LENDLEASE GROUP — Interim / Quarterly Report 2014

Feb 25, 2014

ASX Announcement

Half Year Financial Report – Lend Lease Trust

26 February 2014

Attached is the Half Year Financial Report for the year ended 31 December 2013 for the Lend Lease Trust.

ENDS

For further information, please contact:

Investors: Media: Suzanne Evans Vivienne Bower Tel: 02 9236 6464 / 0407 165 254 Tel: 02 9277 2174 / 0431 487 025

Head of Investor Relations Group Head of Corporate Affairs and Investor Relations

Lend Lease Trust

Half Year Financial Report

December 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 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.	Revenue and Other Income	8
3.	Finance Revenue	8
4.	Distributions	8
5.	Earnings per Unit	8
6.	Equity Accounted Investments	9
7.	Other Financial Assets	10
8.	Borrowings	10
9.	Issued Capital	11
10.	Contingent Liabilities	11
11.	Fair Value Measurement	11
12.	Events Subsequent to Balance Date	12
	Directors' Declaration	13

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 Half Year Financial Report of the Trust, for the six months ended 31 December 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. Directors

The name of each person who has been a Director of the Responsible Entity between 1 July 2013 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	Director since April 2012
P M Colebatch	Director since 2009
G G Edington, CBE	Retired November 2013
P C Goldmark	Director since 2009
J S Hemstritch	Director since 2011
D J Ryan, AO	Director since 2009
M J Ullmer	Director since 2011
N M Wakefield Evans	Appointed September 2013

2. Review and Results of Operations

For the six months ended 31 December 2013 the Trust reported a profit after tax of A\$25,956,000 (December 2012: profit A\$3,338,000).

Key transactions during the period include the acquisition of units in Australian Prime Property Fund Commercial (A\$225,000,000) and Australian Prime Property Fund Industrial (A\$239,059,000).

An interim distribution of A\$25,951,000 (December 2012: A\$887,000) has been approved by the Directors and will be paid on 21 March 2014.

3. Events Subsequent to Balance Date

There were 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 two and forms part of the Directors' Report for the six months ended 31 December 2013.

5. Rounding Off

Lend Lease Trust is a Trust of the kind referred to in the Australian Securities and Investments Commission Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial statements and directors' report have been rounded off to the nearest thousand dollars, or, where the amount is A\$500 or less, zero, unless specifically stated otherwise.

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, 26 February 2014

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

I declare that, to the best of my knowledge and belief, in relation to the review for the half year ended 31 December 2013 there have been:

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

$K/M6$

KPMG

Stuart J Marshall Partner

Sydney 26 February 2014

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.

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Financial Statements

Statement of Comprehensive Income

Half year ended 31 December 2013

	Note	6 months December 2013 A\$'000	6 months December 2012 A\$'000
Revenue and other income	2	11,977
Other expenses		(578)	(279)
Results from operating activities		11,399	(279)
Finance revenue	3	4,142	1,166
Net finance revenue		4,142	1,166
Share of profit of equity accounted investments	6	10,415	2,451
Profit before tax		25,956	3,338
Income tax expense
Profit after tax		25,956	3,338
Other comprehensive income net of tax
Total comprehensive income after tax		25,956	3,338
Basic/diluted earnings per unit (cents)	5	4.51	0.58

Statement of Financial Position

As at 31 December 2013

		December	June
	Note	2013 A\$'000	2013 A\$'000
Current Assets
Cash and cash equivalents		30,750	421,038
Trade and other receivables		7,838	1,731
Total current assets		38,588	422,769
Non Current Assets
Equity accounted investments	6	99,655	89,240
Other financial assets	7	465,497
Total non current assets		565,152	89,240
Total assets		603,740	512,009
Current Liabilities
Trade and other payables		26,146	5,856
Total current liabilities		26,146	5,856
Non Current Liabilities
Borrowings – related parties	8	70,036
Total non current liabilities		70,036	–
Total liabilities		96,182	5,856
Net assets		507,558	506,153
Equity
Issued capital	9	503,722	502,322
Retained earnings		3,836	3,831
Total equity attributable to unitholders		507,558	506,153

