Responsible Entity Retail Responsible Entity Limited · Manager Limited occurred on 23 November 2011. Change of Responsible Entity to Retail Responsible Entity Limited On 11 January

Centro MCS 28 and Controlled EntitiesARSN 103 353 055

Responsible EntityRetail Responsible Entity LimitedABN 80 145 213 663

Financial reportfor the year ended 30 June 2012

PageCorporate directory 1Directors' report 2Auditor's independence declaration 8Financial report

Income statement 9Statement of comprehensive income 10Balance sheet 11Statement of changes in equity 12Cash flow statement 13Notes to the financial statements 14Directors' declaration 42

Independent auditor's report to the unitholders 43

This financial report covers Centro MCS 28 (''CMCS 28'', "the Trust", "the Syndicate" or "the Parent") and its controlledentities (''the Group'' or ''CMCS 28 Group''). The financial report is presented in Australian currency.

Centro MCS 28 is a trust, established and domiciled in Australia. The registered office and principal place of business ofthe Responsible Entity is:

3rd Floor, Centro The Glen235 Springvale RoadGlen WaverleyVictoria 3150

A description of the nature of CMCS 28 Group's operations and its principal activities is included in the Directors' report onpage 2.

The financial report was authorised for issue by the Directors of the Responsible Entity on 13 September 2012. TheResponsible Entity has the power to amend and reissue the financial report.

All press releases, financial reports and other information are available on our website: www.centromcs.com.au

http://www.centromcs.com.au

Centro MCS 28 and Controlled EntitiesCorporate directory

30 June 2012

Responsible Entity Retail Responsible Entity LimitedA.B.N. 80 145 213 663

3rd Floor, Centro The Glen235 Springvale RoadGlen Waverley, VIC 3150Telephone: (03) 8847 0000

Barry McWilliams (Chairman)Peter DayPeggy HainesTim HammonJan West

Secretaries of the Responsible Entity Elizabeth HouriganDimitri Kiriacoulacos

Auditor Ernst & YoungErnst & Young Building8 Exhibition StreetMelbourne, VIC 3000

Security Registry Link Market Services LimitedLevel 4, 333 Collins StreetMelbourne, VIC 3000

-1-

Centro MCS 28 and Controlled EntitiesDirectors' report

30 June 2012

Directors' reportThe Directors of Retail Responsible Entity Limited, the Responsible Entity, present their report on Centro MCS 28 (''CMCS28'', "the Trust", "the Syndicate" or "the Parent") and its controlled entities (''the Group'' or ''CMCS 28 Group'') for the yearended 30 June 2012.

Responsible EntityCPT Manager Limited was appointed as the Responsible Entity of CMCS 28 Group on 17 January 2003.

Change of Responsible Entity to Centro MCS Manager Limited

On 9 August 2011, an application was made to the Australian Securities and Investments Commission (“ASIC”) for relieffrom the requirement to hold a meeting of investors to approve the change of Responsible Entity from CPT ManagerLimited to Centro MCS Manager Limited, both 100% owned subsidiaries of Centro Properties Group (“CNP”). This reliefwas granted by ASIC and investors were notified of the proposed change of Responsible Entity and their right to still call ameeting of investors.

As no meeting was requested by investors, the change of Responsible Entity from CPT Manager Limited to Centro MCSManager Limited occurred on 23 November 2011.

Change of Responsible Entity to Retail Responsible Entity Limited

On 11 January 2012, an application was made to ASIC for relief from the requirement to hold a meeting of investors toapprove the change of Responsible Entity from Centro MCS Manager Limited to Retail Responsible Entity Limited, both100% owned subsidiaries of Centro Retail Australia (“CRF”). This relief was granted by ASIC and investors were notifiedof the proposed change of Responsible Entity and their right to still call a meeting of investors.

As no meeting was requested by investors, the change of Responsible Entity from Centro MCS Manager Limited to RetailResponsible Entity Limited occurred on 10 May 2012.

The registered office and principal place of business of Retail Responsible Entity Limited is 3rd floor, Centro The Glen, 235Springvale Road, Glen Waverley, VIC 3150.

DirectorsThe following persons were Directors of CPT Manager Limited from 1 July 2011 and up to 23 November 2011 (the date ofthe change in the Responsible Entity):

Paul Cooper (Chairman)Robert Tsenin (Managing Director)Anna BudulsJim HallSusan OliverRobert Wylie

The following persons were Directors of Centro MCS Manager Limited from 23 November 2011 and up to 10 May 2012(the date of the change in the Responsible Entity):

Peter Day (Chairman)Tim Hammon (Appointed 29 February 2012)Fraser MacKenzieRobert Tsenin (Appointed 14 December 2011, Retired 29 February 2012)Bill Bowness (Retired 14 December 2011)Anna Buduls (Retired 14 December 2011)Paul Cooper (Retired 14 December 2011)Michael Humphris (Retired 14 December 2011)

The following persons were Directors of Retail Responsible Entity Limited from 10 May 2012 and up to the date of thisreport (unless otherwise stated):

Barry McWilliams (Chairman)Peter DayPeggy HainesTim HammonJan West

Company SecretariesThe Company Secretaries of Retail Responsible Entity Limited are Elizabeth Hourigan and Dimitri Kiriacoulacos.

-2-


30 June 2012(continued)

Principal activitiesThe principal activity of CMCS 28 Group during the course of the year was investment in retail property.

There was no significant change in the nature of this activity during the year.

Review of operationsCMCS 28 Group

CMCS 28 Group recorded a net profit of $2.099 million for the year ended 30 June 2012 (2011: $21.589 million profit).

The movement in net profit for the year compared to the corresponding year is largely due to:

• Lower share of net profits from investments accounted for using the equity method due to lower revaluation gain in theunderlying property valuation of the Group's interest in equity accounted investments;

• Recognition of higher other Responsible Entity fees relating to the recognition of provision for performance feespayable to the manager, as a result of the Net Asset Backing ("NAB") now being higher than the fee threshold asprescribed per the Trust's Constitution;

• Higher financing costs and amortisation of upfront borrowing costs in relation to debt refinancing; and• The net loss on derivative financial instruments due to the early termination of the interest rate swap contract during

the year.

Distributions and return of capital attributable to unitholdersCMCS 28 GroupDistributions paid/payable to unitholders are in line with an expected annual rate of 2.00% (2011: 2.00%).

