MEDIA and STOCK EXCHANGE ANNOUNCEMENT

7 SEPTEMBER 2006

2006 Annual Financial Report

Enclosed for release is the 2006 Annual Financial Report for Mirvac Property Trust (ARSN 086780645) provided in accordance with Listing Rule 4.5.1.

Marsh

Michael Smith Group Company Secretary

Mirvac Property Trust
(ARSN 086 780 645)
and its controlled entities

Annual Financial Report
30 June 2006

	Page
Directors' Report	2
Auditors' Independence Declaration	7
Income Statements	8
Balance Sheets	9
Statements of Changes in Equity	10
Cash Flow Statements	11
Notes to the Financial Statements	12
Directors' Declaration	58
Independent Audit Report to the Unitholders	59

Mirvac Property Trust and its controlled entities Directors' Report

The Directors of Mirvac Funds Limited (ABN 70 002 561 640), the Responsible Entity of Mirvac Property Trust ("the Trust") present their report, together with the financial report of the Trust and its controlled entities ("consolidated entity"), for the year ended 30 June 2006.

Mirvac Property Trust and its controlled entities together with Mirvac Limited and its controlled entities form the stapled entity, Mirvac Group.

Responsible entity

The Responsible Entity of the Trust is Mirvac Funds Limited, an entity incorporated in New South Wales. The immediate parent entity of the Responsible Entity is Mirvac Woolloomooloo Pty Limited (ABN 44 001) 162 205), incorporated in New South Wales, and its ultimate parent entity is Mirvac Limited (ABN 92 003 280 699), incorporated in New South Wales.

Directors

The following persons were Directors of Mirvac Funds Limited during the whole of the financial year and up to the date of this report:

Mr J. A. C. MacKenzie Mr G. J. Paramor Mr P. J. Biancardi Mr R. W. Turner

Messrs N. R. Collishaw, A. G. Fini, P. J. O. Hawkins and Ms P. Morris were appointed Directors on 19 January 2006 and each continues in office at the date of this report.

Ms A. Buduls was a Director from the beginning of the financial year until her resignation on 29 July 2005.

Messrs R. A. Fortune, R. J. Hamilton and A. J. Lane were Directors from the beginning of the financial year until their resignations on 10 November 2005.

Mr D. J. Broit was a Director from the beginning of the financial year until his resignation on 23 February 2006

Mr G. H. Levy was a Director from the beginning of the financial year until his resignation on 3 March 2006.

Principal activities

The principal continuing activities of the consolidated entity consisted of property investment for the purpose of deriving rental income and investments in listed and unlisted funds.

Distributions

Distributions paid to unitholders during the financial year were as follows:

	2006 \$'000	2005 \$'000

June 2005 quarterly distribution paid on 29 July 2005 of 5.16 cents (2004: 4.92 cents)	44.055	34,905
September 2005 quarterly distribution paid on 28 October 2005 of 4.65 cents $(2004: 4.98 \text{ cents})$	39,933	35,851
December 2005 quarterly distribution paid on 27 January 2006 of 4.65 cents $(2004: 4.98 \text{ cents})$	39,936	36,284
March 2006 quarterly distribution paid on 28 April 2006 of 4.65 cents (2005: 5.16 cents)	40.681	43,654
Total distributions paid	164.605	150.694

The June 2006 quarterly distribution of 4.65 cents (\$41.4 million) declared on 30 June 2006, was paid on 28 July 2006.

Distributions paid and payable by the Trust for the year ended 30 June 2006 totalled \$161,964,000 (2005; \$159,844,000).

Review of operations

The net profit for the consolidated entity attributable to unitholders for the year ended 30 June 2006 was \$376,633,000 (2005: \$218,333,000). The operating profit (profit excluding non-cash AIFRS adjustments) was \$183,814,000 (2005: \$157,684,000). The following table summarises key reconciling items between net profit after tax and operating profit.

	2006 \$'000	2005 \$'000
Net profit attributable to the unitholders	376,633	218,333
Net gains from fair value of investment properties	(180, 154)	(56, 952)
Unrealised gains on fair value of derivative financial instruments	(6, 645)
Amortisation of lease incentives Net gains from fair value of investment properties and derivatives included in	5,811	4.021
share of associates profits	(11, 831)	(7,718)
Operating profit	183,814	157,684

Highlights

Key financial highlights for the year ended 30 June 2006 include:

AIFRS earnings of 44.56 cents per unit $\bullet$
Operating earnings of 21.75 cents per unit (excluding non-cash AIFRS items) $\bullet$
Final distribution of 18.60 cents per unit $\bullet$
Net increase of \$180.2 million in revaluations across the investment property portfolio $\bullet$
Rise in NTA per unit to \$2.70 from \$2.43 at 30 June 2005 $\bullet$

Mirvac Property Trust and its controlled entities Directors' Report (continued)

Value of assets

The consolidated entities assets are valued in accordance with policies stated in note 1 of the financial statements. The total consolidated entities assets are as follows:

	2006 \$'000	2005 \$'000
4,283,311 Total assets		3,035,584

Significant changes in state of affairs

Changes in the state of affairs of the consolidated entity are set out in the Directors Report and financial statements. Refer to note 21 for details of debt facilities and note 22 for securities issued. In the opinion of Directors, there were no other significant changes in the state of affairs of the consolidated entity during the financial year.

Matters subsequent to the end of the financial year

At the date of this report, there is no matter or circumstance which has arisen since 30 June 2006 that has significantly affected or may significantly affect:

$(a)$ the consolidated entity operations in future financial vears, or
(b) the results of those operations in future financial years, or
(c) the consolidated entity's state of affairs in future financial vears.

Likely developments and expected results of operations

In the opinion of the Directors, it would prejudice the interests of the consolidated entity to provide additional information relating to likely developments in the operations of the consolidated entity, and the expected results of those operations in financial vears subsequent to 30 June 2006.

Environmental requlations

The consolidated entity is subject to significant environmental legislation and associated regulations and Acts. The consolidated entity is committed to the implementation of responsible and practical management procedures to minimise environmental impacts and provide compliance under the government regulations applicable to all areas of its operations.

Fees paid to the responsible entity or its associates

Fees paid to the responsible entity and its associates out of Trust property during the year were \$1,592,000 (2005: \$1,220,000). Fees charged by the responsible entity represent recovery of costs. No fees were paid out of Trust property to the Directors of the responsible entity during the year.

Mirvac Property Trust and its controlled entities Directors' Report (continued)

Directors' interests

Particulars of Directors' relevant interests in the units of the Trust or a related entity, in debentures of (or interests in a registered scheme made available by) the Trust or a related entity and their rights or options over any such securities, debentures or registered scheme interests as notified by the Directors to the Australian Stock Exchange in accordance with Section 250G of the Corporations Act 2004 as at the date of this report are as follows.

	Interests in
	Securities of
	Related	Mirvac Property
Directors	Entities	Trust Units
J A C MacKenzie		53,751
JF Meridian Trust - units	90,000
JF US Industrial Trust - units	122,643
JF Property Development Fund - Seascapes - units	300,000
G J Paramor		5,414,938
JF Industrial Fund - units	100,000
JF Retail Fund - units	523,247
JF Tourist Park Fund - units	100,000
JF US Industrial Trust - units	306,609
Stadium Australia Trust - stapled securities	5,000
JF Property Development Fund - Seascapes - units	600,000
JF Property Development Fund - Meadow Springs - units	130,000
JF Infrastructure Yield Fund - units	83,333
P J Biancardi		7,000
JF Property Development Fund - Seascapes - units	25,000
JF Property Development Fund - Meadow Springs - units N R Collishaw	50,000
JF Tourist Park Fund - units	10,000	1,371,749

JF Property Development Fund - Seascapes - units A G Fini	25,000	6,105,675
JF Property Development Fund - Seascapes - units	100,000
JF Property Development Fund - Meadow Springs - units	400,000
JF US Industrial Trust - units	100,000
P J O Hawkins		9,000
P Morris		Nil
R W Turner		65,224
JF Industrial Fund - units	30,000
Stadium Australia Trust - stapled securities	2,000
JF Property Development Fund - Seascapes - units	25,000
JF Property Development Fund - Meadow Springs - units	25,000

Options over unissued units

No options over unissued units of the Trust or any of its controlled entities were granted during, or since, the year ended 30 June 2006.

No options over unissued units or interests of the Trust or any of its controlled entities were granted to any of the Directors or to any of the key management personnel of the Trust, and no options were granted during or since the year ended as part of their remuneration.

No unissued units or interests in the Trust or any of its controlled entities are under option as at the date of this report.

No units in the Trust or any of its controlled entities were issued during or since the year ended 30 June 2006 as a result of the exercise of an option over unissued units.

Mirvac Property Trust and its consolidated entities Directors' Report (continued)

Insurance of officers

Since the end of the previous financial year the Trust has not indemnified, or made a relevant agreement for indemnifying against a liability, any person who is or who has been an officer of the responsible entity. No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to Mirvac Funds Limited.

Auditor independence declaration

A copy of the Auditors' Independence Declaration required under section 307c of the Corporations Act 2001 is set out on page 7.

Rounding of amounts

The Trust is of the kind referred to in Class Order 98/0100 issued by the Australian 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.

G J Paramor Director

Sydney 31 August 2006

PRICEWATERHOUSE COPERS

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au-Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Auditor's Independence Declaration

As lead auditor for the audit of Mirvac Property Trust for the year ended 30 June 2006, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Mirvac Property Trust and the entities it controlled during the period.

$M, UN \rightarrow$

Mark Haberlin Partner PricewaterhouseCoopers

Sydney 31 August 2006

Mirvac Property Trust and its consolidated entities
Income Statements For the Year Ended 30 June 2006

			Consolidated		Parent Entity
	Notes	2006	2005	2006	2005
		\$'000	\$'000	\$'000	\$'000


Revenues
Rental income		273,256	245,329	156,895	142.248
Interest income		14,777	7.704	6,634	2,984
Distribution income		1,519	746	94,374	75,610
Other income		917	1,950	3,457	30
Total revenue		290,469	255,729	261,360	220,872

Other income
Net gain on sale of property Unrealised gain on financial instruments - net		5,203 8,391		3,258 6,516
Share of net profits of associates and joint ventures accounted
for using the equity method		28,661	12,143
Net gains from fair value adjustments on investment properties		180,154	56,952	117,164	56,916
Total other income		222,409	69,095	126,938	56,916

Total revenues and other income		512,878	324,824	388,298	277,788

Amortisation		(7, 293)	(5, 455)	(4,689)	(3,457)
Finance costs	5	(53, 412)	(37,067)	(34, 083)	(23, 787)
Property outgoings		(67, 803)	(60, 495)	(41, 160)	(36, 537)
Other expenses		(6,931)	(3,071)	(2, 476)	(2, 147)

Profit for the year		377,439	218,736	305,890	211,860

Profit attributable to minority interest		(806)	(403)
Net profit attributable to the unitholders of the Mirvac
Property Trust		376,633	218,333	305,890	211,860

Earnings per unit for net profit attributable to the
unitholders of the Mirvac Property Trust

	Cents	Cents
Basic earnings per unit	44.56	28.64
Diluted earnings per unit	43.42	27.92

The above income statements should be read in conjunction with the accompanying notes.

Mirvac Property Trust and its consolidated entities
Balance Sheets As at 30 June 2006

Consolidated Parent Entity
Notes 2006 2005 2006	2005
\$'000 \$'000 \$'000	\$'000
CURRENT ASSETS
4,192 19,824 Cash and cash equivalents 204	8,602
7 857,249 Receivables 157,644 1,253,805	167,383
8 Other financial assets at fair value through profit or loss 22,890
9 Non-current assets classified as held for sale 19,000 19,000
10 Other assets 4,105 3,286 2,350	2.004

TOTAL CURRENT ASSETS 907,436 180,754 1,275,359	177,989

NON-CURRENT ASSETS
11 Derivative financial instruments 6,516 6,516
12 Investments accounted for using the equity method 293,502 172,152
13 Other financial assets 26,870 1,120,002 ٠	1,074,556
14 Investment properties 2,887,069 2,485,897 1,724,294	1,365,202
15 Property, plant and equipment 135,423 58,095 118,282	77,049
16 Intangible assets 49,948 49,835
17 3,417 1,794 3,417 Other non-current assets	595

TOTAL NON-CURRENT ASSETS 3,375,875 2,854,830 2,912,324	2,517,402
TOTAL ASSETS 4,283,311 3,035,584 4,187,683	2,695,391

CURRENT LIABILITIES
18 197,184 187,219 227,483 Payables	211,818
19 Borrowings 1,200,000 535,000 1,200,000	384,000
20 Provisions 41,423 44,063 41,423	44,063

TOTAL CURRENT LIABILITIES 1,438,607 806,546 1,428,642	639,881

NON-CURRENT LIABILITIES
21 450,000 158,300 450,000 Borrowings

TOTAL NON-CURRENT LIABILITIES 450,000 158,300 450,000

TOTAL LIABILITIES 1,888,607 1,878,642 964,846	639,881

NET ASSETS 2,394,704 2,070,738 2,309,041	2,055,510

EQUITY 22
Contributed equity 2,044,080 1,934,474 2,044,092 23 126,067	1,934,487
Retained profits 340,606 264,949 Total parent entity interest 2,384,686 2,060,541 2,309,041	121,023 2,055,510
24 Minority interest 10,018 10,197

2,394,704 2,070,738 2,309,041 TOTAL EQUITY	2,055,510

The above balance sheets should be read in conjunction with the accompanying notes.

