MIRVAC GROUP — Interim / Quarterly Report 2003

Feb 25, 2003

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CONSISTING OF THE COMBINED FINANCIAL REPORTS OF

MIRVAC LIMITED (ABN 92003280699) AND ITS CONTROLLED ENTITIES

AND

MIRVAC PROPERTY TRUST (ABN 29769181534) AND ITS CONTROLLED ENTITIES

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED

31 DECEMBER 2002

CONTENTS

Directors' Statement
Combined Statement of Financial Performance
Combined Statement of Financial Position
Combined Statement of Cash Flows
Notes to the Combined Financial Statements	5-8
rectors' Declaration.	9
"Independent Review Report to the Stapled Security Holders	10

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DIRECTORS' STATEMENT

The directors present their report on the combined entity consisting of Mirvac Limited and its controlled entities and Mirvac Property Trust and its controlled entities, for the half-year ended 31 December 2002.

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DIRECTORS

At the date of this report the following persons were directors of Mirvac Limited and Mirvac Funds Limited, as the Responsible Entity for Mirvac Property Trust, during the whole of the half-year and up to the date of this report.

AJLane	R J Hamilton
P J Biancardi	D J Broit
A Buduls.	R A Fortune
GHLevy	BHRNeil
R H Webster

REVIEW OF OPERATIONS

A summary of combined revenues and results for the half-year by significant industry segments is set out below:

	SEGMENT	SEGMENT	SEGMENT	SEGMENT
	REVENUES	REVENUES	RESULTS	RESULTS
	31 DEC 2002	31 DEC 2001	31 DEC 2002	31 DEC 2001
	5000	\$000	\$000	\$000
Property Investment	97,825	83,978	57.348	53,254
Property Development	420,450	452,826	57,798	52.492
Hotel Ownership and Management	46.231	44.871	7.029	6,789
Eliminations / Unallocated	(16, 408)	174	(7, 182)	(5,208)
	548.098	581,849
Profit from ordinary activities before income tax expense			114,993	107,327
Income tax expense			14.548	16,908
Net profit attibutable to the stapled security holders of The Mirvac Group			100.445	90.419

Librarian.

Comments on the operations and the results of those operations are set out below:

(a) Property Investment

Net profit after tax increased by 9.1% over the previous corresponding period to \$57,286 million.

Occupancy rates remained at high levels across the division's investment properties, despite the leasing market remaining difficult. The division continued its strong level of growth with the acquisition of \$102.172 million in assets during the period since June 2002.

(b) Property Development

The development division's net profit after tax increased by 18.9% over the previous corresponding period to \$43.008 million, following a strong six months in the Australian residential market.

Completion of several development projects and a strong result from the NSW housing division contributed to the period's profit.

(c) Hotels

During a challenging year for the industry, the division produced a 4.6% increase in net profit after tax to \$5.623 million over the previous corresponding period. Occupancy levels increased from 72% to 76% and average room rates were maintained at \$161.

ROUNDING OF AMOUNTS TO NEAREST THOUSAND DOLLARS

* livac Limited and Mirvac Property Trust are entities of the kind referred to in Class Order 98/0100 issued by the stralian Securities & Investments Commission, relating to the "rounding off" of amounts in the financial report. Amounts in the financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

This statement is made in accordance with a resolution of the directors of Mirvac Limited and Mirvac Funds Limited,

Signed at Sydney this twelfth day of February 2003.