Final distribution of 0.50 cents per unit have been paid for the quarter ended 30 June 2012. Distributions paid or payableto unitholders for the year, including capital distributions, totalled $9.971 million (2011: $1.899 million). Distributions paidor to be paid in respect of the current financial year ended 30 June 2012 are as follows:

Quarter Cents per unit Date paidSeptember 2011 0.50 24 October 2011December 2011 0.50 23 January 2012March 2012 0.50 23 April 2012June 2012 0.50 23 July 2012

2.00

February 2012 - Return of capital 8.50 10 February 2012Total paid/payable to unitholders 10.50

The tax components of the annual distribution are set out below:

Cents per unitTaxable income -Tax deferred component 10.50Net distribution per unit 10.50

Significant changes in the state of affairsDuring the year the following significant changes in the state of affairs occurred:

Major Restructure Developments

On 9 August 2011, Centro Properties Group (“CNP”) announced that it had entered into an agreement (“ImplementationAgreement”) with a majority of its senior lenders and certain CNP managed funds to aggregate Australian assets andinterests held by CNP, Centro Retail Trust and certain CNP managed funds (excluding Centro MCS Syndicates) to form anew listed entity, CRF (“Aggregation”).

The unitholders of all the entities forming this aggregation voted in favour of the restructure. Accordingly, upon satisfyingall regulatory and other conditions, on 1 December 2011, court approval was obtained for the formation of CRF, withAggregation occurring on 14 December 2011.

Amongst other terms, the Implementation Agreement contained the following provisions:

• The transfer of ownership and control of Centro MCS Manager Limited, the former Responsible Entity of CMCS28 Group, from CNP to CRF, whereby it became a wholly-owned subsidiary of CRF; and

• The transfer of the CMCS 28 related party loan from CNP to CRF on the same terms and conditions.

-3-



Significant changes in the state of affairs (continued)Subsequent to Aggregation, Centro MCS Manager Limited was replaced by Retail Responsible Entity Limited as theResponsible Entity of CMCS 28 Group on 10 May 2012.

Following Aggregation CNP changed its name to CNPR Group on 23 December 2011.

Disposal of investment in unlisted unit trust

CMCS 28 Group owns 100% of the units in CMCS 28 Centro City Perth Holding Trust, the principal underlying asset ofwhich was 50% ownership in the Perth City Central Shopping Centre. Perth City Central Shopping Centre (100% interest)was sold on 24 January 2012 for a consideration of $57.000 million. The Group's share of the net proceeds from this salewas largely used to pay-down the Group's debt of $15.900 million on the same date and pay a special distribution of 8.50cents per unit of $8.072 million to the Group investors and Equity noteholders on 10 February 2012.

Refinance of secured borrowings

The Group's external debt facility of $171.900 million matured on 15 December 2011, of which $15.900 million of thefacility was extended with the same lender for a period of one year with maturity date of 17 December 2012. As notedabove this portion of the loan was fully repaid on 24 January 2012 from the Group's share of the net proceeds from thesale of Perth City Central.

The facility of $156.000 million was repaid through a refinance with a new lender for the same amount for a period of twoyears with maturity date of 13 December 2013. On 30 January 2012, the Group drew down its unused portion of itsborrowing facility amounting to $1.500 million, to be progressively spent on capital works at Centro Bankstown. Refer tonote 10. This new debt facility was refinance through Centro Bankstown Sub Trust No.1, which is 100% owned by CMCS28.

Removal of CNPR Limited (“CNPR”) as the counterparty under the Flexible Exit Mechanism and replacing it with CentroRetail Limited (“CRL”)

As a result of the successful restructure and creation of CRF, unitholders in the Group were asked to approve a proposedResolution to amend the Flexible Exit Mechanism provisions in the Constitution of the Group to remove CPL as thecounterparty under the Flexible Exit Mechanism and replace it with CRL (which is the corporate entity within the stapledvehicles that make up CRF and which agreed to replace CNPR).

On 7 February 2012, unitholders voted in favour of this proposed change and consequently, CRL is now the counterpartyunder the existing Flexible Exit Mechanism provisions.

Events occurring after the reporting periodPut Option Notice under the Flexible Exit Mechanism

As previously reported the Group reached the end of its investment term on 30 June 2012. On 10 August 2012, theResponsible Entity of the Group, Retail Responsible Entity Limited, issued a Put Option Notice under the Flexible ExitMechanism to all CMCS 28 unitholders.

Unitholders who elect to exit the Group under the Put Option will have all (but not part) of their units acquired by CRL.Unitholders had until 7 September 2012 to elect whether to exit under this Put Option.

CRL has the right to "call (or buy)" all investors units under the Flexible Exit Mechanism, and has until 21 September 2012,to exercise this "call". CRL has advised that it intends to "call" (or buy) all investor's units.

Unitholders who exit the Group via the Flexible Exit Mechanism would be expected to receive an amount which isequivalent to the estimated Net Asset Backing (“NAB”) of $0.915 per unit with value date on approximately 5 October2012. This NAB takes into account the performance fee payable to the Responsible Entity which has been calculated inaccordance with the Group's constitution and the original prospectus issued for the Group.

In the event CRL doesn't call all units the Group will continue with remaining investors for a further term of three years until30 June 2015 or the Responsible Entity may still decide that the Group's investment property should be sold.

Except for the matters discussed above, no other matter or circumstance has arisen in the interval between 30 June 2012and the date hereof that has significantly affected, or may significantly affect:(a) the Group's operations in future financial years;(b) the results of those operations in future financial years; or(c) the Group's state of affairs in future financial years.

-4-



Likely developments and expected results of operationsOther than disclosed above, information on the likely developments in the operations of CMCS 28 Group have not beenincluded in the report because the Directors believe it would be likely to result in unreasonable prejudice to CMCS 28Group.

Environmental regulationAs a property owner, the Group is subject to the normal environmental laws and regulations of landowners within Australia.These include regulation against air pollution, liquid discharge and soil contamination. Environmental laws and regulationsin force in the various jurisdictions in which the Group operates are applicable to certain areas of the Group’s operations. The Group has in place procedures to identify and comply with such requirements including, where applicable, obtainingand complying with the conditions of the relevant authority consents and approvals and the obtaining of any necessarylicences.

The Australian Government released the Clean Energy Act 2011 and supporting legislation ('the Scheme') which will havean impact on the Australian economy in which the Group operates. The fixed phase of the Scheme will commence on 1July 2012 for a period of 3 years whereby “liable” entities under the Scheme will have to purchase permits at a fixed priceof $23 per tonne of CO2 equivalent emitted, increasing annually by 2.5% in real terms during the three year period. Noneof the entities within the Group are directly “liable” entities under the Scheme.

Other informationCMCS 28 Group Issued Units

During the year ended 30 June 2012, no units were issued (2011: no units) and no units were redeemed (2011: no units).At 30 June 2012, total units on issue were 94,963,652 (2011: 94,963,652 units).

CMCS 28 Group Total Assets

At 30 June 2012 CMCS 28 Group total assets were $292.658 million (2011: $314.228 million).