Mirvac Property Trust and its consolidated entities
Statements of Changes in Equity
For the Year Ended 30 June 2006

Consolidated		Issued Capital	Retained Earnings	Minority Interest	Total
	Notes	\$'000	\$'000	\$'000	\$'000

Balance at 1 July 2005		1,934,474	126.067	10.197	2,070,738
Adjustment on adoption of AASB 132 and AASB 139 to retained earnings			(130)		(130)
Net profit for the year	23		376,633		376,633
Total recognised income and expenses for the year			376,503		376,503
EIS securities converted/sold/forfeited	22(b)	15,906			15,906
Contributions of equity		93,700			93.700
Distributions provided for or paid			(161, 964)		(161,964)
Minority Interest				(179)	(179)
Balance at 30 June 2006		2,044,080	340,606	10,018	2,394,704
Balance at 1 July 2004		1,460,785	67.578		1,528,363
Net profit for the year			218,333		218,333
Total recognised income and expenses for the year			218,333		218,333
EIS securities converted/sold/forfeited Minority interest acquired on acquisition of controlled	22(b)	11,087			11,087
entity				10,330	10.330
Contributions of equity		100.662			100.662
Transaction cost arising on unit issue		(12)			(12)
Units issued on acquisition of controlled entity		361,952			361.952
Distributions provided for or paid			(159, 844)		(159.844)
Minority interest				(133)	(133)
Balance at 30 June 2005		1,934,474	126.067	10,197	2.070.738

Parent		Issued Capital	Retained Earnings	Total
	Notes	\$'000	\$'000	\$'000
Balance at 1 July 2005		1.934,487	121,023	2,055,510
Net profit for the year			305,890	305,890
Total recognised income and expenses for the year			305,890	305,890
EIS securities converted/sold/forfeited		15,905		15,905
Contributions of equity		93,700		93,700
Distributions provided for or paid		٠	(161, 964)	(161, 964)
Balance at 30 June 2006		2,044,092	264,949	2,309,041

Balance at 1 July 2004		1.460.786	69,007	1,529,793
Net profit for the year			211,860	211,860
Total recognised income and expenses for the year			211.860	211,860
EIS securities converted/sold/forfeited		11.087		11.087
Contributions of equity		100,662		100,662
Units issued on acquisition of controlled entity		361.952	÷	361,952

The above statements of changes in equity should be read in conjunction with the accompanying notes.

Distributions provided for or paid

Balance at 30 June 2005

$(159, 844)$

2,055,510

$(159, 844)$

121,023

$\ddot{\phantom{a}}$

1,934,487

Mirvac Property Trust and its consolidated entities
Cash Flow Statements For the Year Ended 30 June 2006

		Consolidated		Parent Entity
		2006	2005	2006	2005
	Notes	\$000	\$000	\$000	\$000
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		308,818	270,038	179,739	156,845
Payments to suppliers (inclusive of goods and services tax)		(119, 361)	(86,015)	(77, 627)	(52, 434)
		189,457	184,023	102,112	104,411
Interest received Distributions received		9,975 17,340	7,703 5,374	1,832 79,888	3,067 44,957
Borrowing costs paid		(49, 234)	(35,676)	(28, 421)	(23,089)

Net cash inflows from operating activities	33	167,538	161,424	155,411	129,346
Cash flows from investing activities
Payment for property, plant and equipment		(42, 643)	(42, 405)	(6, 547)	(32, 945)
Payments for investment properties		(170, 996)	(113,380)	(161, 868)	(64, 048)
Proceeds from the sale of investment properties		51,081	1,503	21,259
Contributions to joint venture and associated entities		(99, 976)		(45, 447)
Payments for acquisition of controlled entities		(6, 974)	(6, 323)	(6,974)
Payment for other investments		(189)	(62, 995)	$\overline{a}$	(10,071)
Loans to entities related to the responsible entity		(912, 601)	÷	(912, 601)
Repayment of loans by entities related to the responsible entity		223,029	2,550	82,600
Loans to controlled entities			$\blacksquare$	(237, 924)
Advances to controlled entities				(33, 115)	(50, 424)
Repayment of advances by controlled entities			$_{\rm \pi}$	50,425
Net cash outflows from investing activities		(959, 269)	(221,050)	(1, 250, 192)	(157, 488)
Cash flows from financing activities
Repayment of loans to entities related to the responsible entity		(535,000)		(384,000)
Repayment of advances to entities related to the responsible entity		(123, 500)	(5,000)	(123, 500)	(5,000)
Proceeds from borrowings		1,701,700	40,000	1,650,000
Repayment of borrowings		(210,000)
Distributions paid		(116, 264)	(50,032)	(116, 264)	(50,032)
Distributions paid to minority interests in controlled entities		(984) 60,147	(470) 9,830	60,147	9,842
Proceeds from issue of units
Net cash inflows/(outflows) from financing activities		776,099	(5,672)	1,086,383	(45, 190)
Net increase decrease in cash and cash equivalents		(15, 632)	(65, 298)	(8,398)	(73, 332)
Cash and cash equivalents at the beginning of the year		19,824	85,122	8,602	81,934

Cash and cash equivalents at the end of the year	$\overline{33}$	4,192	19,824	204	8,602

The above cash flow statements should be read in conjunction with the accompanying notes.

$\ddagger$ Summary of significant accounting policies

"The Mirvac Group" - Stapled Securities

One Mirvac Property Trust unit is stapled to one Mirvac Limited share to form a Mirvac Group Stapled Security. The stapled securities are quoted and traded together on the Australian Stock Exchange and cannot be traded or dealt with separately.

The entities forming the stapled group entered into a Deed of Co-Operation which provided that the members consider the interests of the Mirvac Group as a whole, when entering into any agreement or arrangement, or carrying out any act. This Deed of Co-operation means that members of the stapled group, where permitted by law, will carry out activities with other members on a cost recovery basis, thereby maintaining the best interests of the Mirvac Group as a whole.

The two Mirvac Group 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 Act 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

The 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.

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

$(a)$ Basis of preparation of financial report

This general purpose financial report has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRSs

Australian Accounting Standards include AIFRSs. Compliance with AIFRSs ensures that the consolidated financial statements and notes of the Mirvac Group comply with International Financial Reporting Standards (IFRSs). The parent entity financial statements and notes also comply with IFRSs except that it has elected to apply the relief provided to parent entities in respect of certain disclosure requirements contained in AASB 132 Financial Instruments: Presentation and Disclosure.

Application of AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards (AIFRS)

This financial report is the first consolidated entity full year financial report to be prepared in accordance with AIFRSs. AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards has been applied in preparing these financial statements.

Financial statements of the consolidated entity until 30 June 2005 had been prepared in accordance with previous Australian Generally Accepted Accounting Principles (AGAAP). AGAAP differs in certain respects from AIFRS. When preparing the consolidated entity financial report for the year ended 30 June 2006, management has amended certain accounting, valuation and consolidation methods applied in the previous AGAAP financial statements to comply with AIFRS. With the exception of financial instruments, the comparative figures in respect of 2005 were restated to reflect these adjustments. The consolidated entity has taken the exemption available under AASB 1 to only apply AASB 132 and AASB 139 from 1 July 2005.

Summary of significant accounting policies (continued) $\mathbf{1}$ .

$(a)$ Basis of preparation of financial report (continued)

Reconciliations and descriptions of the effect of transition from previous AGAAP to AIFRS are given in note 35.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property.

Critical accounting estimates

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

$(b)$ Principles of consolidation

$(i)$ Controlled entities

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Mirvac Property Trust as at 30 June 2006 and the results of all subsidiaries for the financial year then ended.

Controlled entities are all those entities (including special purpose entities) over which the Trust has the power to govern the financial and operating policies, generally accompanying a unitholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Trust controls another entity.

Controlled entities are fully consolidated from the date on which control is transferred to the Trust. They are deconsolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Trust (refer to note $1(e)$ ).

Intercompany transactions and balances between Trust entities are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Trust.

Minority interests in the results and equity of controlled entities are shown separately in the consolidated income statement and balance sheet respectively.

Investments in controlled entities are accounted for at cost in the individual statements of Mirvac Property Trust (parent entity).

$(ii)$ Associates

Associates are all entities over which the Trust has significant influence but not control. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost. Investments in associates are accounted for in the Trust's financial statements using the cost method. The Trust's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

Summary of significant accounting policies (continued) $\ddagger$ .

$(b)$ Principles of consolidation (continued)

The Trust's share of its associates' post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Distributions receivable from associates reduce the carrying amount of the investments.

When the Trust's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Trust does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Trust and its associates are eliminated to the extent of the Trust's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Trust.

$(iii)$ Joint ventures

Joint venture entities

The interest in a joint venture partnership is accounted for in the consolidated financial statements using the equity method and is carried at cost by the Trust. Under the equity method, the share of the profits or losses of the partnership is recognised in the income statement, and the share of movements in reserves is recognised in reserves in the balance sheet.

Profits or losses on transactions establishing the joint venture partnership and transactions with the joint venture are eliminated to the extent of the Trust's ownership interest until such time as they are realised by the joint venture partnership on consumption or sale, unless they relate to an unrealised loss that provides evidence of the impairment of an asset transferred.

$(c)$ Foreign currency translation

Functional and presentation currency $(i)$

Items included in the financial statements of each of the consolidated entity's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is Mirvac Property Trust's functional and presentation currency.

$(ii)$ Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(d)$ Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. Revenue is recognised for the major business activities as follows:

$\left( i\right)$ Rental income

Rental revenue for operating leases is recognised on a straight line basis over the term of the lease, except when an alternative basis is more representative of the pattern of service rendered through the provision of the leased premises. Lease incentives offered under operating leases are amortised on a straight-line basis and offset against rental income.

$(ii)$ Recoverable outgoings

Recovery of outgoings as specified in lease agreements is accrued on an estimated basis and adjusted when the actual amounts are invoiced to the respective tenants.

$(iii)$ Interest

Interest revenue is brought to account when earned, taking inter account the effective yield on the financial asset.

Business combinations $(e)$

The purchase method of accounting is used to account for all business combinations regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, units issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Trust's share of the identifiable net assets acquired is recorded as aoodwill (refer to note 1(p)). If the cost of acquisition is less than the fair value of the net assets of the controlled entity acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

$(f)$ Impairment of assets

Goodwill and intangibles that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(g)$ Cash and cash equivalents

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liguid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

$(h)$ Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised costs, less provision for doubtful debts.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful 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 the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.

Non-current assets held for sale $(i)$

Non-current assets are classified as held for sale and stated at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

An impairment loss is recognised for any initial or subsequent write down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of de-recognition.

Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.

$\ddagger$ . Summary of significant accounting policies (continued)

$(i)$ Investments and other financial assets

From 1 July 2004 to 30 June 2005

The consolidated entity has taken the exemption available under AASB 1 to apply AASB 132 and AASB 139 only from 1 July 2005. The consolidated entity has applied previous AGAAP to the comparative information on financial instruments within the scope of AASB 132 and AASB 139. Under previous AGAAP, interests in listed and unlisted securities, other than subsidiaries and associates, are brought to account at cost and distribution income is recognised in the income statement when receivable.

From 1 July 2005

The consolidated entity classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date.

Financial assets at fair value through profit or loss $\left( n\right)$

Financial assets at fair value through profit or loss with the intention of making a profit are financial assets held for trading which are acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges.

Loans and receivables $(ii)$

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the consolidated entity provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet.

$(iii)$ Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Purchases and sales of investments are recognised on trade-date being the date on which the consolidated entity 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. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit and 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 income statement in the period in which they arise. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

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 consolidated entity establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis and option pricing models refined to reflect the issuer's specific circumstances.

The consolidated entity assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a unit below its costs is considered in determining whether the unit is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss (measured as the difference between the acquisition cost and the current fair value) less any impairment loss on that financial asset previously recognised in profit and loss and is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(k)$ Derivatives

From 1 July 2004 to 30 June 2005

The consolidated entity has taken the exemption available under AASB 1 to apply AASB 132 and AASB 139 from 1 July 2005. The consolidated entity has applied previous AGAAP in the comparative information on financial instruments within the scope of AASB 132 and AASB 139.

The following sets out how derivatives were accounted for under previous AGAAP.

Interest rate swaps

The net amount receivable or payable under interest rate swap agreements was progressively brought to account over the period to settlement. The amount recognised was accounted for as an adjustment to interest and finance charges during the period and included in other debtors or other creditors at each reporting date.

Where an interest rate swap was terminated early and the underlying hedged transaction was:

$(a)$ still expected to occur as designated: the gains or losses arising on the swap upon its early termination continued to be deferred and were progressively brought to account over the period during which the hedged transactions were recognised
$(b)$ no longer expected to occur as designated: the gains or losses arising on the swap upon its early termination were recognised in the income statement at the date of termination.

Adjustments on transition date: 1 July 2005

The nature of the main adjustments to make this information comply with AASB 132 and AASB 139 are that derivatives are measured on a fair value basis. Changes in fair value are either taken to the income statement or an equity reserve (refer below). At the date of transition (1 July 2005) changes in the carrying amounts of derivatives are taken to retained earnings or reserves, depending on whether the criteria for hedge accounting are satisfied at the transition date.

From 1 July 2005

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The consolidated entity designates certain derivatives as either: (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).

