accordingly.

3. Other a. Security Options

No security options were issued during the year by the Trust, and there are no such options on issue.

Directors' Report continued

3. Other continued

b. Indemnification and Insurance of Directors and Officers

Rule 12 of the Trust's Constitution provides for indemnification in favour of each of the Directors named on page one of this Report; the officers of the Responsible Entity or of wholly owned subsidiaries or related entities of the Responsible Entity ('Officers') to the extent permitted by the Corporations Act 2001. Rule 12 does not indemnify a Director, Company Secretary or Officer for any liability involving a lack of good faith.

Each of the Directors is also a Director of the Company and has entered into a Deed of Indemnity, Insurance and Access with the Company. That indemnity extends to indemnify each of the Directors in respect of their roles as officers of the Responsible Entity. The Responsible Entity has not entered into separate deeds of indemnity with the Directors.

No indemnity has been granted to an auditor of the Responsible Entity in their capacity as auditor of the Responsible Entity.

In accordance with the Corporations Act 2001, Rule 12 of the Constitution also permits the Responsible Entity to purchase and maintain insurance or pay or agree to pay a premium for insurance for Officers against any liability incurred as an officer of the Company or of a related body corporate. Due to confidentiality obligations and undertakings for the policy, no further details in respect of the premium or policy can be disclosed.

c. Special rules for Registered Schemes

A\$430,818 in fees and other expenses were paid or are payable to Lend Lease Corporation Limited and its associates out of the assets of the Trust for the financial year ended 30 June 2013 (June 2012: A\$98,713).

No units in the Trust were held by the Responsible Entity at the end of the financial year. Associates of the Responsible Entity held 34,444,590 units as at the end of the financial year.

Details of the units issued in the Trust during the financial year are set out in the Statement of Changes in Equity.

Details of the value of the Trust assets as at the end of the financial year and the basis of the valuation are set out in the Statement of Financial Position and Note 1 to the Financial Statements.

Details of the number of Units in the Trust as at the end of the financial year are set out in the Statement of Changes in Equity.

d. Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

The Lead Auditor's Independence Declaration is set out on page four and forms part of the Directors' Report for the year ended 30 June 2013.

D A Crawford, AO S B McCann

Sydney, 23 August 2013

Chairman Group Chief Executive Officer & Managing Director

Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Lend Lease Responsible Entity Limited (the Responsible Entity of Lend Lease Trust)

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2013 there have been:

• $(i)$ no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
• $(ii)$ no contraventions of any applicable code of professional conduct in relation to the audit.

$kPMC$

MM KPMG

S J Marshall Partner

Sydney

23 August 2013

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Financial Statements

Statement of Comprehensive Income

Year ended 30 June 2013

	June 2013	June 2012
		A\$
	6,712,791	19,485
9	355,692
9	412,160	626
	7,480,643	20,111
		98,713
	460,961	2,827
	891,779	101,540
5	3,990,239
		(81,429)
		(81,429)
	10,579,103	(81,429)
3	1.84	–
	Note	A\$ 430,818 10,579,103 10,579,103

Statement of Financial Position

	As at 30 June 2013

	June 2013	June 2012
Note	A\$	A\$
Current Assets
Cash and cash equivalents 4	421,037,835	412,397
Trade and other receivables – related parties 9	767,852	626
Trade and other receivables – other	962,863
Total current assets	422,768,550	413,023
Non Current Assets
Equity accounted investments 5	89,240,189
Total non current assets	89,240,189	–
Total assets	512,008,739	–
Current Liabilities
Trade and other payables	5,855,870
Total current liabilities	5,855,870	–
Net assets	506,152,869	413,023
Equity
Issued capital 6	502,322,397	572,790
Retained earnings/(accumulated losses)	3,830,472	(159,767)
Total equity attributable to unitholders	506,152,869	413,023