Fees paid to and interests held in CMCS 28 Group by the Responsible Entities or their related entitiesFees paid/payable to the Responsible Entities during the year totalled $1,536,176 (2011: $1,503,168) as disclosed in note20.

No fees were paid out of CMCS 28 Group to the Directors of the Responsible Entities during the year.

The number of interests in CMCS 28 Group held by the Responsible Entity or their related entities as at the end of the yearare disclosed in note 20.

Indemnification and Insurance of Directors and OfficersThe Responsible Entities must indemnify the Directors on a full indemnity basis and to the extent permitted by law, againstall losses or liabilities incurred by the Directors as an officer of the Responsible Entities or of a related body corporateprovided that the loss or liability does not arise out of misconduct including lack of good faith.

During the financial year the Responsible Entities insured their Directors, Secretaries and Officers against liability to thirdparties and for costs incurred in defending any civil or criminal proceedings that may be brought against them in theircapacity as Directors or Officers of Retail Responsible Entity Limited, Centro MCS Manager Limited and CPT ManagerLimited. This excludes a liability which arises out of a wilful breach of duty or improper use of inside information. Thepremiums also insure the Responsible Entities for any indemnity payments they may make to their Officers in respect ofcosts and liabilities incurred. Disclosure of the premiums payable is prohibited under the conditions of the policy.

Proceedings on behalf of the TrustNo person has applied for leave of Court to bring proceedings on behalf of the Responsible Entities of the Trust, or tointervene in any proceedings to which the Responsible Entities are a party for the purpose of taking responsibility onbehalf of the Trust for all or any part of those proceedings.

The Responsible Entities of the Trust were not a party to any such proceedings during the year.

-5-



Meetings of directorsThe following table sets out the numbers of meetings of Directors of CPT Manager Limited, the Responsible Entity of theGroup (including meetings of committees of Directors), held from 1 July 2011 until the 23 November 2011 and the numberof meetings attended by each Director.

BoardMeetings

RiskCommitteeMeetings

AuditCommitteeMeetings

FinanceCommitteeMeetings

CPT Manager Limited (1 July 2011 to 23 November 2011)Number of meetings held: 34 - 6 1

Number of meetings attended:

Paul Cooper 32/34 # # #

Robert Tsenin 26/34 # # #

Anna Buduls 31/34 - 6/6 #

Jim Hall 29/34 - 6/6 0/1

Susan Oliver 30/34 - # 1/1

Robert Wylie 33/34 # 6/6 1/1

# Not a member of the relevant committee during the period

The following table sets out the numbers of meetings of Directors of Centro MCS Manager Limited, the Responsible Entityof the Group (including meetings of committees of Directors), held from 23 November 2011 to 10 May 2012 and thenumber of meetings attended by each Director.

Centro MCS Manager Limited (23 November 2011 to 10 May 2012)Board

MeetingsRisk

CommitteeMeetings

AuditCommitteeMeetings

FinanceCommitteeMeetings

Number of meetings held: 13 1 - -

Number of meetings attended:

Peter Day 13/13 # # #

Tim Hammon(Appointed 29 February 2012)

6/6 * * *

Fraser MacKenzie 13/13 1/1 * *

Robert Tsenin(Appointed 14 December 2011)(Retired 29 February 2012)

2/3 * * *

Bill Bowness(Retired 14 December 2011)

4/4 1/1 # #

Anna Buduls(Retired 14 December 2011)

4/4 1/1 * *

Paul Cooper(Retired 14 December 2011)

3/4 # # #

Michael Humphris (Retired 14 December 2011) 3/4 # # #

* Commencing from 14 December 2011, there were no separate committees for Risk, Audit and Finance.

# Not a member of the relevant committee during the period

-6-

Liability limited by a scheme approved under Professional Standards Legislation

Retail Responsible Entity Limited In relation to our audit of the financial report of Centro MCS 28 and Controlled Entities for the financial year ended 30 June 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

D.J. Shewring Partner 13 September 2012

Centro MCS 28 and Controlled EntitiesIncome statement

For the year ended 30 June 2012

CMCS 28 Group30 June 30 June

2012 2011Notes $'000 $'000

RevenueInterest revenue 266 287Other revenue - 31Total revenue 266 318

Share of net profits from investments accounted for using the equity method 8 25,053 36,963

Expenses, gains and lossesResponsible Entity management fees (1,516) (1,503)Other Responsible Entity fees 13 (3,357) (7)Financing costs 4 (15,986) (13,688)Net movement on mark to market of derivatives (1,961) (123)Other expenses (400) (371)

Total expenses, gains and losses (23,220) (15,692)

Net profit before income tax expense 2,099 21,589

Income tax benefit/(expense) - -Net profit for the year 15 2,099 21,589

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

-9-

Centro MCS 28 and Controlled EntitiesStatement of comprehensive income



2012 2011$'000 $'000

Net profit for the year 2,099 21,589

Other comprehensive income

Reclassification to profit and loss from hedge reserve 2,609 2,608Other comprehensive income for the year 2,609 2,608

Total comprehensive income for the year 4,708 24,197

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

-10-

Centro MCS 28 and Controlled EntitiesBalance sheet

As at 30 June 2012


2012 2011Notes $'000 $'000

ASSETSCurrent assetsCash and cash equivalents 6 5,133 6,775Trade and other receivables 7 2,525 1,603Total current assets 7,658 8,378

Non-current assetsInvestments accounted for using the equity method 8 285,000 305,850Total non-current assets 285,000 305,850

Total assets 292,658 314,228

LIABILITIESCurrent liabilitiesTrade and other payables 9 1,219 710Interest bearing liabilities 10 900 211,267Provisions 11 472 475Derivative financial instruments 12 - 2,573Other financial liabilities 13 7,554 4,197Total current liabilities 10,145 219,222

Non-current liabilitiesInterest bearing liabilities 10 192,770 -Total non-current liabilities 192,770 -

Total liabilities 202,915 219,222

Net assets 89,743 95,006

EQUITYContributed equity 14 72,491 80,563Reserves - (2,609)Retained profits 17,252 17,052Total equity 89,743 95,006

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

-11-

Centro MCS 28 and Controlled EntitiesStatement of changes in equity


CMCS 28 GroupContributed

equityHedgereserve

(Accumulatedlosses)/Retainedearnings

Totalequity

Notes $'000 $'000 $'000 $'000

Balance at 1 July 2010 80,563 (5,217) (2,638) 72,708

Net profit for the year - - 21,589 21,589Other comprehensive income for the year - 2,608 - 2,608Total comprehensive income for the year - 2,608 21,589 24,197

Transactions with owners in their capacity asowners:Distributions provided for or paid 5 - - (1,899) (1,899)Balance at 30 June 2011 80,563 (2,609) 17,052 95,006