The consolidated entity documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The consolidated entity also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

Fair value hedge

Changes in the fair value derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(k)$ Derivatives (continued)

Cash flow hedge $(ii)$

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a nonfinancial liability, the

gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

Derivatives that do not qualify for hedge accounting $(ii)$

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement.

$(1)$ Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the consolidated entity is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. The consolidated entity uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest-rate swaps is calculated as the present value of the estimated future cash flows.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the consolidated entity for similar financial instruments.

Transaction costs are included in the initial carrying amounts of the financial instruments.

$(m)$ Property, plant and equipment

Property, plant and equipment comprises investment properties under construction.

Property under construction is carried at cost. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Summary of significant accounting policies (continued) $\mathbf{1}$ .

$(m)$ Property, plant and equipment (continued)

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimate recoverable amount (note 1(i)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement on a net basis when the risks and rewards pass to the purchaser. When revalued assets are sold, it is consolidated entity policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

Investment property $(n)$

$\langle i \rangle$ Investment properties

Investment properties are properties held for long-term rental vields and for capital appreciation.

Investment properties are carried at fair value, representing open market value determined at each balance date, with any gain or loss arising from a change in fair value recognised in the income statement in the period.

Investment properties are revalued by external valuers on a rotation basis with one-half of the portfolio being valued annually. Investment properties which are not subject to an external valuation at the reporting date are fair valued internally by management.

The carrying amount of the investment properties recorded in the balance sheet includes components relating to lease incentives.

Investment properties under development $(ii)$

Existing investment properties being redeveloped for continued future use are carried at fair value.

$(o)$ Lease incentives

Lease incentives provided under an operating lease are recognised as an expense on a straight-line basis against rental income. As these incentives are repaid out of future lease payments, they are recognised as an asset in the consolidated balance sheet as a component of the carrying amount of investment properties and amortised over the lease period.

Where the investment property is supported by a valuation that incorporates the value of fit-outs, the investment property is revalued back to the valuation amount after the lease incentive amortisation has been charged as an expense.

$(p)$ Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Trust's share of the net identifiable assets of the acquired controlled entity/associate at the date of acquisition. Goodwill on acquisitions of controlled entities is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(a)$ Trade and other payables

These amounts represent liabilities for goods and services provided to the Trust prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Payables whose settlement is deferred, are measured at amortised cost.

$(r)$ Borrowings and borrowing costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not incremental cost relating to the actual draw-down of the facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.

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

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

Contributed equity $(s)$

Ordinary securities are classified as equity.

Incremental costs directly attributable to the issue of new units or options are shown in equity as a deduction from the proceeds. Incremental costs directly attributable to the issue of new units or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

In accordance with AASB 2:" Share Based Payments", securities issued as part of the Mirvac Group EIS are not classified as ordinary units, until such time as the employee loans are fully repaid or they leave the Mirvac Group.

$(t)$ Distributions

Provision is made for the amount of any distribution declared on or before the end of the year but not distributed at balance date.

$(u)$ Earnings per unit

Basic earnings per unit $(i)$

Basic earnings per unit is calculated by dividing the profit attributable to unitholders of the trust by the weighted average number of ordinary units outstanding during the year.

Diluted earnings per unit $(ii)$

Diluted earnings per unit adjusts the figures used in the determination of basic earnings per unit to take into account of interest and other financing costs associated with dilutive potential ordinary units and the weighted average number of units assumed to have been issued for no consideration in relation to dilutive potential ordinary units.

$(v)$ Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(w)$ Comparative information

Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures.

Rounding of amounts $(x)$

The consolidated entity is of a kind referred to in Class order 98/0100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

$(v)$ Net current liabilities

The consolidated entity has classified \$1,200.0 million in interest bearing bridge facilities as current liabilities as a result of these facilities maturing within the next twelve months, these facilities will be refinanced in the normal course of business.

New accounting standards and UIG interpretations $(z)$

Certain new accounting standards and UIG interpretations have been published that are not mandatory for 30 June 2006 reporting periods. The consolidated entity's assessment of the impact of these new standards and interpretations is set out below.

$(i)$ UIG 4 Determining whether an Asset Contains a Lease

UIG 4 is applicable to annual periods beginning on or after 1 January 2006. The consolidated entity has not elected to adopt UIG 4 early. It will apply UIG 4 in its 2007 financial statements and the UIG 4 transition provisions. The consolidated entity will therefore apply UIG 4 on the basis of facts and circumstances that existed as of 1 July 2006. Implementation of UIG 4 is not expected to change the accounting for any of the consolidated entity's current arrangements.

AASB 2005-9 Amendments to Australian Accounting Standards [AASB 4, AASB 1023, AASB 139 & AASB $(ii)$ 1321

AASB 2005-9 is applicable to annual reporting periods beginning on or after 1 January 2006. The amendments relate to the accounting for financial guarantee contracts. The consolidated entity does not hold any financial quarantee contracts. AASB 2005-9 will therefore have no impact on the Trust's financial statements.

$(iii)$ AASB 7 Financial Instruments: Disclosures and AASB 2005-10 Amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038]

AASB 7 and AASB 2005-10 are applicable to annual reporting periods beginning on or after 1 January 2007. The consolidated entity has not adopted the standards early. Application of the standards will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to the consolidated entity's financial instruments.

$(iv)$ AASB 2005-6 Amendments to Australian Accounting Standards [AASB 121]

AASB 2005-6 is applicable to annual reporting periods ending on or after 31 December 2006. The amendment relates to monetary items that form part of a reporting entity's net investment in a foreign operation. It removes the requirement that such monetary items had to be denominated either in the functional currency of the reporting entity or the foreign operation. The amendment to AASB 121 will not impact on the consolidated entity's financial statements.

$2.$ Financial risk management

The consolidated entity's activities expose it to a variety of financial risks; market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses derivative financial instruments such as foreign exchange contracts and interest rate swaps to hedge certain risk exposures.

Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the board of Directors. Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity.

$(a)$ Market risk

Foreian exchange risk $\left( i\right)$

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity's functional currency.

An associate of the consolidated entity operates internationally and is exposed to foreign exchange risk arising from currency exposures to the US dollar.

Forward contracts, are used to manage foreign exchange risk. Group Treasury is responsible for managing exposures in foreign currency by using external forward currency contracts.

$(ii)$ Price risk

The consolidated entity is exposed to equity securities price risk. This arises from investments held by the consolidated entity and classified on the balance sheet as fair value through profit or loss.

$(b)$ Credit risk

The consolidated entity has no significant concentrations of credit risk. The group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The consolidated entity has policies that limit the amount of credit exposure to any one financial institution.

$(c)$ Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. Due to the dynamic nature of the underlying businesses. Group Treasury aims at maintaining flexibility in funding by keeping a committed credit line available.

$(d)$ Cash flow and fair value interest rate risk

The consolidated entity's interest-rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the consolidated entity to cash flow interest-rate risk. Borrowings issued at fixed rates expose the consolidated entity to fair value interest-rate risk. The Trust targets to have 70% of borrowings subject to fixed or capped interest rates. This policy has been complied with at the year end.

The Trust manages its cash flow interest-rate risk by using floating-to-fixed interest rate derivatives. Such interest rate derivatives have the economic effect of converting borrowings from floating rates to fixed or capped rates. Generally, the Trust raises long term borrowings at floating rates and swaps them into fixed rates that are lower than those available if the Trust borrowed at fixed rates directly. Under the interest-rate swaps, the Trust agrees with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional principal amounts.

$3.$ Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors. including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

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

Estimated impairment of goodwill $\left( n\right)$

The consolidated entity tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 1(p). The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions. Refer to note 16(b) for details of these assumptions and the potential impact of changes to the assumptions.

Fair value of investments not traded in active markets $(ii)$

The fair value investments that are not traded in an active market is determined by using valuation techniques. The consolidated entity uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. The consolidated entity has used discounted cash flow analysis to determine the fair value of investments in unlisted companies.

The carrying value of investments not traded in an active market is determined using the above estimates and assumptions is \$22,890 and are disclosed as assets through profit or loss (note 8).

4. Segmental information

Business seaments

Primary Reporting Segment - Business Segments

The consolidated entity derives income from investments in property, short-term deposits and securities authorised by the Trust Constitution.

Geographical segment

The combined entity operates predominantly in Australia.

5. Expenses

	Consolidated		Parent Entity
	2006 \$'000	2005 \$000	2006 \$'000	2005 \$'000
Profit for year includes the following specific expenses:
Finance costs
Interest and finance charges paid/payable	51,432	37,556	33,302	24,636
Borrowing costs amortised	1,980	987	781	627
Less amount capitalised	٠	(1, 476)	٠	(1, 476)
Finance costs expensed	53,412	37,067	34,083	23,787

Amortisation
Landlord fit-outs	5,811	4,021	3,964	2,741
Deferred leasing expenses	1,482	1,434	725	716
Total amortisation	7,293	5,455	4,689	3,457

Movement in provision
Bad & doubtful debts - trade debtors	(335)	603	(335)	602

Earnings per unit 6.

Earnings per unit have been calculated in accordance with AIFRS. In calculating basic earnings per unit, units issued under the Mirvac
Employee Incentive Scheme have been excluded from the weighted average number of units. Connelidated

	consolidated
	2006	2005
Earnings per unit	Cents	Cents

Basic earnings per unit	44.56	28.64
Basic earnings per unit before non-cash AIFRS items	21.75	20.69
Diluted earnings per unit	43.42	27.92
Diluted earnings per unit - before non-cash AIFRS items	21.19	20.17

Reconciliation of earnings used in calculating earnings per unit	\$'000	\$'000
Basic and diluted earnings per unit

Net profit used in calculating earnings per unit	376,633	218,333
Basic and diluted earnings per unit - before non-cash AIFRS
Net profit used in calculating earnings per unit	183,814	157,684
Weighted average number of securities used as denominator	Number	Number

Weighted average number of securities used in calculating basic earnings per
unit	845,280,249	762,298,824
Adjustment for calculation of diluted earnings per unit:	22.104,555
Securities issued under EIS		19,566,960
Weighted average number of securities used in calculating diluted earnings per	867.384.804
unit		781.865.784

The difference in basic and diluted weighted average number of securities is due to the effect of securities issued under the Employee Incentive Scheme which have been excluded in calculating basic earnings per unit.

$\overline{7}$ . Current assets - receivables

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$000	\$'000	\$'000

Trade and other debtors	26,681	13.762	23.823	6,278
Less: Provision for doubtful debts	(372)	(707)	(341)	(675)
	26,309	13.055	23,482	5,603
Distributions owing from controlled entities	٠		58,681	45,317
Loans to entities related to responsible entity	830.000	140,565	830,000
Amounts due from associated entities	940	4.024	1,122
Loans to controlled entities			237.924
Amounts due from controlled entities			102,596	119,904
Provision for diminution			$\blacksquare$	(3,441)
	857.249	157.644	1,253,805	167.383

Further information in relation to amounts due from related entities is set out in note 31.

Effective interest rates and credit risk

Information concerning the effective interest rate and credit risk of both current and non-current receivables is set out in the non-current receivables note (note 11).

Further information in relation to amounts due from related entities is set out in note 31.

(a) Fair values

The fair values for receivables less than 12 months is deemed to equal the carrying amounts. All other receivables are discounted if the effect of discounting is material.

(b) Interest rate risk

The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate by maturity periods for current and non current receivables is set out in the following tables.

					Fixed interest maturing in:
2006	Floating interest rate	1 vear or less	Over 1 to 2 vears	Over 2 to 3 years	Over 3 to 4 years	Over 4 to 5 years	Over 5 years	Non- interest bearing	Total
	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Trade and other debtors		$\blacksquare$	$\mathbf{r}$	$\cdot$	$\mathbf{r}$	$\cdot$	۰.	26,308	26,309
Related party receivables	830.000	$\mathbf{r}$	$\mathbf{w}$	$\scriptstyle\star$	$\overline{r}$	$\overline{\phantom{m}}$	÷	940	830,940
	830,000	$\mathbf{r}$	$\mathbf{r}$	$\cdot$	$\mathbf{r}$	$\cdot$	$\mathbf{r}$	27,248	857,249
Weighted average interest rate	7.68%	$\mathbf{r}$	$\overline{r}$	$\scriptstyle\rm{w}$	$\mathbf{r}$	$\mathbf{r}$	$\mathbf{r}$

$\overline{7}$ . Current assets - receivables (continued)

		Fixed interest maturing in:
2005	Floating interest rate	1 year or less	Over 1 to 2 years	Over 2 to 3 years	Over 3 to 4 years	Over 4 to 5 years	Over 5 vears	Non- interest bearing	Total
	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Trade and other debtors	$\blacksquare$	$\mathbf{r}$	$\tilde{\phantom{a}}$	$\cdot$	$\cdot$	$\blacksquare$	$\tilde{\phantom{a}}$	13,055	13,055
Related party receivables	$\blacksquare$	$\mathbf{r}$	140.565	$\cdot$	$\blacksquare$	$\mathbf{r}$	$\tilde{\phantom{a}}$	4.024	144.589
	$\blacksquare$	$\mathbf{w}$	140.565	$\mathbf{r}$	$\mathbf{r}$	$\blacksquare$	$\tilde{\phantom{a}}$	17.079	157,644
Weighted average interest rate	$\blacksquare$	$\mathbf{r}$	7.76%	$\overline{\phantom{a}}$	$\mathbf{r}$	$\mathbf{r}$	$\overline{\phantom{a}}$

(c) Credit risk

There is no concentration of credit risk with respect to trade and other debtors, as the consolidated entity has a large number of customers within its diversified investment property portfolio. Loans to entities related to the responsible entity comprise interest bearing loans, these loans are considered low risk as the Mirvac Group has a current 'BBB' credit rating by Standard & Poor's Ratings Services, an internationally recognised ratings organisation. Refer to note 2 for more information on the risk management policy of the consolidated entity.