Financial Statements continued

Statement of Changes in Equity

Half year ended 31 December 2013

	6 months December	6 months December
Note	2013 A\$'000	2012 A\$'000
Issued Capital
Opening balance at beginning of financial period	502,322	572
Recapitalisation of Lend Lease Trust		500,300
Distribution Reinvestment Plan (DRP)	1,400	2
Closing balance at end of financial period	503,722	500,874
Retained Earnings
Opening balance at the beginning of financial period	3,831	(159)
Profit after tax	25,956	3,338
Distributions provided for 4	(25,951)	(887)
Closing balance at end of financial period	3,836	2,292

Statement of Cash Flows

	6 months December 2013 A\$'000	6 months December 2012 A\$'000
Cash Flows from Operating Activities
Cash receipts in the course of operations	890
Cash payments in the course of operations	(536)	(114)
Interest received	3,494	795
Distributions received	2,225
Net cash provided by operating activities	6,073	681
Cash flows from Investing Activities
Acquisition of investment in joint venture		(46,500)
Acquisition of other financial assets	(464,059)
Net cash used in investing activities	(464,059)	(46,500)
Cash Flows from Financing Activities
Recapitalisation		500,300
Net proceeds from equity issue		2
Proceeds from borrowings	72,000
Distributions paid	(4,302)
Net cash provided by financing activities	67,698	500,302
Net (decrease)/increase in cash and cash equivalents	(390,288)	454,483
Cash and cash equivalents at beginning of financial period	421,038	412
Cash and cash equivalents at end of financial period	30,750	454,895

Notes to the Financial Statements

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').

The half year financial report was authorised for issue by the Directors on 26 February 2014.

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 2013 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.

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.

In accordance with Australian Securities and Investment Commission Class Order 98/100 dated 10 July 1998, amounts in the half year financial report are rounded off to the nearest thousand dollars unless otherwise indicated.

The accounting policies have been consistently applied by the Trust and are consistent with those applied in the 30 June 2013 annual financial statements with the exception of the addition of the new significant accounting policies as stated in Note 1.3 'Impact of New/Revised Accounting Standards', Note 1.4 'Revenue', Note 1.5 'Equity Accounted Investments (Associates and Joint Ventures)', Note 1.6 'Investments' and Note 1.7 'Borrowings'.

1.3 Impact of New/Revised Accounting Standards

New and Revised Accounting Standards

From 1 July 2013 the Trust has adopted the following new and revised accounting standards, together with the consequential amendments:

• AASB 10 Consolidated Financial Statements and consequential amendments introduce a new definition of control and addresses whether an entity should be included within the consolidated financial statements of the parent company. AASB 10 replaces parts of AASB 127 Consolidated and Separate Financial Statements and UIG-112 Consolidation – Special Purpose Entities. As a result of adopting the new standard, there has been no significant impact on the Trust's financial position and performance.
• AASB 11 Joint Arrangements and consequential amendments establish principles for financial reporting by parties to a joint arrangement. AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG-113 Jointly Controlled Entities – Non Monetary Contributions by Venturers. Refer to Note 1.5 'Equity Accounted Investments (Associates and Joint Ventures)' for revised accounting policies. There was no significant financial impact on the Trust as a result of adopting this standard.
• 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. As a result of adopting the new standard new disclosures have been introduced about the judgements made to determine whether control exists and summarised financial information about certain joint arrangements and associates. Refer to Note 6 'Equity Accounted Investments'.
• AASB 13 Fair Value Measurements and consequential amendments introduce new guidance on fair value measurement and disclosure requirements when fair value is permitted by accounting standards. As a result of adopting the new standard, there has been no significant impact on the Trust's financial position and performance. There have been no significant changes to the Trust's accounting policies where fair value is used as a measurement basis or disclosures on fair value are required. Disclosures required under the new standard in relation to the fair value hierarchy have been included in Note 11 'Fair Value Measurement'.