A.J. LANE Director

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D.J. BROIT-Director

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COMBINED STATEMENT OF FINANCIAL PERFORMANCE

FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

		Combined
	Notes	31 DEC 2002 \$000	31 DEC 2001 \$000
Revenue from operating activities Revenue from outside the operating activities		534,066 4,490	575,983 3,110
Revenue from ordinary activities		538,556	579,093
Cost of goods sold		(316, 977)	(373,376)
Employee benefits expense		(36, 475)	(31, 114)
Depreciation and amortisation expenses		(3, 415)	(2,931)
Borrowing costs expense		(24, 526)	(20, 121)
Property Outgoings		(21, 133)	(17,527)
Other expenses from ordinary activities		(29,064)	(29, 278)
Carrying amount of investment properties and property, plant & equipment sold		(32)	(175)
Costs incurred in unsuccessful takeover offer (no applicable income tax expense)		(1,483)	0
"hare of net profits of associates and joint venture partnerships		9,542	2,756
Profit from ordinary activities before income tax expense		114,993	107.327
income tax expense		14,548	16,908
Net profit attributable to the stapled security holders of The Mirvac Group	2	100,445	90,419
Net decrease in asset revaluation reserve		Ĝ	(649)
Net exchange differences on translation of financial report of foreign controlled entity		(272)	(279)
Total revenues, expenses and valuation adjustments attributable to the stapled security holders of The Mirvac Group recognised directly in equity		(272)	(928)
Total changes in equity other than those resulting from transactions with owners as owners		100,173	89,491
		Cents	Cents
Basic earnings per security	3	16.16	14.70
Diluted earnings per security	3	16.16	14.70

e above combined statement of financial performance should be read in conjunction with the accompanying notes.

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COMBINED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2002

AS AT 31 DECEMBER 2002		COMBINED
	Notes	31 DEC 2002 \$000	30 JUN 2002 \$000
CURRENT ASSETS
Cash assets		17.992	31,506
Receivables		89,177	72,656
Investment properties	8	14,290	0
Inventories		332,151	196,765
Other		8,274	8,763
TOTAL CURRENT ASSETS		461,884	309,690
NON-CURRENT ASSETS
Receivables		62,185	47,038
Investment properties	8	1,945,209	1,818,028
Investments accounted for using the equity method		38,800	30,744
Other financial assets		28	28
Inventories		648,369	519,066
Plant and equipment		16,813	16,071
Deferred tax assets		11,989	7,224
Intangible assets		26,194	26,951
Other		1,557	2,365
TOTAL NON-CURRENT ASSETS		2,751,144	2,467,515
OTAL ASSETS		3,213,028	2,777,205
CURRENT LIABILITIES
Payables		157,906	125,965
Interest bearing liabilities Provisions		116	72
Other		52,739	50.875
		1,782	2,435
TOTAL CURRENT LIABILITIES		212,543	179,347
NON-CURRENT LIABILITIES
Pavables		90,000	0
Interest bearing liabilities Deferred tax liabilities		1,061,472	799, 159
Provisions		81,679	66.843
		2,397	2,365
TOTAL NON-CURRENT LIABILITIES		1,235,548	868,367
TOTAL LIABILITIES		1,448,091	1,047,714
NET ASSETS		1,764,937	1,729,491
EQUITY
Contributed equity		1,621,660	1,600,702
Reserves		50,884	51,155
Retained profits	$\overline{2}$	92,393	77,634
H'OTAL EQUITY		1,764,937	1.729.491

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The above combined statement of financial position should be read in conjunction with the accompanying notes.

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COMBINED STATEMENT OF CASH FLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

		Combined
Notes	31 DEC 2002 \$000	31 DEC 2001 \$000
Cash Flows from Operating Activities
Receipts from customers (inclusive of goods and services tax)	636,524	644,631
Payments to suppliers and employees (Inclusive of goods and services tax)	(659, 593)	555,996)
Interest received	(23,069) 3,601	88,635 2.016
Borrowing costs paid	(36,262)	(21, 213)
Income taxes paid	(16,949)	(13, 895)
Net cash (outflows) / inflows from operating activities	(72, 679)	55,543
Cash Flows from Investing Activities
Payment for property, plant and equipment	(3,369)	(3,530)
Proceeds from the sale of property and equipment	104	135
Payments for investment properties Proceeds from the sale of investment properties	(113,961)	(97,010)
Contributions to joint venture operations/entities	1,755 ${8,056}$	о (5,655)
Proceeds from repayment of equity in joint ventures.	Ð	12,532
Other	(17)	0
Net cash outflows from investing activities	(123, 544)	(93,528)
ish Flows from Financing Activities
Proceeds from borrowings	262,738	116.682
Dividends / Distributions paid	(80,087)	(75,234)
Net cash inflows from financing activities	182,651	41,448
Net (decrease) / increase in cash held	(13, 572)	3,463
Cash at the beginning of the reporting period	31,506	5,368
Effects of exchange rate changes on cash	58	$4^{\circ}$
Cash at the end of the reporting period	17,992	8,835

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The above combined statement of cash flows should be read in conjunction with the accompanying notes.