8. Other financial assets at fair value through profit or loss

Shares in unlisted funds	Consolidated	Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$'000
At beginning of the year
Adjustment on adoption of AASB 132 and AASB 139	20,955
Additions	191
Revaluation	1,744
At end of the year	22,890

Changes in fair values of other financial assets at fair value through profit or loss are recorded in other income in the income statement.

Transition to AASB 132 and AASB 139

The consolidated entity has taken the exemption available under AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards to apply AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 July 2005. At the date of transition to these standards at 1 July 2005, equity securities with a carrying value of \$20,955,000 that were classified in the balance sheet under previous AGAAP as non-current other financial assets, were designated and re-classified as other financial assets at fair value through profit and loss.

9. Current assets - non-current assets classified as held for sale

	Consolidated		Parent entity
	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$'000
30 Cowper Street, Parramatta, NSW	19,000	$\mathbf{u}_\mathbf{r}$	19,000	$\overline{\phantom{a}}$
10. Current assets - other
Prepayments	4.105	3.286	2,350	2,004

$11.$ Derivative financial instruments

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$'000
Non current assets

Interest rate swap contracts - fair value	6.516	$\overline{\phantom{a}}$	6.516	$\sim$

Transition to AASB 132 and AASB 139 $(a)$

The consolidated entity has taken the exemption available under AASB 1 to apply AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 July 2005. For the consolidated entity, at the date of transition to these standards at 1 July 2005, a net adjustment of \$130,000 decrease in net assets was recognised representing a loss of \$130,000 on the re-measurement of interest rate swap contracts to fair value.

$(b)$ Instruments used by the consolidated entity

The consolidated entity is party to derivative financial instruments in the normal course of business in order to limit exposure to fluctuations in interest rates.

$(i)$ Interest rate derivative contracts - fair value

Bank loans of the consolidated entity currently bear an average variable interest rate of 6.18%. It is policy to protect part of the loans from exposure to increasing interest rates. Accordingly, the consolidated entity has entered into interest rate derivative contracts under which it is obliged to receive interest at variable rates and to pay interest at fixed rates.

Derivatives currently in place cover approximately $44\%$ ( $2005 - 11\%$ ) of the loan principal outstanding. The fixed interest rates range between $5.65\%$ and $6.12\%$ (2005 $-5.65\%$ ).

At 30 June 2006, the notional principal amounts and periods of expiry of the interest rate derivative contracts are as follows:

	2006	2005
	\$'000	\$'000
Less than 1 year	$\bullet$	$\mathbf{r}$
$1 - 2$ years	٠	$\mathbf{r}$
$2 - 3$ years	100,000	₩
$3 - 4$ years	100,000	÷
$4 - 5$ years	175,000	75,000
Greater than 5 years	350,000
	725.000	75,000

The contracts require settlement of net interest receivable or payable each reset date (generally 90 days). The settlement dates generally coincide with the dates on which interest is payable on the underlying debt. The contracts are settled on a net basis.

The gain or loss from remeasuring the contracts at fair value is immediately recognised in the income statement. In the vear ended 30 June 2006 \$6,646,000 was transferred to profit and loss.

At balance date for the consolidated entity, and the Trust, these contracts were assets with fair value of \$6,516,000 (2005 - \$nil). In the year ended 30 June 2006 there was on the date of transition to AASB 132 and AASB 139 on 1 July 2005 a loss of \$130,000 on re-measurement to fair value; and a profit from the increase in fair value of \$6,646,000 during the year.

$(c)$ Interest rate risk exposures

Refer to note 21(c) for the consolidated entity's exposure to interest rate risk on interest rate derivatives.

$12.$ Non-current assets -investments accounted for using the equity method

	Consolidated		Parent
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
Shares in associates - (note 26)	195.452	148,713	٠
Interests in joint ventures (note 27)	98,050	23,439	٠
	293,502	172,152	٠	$\mathbf{v}$

$13.$ Non-current assets - other financial assets

Shares in controlled entities - at cost	$\mathbf{r}$	$\tilde{\phantom{a}}$	1,064,598	1,064,485
Shares in associates $-$ (note 26)	$\overline{\phantom{a}}$	$\mathbf{r}$	18.136
Interests in joint ventures (note 27)	$\mathbf{r}$	$\mathbf{r}$	37.268	4.156
Share in listed trusts - at cost	$\cdot$	5,915	$\mathbf{u}$	5,915
Share in unlisted trusts - at cost	$\omega$	419	$\blacksquare$
Shares in associates - at market value	$\blacksquare$	20,536	$\mathbf{u}$
	$\blacksquare$	26,870	1.120.002	1,074,556

Transition to AASB 132 and AASB 139

For further information refer to note 1(i) and 35(5).

The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in accordance with the accounting policy describes in note 1 (b):

Units held in controlled entities of Mirvac Property Trust

Name of entity	Country of incorporation	Class of Units	2006* Equity holding %	2005 Equity holding %
380 St Kilda Road Trust	Australia	Ordinary	100	100
9 Help Street Trust	Australia	Ordinary	100	100
James Fielding Infrastructure Sustainable Equity Fund	Australia	Ordinary	100	100
James Fielding Trust	Australia	Ordinary	100	100
Mirvac Commercial Trust	Australia	Ordinary	100	100
Mirvac Property Trust No 2	Australia	Ordinary	100	100
Peninsular Homemaker Centre Trust	Australia	Ordinary	100	100
Springfield Regional Shopping Centre Trust	Australia	Ordinary	67	67
The George Street Trust	Australia	Ordinary	100	100
The Mulgrave Trust	Australia	Ordinary	100	100

* The proportion of ownership interest is equal to the proportion of voting power held.

$14.$ Non-current assets - investment properties

			Consolidated Entity		Parent Entity
	Note	Date of acquisition	Cost & additions to 30/6/2006 \$'000	Book value 30/6/2006 \$'000	Book value 30/6/2005 \$'000	Book value 30/6/2006 \$'000	Book value 30/6/2005 \$'000	Date of last external valuation	Latest external valuation
67 Albert Avenue, Chatswood NSW		1/9/1989	59,399	73,250	73,000	73,250	73,000	30/6/2005	73,000
Quay West Car Park, 111 Harrington Street, Sydney NSW		30/11/1989	37,560	45,000	42,017	45,000	42,017	30/6/2006	45,000
Orange City Centre, Summer Street, Orange NSW		5/4/1993	29,705	49,000	35,608	49,000	35,608	30/6/2006	49,000
30 Cowper Street, Parramatta NSW		1/9/88	$\ddot{\phantom{0}}$		19,500	$\overline{\phantom{a}}$	19,500	30/6/2005	19,500
Kawana Shoppingworld, Nicklin Way, Buddina QLD		9/12/1993 $(1^{\circ} 50\%)$ 10/6/1998 (2 ^nd 50%)	104.428	175,000	141,594	175,000	141,594	31/12/2005	175,000
Gippsland Centre, Cunninghame Street, Sale VIC		6/1/1994	34,565	46,000	45,000	46,000	45,000	30/6/2005	45,000
Como Centre, Cnr Toorak Road & Chapel Street, South Yarra VIC		18/8/1998	116,540	143,605	141,300	143,605	141,300	30/6/2005	141,300
James Ruse Business Park, 6 Boundary Road, Northmead NSW		14/7/1994	20,000	29,500	29,200	29,500	29,200	30/6/2005	29,200
20-30 Scrivener Street, Warwick Farm NSW		24/12/1993	18,740	21,500	21,040	21,500	21,040	30/6/2006	21,500
Lovett Tower, 13 Keltie Street, Woden ACT		14/7/1994 $(1^{st} 50\%)$ 28/2/1999 $(2^{nd} 50\%)$	43,924	48,500	46,139	48,500	46,139	31/12/2003	46.000
The Marriott Hotel, 36 College Street, Sydney NSW		31/12/1991	83,051	77,724	59,403	$\overline{\phantom{a}}$	ä,	30/6/2006	81,500
1-19 Hargrave Street, Sydney NSW	14(d)	31/12/1991	4,475	12,000	11,008	$\tilde{\phantom{a}}$	÷,	1/3/2005	11,000
40 Miller Street, North Sydney NSW		31/3/1998	60,274	95,000	80,802	95,000	80,802	30/6/2006	95,000
1 Castlereagh Street, Sydney NSW		18/12/1998	47,777	65,400	54,869	65,400	54,869	31/12/2005	65,000
271 Lane Cove Road, North Ryde NSW		5/4/2000	18,664	30,500	25,010	30,500	25,010	30/6/2006	30,500
Royal Domain Centre, 380 St Kilda Road, Melbourne VIC		4/10/1995 $(1^{st}50\%)$ 2/4/2001 (2 ^nd 50%)	84,444	92,000	94.704			30/6/2006	92.000
164 Grey Street, Southbank QLD	14(d)	29/6/2001	7,352	12,500	12,000	12,500	12,000	31/3/2005	12,000
Bay Centre, Cnr Pirrama & Edward Streets, Pyrmont NSW	14(d)	29/6/2001	58,219	88,000	73,500	88,000	73,500	30/4/2006	88,000
200 George Street, Sydney NSW		31/10/2001	24,229	26,500	24,189	$\overline{\phantom{a}}$		30/6/2006	26,500
Unit 23, 177 Pacific Highway, North Sydney NSW		25/1/2002	594	590	594	589	594		$\sim$
Building 1,2,3 & 7, Riverside Quay, Southbank VIC	14(d)	15/4/2002 & 1/7/2003	115,232	115,500	115,000	115,500	115,000	30/6/2005	115,000
John Oxley Centre, 339 Coronation Drive, Milton QLD	14(d)	31/5/2002	37,314	43,000	43,000	43,000	43,000	30/6/2005	43.000
Blacktown Mega Centa, Blacktown Road, Blacktown NSW	14(d)	30/6/2002	30,519	41,000	40,000	41,000	40,000	30/6/2005	40,000
1-47 Percival Road, Smithfield NSW	14(d)	22/11/2002	21,028	23,800	21,135	23,800	21,135	30/6/2006	23,800
Waverley Gardens Shopping Centre, Cnr Police & Jackson Roads, Mulgrave VIC		15/11/2002	104,325	101,400	54,846	101,400	54,846	30/4/2006	101,400

			Consolidated Entity				Parent Entity
	Note	Date of acquisition	Cost & additions to 30/6/2006 \$'000	Book value 30/6/2006 \$'000	Book value 30/6/2005 \$'000	Book value 30/6/2006 \$'000	Book value 30/6/2005 \$'000	Date of last external valuation	Latest external valuation
The Village Centre, Charles Hackett Drive, St Marys NSW		17/1/2003	38,580	43,500	34,893	43.500	34,893	31/12/2005	43,000
Moonee Ponds Central, Homer Street, Monee Ponds VIC		20/5/2003	26,011	25,300	24,307	25,300	24,307	30/6/2006	25,300
Hinkler Central, Maryborough Street, Bundaberg QLD		12/8/2003	80,438	91,000	37,535	91,000	37,535	30/6/2006	91,000
190 George Street, Sydney NSW		5/8/2003	47,122	44,000	42,192	u		30/6/2006	44,000
44 Biloela Street, Villawood NSW	14(d)	24/9/2003	18,866	20,000	17,856	20,000	17,856	30/6/2006	20,000
Stanhope Village, Sentry Drive, Stanhope Gardens NSW		14/11/2003	22,426	28,000	26,462	28,000	26,462	31/3/2004	24,000
333-343 Frankston-Dandenong Rds & 4 Abbotts Road, Dandenong South, VIC		15/1/2004	12,501	13,700	12,456	13,700	12,456	30/6/2006	13,700
64 Biloela Street, Villawood NSW		2/2/2004	22,702	25,000	22,039	25,000	22,039	30/6/2006	25,000
lkon Retail, 81 Macieay Street, Potts Point NSW		7/5/2004	à.	$\overline{\phantom{a}}$	18,000	$\omega$	18,000	30/6/2005	18,000
189 Grey Street, Southbank QLD		19/4/2004	40,488	50,000	50,000	50,000	50,000	30/6/2005	50,000
Ballina Central, Ballina NSW		1/12/2004	43,029	41,000	٠	41,000		30/6/2006	41,000
Nexus industry Park, Liverpool NSW		3/8/2004	16,863	19,000	٠	19,000		30/6/2006	19,000
1 Darfing Island, Pyrmont, NSW		15/5/2006	86,002	86,000	ü	86,000	ü
Bundaberg Plaza, 16 Maryborough Street, Bundaberg QLD		24/9/2004	6,342	6,500	6,500	6,500	6,500	30/6/2005	6,500
Kwinana Hub Shopping Centre, Onr Gilmore & Chisham Aves, Kwinana WA		16/9/2005	27,253	27,250		27,250		30/6/2006	27,250
IBM Building, 8 Brisbane Avenue, Barton ACT		28/6/1985	12,434	12,500	12,000			30/6/2005	12,000
Perpetual Trustees Building, 10 Rudd Street, Canberra ACT		15/10/1987	19,663	18,000	16,091			30/6/2006	18,000
54 Marcus Clarke Street, Canberra, ACT		15/10/1987	21,283	17,300	17,250			30/6/2005	17,250
St George Centre, 60 Marcus Clarke Street, Canberra ACT		1/9/1989	58,664	53,500	48,170	à.		30/6/2006	53,500
Burns Centre, 28 National Circuit, Forrest ACT		27/9/1990	18,621	15,550	13,434	à,		30/6/2006	15,550
Arts House, 40 Macquarie Street, Barton ACT		8/12/1995	17,121	19,000	18,000	ú		30/6/2005	18,000
38 Sydney Avenue, Forrest ACT		26/6/1996	34,217	37,000	36,000	u		30/6/2005	36,000
Optus Centre, 101-103 Miller Street, North Sydney NSW		30/6/1994	288,387	365,000	365,000	v		30/6/2005	365,000
The Melcentre, 60 Margaret Street, Sydney NSW (50% interest)		6/8/1998	177,584	180,000	162,932	J.		31/12/2005	179,000
127 Creek Street, Brisbane QLD		1/5/1998	48,431	72,000	48,054	à,		30/6/2006	72,000
101 Grenfell Street, Adelaide SA		1/12/1998	ä,	$\overline{\phantom{a}}$	27,925	٠		30/6/2004	27,800
253 Wellington Road & 18-20 Compark Circuit, Mulgrave VIC		1/8/2001	15,784	17,000	15,960	×,		30/6/2006	17,000
30-32 Compark Circuit, Mulgrave VIC		1/2/2003	6,719	8,750	7,975	ä,	ù,	30/6/2006	8,750
9 Heip Street, Chatswood NSW		1/6/2002	44,603	34,000	33,599	ù,		30/6/2005	34,000