CMCS 28 GroupContributed

equityHedgereserve

Retainedearnings

Totalequity

$'000 $'000 $'000 $'000

Balance at 1 July 2011 80,563 (2,609) 17,052 95,006

Net profit for the year - - 2,099 2,099Other comprehensive income for the year - 2,609 - 2,609Total comprehensive income for the year - 2,609 2,099 4,708

Transactions with owners in their capacity asowners:Distributions provided for or paid 5 (8,072) - (1,899) (9,971)Balance at 30 June 2012 72,491 - 17,252 89,743

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

-12-

Centro MCS 28 and Controlled EntitiesCash flow statement



2012 2011Notes $'000 $'000

Cash flows from operating activitiesDistribution received from associates 17,050 19,333Payments to suppliers (inclusive of goods and services tax) (1,937) (1,648)Interest received 266 287Interest paid/derivative settlements (15,360) (14,509)Payment for upfront borrowing costs (1,866) -Net cash (outflow)/inflow from operating activities 17 (1,847) 3,463

Cash flows from investing activitiesNet proceeds from disposal of investments 27,979 -Net cash inflow from investing activities 27,979 -

Cash flows from financing activitiesDistributions paid (9,974) (1,899)Proceeds from interest bearing liabilities 157,500 -Repayments of interest bearing liabilities (175,300) -Net cash outflow from financing activities (27,774) (1,899)

Net (decrease)/increase in cash and cash equivalents (1,642) 1,564Cash and cash equivalents at the beginning of the financial year 6,775 5,211Cash and cash equivalents at the end of the financial year 6 5,133 6,775

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

-13-

Centro MCS 28 and Controlled EntitiesNotes to the financial statements

30 June 2012

1 Summary of significant accounting policiesThe principal accounting policies adopted in the preparation of the financial report are set out below. These policies havebeen consistently applied to all the years presented, unless otherwise stated. The financial report includes financialstatements for Centro MCS 28 (''CMCS 28'', "the Trust", "the Syndicate" or "the Parent") and its controlled entities (''theGroup'' or ''CMCS 28 Group'').

(a) Statement of compliance with International Financial Reporting Standards

This general purpose financial report complies with Australian Accounting Standards. Compliance with AustralianAccounting Standards ensures that the financial report, comprising the financial statements and the notes thereto,complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting StandardsBoard (IASB).

(b) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, otherauthoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year except as detailed in note 1(u).When the presentation or classification of items in the financial report is amended, comparative amounts are alsoreclassified unless it is impracticable.

The Group has not elected to early adopt any new Australian Accounting Standards that have been issued but are not yeteffective. The financial report is presented in Australian dollars.

Going concern

The financial report for the year ended 30 June 2012 has been prepared on a going concern basis.

As at 30 June 2012 the current liabilities of CMCS 28 Group exceeds its current assets by $2.487 million, due toperformance fees and deferred management fees of $7.554 million, as disclosed in note 13.

The Responsible Entity is entitled to recover unpaid fees at the end of the syndicate term. Although the end date of thesyndicate term is on 30 June 2012, the performance fees and deferred management fees are only payable to theResponsible Entity within a reasonable time frame following either of the following events:

• Upon the sale of the properties and wind up, where the Responsible Entity is satisfied that the Group will be able tomeet this obligation from the proceeds of the sale of properties; or

• On rollover or following a "call" of all units under the Flexible Exit Mechanism provisions, where the Responsible Entitywould have considered and satisfied itself how the fees are to be funded.

As previously reported the Group reached the end of its investment term on 30 June 2012. On 10 August 2012, theResponsible Entity of the Group, Retail Responsible Entity Limited, issued a Put Option Notice under the Flexible ExitMechanism to existing unitholders.

Unitholders who elect to exit the Group under the Put Option will have all (but not part) of their units acquired by CentroRetail Limited (“CRL”). Unitholders had until 7 September 2012 to elect whether to exit under this Put Option.


In the event CRL doesn't call all units the Group will continue with remaining investors for a further term of three years until30 June 2015.

After taking into account all available information, the Directors have concluded that the loans payable by CMCS 28 Groupto Centro Retail Australia and the end of the syndicate term will not cause significant uncertainty as to the going concern ofCMCS 28 Group and there are reasonable grounds to believe that the basis of preparation of financial report on a goingconcern basis is appropriate.

The Directors have formed this view based on a number of factors including:

• The Group's net asset position of $89.743 million; and

• The underlying performance of the Group's investment portfolio, including the forecast cash flows.

-14-



1 Summary of significant accounting policies (continued)Historical cost conventionThese financial statements have been prepared on a historical cost basis, except for available-for-sale financial assets,certain financial assets and liabilities (including derivative instruments) and investment property which have all beenrecognised at fair value.

Significant accounting estimates, judgements and assumptionsThe preparation of financial statements in conformity with Australian Accounting Standards requires the use of certaincritical accounting estimates. It also requires management to exercise its judgement in the process of applying theGroup's accounting policies. The areas involving a higher degree of judgement or complexity, or areas whereassumptions and estimates are significant to the financial statements, are disclosed in note 2.

(c) Principles of consolidation

These financial statements comprise the consolidated accounts of CMCS 28 and its controlled entities.

Controlled entities are those entities over which the Group has the power to govern the financial and operating policies ofthe entity so as to obtain benefits from its activities. Where control of an entity is obtained during a financial year, itsresults are included in the Group's income statement from the date on which control commences. Where control of anentity ceases during a financial year its results are included for that part of the year during which control existed.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The effects of alltransactions between entities in the Group are eliminated on consolidation.

Non-controlling interests in the results and equity of controlled entities are shown separately in the income statement andbalance sheet respectively.

(d) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.

The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that the futureeconomic benefits will flow to the Group and specific criteria have been met for each of the Group's activities as describedbelow. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the revenuehave been resolved.

(i) Property ownership revenueAs the owner of a shopping centre, the Group derives rental revenue from the leasing of this property. Lease income isrecognised on a straight-line basis over the lease term. Contingent rental revenue is recognised on an accrual basis asearned.

(ii) Distribution revenueDistribution revenue is recognised as revenue when the right to receive payment is established.

(iii) Interest revenueInterest revenue is recognised on a time proportion basis using the effective interest method.

(e) Income tax

Under current income tax legislation no income tax is payable by the Group provided the taxable income is fully distributedto unitholders or the unitholders become presently entitled to all the taxable income.

(f) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highlyliquid investments with original maturities of three months or less that are readily convertible to known amounts of cashand which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are shown withininterest bearing liabilities in current liabilities.