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1. BASIS OF PREPARATION OF HALF-YEAR FINANCIAL STATEMENTS

The Mirvac Group - Stapling of Securities

The Mirvac Group was initially formed by the stapling of the securities of three listed entities comprising Mirvac Limited, Mirvac Commercial Trust and Mirvac Property Trust.

On 1 November 2001, the Mirvac Group Stapled Security holders approved resolutions to simplify the structure of the Mirvac Group, subject to certain conditions, which were subsequently satisfied.

The simplification resulted in the acquisition of all of the units in Mirvac Commercial Trust by Mirvac Property Trust. On 13 September 2002, the Australian Stock Exchange suspended trading in Mirvac Stapled Securities ("MGR") and the existing stapled structure was de-stapled, and re-stapled in the simplified structure.

Mirvac Group Stapled Securities, quoted and traded together on the Australian Stock Exchange, now comprise one Consolidated Mirvac Limited share and one Consolidated Mirvac Property Trust unit.

The simplification of the stapled security structure had no effect on the financial statements of the Mirvac Group for the half-year ended 31December 2002.

The stapled securities cannot be traded or dealt with separately.

The two Mirvac entities comprising the stapled group, remain separate legal entities in accordance with the Corporations Act 2001, and are each required to comply with the reporting and disclosure requirements of Accounting Standards and the Corporations Regulations 2001.

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

any of Mirvac Limited or Mirvac Property Trust resolving by special resolution in general meeting and in accordance with its constitution to terminate the stapling provisions: or

• the commencement of the winding up of Mirvac Limited or Mirvac Property Trust.

e Australian Stock Exchange reserves the right (but without limiting its absolute discretion) to remove one or more entities with stapled securities from the official list if any of their securities cease to be 'stapled' together, or any equity securities of the same class are issued by one entity which are not stapled to equivalent securities in the other entity or entities

Basis of Accounting

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The financial statements of The Mirvac Group consist of the aggregated financial statements of the combined entity comprising Mirvac Limited and its controlled entities and Mirvac Property Trust and its controlled entities. None of the entities whose securities are stapied is a parent of the other entity and the entities do not have a common parent.

The financial statements are a general purpose financial report, which has been prepared to satisfy the requirements of the Urgent Issues Group Concensus View 13, "The Presentation of the Financial Report of Entities Whose Securities are Stapled", and in accordance with Accounting Standard AASB 1029: Interim Financial Reporting, other mandatory professional reporting requirements (Urgent Issues Group Concensus Views), and other authoritative pronouncements of the Australian Accounting Standards Board.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, it is recommended that this report should be read in conjunction with the Annual Report for the year ended 30 June 2002 and any public announcements made by The Mirvac Group during the half-year in accordance with the continuous disclosure requirements of the Listing Rules of the Australian Stock Exchange.

The accounting policies adopted in preparing the financial statements have been consistently applied by the individual entities comprising the combined financial statements, and are consistent with those of the previous financial year and corresponding interim reporting period, except as otherwise stated.

	Combined
ectAINED PROFITS	31 DEC 2002 5000	30 JUN 2002 \$000	31 DEC 2001 5000
Retained profits at the beginning of the half-year	77,634	78,734	68,193
Net profit attributable to the stapled security holders of The Mirvac Group	100,445	79,636	90.419
Dividends / Distributions provided for or paid	(85,686)	(81.861)	(79, 878)
Aggregate of amounts transferred from reserves	0	1,125	0
Retained profits at the end of the half-year	92.393	77.634	78,734

		Combined
3.	EARNINGS PER SECURITY	31 DEC 2002	31 DEC 2001
	Basic Earnings per security	16.16 cents	14.70 cents
	Diluted Earnings per security	16.16 cents	$14.70$ cents
	The weighted average number of ordinary securities outstanding during	No.	No.
	the half-year used in the calculation of basic earnings per security	621,376,477	615,047,119
		Combined
	DISTRIBUTIONS	31 DEC 2002 \$000	31 DEC 2001 \$000
	Distributions provided for or paid during the half-year.	85,686	79.878