Financial Statements continued

Statement of Changes in Equity

Year ended 30 June 2013

		June 2013	June 2012
Issued Capital	Note	A\$	A\$
Opening balance at beginning of financial year		572,790	570,916
Recapitalisation of Lend Lease Trust		500,300,000
Units issued through Distribution Reinvestment Plan (DRP)		1,449,607	1,874
Closing balance at end of financial year	6	502,322,397	572,790
Retained Earnings/(Accumulated Losses)
Opening balance at the beginning of financial year		(159,767)	(78,338)
Profit/(loss) after tax		10,579,103	(81,429)
Distributions paid and provided for		(6,588,864)
Closing balance at end of financial year		3,830,472	(159,767)
Statement of Cash Flows
Year ended 30 June 2013
	Note	June 2013 A\$	June 2012 A\$
Cash Flows from Operating Activities
Cash payments in the course of operations		(737,783)	(101,540)
Cash received in the course of operations		5,750,554	19,485
Net cash provided by/(used in) operating activities	8a	5,012,771	(82,055)
Cash Flows from Investing Activities
Acquisition of investment in joint ventures		(85,249,950)
Net cash used in investing activities		(85,249,950)	–
Cash Flows from Financing Activities
Recapitalisation		500,300,000
Net proceeds from equity issue		1,449,607	7,231
Distributions paid		(886,990)
Net cash provided by financing activities		500,862,617	7,231
Net increase/(decrease) in cash and cash equivalents		420,625,438	(74,824)
Cash and cash equivalents at beginning of financial year		412,397	487,221
Cash and cash equivalents at end of financial year	8b	421,037,835	412,397

1. Significant Accounting Policies

Lend Lease Trust ('the Trust') is domiciled in Australia.

Lend Lease Corporation Limited ('the Company') acquired 100% of the Trust on 2 October 2009. Following shareholders' approval on 12 November 2009, the units in the Trust were distributed as an 'in specie' dividend to the shareholders. The shares of the Company and the units in the Trust were combined as stapled securities and from 13 November 2009 have been traded as one security under the name of Lend Lease Group on the Australian Securities Exchange ('ASX').

Following stapled securityholders' approval on 15 November 2012, the Company has reallocated capital to the Trust by reducing the Company's share capital by A\$500,300,000 and applying that amount as additional capital to the Trust. This capital reallocation did not affect the number of shares on issue nor the number of units held by each securityholder and did not result in any cash distribution to members.

The principal accounting policies adopted in the preparation of the financial report are set out below.

The financial report was authorised for issue by the Directors on 23 August 2013.

1.1 Statement of Compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board and the Corporations Act 2001. The financial report also complies with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board.

1.2 Basis of Preparation

The financial report is presented in Australian dollars and is prepared under the historical cost basis.

The preparation of a financial report that complies with AASBs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The accounting policies set out below have been consistently applied to all financial years.

1.3 Impact of New/Revised Accounting Standards

New and Revised Accounting Standards

From 1 July 2012 the Group has adopted AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income.

The change relates only to disclosures and had no impact on earnings per unit or net profit. The changes have been applied retrospectively and require the Trust to separately present those items of other comprehensive income that may be reclassified to profit or loss in the future from those that will never be reclassified to profit or loss.

From 1 July 2012 the Trust has also adopted AASB 2010- 8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets. The changes had no significant impact on the Group's assessment of deferred taxes.

New Accounting Standards and Interpretations Not Yet Adopted

Certain new accounting standards and interpretations have been published that are not mandatory for the financial year ended 30 June 2013 but are available for early adoption and have not been applied in preparing this report.

The potential effect of these is outlined below:

− AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9, AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) and AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures (September 2012).

These standards address the classification, measurement and derecognition of financial assets and financial liabilities. The potential effect of this standard is yet to be determined.

• AASB 10 Consolidated Financial Statements introduces a new definition of control and addresses whether an entity should be included within the consolidated financial statements of the parent company.
• AASB 11 Joint Arrangements establishes principles for financial reporting by parties to a joint arrangement.

The Trust's assessment of the impact of AASB 10 and AASB 11 indicates that the application of these standards is unlikely to have a significant impact on the Trust's financial position and performance.

– AASB 12 Disclosure of Interests in Other Entities relates to disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. Application of this standard will not affect amounts recognised in the financial statements, however it will impact the type of information disclosed in relation to the Trust's investments.

1. Significant Accounting Policies continued

1.3 Impact of New/Revised Accounting Standards continued

New Accounting Standards and Interpretations Not Yet Adopted continued

• AASB 13 Fair Value Measurements and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 introduce new guidance on fair value measurement and disclosure requirements when fair value is permitted by accounting standards. Application of this standard will not affect amounts recognised in the financial statements, however it will impact the type of information disclosed in relation to the fair value hierarchy.