1. Significant Accounting Policies continued

1.3 Impact of New/Revised Accounting Standards continued

New Accounting Standards and Interpretations Not Yet Adopted

Certain new accounting standards and interpretations have been published that are not mandatory for the half year ended 31 December 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 and consequential amendments address the classification, measurement and derecognition of financial assets and financial liabilities and hedging. The potential effect of this standard is yet to be determined.
• AASB 2013-3 Amendments to AASB 136 Recoverable Amount Disclosures for Non-Financial Assets introduces additional disclosures about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. The potential effect of this standard is yet to be determined.
• AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities provides an exemption from consolidation of subsidiaries under AASB 10 for entities which meet the definition of an 'investment entity', such as certain investment funds. Instead, such entities would measure their investment in particular subsidiaries at fair value through profit or loss. The potential effect of this standard is yet to be determined.

1.4 Revenue

Distributions

Distribution income is recognised when the right to receive payment is established, usually on declaration of the distribution.

1.5 Equity Accounted Investments (Associates and Joint Ventures)

Investments in associates and joint ventures 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 or joint control, over the financial and operating policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The financial statements include the Trust's share of the total recognised gains or losses of associates and joint ventures 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, this is from the date joint control commences until the date joint control ceases.

Other movements in associates' and joint ventures' reserves are recognised directly in the Trust's reserves. Investments in associates and joint ventures 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. Distributions from associates and joint ventures 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 to the extent of the Trust's interest in the associate or joint venture. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

1.6 Investments

The Trust classifies its investments in equity securities in the following categories: financial assets at fair value through profit or loss.

Financial Assets at Fair Value through Profit or Loss

This category has two subcategories: financial assets held for trading, and financial assets designated at fair value through profit or loss at inception. A financial asset is classified in this category if it is acquired principally for the purpose of selling in the short term (held for trading) or if so designated by the Trust either to eliminate a measurement or recognition inconsistency, or where a group of financial assets is managed, and its performance is evaluated, on a fair value basis in line with the Trust's documented risk management or investment strategy (at inception). Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date.

Recognition and Measurement Criteria

Purchases and sales of investments are recognised on trade date – the date on which the Trust commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or been transferred and the Trust has transferred substantially all the risks and rewards of ownership. Available for sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held to maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the Statement of Comprehensive Income in the financial year in which they arise.

Unrealised gains or losses arising from changes in the fair value of non monetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the Statement of Comprehensive Income as gains or losses from investment securities.

1. Significant Accounting Policies continued

1.6 Investments continued

Recognition and Measurement Criteria continued

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Trust establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, and discounted cash flow analysis.

Refer to Note 11 'Fair Value Measurement' for a summary of the basis of valuation of investments measured at fair value.

1.7 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost and any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of Comprehensive Income over the period of the borrowings using the effective interest method.

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

1.8 Key Sources of Estimation Uncertainty

Valuation of Assets and Recoverable Amounts

The Trust assesses the fair value of certain assets and liabilities by using estimation techniques where there is no available market or exit price. The Trust assesses the recoverability of the carrying value of assets held at cost or amortised cost using estimations of their recoverable amount. Refer to Note 11 'Fair Value Measurement' for a summary of the basis of valuation of assets and liabilities measured at fair value including the level in the fair value hierarchy in which such valuations have been classified.