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NOTES TO THE COMBINED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

	Combined		Combined
EQUITY SECURITIES ISSUED	31 DEC 2002	31 DEC 2001	31 DEC 2002	31 DEC 2001
	Securities	Securities	\$000	\$000
Issue of ordinary securities during the half-year.
Employee share scheme issues	4,123,440	3,862,359	16.957	14,655
Private placement of securities	Ð	6.102.432	Ð	21.775
Securities issued under options	Ð	409.075	o	1.554
Issued for no consideration:
Distribution reinvestment plan issues	996.748	719.346	4.001	2.625
De-stapling of Mirvac Group securities on simplification (refer Note (a))	(622,171,046)		a	Ű
Re-stapling of Mirvac Group securities (refer Note (a))	622,171,046			- 0
	5.120.188	11,093,212	20.958	40,609

(a) Simplification of Stapled Group
On 13 September 2002, the Australian Stock Exchange suspended trading in Mirvac Stapled Securities ("MGR") and the existing

Stapled security structure was de-stapled, as Mirvac Property Trust acquired all of the units of Mirvac Commercial Trust.
Mirvac Property Trust units were re-consolidated and the Mirvac Group securities re-stapled in the s

Mirvac Group Stapled Securities, quoted and traded together on the Australian Stock Exchange, now comprise one

Consolidated Mirvac Limited share and one Consolidated Mirvac Property Trust unit.

The simplification of the stapled security structure had no effect on the financial statements of the Mirvac Group for the half-year ended 31December 2002.

6. AGGREGATED SEGMENTAL INFORMATION

KILOSYMAS IV. 1 RIMARY REPORTING - BUSINESS SEGMENTS	Property Investment \$000	Property Development \$000	Hotels \$000	Eliminations/ Unaliocated \$000	Combined Totals \$000
31 DECEMBER 2002
Total Assets	1,877,045	1,162,472	151,755	21,756	3,213,028
Sales to external customers Intersegment sales	95,114 2,451	392,838 14,089	46,114 ٥	0 (16, 540)	534,066
Total sales revenue	97,565	406,927	46,114	(16, 540)	534,066
Share of net profits of associates and joint ventures Other revenue including sale of investment properties	C 260	9,542 3,981	0 117	0 132	9,542 4,490
Total segment revenue	97,825	420,450	46,231	$\cdot$ (16,408)	548,098
Segment result before interest and income tax	70,915	68,746	7,036	(7, 178)	139,519
Net interest allocated	13,567	10,948	7	4	24,526
Profit/(Loss) from ordinary activities after interest and before income tax expense	57,348	57,798	7,029	(7, 182)	114,993
Income tax expense applicable to ordinary activities	62	14,790	1,408	(1,710)	14,548
Net Profit / (Loss)	57,286	43,008	5,623	(5, 472)	100,445
DECEMBER 2001
Total Assets	1,547,530	784,557	145,612	56,458	2,534,157
Sales to external customers Intersegment sales	83,787 0	447,343 0	44,853 ٥	0 0	575,983 0
Total sales revenue	83,787	447,343	44,853	Ő	575,983
Share of net profits of associates and joint ventures Other revenue including sale of investment properties	O 191	2,756 2,727	0 18	0 174	2,756 3,110
Total segment revenue	83,978	452,826	44,871	174	581,849
Segment result before Interest and income tax	63,262	62,587	6,804	(5,205)	127,448
Net interest allocated	10,008	10,095	15	3	20,121
Profil/(Loss) from ordinary activities after interest and before income tax expense	53,254	52,492	6,769	(5,208)	107,327
Income tax expense applicable to ordinary activities	741	16,316	1,412	(1, 561)	16,908
Net Profit / (Loss)	52,513	36,176	5,377	(3,647)	90,419

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Secondary Reporting Segment - Geographical segments - The combined entity operates predominantly in Australia.

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NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

.
		Combined
CONTINGENT LIABILITIES	31 DEC 2002 \$900	30 JUN 2002 \$000
Contingent liabilities in respect of certain performance guarantees granted in the normal course of business	52,964	52,103

No material loss is anticipated.