			Consolidated Entity			Parent Entity
	Note	Date of acquisition	Cost & additions to 30/6/2006 \$'000	Book value 30/6/2006 \$000	Book value 30/6/2005 \$'000	Book value 30/6/2006 \$'000	Book value 30/6/2005 \$'000	Date of last external valuation	Latest external valuation
Peninsula Homeaker Centre, 1128 Nepean Highway, Mornington VIC		1/12/2003	53,457	57,000	56,600	٠	л.	30/6/2005	56,600
7 Railway Street, Chatswood NSW		11/8/2003	11.735	3.950	10.209	$\overline{\phantom{a}}$	M	31/12/2005	3.750
Total non-current assets investment properties			2,479,684	2,887,069	2,485,897	1.724.294	1,365,202

(a) Reconciliation of carrying amounts of investment properties

	Consolidated			Parent Entity
	2006	2005	2006	2005
	\$'000	\$'000	\$000	\$000
At fair value
Opening balance at 1 July	2,485,897	2.162.159	1.365.202	1.236.353
Additions	267,714	109.672	258,115	73,009
Additions through acquisitions of controlled entities		160.188
Disposals	(45,878)		(18.000)
Classified as held for sale or disposals	(19,000)		(19,000)
Net gains from fair value adjustments	180.154	56.952	117.164	56,916
Transfer from property plant & equipment	25,502	2,381	25,502	2.381
Amortisation	(7, 320)	(5,455)	(4,689)	(3, 457)
Closing balance at 30 June	2.887.069	2.485.897	1.724.294	1.365.202

(b) Amounts recognised in profit and loss for investment property

	Consolidated		Parent Entity
	2006	2005		2006	2005
	\$'000	\$'000	\$'000	\$'000
Rental income Direct operating expenses from property that	273.256	245.329	156,895	142.248
generated rental income	(67, 803)	(60.495)	(41, 160)	(36,537)

(c) Valuation basis

The basis of the valuation of investment properties is fair value being the amounts for which the properties could be exchanged between willing parties in an arm's length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases.

Investment properties are revalued by external valuers on a rotation basis with one half of the portfolio being valued annually. Investment properties which are not subject to an external valuation at the reporting date are fair valued internally by management.

The carrying amount of the investment properties recorded in the balance sheet includes components relating to lease incentives.

(d) Non-current assets pledged as security

These properties are is secured as part of The Mirvac Group Commercial Mortgage Backed Security issue Refer to note 21(a) for information on non-current assets pledged as security by the Trust or its controlled entities.

Non-current assets - investment properties (continued) $14.$

(e) Property portfolio

The consolidated entity's property portfolio is made up as follows:

	Consolidated
	2006	2005
	\$'000	\$'000
Investment properties per balance sheet	2,887,069	2,485,897
Properties classified as assets held for sale	19,000
Properties under construction classified as property, plant and equipment	135.423	118,282
	3.041.492	2.604.179

15. Non-current assets - property, plant and equipment

Reconciliation of carrying amounts of property, plant & equipment

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$000
At fair value
Opening balance at 1 July	118,282	42.969	77.049	42,968
Additions	42.643	36.462	6.548	36,462
Additions through acquisitions of controlled entities		41.232	٠
Transfer to investment properties	(25, 502)	(2, 381)	(25, 502)	(2, 381)

Closing balance at 30 June	135.423	118.282	58.095	77,049

Property, plant and equipment comprises investment properties under construction, refer note 1(m).

Non-current assets - intangibles 16.

	Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Goodwill	49,948	49.835	$\overline{\phantom{a}}$	$\tilde{\phantom{a}}$

16. Non-current assets - intangibles (continued)

$(a)$ Impairment tests for goodwill

Goodwill is allocated to the consolidated entities cash-generating units (CGU's) identified according to business segment. The consolidated entity is considered a single cash generating unit. The recoverable amount of goodwill is determined based on a value-in-use calculation. These calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for in which the business operates.

$(b)$ Key assumptions used for value-in-use calculations

	Growth rate**		Discount rate
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Property investment	5%	5%	10%	10%

* No forecast growth rate as value-in use calculations based on actual cashflows

** Weighted average post-tax growth rate used to extrapolate cash flows beyond the budget period

Management determined budgeted gross margin based on past performance and its expectations for the future. The weighted average growth rates used re consistent with forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments and the countries in which they operate.

$(c)$ Impairment charge

No impairment charge has been calculated for the year ending 30 June 2006 (2005: \$0).

17. Non-current assets - other

	Consolidated 2006 \$'000	2005 \$'000	Parent Entity 2006 \$'000	2005 \$'000
Deferred borrowing expenses	3.417	.794	3.417	595

18. Current liabilities - payables

197.184	227,483	187.219	211.818
6.220 9,937 1.348 171.303	10.901 10,696 1.308 198,300	3.826 6,277 1.031 170.998	3.626 3.214 6.445 902 197.631

	8.376	6,278	5.087

Further information in relation to amounts due from related entities is set out in note 31.

19. Current liabilities - borrowings

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$'000
Syndicated bank loans (unsecured) Loan from entities related to the responsible entity	1,200,000		1,200,000
(unsecured)	$\blacksquare$	53.000	٠	53,000
	1,200,000	53,000	1,200,000	53,000
Commercial notes (secured)		482.000	$\blacksquare$	331,000
	1,200,000	535,000	1,200,000	384,000

(a) Interest rate risk exposures

Details of the consolidated entity's exposure to interest rate changes on borrowings are set out in note 21(c).

(b) Fair value disclosures

Details of the fair value of borrowings for the consolidated entity are set out in note 21(d).

(c) Security

Details of the security relating to each of the secured liabilities and further information on the bank overdrafts and bank loans are set out in note 21.

20. Current Liabilities - provisions

	Consolidated		Parent Entity
	2005 2006		2006	2005
	\$'000	\$'000	\$'000	\$'000
Distributions payable	41,423	44.063	41,423	44,063
Movements: Opening balance Additional provisions recognised	44.063 161,965	34.913 159.844	44.063 161,965	34.913 159.844
Payments/ units issued under distribution reinvestment plan	(164,605)	(150.694)	(164,605)	150,694)
Closing balance	41,423	44.063	41,423	44.063

Non-current liabilities - borrowings 21.

Bank loans (secured)	$\mathbf{u}$	158.300
Syndicated bank loans (unsecured)	450.000		450.000
	450.000	158.300	450.000

$21.$ Non-current liabilities - borrowings (continued)

Bank loans

The Mirvac Group has an unsecured syndicated bridge facility and a multi-option borrowing facility totalling \$3,200 million (2005 - \$965 million), of which \$1,200 million matures in June 2007, \$1,000 million matures in June 2009 and \$1,000 million matures in June 2011. Subject to the compliance with the terms, the bank loan facilities may be drawn at any time. The Trust and an entity related to the responsible entity are both borrowers under the Mirvac Group facility, and are party to a deed poll of guarantee. The Trust had drawn down \$1,650 million of this syndicated multi-option borrowing facility at 30 June 2006. These facilities replaced the previous secured bank and Commercial Mortgage Backed Securities (CMBS) programmes which were partially repaid on 5 June 2006.

Commercial notes

The Mirvac Group has one issue of commercial notes outstanding under its Commercial Mortgage Backed Securities (CMBS) program totalling \$138 million which matures on 22 October 2008 (2005: \$138 million). Interest is payable either quarterly or semi-annually in arrears in accordance with the terms of the notes.

Other bank borrowings

A controlled entity had a secured bank facility of \$158 million at 30 June 2005 which was repaid on 5 June 2006.

(a) Assets pledged as security

The Commercial Notes are secured by a first ranking real property mortgages and a fixed and floating charge over specific investment properties of the consolidated entity. A controlled entity has a debt facility secured by real property mortgages and a fixed and floating charge. The carrying amounts of assets pledged as security for current and non-current borrowings are:

			Consolidated		Parent entity
		2006		2005	2006	2005
	Note	\$'000		\$'000	\$'000	\$'000


The carrying amount of non-current assets pledged as security are:

First ranking real property mortgage
Investment properties	14	355,800		1,682,132	344,792	1,367,163
Floating and equitable charge (assets of Mirvac Property
Trust and controlled entities
Investments accounted for using the equity method Total assets pledged as security		355,800		122,027 1,804,159	344,792	1,367,163

(b) Financing arrangements
Total facilities:
Commercial notes (CMBS)			482,000		331,000
Loan from entities related to the responsible entity			53,000			53,000
Other bank facilities			158,300
Syndicated loans*		3,200,000		3,200,000
		3,200,000	693,300	3,200,000	384,000
Used at balance date:
Commercial notes (CMBS)			482,000		331,000
Loan from entities related to the responsible entity			53.000			53,000
Other bank facilities			158,300
Syndicated loans*		2,165,000		2,165,000
		2,165,000	693,300	2,165,000	384,000

Unused at balance date: Commercial notes (CMBS)
Loan from entities related to the responsible entity
Other bank facilities
Syndicated loans*		1,035,000		1,035,000
		1,035,000		1,035,000

*The Trust can access the Mirvac Group joint facility and has drawn down \$1,650 million at 30 June 2006.

$21.$ Non-current liabilities - borrowings (continued)

(c) Interest rate risk exposures

The following table sets out the consolidated entity's exposure to interest rate risk, including the contractual repricing dates and the effective weighted average interest rate by maturity periods. Exposures arise predominantly from liabilities bearing variable interest rates as the consolidated entity intends to hold fixed rate liabilities to maturity.

			Fixed interest maturing in:
30 June 2006	Floating interest rate \$'000	1 year or less \$'000	Over 1 to $2$ vears \$'000	Over 2 to 3 vears \$'000	Over 3 to $4$ vears \$000	Over 4 to $5$ vears \$'000	Over 5 years \$'000	Total \$'000
Unsecured syndicated loans	1.650.000							1,650,000
Interest rate derivatives *	(725.000)		$\tilde{\phantom{a}}$	100,000	100,000	175,000	350,000
	925,000		$\scriptstyle\star$	100,000	100,000	175,000	350,000	1,650,000
Weighted average interest rate	5.90%		$\ddot{ }$	5.75%	5.97%	5.84%	6.04%
Fixed interest maturing in:
30 June 2005	Floating interest rate	1 year or less	Over 1 to 2 years	Over 2 to 3 years	Over 3 to $4$ years	Over 4 to 5 years	Over 5 years	Total
	\$'000	\$'000	\$000	\$000	\$'000	\$000	\$'000	\$'000
Bank loans	158,300						$\cdot$	158,300
Commercial notes (CMBS) Loan from entities related to the	161,000	321,000					÷	482,000
responsible entity	53,000	$\overline{\phantom{a}}$	$\overline{r}$	۰	$\overline{a}$		$\overline{\phantom{a}}$	53,000
Interest rate derivatives *	(75,000)				$\overline{a}$	75,000
	297,300	321,000	w.		×	75,000	$\overline{\phantom{a}}$	693,300
Weighted average interest rate	6.09%	6.57%			$\overline{a}$	5.65%

* Notional principal amounts

(d) Fair value

The carrying amounts and fair values of borrowings at balance date are:

	2006 Carrying Fair value amount \$'000 \$'000		2005
			Carrying amount \$'000	Fair value \$'000
On-balance sheet
Non-traded financial liabilities
Syndicated bank loans	1,650.000	1,650,000
Commercial notes (secured)		×.	482,000	482,000
Loan from entities related to the responsible entity			53,000	53,000
(unsecured)		٠
Bank loans		×.	158.300	158,300
	1,650,000	1,650,000	693.300	693,300

$21.$ Non-current liabilities - borrowings (continued)

(d) Fair value (continued)

Other than those classes of borrowings denoted as "traded", none of the classes are readily traded on organised markets in standardised form.