(g) Trade and other receivables

Trade and other receivables are recognised initially at fair value, and subsequently measured at amortised cost using theeffective interest method, less a provision for impairment.

-15-



1 Summary of significant accounting policies (continued)Collectability of trade and other receivables is reviewed on an ongoing basis. Debts which are known to be uncollectibleare written off when identified. An allowance account (provision for impairment of trade receivables) is used when there isobjective evidence that the Group will not be able to collect all amounts due according to the original terms of thereceivables.

(h) Investments in associates and joint ventures

Investments in associates are accounted for in the Group’s financial statements using the equity method or at fair valuethrough profit or loss in accordance with the Group’s election under the exemption in AASB 128 Investments inAssociates. Under the equity method, the CMCS 28 Group’s share of the post-acquisition profits or losses of associates isrecognised 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 cost of the investment. Associates are those entitiesover which the Group exercises significant influence, but not control.

Associates are those entities over which the Group exercises significant influence, but not control. Investments in jointventures are those entities in which the Group has a contractual arrangement that establishes joint control over theeconomic activities of the entity.

Investments in associates are accounted for in the Group’s financial statements using the equity method. Under the equitymethod, the Group’s share of the post-acquisition profits or losses of associates is recognised in the consolidated IncomeStatement, and its share of post-acquisition movements in reserves is recognised in consolidated reserves. Thecumulative post-acquisition movements are adjusted against the cost of the investment.

Investments in joint ventures are accounted for using the equity method in the consolidated financial statements.

(i) Financial assets

The Group classifies its investments in financial assets in the following categories: financial assets at fair value throughprofit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. Theclassification depends on the purpose for which the investments were acquired.

(i) Financial assets at fair value through profit or loss These include financial assets that are held for trading purposes which may be sold.

Financial assets designated at fair value through profit or loss at inception, are those that are managed and theirperformance evaluated on a fair value basis in accordance with the Group's documented investment strategy. TheGroup's policy is for the Responsible Entity to evaluate the information about these financial assets on a fair value basistogether with other related financial information.

(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in anactive market. They arise when the Group provides money, goods or services directly to a debtor with no intention ofselling the receivable. They are included in current assets, except for those with maturities greater than 12 months afterthe end of the reporting period which are classified as non-current assets and will be discounted to present value. Loansand receivables are included in receivables in the balance sheet.

(iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturitiesthat the Group has the positive intention and ability to hold to maturity.

(iv) Available-for-sale financial assets Available-for-sale financial assets, comprising principally marketable securities, are non-derivatives that are eitherdesignated in this category or not classified in any of the other categories.

Recognition and derecognition Purchases and sales of investments are recognised on trade date - the date on which the Group commits to purchase orsell the asset. Financial assets are initially recognised at fair value plus transaction costs for all financial assets notcarried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows fromthe financial assets have expired or has been transferred and the Group have transferred substantially all the risks andrewards of ownership.

-16-



1 Summary of significant accounting policies (continued)Subsequent measurement Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fairvalue. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interestmethod. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fairvalue through profit or loss' category are included in the income statement in the period in which they arise. Unrealisedgains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale arerecognised directly in equity in the available-for-sale investments revaluation reserve. When securities classified asavailable-for-sale are sold or impaired, the accumulated fair value adjustments deferred in equity are recycled to theincome statement.

If the market for a financial asset is not active (as for unlisted securities), the Group establishes fair value by usingvaluation techniques. These include reference to the fair values of recent arm's length transactions, involving the sameinstruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing modelsrefined to reflect the issuer's specific circumstances.

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

(j) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year andwhich are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

Trade and other payables are carried at amortised cost and not discounted due to their short term nature.

(k) Interest bearing liabilities

Interest bearing liabilities are initially recognised at fair value, net of transaction costs incurred. Interest bearing liabilitiesare subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and theredemption amount is recognised in the income statement over the period of the borrowings using the effective interestmethod.

Interest bearing liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlementof the liability for at least 12 months after the end of the reporting period.

(l) Borrowing costs

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

(m) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation.

When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, thereimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle thepresent obligation at the end of the reporting period using a discounted cash flow methodology. The risks specific to theprovision are factored into the cash flows and as such a risk-free government bond rate relative to the expected life of theprovision is used as a discount rate.

-17-



1 Summary of significant accounting policies (continued)If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects thetime value of money and the risks specific to the liability. The increase in the provision resulting from the passage of timeis recognised in finance costs.

(n) Derivatives

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequentlyremeasured to their fair value at the end of each reporting period. The method of recognising the resulting gain or lossdepends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Group designates certain derivatives as either:

• hedges of fair valued assets or liabilities or a firm commitment (fair value hedge); or • hedges of highly probable forecast transactions (cash flow hedges).

The Group 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 Group alsodocuments its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used inhedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows ofhedged items.

(i) Fair value hedgeChanges in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the incomestatement, together with any changes in the fair value of the hedge asset or liability that are attributable to the hedged risk.

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

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profitor loss (for instance when the forecast sale that is hedged takes place).

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

(iii) Derivatives that do not qualify for hedge accountingCertain derivative instruments do not qualify for hedge accounting. A change in the fair value of any derivative instrumentthat does not qualify for hedge accounting is immediately recognised in the income statement. No derivative financialinstruments were designated into a hedging relationship and therefore all movements in fair value have been taken to theincome statement.

(o) Other financial liabilities

(i) Performance fee contracts Performance fees are recognised as a financial liability in accordance with the Constitution. The liability is initiallymeasured at fair value and subsequently measured at amortised cost using the effective interest method in accordancewith AASB 139 Financial Instruments: Recognition and Measurement, based on the intrinsic value of the performance feethat is, the fee that would be payable based on the conditions prevailing at the end of the reporting period.

(ii) Deferred management feesDeferred management fees are recognised as a financial liability. The Group’s Constitution and Product DisclosureStatement provides for the subsequent recovery of any prior year management fees at the end of the syndicate’s term oron wind up of the Group.

The liability is initially measured at fair value and subsequently measured at amortised cost using the effective interestmethod in accordance with AASB 139 Financial Instruments: Recognition and Measurement, based on the intrinsic valueof the deferred management fee that is, the fee that would be payable based on the conditions prevailing at the end of thereporting period.

-18-



1 Summary of significant accounting policies (continued)

(p) Fair value estimation

The fair value of financial instruments is based on their quoted market prices at the end of the reporting period without anydeduction for estimated future selling costs. Financial assets are valued at bid prices, while financial liabilities are valuedat asking prices.

If a quoted market price is not available on a recognised stock exchange or from a broker / dealer for non-exchange-tradedfinancial instruments, the fair value of the instrument is estimated using valuation techniques, including use of recent arm’slength market transactions, reference to the current fair value of another instrument that is substantially the same,discounted cash flow techniques, or any other valuation technique that provides a reliable estimate of prices obtained inactual market transactions.