The combined entity has provided performance guarantess which are undeterminable in amount in respect of certain developments.
No material losses are anticipated in respect of these contractual obligations.

8. INVESTMENT PROPERTIES	Date Acquired	Cost & Additions to 31/12/02	Book Value 31/12/02	Book Value 30/08/02	Latest External	Date Last External	External Valuer / Notes
AT VALUATION		5000	5000	5000	Valuation \$000	Valuation
Mirvac Property Trust and controlled entities
Current investment properties 15 London Circuit, Canberra ACT	30/10/92	27,894	14.290		14,000	30/6/00	Alex Martin AAPI - Jones Lang LaSalle
Non-Current
Egis Tower, Chatswood, NSW	1/9/89	54,406	70,151	69,500	69,500	30/6/02	D McGrath - FPD Saville
30 Cowper Street, Parramarta NSW	1/9/68	15,864	20,539	20,600	20,500	30/6/02	A Graham AAPI - Colliers International
Quay West Carpark, 111 Harrington Street, Sydney NSW	30/11/89	37,128	41,590	41,567	41,500	30/6/30	SH Fairfax ARIC AAPI - CB Richard Ellis
Crange City Centre, Orange NSW	5/4/93	28,654	30,086	30,075	30,000	30/6/01	JE Burdekin FAPI-Jones Lang LaSalle BR Stewart GAPI-Jones Lang LaSalle
Kawana Shoppingworld, Buddina, QLD	9/12/93 & 10/6/98	95,040	110,997	95,968	91,000	30/6/00	D Mohr AAPI - CB Richard Ellis
Gippsland Centre, Cunningham St, Sale VIC	8/1/94	33,699	33,121	32,500	32,500	30/6/02	D Magree FAPI - M3 Property Strategists
Como Centre, Car Toorak Rd & Chapel St, South Yarra VIC	18/8/98	108,445	115,456	115,000	115,000	30/6/02	P Grieve AAPI - CB Richard Ellis
Parramatta Industrial Estate, Boundary Rd, Northmead NSW	14/7/94	18,682	27,100	27,100	27,100	30/6/02	K Kaymaz AAPI - Colliers International
30 Scrivener St, Warwick Farm NSW	24/12/93	17,686	19,859	19,817	19,800	30/6/01	J Wauph AAPI - Colliers Jardine
att Tower, Keltie St, Woden, ACT	1/4/94 & 28/2/99	47,761	41,359	41,114	41,000	30/6/01	A J Martin AAPI-Jones Lang LaSalle
Wie Marriott Hotel, College St & Hargrave St, Sydney NSW	31/12/91	94,820	76,226	76.222	75,650	30/6/00	M Stratton AAPI - Colliers Jardine
1-19 Hargrave Street, Sydney NSW	31/12/01	4,100	8,987	9,000	9,000	01/03/02	S Fairfax ARIC AAPI -CB Richard Ellis
40 Miller St, North Sydney NSW	31/3/98	59,056	80,168	80,122	80,000	30/6/00	TM Phelan FAPI - Knight Frank
1 Castlereagh St, Sydney NSW 271 Lane Cove Rd, North Ryde, NSW	18/12/98 5/4/00	46,801 18,852	45,822 20,110	45,703 20,109	45.500	30/6/00	M Stratton AAPt - Colliers Jardine
Royal Domain Centre, 380 St Klida Rd, VIC	4/10/95 & 2/4/01	81,726	84.258	84,167	20,000 84,000	01/03/01 30/6/01	TM Phelan FAPI - Knight Frank R J Scrivener FAPI, FRICS Andersen
164 Grey St, South Bank, OLD	29/6/01	8,286	9,500	9,500	9,500	01/03/02	J Irving AAPI - CB Richard Ellis D Mohr AAPI - CB Richard Ellis
Bay Centre, Pirrama & Edward Sts Pyrmont NSW	29/6/01	59.647	59,647	41,152			- internal Valuation 2002: Note (i)