The fair values for payables less than 6 months is deemed to equal the carrying amounts. All other payables are discounted if the effect of discounting is material.

On-balance sheet $(i)$

The fair value of borrowings is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for liabilities with similar risk profiles.

$(ii)$ Off-balance sheet

The Trust and certain controlled entities have potential financial liabilities which may arise from certain contingencies disclosed in note 28. As explained in those notes, no material losses are anticipated in respect of any of those contingencies and the fair value disclosed below is the directors' estimate of amounts which would be payable by the consolidated entity as consideration for the assumption of those contingencies by another party.

22. Contributed equity

Consolidated	2006 Units	2005 Units	2006 \$'000	2005 \$'000
(a) Paid up capital
Mirvac Property Trust - ordinary units issued	870,037,575	832.083.977	2.044.080	1,934,474
Total contributed equity			2,044,080	1,934,474

22. Contributed equity (continued)

(b) Movements in paid up capital of the Trust for the 2006 and 2005 years were as follows:

Consolidated	Issue date	issue price	Note	No of securities 000's	$$^{\circ}000^{\circ}$ s
Opening balance at 30 June 2004				692.124	1,460,785
Distribution reinvestment plan issues Distribution reinvestment plan issues Issued as consideration for acquisition of the James	30/7/04 29/10/04	\$3.05 \$3.09	(d) (d)	7,402 8.686	22,577 26,845
Fielding Trust Distribution reinvestment plan issues Distribution reinvestment plan issues EIS securities converted/sold/forfeited Capital raising costs	7/1/05 28/1/05 29/4/05 various	\$3.46 \$3.35 \$3.13	(e) (d) (d)	103,598 8,018 7,791 4,465	361,952 26,865 24,375 11,087 (12)
Balance of units at 30 June 2005				832,084	1,934,474
Distribution reinvestment plan issues Security placement with institutions on underwriting of	27/1/06	\$2.89	(d)	9.143	26,418
distribution reinvestment plan Distribution reinvestment plan issues Security placement with institutions on underwriting of	27/1/06 28/4/06	\$2.89 \$3.02	(f) (d)	6.873 7.289	19,860 21,989
distribution reinvestment plan EIS securities converted/sold/forfeited	28/4/06 various	\$3.02	(f)	8,430 6,219	25,433 15,906
Balance of units at 30 June 2006				870.038	2.044.080

(c) Employee incentive scheme issues

During the financial year 5,097,057 ordinary stapled securities were issued to employees of Mirvac Limited and its related entities (2005: 3,036,745 ordinary stapled securities). The stapled securities were issued at market price.

The total of stapled securities issued to employees of Mirvac Limited under the Employee Incentive Scheme at 30 June 2006 is 20,585,830 (2005: 21,707,026). The market price per ordinary stapled security at 30 June 2006 was \$4.35 (2005: \$3.57).

Securities issued as part of the Mirvac EIS are not classified as ordinary securities, until such time as the employee loans are fully repaid or they leave the Mirvac Group.

(d) Distribution reinvestment plan

The distribution reinvestment plan was suspended on 6 June 2005 and recommenced operation from the December 2005 quarterly distribution.

Under the distribution reinvestment plan, unitholders of ordinary units may elect to have all or part of their distribution entitlements satisfied by the issue of new ordinary units rather than being paid in cash. Units issued under the plan were issued at a 2% discount to the market price.

22. Contributed equity (continued)

(e) Acquisition of James Fielding Trust

On 29 December 2004, the Mirvac Property Trust acquired the James Fielding Trust by way of issue of 0.73 Mirvac Property Trust unit for 1 James Fielding Trust unit. These securities were issued on 7 January 2005.

(f) Unit placement with institutions

Securities eligible for issue under the distribution reinvestment plan, and not taken up by unitholders, for the December 2005 and March 2006 quarter distributions, were placed with JP Morgan Australia Limited respectively, under underwriting agreements. The placement securities were issued at the same price as the distribution reinvestment plan issue.

(g) Reconciliation of securities issued on ASX

Under AIFRS, securities issued under the Mirvac Employee Incentive Scheme are required to be accounted for as an option and are excluded from total issued capital.

Total ordinary securities issued as detailed above is reconciled to securities issued on the Australian Stock Exchange (ASX) as follows:

	2006 Number	2005 Number
Total ordinary securities issued (AIFRS)	870,037,575	832,083,977
Securities issued under EIS	20.585.830	21.707.026
Total securities issued on ASX	890,623,405	853,791,003

23. Retained profits

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$'000

Retained profits at the beginning of the year	126,067	67.578	121.023	69,007
Adjustment on adoption of AASB 132 and AASB 139	(130)	$\mathbf{r}$
Net profit attributable to the unitholders of the Mirvac Property
Trust	376,633	218.333	305,890	211,860
Distributions provided for or paid	(161, 964)	(159, 844)	(161, 964)	(159,844)
Retained profits at the end of the year	340.606	126.067	264,949	121,023

24. Minority interest

Interest in:

179	$\sim$
	$\sim$
	10.197	10.018 $\boldsymbol{\pi}$ $\overline{\phantom{a}}$

25. Distributions

	2006 \$'000	2005 \$'000
Ordinary units
Quarterly ordinary distributions paid as follows:
4.65 cents per ordinary unit paid on 28 October 2005	39,933
4.98 cents per ordinary unit paid on 29 October 2004		35,851
4.65 cents per ordinary unit paid on 27 January 2006	39,936
4.98 cents per ordinary unit paid on 28 January 2005		36.284
4.65 cents per ordinary unit paid on 28 April 2006	40,681
5.16 cents per ordinary unit paid on 29 April 2005 4.65 cents per ordinary unit paid on 28 July 2006	41,414	43.654
5.16 cents per ordinary unit paid on 29 July 2005		44,055

Total distribution 18.60 cents per fully paid ordinary unit
(2005: 20.28 cents per ordinary unit)	161,964	159,844
Distributions actually paid or satisfied by the issue of units
under the group distribution reinvestment plans during the
years ended 30 June 2006 and 2005 were as follows:
Paid in cash	116,264	50.032
Satisfied by the issue of units	48,341	100.662
	164,605	150.694

26. Investments in associates

Investments in associates are accounted for in the combined financial statements using the equity method of accounting. Information relating to associates is set out below.

Name	Principal activities		Ownership interest		Consolidated		Parent Entity
		2006 %	2005 %	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
	Associates accounted for using the equity method:
JF Meridian Trust	Listed property trust	19.90%	18.97%	175,897	148.713	۰	$\mathbf{r}$
JFUS Industrial Trust	Listed property trust	4.90%	$\;$	19,555		18,136
				195.452	148.713	18.136	$\blacksquare$

Each of the above associates is incorporated in Australia.

Investments in associates (continued) 26.

$(a)$ Investment in associates accounted for in the combined financial statements using the equity method of accounting:

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$'000
Movements in carrying amounts:
Carrying amount at the beginning of the year	148,713	97,495
New investment during the reporting period	33,751	52,336
Share of profit from ordinary operating activities	22,348	3,962
Distributions received	(9,360)	(7, 818)
Share of increment on revaluation of investment properties		2,738
Balance at end of the financial year	195,452	148,713	$\overline{a}$

Results attributable to associates:
Profit from ordinary activities	22,348	3.962
Distributions received / receivable	(9,360)	(7, 818)
Transfer from reserves		1,136
Retained profits attributable to associates on acquisition of controlled entity	м	3,515
Retained profits attributable to associates at the end of the financial year	12,988	795	м.


Share of associates expenditure commitments
Capital commitments	4,693	1,306
Contingent liabilities

Summary of the performance and financial position of associates

The aggregate profits, assets and liabilities of associates are:

Revenue	245,818	134.534
Profit from ordinary activities	142,696	95,716	$\mathbf{r}$	$\mathbf{H}$
Total assets	2,087,142	923.639	$\tilde{ }$	$\mathbf{r}$
Total liabilities	912,819	230.951	$\overline{a}$	$\overline{\phantom{a}}$
Fair value of listed investments in associates
JF Meridian Trust	155,409	146.596	$\tilde{ }$	$\mathbf{r}$
JF US Industrial Trust	17,591	5.915	$\mathbf{r}$	$\overline{\phantom{a}}$

Investment in joint ventures 27.

Joint Venture Entities $(a)$

Joint Venture entities are equity accounted and are included in investments in Joint Ventures - refer note 13.

		Ownership interest 2006 ℅	Consolidated Ownership Interest			Parent Entity
			2005 %	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
	Joint Ventures accounted for using equity method:
197 Salmon Street Trust	-Property investment	50.0%	50.0%	53,933	11.183	٠	$\cdot$
Old Wallgrove Road Trust	-Property investment	50.0%	50.0%	7,500	8.100	۰	$\overline{\phantom{a}}$
Notron No 346 Trust	-Hotel investment	50.0%	50.0%	17.861	4.156	16.797	4,156
Mirvac ARF Trust	-Property investment	50.0%		18,756		20,471
				98,050	23,439	37.268	4,156

$(b)$ Joint Venture Entities

Aggregated information relating to the above joint venture entities is set out below:

	Consolidated		Parent Entity
	2006 \$000	2005 \$'000	2006 \$000	2005 \$000
Movement in carrying amount of investment in entities
Carrying amount at the beginning of the financial year	23.439
Investment acquired as part of acquisition of controlled entity	٠	14.303
New capital contributions	72.140	4.156
Distributions received	(3,243)	(463)
Decrement against carrying value of entity	(599)
Share of operating profits	6.313	5,443
Carrying amount at the end of the financial year	98,050	23,439

Joint Venture Entities - Aggregate share of Entities' Assets and Liabilities

Current assets	22.155	903
Non-current assets	249.685	108.468
Total assets	271.840	109.371
Current liabilities	3.834	79.981
Non-current liabilities	83.965	$\cdot$	- 44
Total liabilities	87.799	79.981
Net Assets	184.041	29,390

Aggregate share of entities' revenues, expenses and results

Revenues Expenses	15,983 3,357	2.943 1.074	- 4 - 4
Profit before income tax	12.626	1.869
Share of joint venture expenditure commitments: Capital commitments Contingent liabilities of joint ventures: Contingent liabilities	2.700 $\sim$	43.747	- 4 - 4

Contingent liabilities 28.

	Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Contingent liabilities in respect of certain performance quarantees granted in the normal course of business	10.700	19.660	10.700

No material losses are anticipated in respect of these contractual obligations.

Commitments 29.

Capital commitments

	Consolidated		Parent Entity
	2006	2005	2006
	\$'000	\$000	\$'000	\$'000
Investment properties
Not later than one year	288,751	236.648	76.537	236,648
Later than one year but not later than 5 years		181,994		25,985
Later than 5 years	×.		۰.
	288,751	418,642	76.537	262,633

30. Key management personnel disclosures

$(a)$ Directors

The following persons were directors of Mirvac Funds Limited during the financial year:

Chairman - non-executive

J A C MacKenzie (appointed chairman on 10 November 2005) (appointed Director on 7 January 2005) A J Lane (retired 10 November 2005)

Executive Directors

G J Paramor, Managing Director (appointed 7 January 2005)

R J Hamilton (resigned 10 November 2005)

D J Broit (resigned 23 February 2006)

N R Collishaw (appointed 19 January 2006)
A G Fini (appointed 19 January 2006)

Non-executive Directors

P J Biancardi (appointed 1 July 2001) P J O Hawkins (appointed 19 January 2006) P Morris (appointed 19 January 2006)
R W Turner (appointed 7 January 2005)
A Buduls (resigned 29 July 2005)
R A Fortune (resigned 10 November 2005)
G H Levy (resigned 23 February 2006)

$(b)$ Other key management personnel

The following persons also had authority and responsibility for planning, directing and controlling the activities of the consolidated entity, directly or indirectly, during the financial year:

Name	Position	Employer
M V O'Brien	Chief Executive NSW Development	Mirvac Projects Pty Limited
C Freeman	Chief Executive Queensland	Mirvac Projects Pty Limited
RPLynch	Chief Executive Mirvac Homes NSW	Mirvac Constructions Pty Limited
B Draffen	Chief Executive Victoria	Mirvac Projects Pty Limited
A Harrington	Chief Executive Funds Management	Mirvac Projects Pty Limited
A Turner	Chief Executive Hotels	Mirvac Projects Pty Limited
T J Regan	Chief Financial Officer	Mirvac Projects Pty Limited

All of the above persons, except T J Regan, were also key management persons during 2005.

C Langford, Chief Executive Retail Projects, and I Costley, Chief Executive NSW Development, were key management personnel for the year ended 30 June 2005.

A G Fini and N R Collishaw were also key management persons during 2005, until their appointment as Executive Directors.

$(c)$ Key management personnel compensation

Key management personnel are employed by Mirvac Projects Pty Ltd. Payments made from the consolidated entity to Mirvac Funds Limited do not include any amounts directly attributable to the compensation of key management personnel.

Key management personnel disclosures (continued) 30.