2. Revenue and Other Income

	6 months December 2013	6 months December 2012
Distribution income	A\$'000 10,060	A\$'000
Fair value gain on fair value through profit and loss assets	1,438
Other income – related parties	479
Total revenue and other income	11,977	–

3. Finance Revenue

	6 months	6 months
	December	December
	2013 A\$'000	2012 A\$'000
Finance revenue – external parties	2,178	1,166
Finance revenue – related parties	1,964
Total revenue and other income	4,142	1,166

4. Distributions

		6 months December	6 months December
	Cents Per Unit	2013 A\$'000	2012 A\$'000
Lend Lease Trust Interim Distribution
December 2013 – provided for (payable 21 March 2014)	4.5	25,951
December 2012 – paid 27 March 2013	0.2		887
		25,951	887
		6 months June 2013 A\$'000	6 months June 2012 A\$'000
Lend Lease Trust Final Distribution
June 2013 – paid 27 September 20131	1.0	5,702
		5,702	–

1 No Lend Lease Trust distribution was declared for the period ended 30 June 2012.

5. Earnings per Unit

	December 2013	December 2012
Basic/Diluted Earnings Per Unit (EPU)
Profit after tax A\$'000	25,956	3,338
Weighted average number of units (000's)	576,130	573,588
Basic/diluted EPU (cents)	4.51	0.58

6. Equity Accounted Investments

					December 2013 A\$'000	June 2013 A\$'000
a. Joint Ventures
Investment in joint ventures					99,655	89,240
	Interest		Share of Profit/(Loss)1		Net Book Value
	December 2013 %	June 2013 %	December 2013 A\$'000	December 2012 A\$'000	December 2013 A\$'000	June 2013 A\$'000
Joint Ventures
Lend Lease International Towers Sydney Trust	25.0	25.0	10,415	2,451	99,655	89,240

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.

b. Material Joint Ventures summarised financial information

The table below provides summarised financial information for those joint ventures that are material to the Trust. The information disclosed reflects the amounts presented in the financial statements of the relevant joint ventures and are not the reporting entities share of those amounts. They have been amended to reflect adjustments made by the Trust when using the equity method, including fair value adjustments and differences in accounting policies.

	Lend Lease International Towers Sydney Trust
	December 2013 A\$'000	December 2012 A\$'000
Statement of Comprehensive Income
Revenue from provision of services
Interest income	22	79
Depreciation and amortisation
Fair value revaluations	30,102	11,120
Interest expense	(41)
Other expenses	(1,493)	(1,393)
Income tax expense
Profit for the period	28,590	9,806
Other comprehensive income
Total comprehensive income	28,590	9,806
Dividends received from joint ventures	–	–
Trust's share of comprehensive income	7,148	2,451
Other adjustments	3,267
Total share of profit of joint ventures	10,415	2,451

6. Equity Accounted Investments continued

b. Material Joint Ventures summarised financial information continued

	Lend Lease International Towers
	Sydney Trust
	December 2013 A\$'000	June 2013 A\$'000
Statement of Financial Position
Current Assets
Cash and cash equivalents	1,169	2,440
Other current assets	15,596	17,268
Total current assets	16,765	19,708
Non current assets	1,052,911	871,183
Total Non current assets	1,052,911	871,183
Current liabilities
Financial liabilities (excluding trade payables)
Other current liabilities	169,873	133,747
Total current liabilities	169,873	133,747
Non current liabilities
Financial liabilities (excluding trade payables)	99,341
Other non current liabilities	414,911	400,183
Total non current liabilities	514,252	400,183
Net assets	385,551	356,961
Reconciliation to Carrying Amounts
Opening net assets 1 July	356,961
Profit for the period	28,590	15,961
Acquisition of investment		341,000
Other comprehensive income
Dividends paid
Closing net assets	385,551	356,961
Trust's share of net assets	96,388	89,240
Other adjustments	3,267
Carrying amount at end of period	99,655	89,240

7. Other Financial Assets

	December 2013 A\$'000	June 2013 A\$'000
Non Current Measured at Fair Value
Fair Value Through Profit or Loss – Designated at Initial Recognition
Australian Prime Property Fund – Industrial	239,059
Australian Prime Property Fund – Commercial	226,438
Total other financial assets	465,497	–
8. Borrowings
Non Current
Loan from related party	70,036
Total borrowings	70,036	–

During the current period, the Trust made a drawdown of A\$72,000,000 on a non interest bearing Revolving Loan Facility entered into with a related party in the Lend Lease Group. In accordance with the loan agreement, this loan is repayable in full on the maturity date being May 2022 or on such earlier date as the lender determines. Lend Lease Trust has obtained a letter from the related party stating that they will not request repayment of the loan for a period of 12 months from the date of this financial report. The loan has been classified as non current and has been discounted to reflect measurement at fair value as the loan is non interest bearing.