55 Lavender Street, Milsons Point, NSW	3/7/01	59,579	59,559	59,500	59,500	01/03/02	TM Phelan FAPI - Knight Frank GA Thomson FAPI - Knight Frank
200 George Street, Sydney, NSW	31/10/01	23,663	24,005	24,000	24,000	01/03/02	A Pannifex - FPD Savills
Unit 23, 177 Pacific Highway, North Sydney, NSW	25/01/02	594	594	592			Internal Valuation 2002: Note (i)
Riverside Quay,Southbank, V/C	15/04/02	82,106	80,736	80,000	80,000	30/06/02	M Reynolds AAP) - Colliers International
John Oxley Centre, 339 Coronation Drive Milton, GLD	31/05/02	35,309	35,300	35,300	35,300	30/06/02	J Irving AAPI - CB Richard Ellis D Mohr AAPI - CB Richard Ellis
Blacktown Mega Centa, Blacktown NSW	30/6/02	30,034	30,034	30.002	30,000	1/3/02	ID Mc Lennan AAPI / JE Burdekin FAPI Jones Lang LaSalle Advisory
1-47 Percival Road, Smithfield NSW	22/11/02	14,170	14,170				- Internal Valuation 2002: Note (i)
Waverley Gardens Shopping Centre, Onr Police & Jackson Roads Mulgrave VIC	15/11/02	53,819	53,819
The Village Centre, St Mary's NSW	17/1/03	34,183	34, 183				- Internal Valuation 2002: Note (i)
8 Brisbane Ave, Canberra ACT	26/6/85	12,222	10,650	10.650	10.650	30/6/02	· Internal Valuation 2002: Note (i) Philip Harding AAPI - Kriight Frank
Perpetual Trustees Building, 10 Rudd St, Canberra ACT	15/10/87	19,022	10,652	10,581	10,500	30/6/00	Alex Martin AAPI - Jones Lang LaSaile
54 Marcus Clarke St, Canberra ACT	15/10/87	21,487	14,905	14,900	14,900	30/6/02	Philip Harding AAPI - Knight Frank
St George Centre, 60 Marcus Clarke St, Canberra ACT	1/9/69	55,856	38,699	38,480	38,000	30/6/00	Alex Martin AAPI - Jones Lang LaSalle
Burns Centre, 28 National Circuit, Canberra ACT	27/9/90	18,542	9,322	9,322	9,200	30/6/00	Alex Martin AAPI - Jones Lang LaSalle
15 London Circuit, Canberra ACT	30/10/92			14,091	14,000	30/6/00	Alex Martin AAPI - Jones Lang LaSalle
Arts House, 40 Macquarie St, Canberra ACT	8/12/95	17,068	16,750	16,750	16,750	30/6/62	Phllip Harding AAPI - Knight Frank
38 Sydney Ave, Canberra ACT	26/6/96	29,733	33,800	33,800	33,800	30/6/02	Philip Harding AAPI - Knight Frank
The Optus Centre, 101-103 Miller St, North Sydney NSW	30/6/94	279,769	382,278	381,587	381,000	30/6/01	Allan Richard FAPI / Neil Proudlove ARICS AAPL CB Richard Ellis
Metcentre, 60 Margaret St, Sydney NSW (50% interest)	6/8/98	166,153	158,590	155,436	150,000	30/6/00	Andrew Pannifex AAPI (Andrew Johnston AAPI - Kisight Frank
Capital works in progress		4,484	4,484	6,523			- At cost
Mirvac Limited and controlled entities
Other Hotel Properties	various	39,845	39,845	39,499			- Internal Valuation 2002; Note (i)
Elimination of intra-group charges			${2, 142}$	(2,101)
Total non-current investment properties		1,828,181	1,945,209	1,618,028
Total Investment Properties		1,856,075	1,959,499	1,818,028