$(d)$ Equity instrument disclosures relating to key management personnel

Key management personnel unitholdings

The number of ordinary securities in the Trust held during the financial year by each director and other key management personnel, including their personally-related parties, are set out below:

	Balance at start	Units issued under EIS		Balance at
2006	of the year		Other changes	end of the year
Directors
R J Hamilton	3,201,498		(3,201,498)
BHRNeil	32,568		(32, 568)
P J Biancardi	7,000			7,000
D J Broit	1,058,429		(1,058,429)
R A Fortune	1,156,479		(1, 156, 479)
A J Lane	67,649		(67, 649)
A Buduls	8,568		(8,568)
G H Levy	37,654		(37, 654)
G J Paramor	5,351,821	63,117		5,414,938
J A C MacKenzie	51.929		916	52,845
R W Turner	64,396		554	64,950
N R Collishaw	1,310,233	61,516		1,371,749
A G Fini	6,315,921	61,516	(271, 762)	6,105,675
P J O Hawkins			9,000	9,000

Other key personnel
B Draffen	49,729	61,516	(32, 722)	78,523
C Freeman	440.671	61,516	(249, 815)	252,372
A Harrington	837.803	49,213		887,016
$R$ P Lynch	854.925	61,516	(207, 895)	708,546
M V O'Brien	86,765	61,516	(148, 281)
T J Regan	971,803	61,516	(300, 203)	733,116
A Tumer	609,086	24,606		633,692

30. Key management personnel disclosures (continued)

(d) Equity instrument disclosures relating to key management personnel

2005	Balance at start of the year	Units issued under EIS.	Other changes	Balance at end of the year

Directors
RJ Hamilton	13,199,132		(9,997,634)	3,201,498
BHR Neil	1,259,357		(1,226,789)	32,568
P J Biancardi	7,000			7,000
D J Broit	1,061,053		(2,624)	1,058,429
R A Fortune	1,135,713		20,766	1,156,479
A J Lane	67,649			67,649
A Buduls	8,099		469	8,568
G H Levy	35,597		2,057	37,654
RJ Webster	12,911		248	13,159
G J Paramor			5,351,821 ¹	5,351,821
J A C MacKenzie			$51,929$ ¹	51,929
R W Turner			64,396 ¹	64,396
Other key personnel
N R Collishaw			$1,310,233$ ¹	1,310,233
B Draffen	32,722	17,007		49,729
A G Fini	95,320	45,351	6,175,250	6,315,921
C Freeman	395,320	45,351		440,671
A Harrington			837,803	837,803
CD Langford	56,677	22,676		79,353
R P Lynch	595,320	45,351	214,254	854,925
M V O'Brien	41,414	45,351		86,765
A Turner	404.176	11.338	193.572	609.086

¹ Converted into Mirvac securities on the acquisition of the James Fielding Trust

30. Key management personnel disclosures (continued)

$(f)$ Loans to directors and key management personnel

The consolidated entity has not mad, guaranteed or secured, directly or indirectly, any loans to the key management personnel or their personally related entities at any time during the year.

Other transactions key management personnel $(q)$

The Directors of Mirvac Funds Limited have the ability to utilise the facilities of the hotels under management at rates offered to all employees.

One Director, Mr G Paramor, is a Director of Leighton Properties Pty Limited to which property development fees were paid.

One Director, Mr J A C MacKenzie is a consultant for Deloitte to which advisory fees have been paid.

A company associated with Mr A G Fini together with Mirvac Property Trust in joint venture interests in lots 2,3 and 4 of Inaloo Development Joint Venture as tenants in common to subdivide and develop the property.

31. Related parties

The responsible entity $(a)$

The Responsible Entity of the Trust is Mirvac Funds Limited, an entity incorporated in New South Wales. The immediate parent entity of the Responsible Entity is Mirvac Woolloomooloo Pty Limited, incorporated in New South Wales and its ultimate parent entity is Mirvac Limited, incorporated in New South Wales.

$(b)$ Directors and key management personnel

Disclosures relating to directors and specified executives are set out in note 30.

Responsible entity's fee $(c)$

As outlined in the Explanatory Memorandum dated 4 May 1999, as part of the merger of the Mirvac Group, Mirvac Funds Limited reduced its Responsible Entity fees to a recovery of cost basis. Fees charged by Mirvac Funds Limited for the year to 30 June 2005 were \$1,592,000 (30 June 2005: \$1,220,000) in accordance with the terms contained in the merger proposal in 1999.

d) Controlled entities

Interests in controlled entities are set out in note 13.

Kev management personnel e)

Disclosures relating to key management personnel are set out in note 30.

$f$ Transactions with related parties

The following transactions occurred with related parties:

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$'000	\$000	\$'000	\$'000
Revenue and other income
Rental income from entities related to responsible entity Interest received from entities related to responsible	21,964	20.766	15,445	13.948
entity	13,717		4,802
Expenses Interest paid to entity related to responsible entity	33.661	34,143	24.744	24.533
Property management fee expense	11,870	10.572	7.567	7.344
Capital expenditure to entities related to responsible entity	184.291	35,548	182.921	35,548

31. Related parties (continued)

Terms and conditions $g)$

All other transactions were made on normal commercial terms and conditions and at market rates, except that there are no fixed terms for the repayment of loans between the parties, and the loans are interest free.

32. Remuneration of auditors

During the year the following fees were paid or payable for services provided by the auditor of the consolidated entity, its related practices and non-related audit firms:

	Consolidated		Parent entity
	2006	2005	2006	2005
(a) Assurance services	\$'000	\$'000	\$'000	\$'000
Audit services PricewaterhouseCoopers Australian firm Audit and review of financial reports and other audit work under the Corporations Act 2001	410.000	225,000	370,000	155,000
Total remuneration for audit services	410.000	225,000	370,000	155,000
Other assurance services PricewaterhouseCoopers Australian firm Audit of regulatory returns	46.040	32,500	26,000	13.000
Audit of property outgoings statement Due diligence services	83,420	76.900 47.200	46,050	55,500 47,200
IFRS accounting services	37,500		37.500
Total remuneration for other assurance services	166.960	156,600	109,550	115,700
Total remuneration for assurance services	576,960	381,600	479,550	270,700
Taxation services (b)
PricewaterhouseCoopers Australian firm Tax compliance services, including review of company income tax returns	108.710	76,100	19,550	15,800
International tax consulting and tax advice on mergers and acquisitions	29.712	49.600	29.712	49,600
Total remuneration for taxation services	138.422	125,700	49.262	65,400

33. Note to the cash flow statement

	Consolidated		Parent Entity
	2006	2005	2006	2005
	\$000	\$000	\$000	\$000
a) Reconciliation of cash
For the purposes of the statement of cash flows, cash includes cash at bank, cash on hand and investments in money market instruments.
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the balance sheet as follows:
Cash at bank & on hand	4,192	19,824	204	8,602
Balance per statement of cash flows	4,192	19,824	204	8,602
b) Reconciliation of net cash inflows from operating activities to profit after tax
Net profit	377,439	218.736	305,890	211,860
Revaluation of investment properties	(180, 154)	(56, 952)	(117, 164)	(56, 916)
Amortisation	9,273	6,442	5,470	4,084
Unrealised gain on financial instruments - net	(8, 391)		(6, 516)
(Profit)/Loss on sale of investment properties	(5,203)		(3,258)
Share of profits of associates and joint ventures not received as distributions	(16,059)	(3,862)
Change in operating assets and liabilities, net of effects from purchase of controlled entity -
(Increase)/Decrease in receivables	(10, 032)	(9,420)	(32, 365)	(30, 626)
Decrease/(Increase) in other assets	(4, 414)		(3,949)
(Decrease)/Increase in creditors	5,079	6,480	10,744	944
(Decrease) in other provision			(3,441)
Net cash inflows from operating activities	167,538	161.424	155,411	129,346

34. Events occurring after reporting date

No circumstances have arisen since the end of the financial year which have significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

35. Explanation of transition to Australian equivalents to IFRSs

Reconciliation of equity reported under previous Australian Generally Accepted Accounting
Principles (AGAAP) to equity under Australian equivalents to IFRS's (AIFRS). $(1)$

At the date of transition to AIFRS: 30 June 2004 $(a)$

			Consolidated			Parent entity
			Effect of			Effect of
		Previous	Transition		Previous	Transition
		AGAAP	to AIFRS	AIFRS	AGAAP	to AIFRS	AIFRS
	Note	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
CURRENT ASSETS
Cash and cash equivalents		85,122		85,122	81,934		81,934
Receivables	4(iii)	11,938		11,938	21,537	÷	21,537
TOTAL CURRENT ASSETS		97,060	٠	97,060	103,471	٠	103,471
NON-CURRENT ASSETS
Receivables					66,039		66,039
Other financial assets					692,714		692,714
Property, plant and equipment			42,969	42,969		42,969	42,969
Investment properties	4(i)	2,205,128	(42,969)	2,162,159	1,279,321	(42,969)	1,236,352
Other	4(iv)	5,132	(3,379)	1,753	3,173	(1,950)	1,223
TOTAL NON-CURRENT ASSETS		2,210,260	(3, 379)	2,206,881	2,041,247	(1,950)	2,039,297
TOTAL ASSETS		2,307,320	(3, 379)	2,303,941	2,144,718	(1,950)	2,142,768
CURRENT LIABILITIES
Payables	4(iii)	161,916	43.749	205,665	150,313	43,749	194,062
Interest bearing liabilities		53,000		53,000	53,000		53,000
Provisions		34,913		34,913	34,913		34,913
TOTAL CURRENT LIABILITIES		249,829	43,749	293,578	238,226	43,749	281,975
NON-CURRENT LIABILITIES
Interest bearing liabilities		482,000		482,000	331,000	$\tilde{\phantom{a}}$	331,000
TOTAL NON-CURRENT LIABILITIES		482,000		482,000	331,000		331,000
TOTAL LIABILITIES		731,829	43,749	775,578	569,226	43,749	612,975
NET ASSETS		1,575,491	(47, 128)	1,528,363	1,575,492	(45,699)	1,529,793
EQUITY
Contributed equity		1,504,534	(43, 749)	1,460,785	1,504,535	(43, 749)	1,460,786
Reserves	4(i)	70,957	(70, 957)		70,957	(70, 957)
Undistributed income	4(vi)		67,578	67,578		69,007	69,007
Total parent entity interest		1,575,491	(47, 128)	1,528,363	1,575,492	(45, 699)	1,529,792
Minority interest
TOTAL EQUITY		1,575,491	(47, 128)	1,528,363	1,575,492	(45,699)	1,529,793

Explanation of transition to Australian equivalents to IFRSs (continued) 35.

At the end of the last full year reporting period under previous AGAAP: 30 June 2005 $(b)$

		Previous	Consolidated Effect of Transition		Previous AGAAP	Parent entity Effect of Transition to	AIFRS
	Note	AGAAP \$'000	to AIFRS \$'000	AIFRS \$'000	\$'000	AIFRS \$'000	\$'000
CURRENT ASSETS Cash and cash equivalents Receivables	4(iii)	19,824 160,930		19,824 160,930	8,602 169,387		8,602 169,387

TOTAL CURRENT
ASSETS		180,754		180,754	177,989		177,989
NON- CURRENT ASSETS Investments accounted for using the equity method		172,152		172,152
Other financial assets Property,	4(ii)	26,870		26,870	1,074,556		1,074,556
plant and equipment			118,282	118,282		77,049	77,049
Investment properties Intangible		2,604,179	(118, 282)	2,485,897	1,442,251	(77,049)	1,365,202
assets		48,589	1,246	49,835
Other		6,503	(4,709)	1,794	3,676	(3,081)	595
TOTAL NON- CURRENT ASSETS		2,858,293	(3,463)	2,854,830	2,520,483	(3,081)	2,517,402

TOTAL ASSETS		3,039,047	(3, 463)	3,035,584	2,698,472	(3,081)	2,695,391
CURRENT LIABILITIES
Payables Interest	4(ii)	168,887	58,596	227,483	153,222	58,596	211,818
bearing liabilities		535,000		535,000	384,000		384,000
Provisions		44,063		44,063	44,063		44,063
TOTAL CURRENT LIABILITIES		747,950	58,596	806,546	581,285	58,596	639,881
NON- CURRENT LIABILITIES Interest bearing liabilities		158,300		158,300
TOTAL NON- CURRENT		158,300		158,300
LIABILITIES
TOTAL		906,250	58,596	964,846	581,285	58,596	639,881

LIABILITIES

NET ASSETS		2,132,797	(62, 059)	2,070,738	2,117,187	(61, 677)	2,055,510
EQUITY Contributed
equity		1,993,070	(58, 596)	1,934,474	1,993,083	(58, 596)	1,934,487
Reserves	4(i)	129,530	(129, 530)	$\overline{\phantom{a}}$	124.104	(124, 104)
Undistributed income	4(vi)	$\blacksquare$	126,067	126.067		121,023	121,023
Total parent
entity interest Minority		2,122,600	(62, 059)	2,060,541	2.117,187	(61, 677)	2,055,510
interest		10,197	$\blacksquare$	10,197	$\mathbf{r}$	$\mathbf{r}$
TOTAL EQUITY		2.132.797	(62, 059)	2,070,738	2,117,187	(61, 677)	2,055,510

Explanation of transition to Australian equivalents to IFRSs (continued) 35.

$(2)$ Reconciliation of profit under previous AGAAP to profit under Australian equivalents to IFRSs (AIFRS)

		Consolidated	Parent Entity 30 June 2005
		30 June 2005
	Note	\$'000	\$'000
Net profit under previous AGAAP		156.438	157,685
AIFRS adjustments:
Net gains from fair value adjustments to investment properties	4(i), (iv)	56.952	56,916
Amortisation of lease incentives	4(iv)	(4,021)	(2,741)
Reversal of goodwill amortisation	4(ii)	1,246
Adjusted share of net profit of associates due to reversal of
valuation on investment properties from reserves	4(i)	7.718

Net profit under AIFRS		218.333	211.860

$(3)$ Reconciliation of cash flow statement for the year ended 30 June 2005

The adoption of AIFRS's has not resulted in any material adjustments to the cash flow statement.

