LENDLEASE GROUP — Interim / Quarterly Report 2013

Feb 17, 2013

ASX Announcement

Half Year Financial Report – Lend Lease Trust

18 February 2013

Attached is the Half Year Financial Report for the period ended 31 December 2012 for the Lend Lease Trust.

ENDS

Investor Relations and Media Sally Cameron Vivienne Bower

Tel: 02 9236 6464 Tel: 02 9277 2174

Group Executive - Investor Relations Group Head of Corporate Affairs and Investor Relations Mob: 0448 129 022 Mob: 0431 487 025

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

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

Lend Lease Trust

Half Year Financial Report

December 2012

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 Auditors Independence Declaration under Section 307C of the Corporations Act 2001	2
	Financial Statements	3
	Statement of Comprehensive Income	3
	Statement of Financial Position	3
	Statement of Changes in Equity	4
	Statement of Cash Flows	4
	Notes to the Financial Statements	5
1.	Significant Accounting Policies	5
2.	Distributions	7
3.	Earnings per Unit	7
4.	Equity Accounted Investments	7
5.	Issued Capital	7
6.	Contingent Liabilities	8
7.	Events Subsequent to Balance Date	8
	Directors' Declaration	9

Directors' Report

The Directors of Lend Lease Responsible Entity Limited, the Responsible Entity for the Lend Lease Trust ('the Trust'), present their Report together with the Half Year Financial Report of the Trust, for the six months ended 31 December 2012 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. 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

2. Review of Operations and Results

For the six months ended 31 December 2012 the Trust reported a profit after tax of A\$3,338,450 (December 2011: Loss A\$45,223).

3. Events Subsequent to Balance Date

There are no material events subsequent to the end of the financial period.

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

The Lead Auditor's Independence Declaration is set out on page 2 and forms part of the Directors' Report for the six months ended 31 December 2012.

This report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

D A Crawford AO S B McCann

Sydney, 18 February 2013

Chairman Chief Executive Office and 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 for the Lend Lease Trust (the Trust)

I declare that, to the best of my knowledge and belief, in relation to the review for the half year ended 31 December 2012 there have been:

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

KPMG

$\frac{1}{2}$ KPMG

Sydney

18 February 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.

Stuart Marshall Partner

Financial Statements

Statement of Comprehensive Income

Half year ended 31 December 2012

	6 months December	6 months December
	2012	2011
Note Revenue	A\$	A\$
Finance revenue
External parties	1,165,890	10,836
Total revenue	1,165,890	10,836
Expenses
Cost recharges – related party	113,879	56,059
Other expenses	165,021
Total expenses	278,900	56,059
Share of profit of equity accounted investments 4	2,451,460	–
Profit/(loss) before tax	3,338,450	(45,223)
Income tax expense
Profit/(loss) after tax	3,338,450	(45,223)
Other comprehensive income net of tax
Total comprehensive income after tax	3,338,450	(45,223)
3 Basic/diluted earnings per unit (cents)	0.58	–

Statement of Financial Position

As at 31 December 2012

	December	June
	2012	2012
Note Current Assets	A\$	A\$
Cash and cash equivalents	454,895,186	412,397
Loans and receivables – related parties	371,439	626
Total current assets	455,266,625	413,023
Non Current Assets
Investments accounted for using equity method 4	48,951,410
Total non current assets	48,951,410	–
Total assets	504,218,035	413,023
Current Liabilities
Trade and other payables	1,051,990
Total current liabilities	1,051,990	–
Net assets	503,166,045	413,023
Equity
Issued capital 5	500,874,352	572,790
Retained earnings	2,291,693	(159,767)
Total equity attributable to unitholders	503,166,045	413,023

Financial Statements continued

Statement of Changes in Equity

Half year ended 31 December 2012

		6 months December 2012	6 months December 2011
	Note	A\$	A\$
Issued Capital
Opening balance at beginning of financial period		572,790	570,916
Recapitalisation of Lend Lease Trust		500,300,000
Unit issue through dividend reinvestment plan (DRP)		1,562	888
Closing balance at end of financial period	5	500,874,352	571,804
Retained Earnings
Opening balance at the beginning of financial period		(159,767)	(78,338)
Profit/(loss) after tax		3,338,450	(45,223)
Distributions provided for	2	(886,990)
Closing balance at end of financial period		2,291,693	(123,561)
Statement of Cash Flows Half year ended 31 December 2012		6 months December 2012	6 months December 2011
Cash Flows from Operating Activities		A\$	A\$
Cash payments in the course of operations		(114,181)	(56,059)
Interest received		795,358	10,836
Net cash provided by/(used in) operating activities		681,176	(45,223)
Cash flows from investing activities
Investment in associates		(46,499,950)
Net cash provided by/(used in) investing activities		(46,499,950)	–
Cash Flows from Financing Activities
Recapitalisation		500,300,000
Net proceeds from equity issue		1,562	6,245
Net cash provided by/(used in) financing activities		500,301,562	6,245
Net increase/(decrease) in cash and cash equivalents		454,482,789	(38,978)
Cash and cash equivalents at beginning of financial period		412,397	487,221
Cash and cash equivalents at end of financial period		454,895,186	448,243

1. Significant Accounting Policies

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 LLT by reducing the Company's share capital by A\$500.3 million and applying that amount as additional capital to LLT. 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 half year financial report was authorised for issue by the Directors on 18 February 2013.