Where discounted cash flow techniques are used, estimated future cash flows are based on management's best estimatesand the discount rate used is a market rate at the end of the reporting period applicable for an instrument with similarterms and conditions. Where other pricing models are used, inputs are based on market data at the end of the reportingperiod.

The fair value of derivatives that are not exchange traded is estimated at the amount that the Group would receive or payto terminate the contract at the end of the reporting period taking into account current market conditions (e.g. appropriateyield curve) and the current creditworthiness of the counterparties. Specifically, the fair value of a forward exchangecontract is determined as a net present value of estimated future cash flows, discounted at appropriate market rates on thevaluation date. The fair value of interest rate swaps and cross currency interest rate swaps is the estimated amount thatthe entity would receive or pay to terminate the swap at the end of the reporting period taking into account current interestrates, foreign exchange rates and the current creditworthiness of swap counterparties.

Investments in other unlisted funds are recorded at the exit price as reported by the managers of the funds.

(q) Contributed equity

Ordinary units are classified as equity.

Incremental costs directly attributable to the issue of new units are shown in equity as a deduction, net of tax, from theproceeds. Incremental costs directly attributable to the issue of new units for the acquisition of a business are not includedin the cost of the acquisition as part of the purchase consideration.

(r) Net tangible asset backing per unit

(i) Basic net tangible asset backing per unitBasic net tangible asset backing per unit is determined by dividing the net assets attributable to unitholders (excludingintangible assets) by the number of units outstanding at balance date.

(ii) Adjusted net tangible asset backing per unitAdjusted net tangible asset backing per unit adjusts the figures used in the determination of basic net tangible assetbacking per unit by taking into account the equity notes (where applicable).

(s) Distributions and return of capital

A provision is made for the amount of any distribution announced or to which the unitholders became presently entitled onor before the end of the reporting period but not distributed at the end of the reporting period.

(t) Goods and Services Tax (GST)

Revenues, expenses and assets of Australian entities are recognised net of the amount of GST, except where the amountof the GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised aspart of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the balance sheet are shown inclusive of GST.

The net amount of GST recoverable from or payable to the taxation authority is included in other receivables or payables inthe balance sheet.

Cashflows are presented on a gross basis. The GST components of cash flows arising from investing or financingactivities which are recoverable from or payable to the taxation authority, are presented as operating cashflow.

-19-



1 Summary of significant accounting policies (continued)

(u) Changes in accounting policy

From 1 July 2011 the Group has adopted the following Australian Accounting Standards and Interpretations:

• AASB 2009-12 Amendments to Australian Accounting Standards

• AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual ImprovementsProject

• AASB 2010-5 Amendments to Australian Accounting Standards

• AASB 2010-6 Amendments to Australian Accounting Standards - Disclosures on Transfers of Financial Assets

• AASB 124 Related Party Disclosures (Amendment)

Adoption of these Accounting Standards and Interpretations did not have any material effect on the financial position orperformance of the Group. The amending standards which introduce the changes to these standards have also beenadopted from 1 July 2011 and 1 July 2010 as necessary.

(v) Australian Accounting Standards issued but not yet effective

Certain new Australian Accounting Standards have been published that are not mandatory for 30 June 2012 reportingperiods. The Group's assessment of the impact of these new Australian Accounting Standards is set out below.

(i) AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9AASB 2010-7 is applicable for annual reporting periods beginning on or after 1 January 2015 and is available for earlyadoption. The amendment addresses the current measurement models of financial liabilities in AASB 139 FinancialInstruments: Recognition and Measurement. Under the revised model, financial liabilities which are designated at FairValue through Profit or Loss are required to have any credit value adjustments pass through other comprehensive incomeand there is no recycling of these adjustments to profit or loss on extinguishment.

The amendment is not expected to have a material impact on the financial statements.

(ii) AASB 2010-9 Amendments to Australian Accounting Standards – Severe Hyperinflation and Removal of Fixed Datesfor First-time adoptersAASB 2010-9 is applicable for annual reporting periods beginning on or after 1 January 2013 and is available for earlyadoption. The amendment provides relief for first-time adopters of Australian Accounting Standards from having toreconstruct transactions that occurred before their date of transition to Australian Accounting Standards. The amendmentsin respect of severe hyperinflation provide guidance for entities emerging from severe hyperinflation either to resumepresenting Australian Accounting Standards financial statements or to present Australian Accounting Standards financialstatements for the first time.

The amendment is not expected to have a material impact on the financial statements of the Group as it will not be a firsttime adopter as a result of operating in a severe hyperinflation environment.

(iii) AASB 2011-2 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergenceproject - Reduced disclosure regime This Standard makes amendments to the application of the revised disclosures to Tier 2 entities, that are applying AASB1053, and is applicable from 1 January 2013.

The amendment is not expected to have a material impact on the net results or net assets of the Group.

(iv) AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management PersonnelDisclosure RequirementsAASB 2011-4 is applicable for annual reporting periods beginning on or after 1 July 2013 and is not available for earlyadoption. The amendment deletes from AASB 124 Related Party Disclosures, individual key management personneldisclosure requirements for disclosing entities that are not companies.

The amendment is not expected to have a material impact on the net results or the net assets of the Group.

(v) AASB 2011-9 Amendments to Australian Accounting Standards - Presentation of Other Comprehensive IncomeAASB 2011-9 is applicable for annual reporting periods beginning on or after 1 July 2012 and is available for earlyadoption. The amendment requires entities to group items presented in other comprehensive income on the basis ofwhether they might be reclassified subsequently to profit or loss and those that will not.

-20-



1 Summary of significant accounting policies (continued)The amendment is not expected to have a material impact on the net results or net assets of the Group.

(vi) AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising fromAASB 9 AASB 9 is applicable for annual reporting periods beginning on or after 1 January 2015 and is available for early adoption.AASB 9 addresses the current classification and measurement models of financial assets in AASB 139 FinancialInstruments: Recognition and Measurement with a new model. Under this new model, financial assets that are debtinstruments with certain characteristics are measured at amortised cost. All other financial assets are measured at fairvalue. For equity instruments, an option is available to recognise all fair value changes in other comprehensive income.

These changes may impact the classification and measurement of financial assets held by the parent and the Group. TheGroup is still assessing the impacts of this standard.

(vii) AASB 10 Consolidated Financial StatementsAASB 10 is applicable for annual reporting periods beginning on or after 1 January 2013, and is available for earlyadoption under certain circumstances. AASB 10 replaces both AASB 127 Consolidated Financial Statements and AASBInterpretation 112 Special Purpose Entities. The new control model broadens the situations when an entity is consideredto be controlled by another entity and includes new guidance for applying the model to specific situations, including whenacting as a manager may give control, the impact of potential voting rights and when holding less than a majority votingrights may give control.