$(4)$ Notes to the reconciliation

$(i)$ Investment Properties

Under AASB 140 Investment Property, the consolidated entity has elected to measure investment properties at fair value, with any gain or loss arising from changes in fair value, net of applicable tax, recognised through the income statement.

This has resulted in a change to the previous accounting policy under which changes in the fair value of investment properties are recognised in the asset revaluation reserve, with no provision recognised for tax unless it is expected that a liability for tax will crystallise.

In addition the carrying value of investment properties recorded in the balance sheet is inclusive of components relating to lease incentives. Under AGAAP rent free incentives were separately categorised on the balance sheet (i.e. in addition to the carrying value).

On transition to AIFRS, fair value adjustments for investment properties recorded in the asset revaluation reserve have been reclassified to retained earnings.

Property intended for sale in the ordinary course of business are not classified as investment properties but are classified as non-current assets held for sale. Investment properties in the process of construction and land held for development at cost are classified as property plant and equipment.

35. Explanation of transition to Australian equivalents to IFRSs (continued)

$(ii)$ Intangible Assets - Goodwill

Under AASB 3 Business Combinations, amortisation of goodwill is prohibited, and has been replaced by annual impairment testing focusing on the cash flows of the related cash generating unit or groups of cash generating units. This has resulted in a change to the previous AGAAP accounting policy, under which goodwill was amortised on a straight line basis over the period during which the benefits were expected to arise and not exceeding 20 years.

The consolidated entity has applied the exemption available in AASB 1, allowing it not to apply AASB 3 retrospectively and hence, prior years amortisation has not been written back at the date of transition, however amortisation from transition date to 30 June 2005 has been added back.

$(iii)$ Financial Instruments

The consolidated entity has taken advantage of the exemption available under AASB 1: First-time adoption of Australian Equivalents to International Financial Reporting Standards, to apply AASB 132 and AASB 139 only from 1 July 2005. This allows the consolidated entity to apply previous AGAAP to the comparative information of financial instruments within the scope of AASB 132 and AASB 139 for the half year ending 31 December 2005 and full year ending 30 June 2006 financial statements.

Under AIFRS financial instruments will generally be recognised at fair value in the balance sheet. Derivatives taken out to reduce exposure to fluctuations in floating interest rates may be accounted for as cash flow hedges provided that the hedge designation, documentation and effectiveness tests can be met. If these tests are satisfied the derivative is measured at fair value and gains and losses are reflected directly in equity until the hedged transaction occurs, when they are released to the income statement. To the extent that the hedges do not satisfy the above tests, then a corresponding portion of the gain or loss is reflected in the income statement directly.

On adoption of AASB 139 as at 1 July 2005, an adjustment to decrease retained earnings of \$130,000 has been recognised as the consolidated entity has assessed hedges not to be effective.

At the date of transition to these standards at 1 July 2005, equity securities with a carrying value of \$20,955 that were classified in the balance sheet under previous AGAAP as non-current other financial assets, were designated and re-classified as other financial assets at fair value through profit and loss.

$(iv)$ Equity-based Compensation Benefits

Equity issued under the Employee Incentive Scheme that are non-recourse and held in trust have been derecognised on entry into AIFRS.

$(v)$ Lease incentives

Under AIFRS, all lease incentives provided under an operating lease are required to be recognised as an expense on a straight-line basis against rental income and are recognised as an asset in the consolidated balance sheet as a component of the carrying amount of investment properties.

This differs from the previous accounting policy, under which rent free incentives were separately classified as a receivable and amortised, and fitout incentives were capitalised as part of investment properties but were not amortised.

The amortisation of lease incentives has been offset by an adjustment to income from the revaluation of investment properties in order to maintain the fair value of investment properties. Such treatment results in no net impact on total equity at 1 July 2004, nor net profit for the year ended 30 June 2005.

Explanation of transition to Australian equivalents to IFRSs (continued) 35.

$(vi)$ Retained earnings

The effect on retained earnings of the changes set out above are as follows:

		Consolidated		Parent entity
	Note	1 Jul 2004 \$'000	30 Jun 2005 \$'000	1 Jul 2004 \$'000	30 Jun 2005 \$'000

Write-back of goodwill amortisation	4(ii)		1.246	$\mathbf{r}$	$\overline{r}$
Amortisation of lease incentives	4(iv)	(7, 282)	(11, 439)	(5,287)
Revaluation investment properties (offset amortisation of lease incentives)	4(iv)	7,282	11,439	5,287
Transfer from reserves	4(i)	70.957	129,530	70.957	124.104
Devaluation of deferred leasing costs	4(i)	(3,379)	(4,709)	(1,950)	(3,081)
Total increase		67,578	126,067	69,007	121,023

Explanation of transition to Australian equivalents to IFRSs (continued) 35.

Adjustments on transition to AASB 132 Financial Instruments: Disclosure and Presentation and $(5)$ AASB 139 Financial Instruments: Recognition and Measurement: 1 July 2005

		Consolidated			Parent entity
	Note	30 June 2005 \$'000	Adjustment \$'000	1 July 2005 \$'000	30 June 2005 \$'000	Adjustment \$'000	1 July 2005 \$'000
CURRENT ASSETS
Cash and cash equivalents Other assets at fair value through		19,824		19,824	8,602		8,602
profit or loss account	4(iii)		20,955	20,955
Receivables		160,930		160,930	169,387	w.	169,387
TOTAL CURRENT ASSETS		180,754	20,955	201,709	177,989	٠	177,989

NON-CURRENT ASSETS
Derivative financial instruments Investments accounted for using	4(ii)		224	224
the equity method	4(iii)	172,152	(20, 955)	151,197
Other financial assets		26,870		26,870	1,074,556		1074,556
Property, plant and equipment		118,282		118,282	77,049		77,049
Investment properties		2,485,897		2,485,897	1,365,202		1,365,202
Intangible assets Other		49,835 1,794		49,835 1,794	595		595

TOTAL NON-CURRENT ASSETS		2,854,830	(20, 731)	2,834,099	2,517,402		2,517,402
TOTAL ASSETS		3,035,584	224	3,035,808	2,695,391		2,695,391

CURRENT LIABILITIES Payables		227,483		227,483	211,818		211,818
Derivative financial instruments	4(ii)		354	354
Interest bearing liabilities		535,000		535,000	384,000		384,000
Provisions		44,063		44,063	44,063		44,063
TOTAL CURRENT LIABILITIES		806,546	354	806,900	639,881	×	639,881

NON-CURRENT LIABILITIES
Interest bearing liabilities		158,300	$\overline{\phantom{a}}$	158,300
TOTAL NON-CURRENT LIABILITIES		158,300	$\overline{\phantom{a}}$	158,300		4

TOTAL LIABILITIES		964,846	354	965,200	639,881	٠	639,881
NET ASSETS		2,070,738	(130)	2,070,608	2,055,510	a,	2,055,510

EQUITY
Contributed equity		1,934,474	۰	1,934,474	1,934,487		1,934,487
Undistributed income Total parent entity interest	4(iii)	126,067 2,060,541	(130)	125,937 2,060,411	121,023 2,055,510		121,023
Minority interest		10,197	(130)	10,197			2,055,510
TOTAL EQUITY		2,070,738	(130)	2,070,608	2,055,510	a,	2,055,510

Refer to notes 1(a), 1(j) and 1(k) for further information on the transition to AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement on 1 July 2005.

Mirvac Property Trust and its controlled entities Directors' declaration

For the Year Ended 30 June 2006

In the Directors' opinion:

$(a)$ the financial statements and the additional disclosures included in the Directors' report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001, including:
$(i)$ complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
$(ii)$ giving a true and fair view of the consolidated entity's financial position as at 30 June 2006 and of its performance, as represented by the results of their operations, changes in equity and their cash flows, for the financial vear ended on that date; and
$(b)$ there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable: and

The directors have been given the declarations by the Managing Director and Chief Financial Officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Directors.

G J Paramor Director

Sydney 31 August 2006

PRICEWATERHOUSE COPERS

Independent audit report to the unitholders of Mirvac Property Trust

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Audit opinion

In our opinion, the financial report of Mirvac Property Trust:

gives a true and fair view, as required by the Corporations $Act 2001$ in Australia, of the financial position of Mirvac Property Trust and Mirvac Property Trust Group (defined below) as at 30 June 2006, and of their performance for the year ended on that date, and
$\bullet$ is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001

Scope

The financial report and directors' responsibility

The financial report comprises the balance sheets, income statements, cash flow statements, statements of changes in equity, accompanying notes to the financial statements, and the directors' declaration for both Mirvac Property Trust (the trust) and the Mirvac Property Trust Group (the consolidated entity), for the year ended 30 June 2006. The consolidated entity comprises both the trust and the entities it controlled during the year.

The directors of the Mirvac Funds Limited, the responsible entity of the trust, are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit in order to express an opinion to the unitholders of the trust. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the trust's and the consolidated entity's financial position, and of their performance as represented

PRICEWATERHOUSE COPERS

by the results of their operations, changes in equity and cash flows. We formed our audit opinion on the basis of these procedures, which included;

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Prixevatataren (copes.

PricewaterhouseCoopers

$M$ $U_1$

Mark Haberlin Partner

Sydney 31 August 2006

AI assistant

MIRVAC GROUP — Regulatory Filings 2006

65328_rns_2006-09-06_61169f9a-14c5-483e-916c-301586a45a57.pdf

MEDIA and STOCK EXCHANGE ANNOUNCEMENT

7 SEPTEMBER 2006

2006 Annual Financial Report

Mirvac Property Trust(ARSN 086 780 645)and its controlled entities

Annual Financial Report30 June 2006

Contents

Mirvac Property Trust and its controlled entities Directors' Report

Responsible entity

Directors

Principal activities

Distributions

Review of operations

Highlights

Mirvac Property Trust and its controlled entities Directors' Report (continued)

Value of assets

Significant changes in state of affairs

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental requlations

Fees paid to the responsible entity or its associates

Mirvac Property Trust and its controlled entities Directors' Report (continued)

Directors' interests

Options over unissued units

Mirvac Property Trust and its consolidated entities Directors' Report (continued)

Insurance of officers

Auditor independence declaration

Rounding of amounts

PRICEWATERHOUSE COPERS

PricewaterhouseCoopers ABN 52 780 433 757

Auditor's Independence Declaration

Mirvac Property Trust and its consolidated entitiesIncome Statements For the Year Ended 30 June 2006

Earnings per unit for net profit attributable to theunitholders of the Mirvac Property Trust

Mirvac Property Trust and its consolidated entitiesBalance Sheets As at 30 June 2006

Mirvac Property Trust and its consolidated entitiesStatements of Changes in EquityFor the Year Ended 30 June 2006

Mirvac Property Trust and its consolidated entitiesCash Flow Statements For the Year Ended 30 June 2006

$\ddagger$ Summary of significant accounting policies

"The Mirvac Group" - Stapled Securities

$(a)$ Basis of preparation of financial report

Compliance with IFRSs

Application of AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards (AIFRS)

Summary of significant accounting policies (continued) $\mathbf{1}$ .

$(a)$ Basis of preparation of financial report (continued)

Historical cost convention

Critical accounting estimates

$(b)$ Principles of consolidation

$(i)$ Controlled entities

$(ii)$ Associates

Summary of significant accounting policies (continued) $\ddagger$ .

$(b)$ Principles of consolidation (continued)

$(iii)$ Joint ventures

Joint venture entities

$(c)$ Foreign currency translation

Functional and presentation currency $(i)$

$(ii)$ Transactions and balances

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(d)$ Revenue recognition

$\left( i\right)$ Rental income

$(ii)$ Recoverable outgoings

$(iii)$ Interest

Business combinations $(e)$

$(f)$ Impairment of assets

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(g)$ Cash and cash equivalents

$(h)$ Trade receivables

Non-current assets held for sale $(i)$

$\ddagger$ . Summary of significant accounting policies (continued)

$(i)$ Investments and other financial assets

From 1 July 2004 to 30 June 2005

From 1 July 2005

Financial assets at fair value through profit or loss $\left( n\right)$

Loans and receivables $(ii)$

$(iii)$ Available-for-sale financial assets

$\mathbf{1}$ . Summary of significant accounting policies (continued)

$(k)$ Derivatives

From 1 July 2004 to 30 June 2005

Interest rate swaps

Adjustments on transition date: 1 July 2005

MIRVAC GROUP Regulatory Filings 2006

Mirvac Property Trust
(ARSN 086 780 645)
and its controlled entities

Annual Financial Report
30 June 2006

Mirvac Property Trust and its consolidated entities
Income Statements For the Year Ended 30 June 2006

Earnings per unit for net profit attributable to the
unitholders of the Mirvac Property Trust

Mirvac Property Trust and its consolidated entities
Balance Sheets As at 30 June 2006

Mirvac Property Trust and its consolidated entities
Statements of Changes in Equity
For the Year Ended 30 June 2006

Mirvac Property Trust and its consolidated entities
Cash Flow Statements For the Year Ended 30 June 2006