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52,103

(i) Internal Valuations at 31 December 2002

J,

Properties not externally valued during the reporting period are carried al internal (directors') valuation at 31 December 2002.
All other properties are carried at external valuation plus capital expenditure incurred sinc

ence somewheathout.
Investment properties are revalued by external valuers on the basis of one third of the portfolio being valued annually, investment properties in the reporting period, which are
In the for external reva

9. TAX CONSOLIDATION

The tax consolidation regime became operative on 1 July 2002, and allows Mirvac Limited and its wholly-owned Australian resident entities to elect to consolidate and be treated as a single entity for income tax purposes. At the date of this report, the implementation of the tax consolidation regime is not expected to have a material impact on the carrying value of deferred tax assets and liabilities of the Mirvac Group as at 31 December 2002.

10. EVENTS OCCURRING SUBSEQUENT TO REPORTING DATE

a) Investment property acquisitions / disposals

In December 2002, Mirvac Property Trust entered Into an agreement to purchase The Village Centre, St Mary's for a cash consideration of \$32.415 million.

The acquisition was completed on 17 January 2003 and the property acquisition brought to account at 31 December 2002.

Mirvac Property Trust is due to complete the sale of commercial property at 15 London Circuit, Canberra, ACT, on 30 April 2003 for \$17.550 million.

The sale of the property has not been brought to account in the financial statements at 31 December 2002.

b) Private placement of securities

On 12 February 2003, the Mirvac Group announced a private placement of securities to institutional investors to raise a total of \$200 million. Under the offer, approximately 49.8 million securities will be issued at an issue price of \$4.02 per security. The funds raised from the private placement will be utilised initially to retire debt and to fund investment acquisitions and growth opportunities. The financial effect of the private placement has not been brought to account in the combined financial statements at 31 December 2002.

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DIRECTORS' DECLARATION

FOR THE HALF-YEAR ENDED 31 DECEMBER 2002

The directors declare that the financial statements and notes set out on pages 2 to 8:

• (a) comply with Accounting Standards and other mandatory professional reporting requirements; and
• (b) give a true and fair view of the combined entity's financial position as at 31 December 2002 and of its performance, as represented by the results of its operations and its cash flows, for the half-year ended on that date.

In the directors' opinion there are reasonable grounds to believe that the combined entity will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors of Mirvac Limited and Mirvac Funds Limited as the Responsible Entity for Mirvac Property Trust.

Signed at Sydney this twelfth day of February 2003.

A.J. LANE Director

$2$ c $\sim$

D.J. BROIT Director

INDEPENDENT REVIEW REPORT TO THE STAPLED SECURITY HOLDERS OF THE MIRVAC GROUP

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report, set out on pages 2 to 9, does not present fairly in accordance with Accounting Standard AASB 1029: Interim Financial Reporting and other mandatory professional reporting requirements, the financial position of The Mirvac Group (defined below) as at 31 December 2002 and its performance for the half-year ended on that date.

This statement must be read in conjunction with the following explanation of the scope and summary of our role as auditor.

Scope and summary of our role

The financial report - responsibility and content

The preparation of the financial report for the half-year ended 31 December 2002 is the responsibility of the directors of Mirvac Limited and Mirvac Funds Limited as the Responsible Entity for Mirvac Property Trust. It includes the financial statements for The Mirvac Group (the Group), which comprises the aggregated financial statements of Mirvac Limited and the entities it controlled during the half-year ended 31 December 2002 and Mirvac Property Trust and the entities it controlled during the half-year ended 31 December 2002.

The auditor's role and work

We conducted an independent review of the financial report in order for the Group to lodge the financial report with the Australian Stock Exchange. Our role was to conduct the review in accordance with Australian Auditing Standards applicable to review engagements. Our review did not involve an analysis of the prudence of the business decisions made by the directors or management.

This review was performed in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report does not present fairly a view in accordance with Accounting Standard AASB 1029: Interim Financial Reporting, and other mandatory professional reporting requirements in Australia which is consistent with our understanding of the Group's financial position, and its performance as represented by the results of its operations and its cash flows.

The review procedures performed were limited primarily to:

• inquiries of Mirvac Limited and Mirvac Funds Limited personnel of certain internal controls, transactions and individual items.
• analytical procedures applied to financial data.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit, and accordingly, we do not express an audit opinion.

Independence

As auditor, we are required to be independent of the Group and free of interests which could be incompatible with integrity and objectivity, In respect of this engagement, we followed the independence requirements set out by The Institute of Chartered Accountants in Australia, the Corporations Act 2001 and the Auditing and Assurance Standards Board.

In addition to our statutory audit and review work, we were engaged to undertake other services for the Group. In our opinion the provision of these services has not impaired our independence.

Purtuhne Lors

PricewaterhouseCoopers Chartered Accountants

n Amor

B.K. Hunter Partner

Sydney 12 February 2003