The standards above become mandatory for the June 2014 financial year, with the exception of AASB 9 which will apply to the June 2016 financial year. With the exception of AASB 13, which applies prospectively, the standards are to be applied retrospectively.

1.4 Revenue

Revenue is measured at the fair value of the consideration received or receivable and is recognised when the amount can be reliably measured and future economic benefits will flow to the Trust.

Finance Revenue

Finance revenue is recognised on a time proportion basis using the effective interest method.

1.5 Income Tax

Under current Australian income tax legislation the Trust is not liable for income tax, including capital gains tax, to the extent that unitholders are presently entitled to the taxable income of the Trust.

1.6 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, bank overdrafts and other short term highly liquid investments that are readily convertible to known amounts of cash within three months and which are subject to an insignificant risk of changes in value.

Bank overdrafts (if applicable) are shown as a current liability on the Statement Financial Position and are shown as a reduction to the cash balance in the Statement of Cash Flows.

1.7 Trade and Other Receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial.

A provision for impairment of trade receivables is established when there is objective evidence that the Trust will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and fair value, which is estimated as the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the Statement of Comprehensive Income.

1.8 Equity Accounted Investments (Associates and Joint Venture Entities)

Investments in associates and joint venture entities are accounted for using the equity method. Associates (including partnerships) are entities in which the Trust, as a result of its voting rights, has significant influence, but not control, over financial and operating policies. A joint venture entity is an entity which has a contractual arrangement whereby two or more parties undertake an economic activity which is subject to joint control.

The financial statements include the Trust's share of the total recognised gains or losses of associates and joint venture entities on an equity accounted basis. For associates, this is from the date that significant influence commences until the date that significant influence ceases, and for joint venture entities, this is from the date joint control commences until the date joint control ceases. Other movements in associates' and joint venture entities' reserves are recognised directly in reserves. Investments in associates and joint venture entities are carried at the lower of the equity accounted carrying amount and the recoverable amount.

When the Trust's share of losses exceeds the carrying amount of the equity accounted investment (including assets that form part of the net investment in the associate or joint venture entity), the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Trust has recourse to obligations in respect of the associate or joint venture entity. Dividends from associates and joint venture entities represent a return on the Trust's investment and as such are applied as a reduction to the carrying value of the investment. Unrealised gains arising from transactions with equity accounted investments are eliminated against the investment in the associate or joint venture entity to the extent of the Trust's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

1.9 Trade and Other Payables

Trade and other payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Trust. Trade and other payables are stated at amortised cost or at cost when the impact of discounting would be immaterial.

Trade and other payables are presented as current liabilities unless there is an unconditional contractual right for the Trust to defer payment for at least 12 months from the reporting date.

1.10 Issued Capital

Ordinary units are classified as equity. When issued capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a change in equity. Distributions are recognised as a liability in the financial year in which they are declared.

1. Significant Accounting Policies continued

1.11 Earnings Per Unit

Basic earnings per unit ('EPU') is determined by dividing profit/(loss) after tax attributable to the unitholders of the Trust, excluding any costs of servicing equity other than ordinary units, by the weighted average number of ordinary units outstanding during the financial year, adjusted for bonus elements in ordinary units issued during the financial year.

Diluted EPU is determined by adjusting the profit/(loss) after tax attributable to the unitholders of the Trust and the weighted average number of ordinary units outstanding for the effects of all dilutive potential ordinary units.

1.12 Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax ('GST'), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian Taxation Office ('ATO') is included as a current asset or liability in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

2. Distributions

The total distributions for the year ended 30 June 2013 were A\$6,588,864 (June 2012: A\$nil). Distributions of A\$886,990 were paid on 27 March 2013. The remaining distributions of A\$5,701,874 were provided for as at 30 June 2013 and will be paid on 27 September 2013.

3. Earnings per Unit	June 2013	June 2012
Basic/Diluted Earnings Per Unit (EPU)
Profit/(loss) after tax A\$	10,579,103	(81,429)
Weighted average number of units	574,264,539	571,828,552
Basic/diluted EPU (cents)	1.84	–
	June 2013	June 2012
	A\$	A\$
4. Cash and Cash Equivalents
Cash	42,461,081	412,397
Short term investments	378,576,754
Total cash and cash equivalents	421,037,835	412,397

Short term investments earned variable rates of interest which averaged 3.2% per annum during the year ended 30 June 2013 (30 June 2012: A\$nil).