9. Issued Capital

	December 2013 No of units 000's	December 2013 A\$'000	June 2013 No of units 000's	June 2013 A\$'000
Issued Capital
Issued capital at beginning of financial period	575,508	502,322	572,790	572
Recapitalisation of Lend Lease Trust				500,300
Distribution Reinvestment Plan (DRP)	1,204	1,400	2,718	1,450
Issued capital at end of financial period	576,712	503,722	575,508	502,322

Issuance of Securities

As at 31 December 2013 Lend Lease Trust had 576,712,337 units on issue equivalent to the number of Lend Lease Corporation shares on issue. The issued units of the Trust and shares on issue by Lend Lease Corporation Limited are stapled securities.

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 7 March 2014. The issue price is the arithmetic average of the daily volume weighted average price of Lend Lease Group stapled securities traded on the Australian Securities Exchange for the period of five 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.

10. Contingent Liabilities

In certain circumstances, the Trust, as part of the Stapled Group, guarantees the performance of particular Group entities in respect of their obligations. This includes bonding and bank guarantee facilities used primarily by the construction business. These guarantees are provided in respect of activities that occur in the ordinary course of business and any known losses in respect of the relevant contracts have been brought to account.

11. Fair Value Measurement

Basis of Determining Fair Value

The determination of fair values of financial and non financial assets and liabilities that are not measured at cost or amortised cost in the half year financial report are summarised as follows:

• The fair value of unlisted equity investments is determined based on an assessment of the underlying net assets, future maintainable earnings and any special circumstances pertaining to the particular investment; and
• The fair value of unlisted investments in property funds has been determined by reference to the fair value of the underlying properties which are valued by independent appraisers.

– – – –

Notes to the Financial Statements continued

11. Fair Value Measurement continued

Fair Value Measurements

The table below analyses financial and non financial assets and liabilities carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1: The fair value is determined using the unadjusted quoted price for an identical asset or liability in an active market for identical assets or liabilities;
• Level 2: The fair value is calculated using predominantly observable market data other than unadjusted quoted prices for an identical asset or liability; and
• Level 3: The fair value is calculated using inputs that are not based on observable market data.

		Carrying Amount
	Note	Level 1 A\$'000	Level 2 A\$'000	Level 3 A\$'000	Total A\$'000
December 2013
Financial Assets
Fair value through profit or loss – unlisted equity investments	7			465,497	465,497
		–	–	465,497	465,497

During the period there were no transfers between Level 1, Level 2 and Level 3 fair value hierarchies.

		Carrying Amount
	Note	Level 1 A\$'000	Level 2 A\$'000	Level 3 A\$'000	Total A\$'000
June 2013

Financial Assets

Fair value through profit or loss – unlisted equity investments 7

Reconciliation

Reconciliation of the carrying amount for Level 3 financial instruments is set out as follows.

	December 2013 Unlisted Equity Investments A\$'000	June 2013 Unlisted Equity Investments A\$'000
Carrying amount at beginning of financial period
Additions/disposals	464,059
Gains/losses recognised in other comprehensive income – fair value	1,438
Carrying amount at end of financial period	465,497	–

The potential effect of using reasonably possible alternative assumptions for valuation inputs would not have a material impact on the Trust.

12. Events Subsequent to Balance Date

There were 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 2013 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, 26 February 2014

Chairman Chief Executive Officer and Managing Director

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

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 2013, 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 12 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 2013 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:

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.

• (a) giving a true and fair view of the Trust's financial position as at 31 December 2013 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

KPMG

$19$

Stuart J Marshall Partner

Sydney

26 February 2014