Based on preliminary analysis, the adoption of AASB 10 will not have any impact on the net assets or net results of theGroup.

(viii) AASB 11 Joint ArrangementsAASB 11 replaces the recognition and measurement requirements of AASB 131 Interests in Joint Ventures. The standardis applicable for annual reporting periods beginning on or after 1 January 2013, and is available for early adoption undercertain circumstances. AASB 11 clarifies the distinction between joint operations and joint ventures, and eliminates theoption to use proportionate consolidation in accounting for joint ventures. Joint operations that give the joint venture partiesa right to the underlying assets and obligations are accounted for by recognising the share of those assets and obligations.


(ix) AASB 12 Disclosure of Interests in Other EntitiesAASB 12 is applicable for annual reporting periods beginning on or after 1 January 2013, and is available for earlyadoption under certain circumstances. AASB 12 includes all disclosures relating to an entity's interests in subsidiaries,joint arrangements, associates and structured entities. New disclosures have been introduced about the judgementsmade by management to determine whether control exists, and to require summarised information about jointarrangements, associates and structured entities and subsidiaries with non-controlling interests.


(x) AASB 13 Fair Value Measurement This standard is applicable for annual reporting periods beginning on or after 1 January 2013 and is available for earlyadoption. The amendment does not change when an entity is required to use fair value, but rather establishes a singlesource of guidance on how fair value is determined when fair value is required or permitted. AASB 13 also expands thedisclosure requirements for all assets or liabilities recognised at fair value, including where disclosures of assets at fairvalue are required. This includes information about the assumptions made and the qualitative impact of thoseassumptions on the fair value determined.

Based on preliminary analysis, other than additional disclosures on how fair value is determined, the adoption of AASB 13is not expected to impact net assets or net results of the Group as the existing fair value methods used by the Group areconsistent with the guidance under AASB 13.

(xi) AASB 1053 Application of Tiers of Australian Accounting StandardsAASB 1053 is applicable for annual reporting periods beginning on or after 1 July 2013 and is available for early adoption.AASB 1053 introduces a differential reporting framework with Tier 1 and Tier 2 reporting requirements for preparinggeneral purpose financial statements. Whilst the recognition, measurement and presentation requirements will remainunchanged under the second tier, there will be substantially reduced disclosures in relation to these requirements forentities that do not have public accountability (as defined by the standard). The Group is still assessing theappropriateness of application of Tier 2 reporting requirements and the impacts of this standard.

-21-



1 Summary of significant accounting policies (continued)(xii) AASB 1054 Australian Additional Disclosures This standard is as a consequence of phase 1 of the joint Trans-Tasman Convergence project of the AASB and FRSB.This standard relocates all Australian specific disclosures from other standards to one place and revises disclosures in thefollowing areas:

(a) Compliance with Australian Accounting Standards(b) The statutory basis or reporting framework for financial statements(c) Whether the financial statements are general purpose or special purpose(d) Audit fees(e) Imputation credits

The amendment will be applied from 1 July 2012, and is not expected to have a material impact on the net results or netassets of the Group.

(xiii) Annual improvements to IFRS – 2009-2011 CycleThis standard is applicable for annual reporting periods beginning on or after 1 January 2013 and is available for earlyadoption. The standard sets out amendments to International Financial Reporting Standards (IFRSs) and the relatedbases for conclusions and guidance made during the International Accounting Standards Board’s Annual Improvementsprocess. These amendments have not yet been adopted by the AASB.

The Group is still assessing the impacts of this standard

(w) Rounding of amounts

The Group is of a kind referred to in Class Order 98/100, 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 inaccordance with that Class Order to the nearest thousand dollars ($'000), or in certain cases, the nearest dollar.

2 Significant accounting estimates, judgements and assumptionsThe preparation of financial statements requires estimates and assumptions concerning the application of accountingpolicies to be made by the Group. Estimates are continually evaluated and are based on historical experience and otherfactors, including expectations of future events that are believed to be reasonable under the circumstances. Theestimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assetsand liabilities within the next financial year are discussed below. Revisions to accounting estimates are recognised in theperiod in which the estimate is revised and in any future periods affected.

Investment property valuesInvestment properties are carried at their fair value. Valuations are either based on an independent valuation or on aDirectors' valuation which is supported by the extrapolation of independent valuations on similar properties. Valuations aredetermined based on assessments and estimates of uncertain future events, including upturns and downturns in propertymarkets and availability of similar properties, vacancy rates, market rents and capitalisation and discount rates.

At 30 June 2012, the carrying value of investments accounted for using the equity method held by the Group is $285.000million (30 June 2011: $305.850 million). Refer to note 8 for the reconciliation of the movements in investments accountedfor using the equity method.

Fair value of mark to market derivatives and other financial instrumentsManagement uses their judgement in selecting an appropriate valuation technique for financial instruments not quoted inan active market. Valuation techniques commonly used by market practitioners are applied. For mark to market derivativefinancial instruments, assumptions are made based on quoted market rates adjusted for specific features of theinstrument. Other financial instruments are valued using a discounted cash flow analysis based on assumptionssupported, where possible, by observable market prices or rates.

Collectability of trade receivablesCollectability of trade receivables is reviewed on an ongoing basis. An allowance account (provision for impairment oftrade receivables) is used when there is objective evidence that the Group will not be able to collect all amounts dueaccording to the original terms of the receivables.

The Responsible Entity estimates the amount to be provided for based on knowledge of individual retailer's circumstances,customer creditworthiness, and current economic trends. The amount of the allowance is continually reassessed followingany changes in individual retailer's circumstances, such as bankruptcy, with a complete review undertaken every sixmonths.

-22-



3 Parent entity financial information(a) Parent entity

The parent entity of CMCS 28 Group is Centro MCS 28.

(b) Financial information

The individual financial statements for the parent entity show the following aggregate amounts:

Centro MCS 2830 June 30 June

2012 2011$'000 $'000

Income statement informationNet profit attributable to members of Centro MCS 28 2,099 22,422

Comprehensive income informationTotal comprehensive income attributable to members of Centro MCS 28 4,708 24,303

Balance sheetCurrent assets 6,623 7,401

Total assets 291,623 313,251

Current liabilities 9,004 218,139


Equity attributable to unitholders of Centro MCS 28Contributed equity 72,491 80,563Reserves - (2,609)Retained profits 17,358 17,158

89,849 95,112

(c) Guarantees

Centro MCS 28 has not entered into any guarantees nor provided any guarantees to its subsidiaries.