					June 2013	June 2012
5. Equity Accounted Investments					A\$	A\$
Joint Ventures
Investment in Joint Ventures					89,240,189
	Interest		Share of Profit		Net Book Value
	June 2013 %	June 2012 %	June 2013 A\$	June 2012 A\$	June 2013 A\$	June 2012 A\$
Joint Ventures
Lend Lease International Towers Sydney Trust	25.0		3,990,239		89,240,189
					June 2013	June 2012
a. Joint Ventures Additional Disclosures					A\$	A\$
Lend Lease's Share of Profit or Loss
Revenue					41,260
Fair value revaluations					4,572,539
Expenses					(623,560)
Share of profit before tax					3,990,239	–
Income tax (expense)/benefit
Share of profit after tax					3,990,239	–
Lend Lease's Share of Statement of Financial Position
Current assets					4,926,909
Non current assets					217,795,839
Total assets					222,722,748	–
Current liabilities					(33,436,720)
Non current liabilities					(100,045,839)
Total liabilities					(133,482,559)	–
Net assets attributable to equity accounted investments					89,240,189	–

	June 2013	June 2013	June 2012	June 2012
6. Issued Capital	No of units	A\$	No of units	A\$
Issued Capital
Issued capital at beginning of financial year	572,789,827	572,790	570,915,669	570,916
Recapitalisation of Lend Lease Trust		500,300,000
Distribution Reinvestment Plan (DRP)	2,718,487	1,449,607	1,874,158	1,874
Issued capital at end of financial year	575,508,314	502,322,397	572,789,827	572,790

Issuance of Securities

Following stapled securityholders' approval on 15 November 2012, the Company has reallocated capital to the Trust by reducing the Company's share capital by A\$500,300,000 and applying that amount as additional capital to the Trust. This capital reallocation did not affect the number of shares on issue nor the number of units held by each securityholder in Lend Lease Group and did not result in any cash distribution to members.

Security Accumulation Plans

The Distribution Reinvestment Plan ('DRP') was reactivated in February 2011. The last date for receipt of an election notice for participation in the DRP is 11 September 2013. The issue price is the arithmetic average of the daily volume weighted average price of Lend Lease stapled securities traded (on the Australian Securities Exchange) for the period of seven consecutive business days immediately following the record date for determining entitlements to distribution. If that price is less than 50 cents, the issue price will be 50 cents. Stapled securities issued under the DRP rank equally with all other stapled securities on issue.

Terms and Conditions

A stapled security represents one share in the Company stapled to one unit in the Trust.

Stapled securityholders have the right to receive declared dividends from the Company and distributions from the Trust and are entitled to one vote per stapled security at securityholders' meetings. Ordinary stapled securityholders rank after all creditors in repayment of capital.

7. Financial Instruments

a. Credit Risk

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on financial assets recognised in the Statement of Financial Position equals the carrying amount. No provision for doubtful debts has been raised as no impairment has been identified.

b. Liquidity Risk

Liquidity Risk is the risk of having insufficient availability of funds to settle financial liabilities as and when they fall due. The Trust held financial liabilities of A\$5,855,870 at 30 June 2013.

	Carrying Amount	Contractual Cash Flows	Less than One Year	One to Two Years	Two to Five Years	More than Five Years
June 2013	A\$	A\$	A\$	A\$	A\$	A\$
Trade and other payables	5,855,870	5,855,870	5,855,870
	5,855,870	5,855,870	5,855,870	–	–	–
June 2012 Trade and other payables

– – – – – –

c. Currency Risk

The Trust does not have an exposure to currency risk.

d. Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument of cash flow associated with the instrument will fluctuate due to change in the market interest rates.

7. Financial Instruments continued

d. Interest Rate Risk continued

Sensitivity Analysis

At 30 June 2013 it is estimated that an increase of one percentage point in interest rates would have increased the Trust's profit before tax by approximately A\$1,832,018 (June 2012: A\$385). A one percentage decrease would have an equal and opposite effect on equity and profit or loss. The increase or decrease in interest income/expense is proportional to the increase or decrease in interest rates.

The Trust's exposure to interest rate risk on financial instruments is set out below, the Trust has no fixed rate instruments.