1.1 Statement of Compliance

The half year financial report is a general purpose financial report which has been prepared in accordance with AASB 134 'Interim Financial Reporting' and the Corporations Act 2001. The half year financial report of the Trust also complies with the recognition and measurement requirements of the International Financial Reporting Standards (IFRS) and Interpretations adopted by the International Accounting Standards Board.

The half year financial report should be read in conjunction with the 30 June 2012 annual financial report and any public announcements by the Trust during the half year in accordance with continuous disclosure obligations arising under the Corporations Act 2001. The half year financial report does not include all of the information required for a full financial report.

1.2 Basis of Preparation

The half year financial report is presented in Australian Dollars and is prepared under the historical cost basis except for the following assets, which are stated at their fair value: fair value through profit or loss investments and investment property.

The preparation of an interim report that complies with AASB 134 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities and 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 are consistent with those applied in the 30 June 2012 annual financial report with the exception of the addition of the new significant accounting policy at Note 1.3.

1.3 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 Group has incurred 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. Significant Accounting Policies continued

1.4 New Accounting Standards and Interpretations Not Yet Adopted

Certain new accounting standards and interpretations have been published that are not mandatory for this reporting period.

• − 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 entity.
• − AASB 11 Joint Arrangements establishes principles for financial reporting by parties to a joint arrangement.

The impact of changes for Accounting Standards AASB 10 and AASB 11 are still being fully assessed. Initial assessments performed in the context of various investees, based on guidance issued to date, indicates however that the application of these standards is unlikely to have a significant impact on the composition of 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.
• − 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. The potential effect of this standard is yet to be determined.

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.

2. Distributions

Distributions of A\$886,990 were provided for during the period to 31 December 2012 and will be paid on 27 March 2013 (31 December 2011: A\$Nil).

						December 2012		December 2011
3.	Earnings per Unit
	Basic/Diluted Earnings Per Unit (EPU)
	Profit/(loss) after tax			A\$		3,338,450		(45,223)
	Weighted average number of units							573,587,834 571,359,880
	Basic/diluted EPU (cents)					0.58		–
						December 2012		June 2012
4.	Equity Accounted Investments					A\$		A\$
	Joint Ventures
	Investment in Joint Ventures					48,951,410		–
		Interest		Share of Profit/(Loss)	1
		December 2012	June 2012	December 2012	December 2011	December	Book Value 2012	June 2012
	Joint Ventures	%	%	A\$	A\$		A\$	A\$
	Lend Lease International Towers Sydney Trust	25.0		2,451,460		48,951,410
1	Reflects the after tax contribution to the Trust's profit, and is after tax paid by the equity accounted investment vehicles themselves, where relevant.
			December 2012 No of	December 2012		June 2012 No of		June 2012
			units		A\$	units		A\$

5. Issued Capital
Issued Capital
Issued capital at beginning of financial period	572,789,827	572,790	570,915,669	570,916
Recapitalisation of Lend Lease Trust		500,300,000
Distribution Reinvestment Plan (DRP)	1,562,056	1,562	1,874,158	1,874
Issued capital at end of financial period		574,351,883 500,874,352	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\$500.3 million and applying that amount as additional capital to LLT. 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. Subject to the rules of the DRP, 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. 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 LLT.

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

6. Contingent Liabilities

The Trust does not have any contingent liabilities.

7. Events Subsequent to Balance Date

There are no material events subsequent to the end of the financial period.

Directors' Declaration

In the opinion of the Directors of Lend Lease Responsible Entity Limited, the responsible entity for the 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 31 December 2012 and of its performance for the half year ended on that date; and
• b. Complying with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Regulations ²⁰⁰¹.
• 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.

Signed in accordance with a resolution of the Directors:

D A Crawford AO S B McCann

Sydney, 18 February 2013

Chairman Chief Executive Officer and Managing Director

Independent auditor's review report to the members of Lend Lease Trust Report on the half year financial report

We have reviewed the accompanying half year financial report of Lend Lease Trust (the Trust), which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes 1 to 7 comprising a summary of significant accounting policies and other explanatory information and the directors' declaration.

Directors' responsibility for the half year financial report

The directors of Lend Lease Responsible Entity Limited, the Responsible Entity for Lend Lease Trust, are responsible for the preparation of the half year 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 half year financial report that is free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Trust's financial position as at 31 December 2012 and its performance for the half year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of Lend Lease Trust, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

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

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half year financial report of Lend Lease Trust is not in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the Trust's financial position as at 31 December 2012 and of its performance for the half year ended on that date; and

(b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

$KPMG$

$\sqrt{2}$ KPMG

Stuart Marshall Partner

Sydney

18 February 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.