	Carrying Amount
	June 2013	June 2012
Variable Rate Instruments	A\$	A\$
Financial Assets	421,037,835	412,397

e. Net Fair Values of Financial Assets and Liabilities

The Trust's financial assets and liabilities in the Statement of Financial Position approximate their fair values.

	June 2013	June 2012
8. Notes to the Statement of Cash Flows	A\$	A\$
a. Reconciliation of Loss After Tax to Net Cash Provided by Operating Activities
Profit/(loss) after tax Share of profit of equity accounted investment	10,579,103 (3,990,239)	(81,429)
Changes in assets and liabilities Increase in trade and other receivables Increase in payables	(1,730,089) 153,996	(626)
Net cash provided by/(used in) operating activities	5,012,771	(82,055)
b. Cash and Cash Equivalents
Disclosed in the Statement of Financial Position as follows:
Cash	42,461,081	412,397
Short term investments	378,576,754
Total cash and cash equivalents	421,037,835	412,397

9. Related Party Disclosures

Key Management Personnel Disclosures

The Trust does not employ personnel in its own right. However it is required to have an incorporated Responsible Entity to manage its activities. The Responsible Entity is considered to be the Key Management Personnel of the Trust.

Responsible Entity's Remuneration

In accordance with the Trust's Constitution, the Responsible Entity is entitled to receive costs incurred in performance of its duties and expense reimbursements where expenses have been incurred on behalf of the Trust.

As at 30 June 2013, A\$430,818 (June 2012: A\$98,713) was charged to the Trust, the amount owed to the Responsible Entity was A\$nil (June 2012: A\$nil).

Other Related Party Transactions

The Trust received other income of A\$412,160 from the Company (June 2012: A\$626) and as at 30 June 2013, A\$412,160 (June 2012: A\$626) was receivable from the Company. In addition the Trust had finance income of A\$355,692 which was receivable from the Company (June 2012: A\$nil).

10. Audit Fees

During the year audit fees of A\$30,536 (June 2012: A\$21,836) were incurred and A\$10,900 was accrued to 30 June 2013 (June 2012: A\$nil).

Other audit services charges for the year ended 30 June 2013 totalled A\$45,900 (June 2012: A\$nil).

11. Commitments

	June 2013 Joint Ventures	June 2012 Joint Ventures
At balance date, capital commitments existing in respect of interests in equity accounted	A\$	A\$
investments in the financial statements are as follows:
Due within one year	73,079,000
Due between one and five years	341,671,050
Due later than five years
	414,750,050	–

12. Contingent Liabilities

The Trust does not have any contingent liabilities at 30 June 2013.

13. Events Subsequent to Balance Date

Since 30 June 2013, the Trust subscribed for units in Australian Prime Property Fund Commercial ('APPFC') for a total investment of A\$225,000,000.

There were no other material events subsequent to the end of the financial year.

Directors' Declaration

In the opinion of the Directors of Lend Lease Responsible Entity Limited, the Responsible Entity of Lend Lease Trust ('the Trust'):

• 1. The financial statements and notes are in accordance with the Corporations Act 2001, including:
• a. Giving a true and fair view of the financial position of the Trust as at 30 June 2013 and of its performance for the financial year ended on that date; and
• b. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
• 1. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1.1.
• 1. There are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable.
• 1. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2013.

Signed in accordance with a resolution of the Directors:

D A Crawford, AO S B McCann

Sydney, 23 August 2013

Chairman Group Chief Executive Officer & Managing Director

Independent auditor's report to the members of Lend Lease Trust

Report on the financial report

We have audited the accompanying financial report of Lend Lease Trust (the Trust), which comprises the statement of financial position as at 30 June 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, notes 1 to 13 comprising a summary of significant accounting policies and other explanatory information and the directors' declaration.

Directors' responsibility for the financial report

The directors of Lend Lease Responsible Entity Limited (the Responsible Entity of the Trust) are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In note 1, the directors of the Responsible Entity also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

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 the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Trust's financial position and of its performance.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Auditor's opinion

In our opinion:

(a) the financial report of the Trust is in accordance with the Corporations Act 2001, including:

• giving a true and fair view of the Trust's financial position as at 30 June 2013 and $(i)$ of its performance for the year ended on that date; and
• complying with Australian Accounting Standards and the Corporations $(ii)$ Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1.

$KPM6$

KPMG $\frac{1}{2}$ , $\frac{1}{2}$

S J Marshall Partner Sydney 23 August 2013