(d) Contingent liabilities

Centro MCS 28 does not have any contingent liabilities as at 30 June 2012 (2011: nil).

(e) Contractual commitments

Centro MCS 28 does not have any contractual commitments as at 30 June 2012 (2011: nil).

4 Financing costsCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Interest on borrowings 13,857 11,766Interest on equity notes 869 900Amortisation of prepaid borrowing fees 1,260 1,022

15,986 13,688

-23-



5 DistributionsCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Income distributions 1,899 1,899Capital distributions 8,072 -

9,971 1,899

Of the total net cash distributed by CMCS 28 Group 100.00% is tax advantaged (2011: 17.70%)

6 Current assets - Cash and cash equivalentsCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Cash at bank and on hand 5,133 6,7755,133 6,775

7 Current assets - Trade and other receivablesCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Trade receivablesProperty receivables 149 149Impairment of receivables (136) (136)Total property receivables 13 13

Other receivablesDistribution receivables from related parties 2,512 1,590

2,525 1,603

-24-



7 Current assets - Trade and other receivables (continued)

(a) Impaired trade receivables

CMCS 28 Group has recognised $nil (2011: $0.136 million) in respect of impaired trade receivables during the year ended30 June 2012.

Movements in the provision for impairment of receivables are as follows:


2012 2011$'000 $'000

Opening balance at 1 July (136) -Provision for impairment recognised during the year - (136)Closing balance at 30 June (136) (136)

The creation and release of the provision for impaired trade receivables has been included in 'direct property expenses' inthe income statement.

(b) Past due but not impaired

As at 30 June 2012, trade receivables of $0.013 million (2011: $0.013 million) were past due but not impaired. Theserelated to a number of independent customers for whom there is no recent history of default.

The ageing analysis of past due but not impaired trade receivables is as follows:


2012 2011$'000 $'000

Less than 30 days (not past due) - -Between 31 days and 60 days (past due) - -Between 61 days and 90 days (past due) - -Greater than 91 days (past due) 13 13

13 13

The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on thecredit history of these other classes, it is expected that these amounts will be received when due. The Group does nothold any collateral in relation to these receivables.

-25-



8 Non-current assets - Investments accounted for using the equity method

(a) Investments accounted for using the equity method

Information relating to associates is set out below.

Name of entity Principalactivity

Ownership interest CMCS 28 Group

30 June 30 June 30 June 30 June2012 2011 2012 2011

% % $'000 $'000

Unlisted

Perth City Central Shopping CentrePropertyInvestment - 50.00 - 28,350

Centro BankstownPropertyInvestment 50.00 50.00 285,000 277,500

285,000 305,850

The reconciliation below details the movements for the year:


2012 2011$'000 $'000

Opening balance at 1 July 305,850 287,100Share of profit from investments accounted for using the equity method 25,053 36,963Distribution received/receivable (21,010) (20,880)Additional investment during the year 2,948 2,667Disposal of equity investment (27,841) -Closing balance at 30 June 285,000 305,850

Investment in joint ventures

CMCS 28 owns 100% of the units in CMCS 28 Centro City Perth Holding Trust, the principal underlying asset of which was50% ownership in the Perth City Central Shopping Centre. Perth City Central Shopping Centre (100% interest) was soldon 24 January 2012 for a consideration of $57.000 million.

CMCS 28 owns 100% of the units in Bankstown Sub Trust No.1, the principal underlying asset of which is a 300 year leaseover 50% of the Centro Bankstown property through a joint venture partnership arrangement. All undistributed profits ofBankstown Sub Trust No. 1, which are attributable to CMCS 28 Group, are recognised by CMCS 28 Group in the carryingamount of its investment. The underlying property has been independently valued at $570.000 million (100% interest) as at30 June 2012 (2011: $555.000 million).

(b) Summary of the financial information and performance of associates


2012 2011$'000 $'000

Total assets 578,308 617,516


Revenues 51,753 51,845

Net profit for the year 50,116 73,926

The associates' financial information represents 100% of the associates' financial position and profits or losses.

The net profit is inclusive of the revaluation on investment properties.-26-



8 Non-current assets - Investments accounted for using the equity method (continued)

(c) Share of associates' expenditure commitments

There are no contractual commitments as at 30 June 2012 (2011: $1.177 million).

(d) Share of associates' contingent liabilities

There are no contingent liabilities as at 30 June 2012 (2011: nil).

9 Current liabilities - Trade and other payablesCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Related party payables 327 355Accrued interest 501 -Other payables 391 355Total trade and other payables 1,219 710

10 Interest bearing liabilitiesCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Current

Secured borrowings (a) - 171,900Deferred transaction costs - (1,533)

- 170,367

Equity notes (b) - 40,000Related party loans (c) 900 900Total current interest bearing liabilities 900 211,267

Non-current

Secured borrowings (a) 157,500 -Deferred transaction costs (1,330) -

156,170 -

Equity notes (b) 36,600 -Total non-current interest bearing liabilities 192,770 -

-27-



10 Interest bearing liabilities (continued)

(a) Secured borrowings

The secured borrowings are provided under an Australian dollar facility. The Group's external debt facility of $171.900million matured on 15 December 2011, of which $15.900 million of the facility was extended with the same lender. Theextension was for a period of 1 year with maturity date of 17 December 2012 and was fully repaid on 24 January 2012.The facility of $156.000 million was repaid through a refinance with a new lender for the same amount. The new facility isfor a period of 2 years with maturity date of 13 December 2013 and have fixed interest rates. On 30 January 2012, theGroup drew down its unused capital expenditure borrowing facility amounting to $1.500 million, to be progressively spenton capital works at Centro Bankstown.

The secured borrowings of CMCS 28 Group are secured by a first ranking fixed and floating charge over all assets andundertakings of the Group, in addition to mortgages over its equity accounted investment properties, Centro Bankstownand previously Perth City Central Shopping Centre. Perth City Central Shopping Centre was sold on 24 January 2012 andthe proceeds were used to repay the secured borrowings of $15.900 million.

(b) Equity notes

The equity notes were issued at $1.00 per note. Equity note holders are entitled to interest at a margin of 0.25% perannum above the distribution yield paid on units. The interest is payable quarterly in arrears. The equity notes arerepayable on 31 December 2013 having been extended from 30 June 2012 for a further one and half year period. On 10February 2012, the Group made a capital distribution of 8.50 cents per note. The equity notes now have a face value of91.50 cents per note. Each equity note may be converted into units:(i) in lieu of repayment at 31 December 2013; or(ii) if an accelerated repayment/conversion is triggered as described in the original Group Prospectus at the election of theequity note holder.

The conversion options are that of the equity notes holders and they have no voting rights at the meetings of unitholders.

(c) Related party loans

Centro Retail Australia provided an at-call loan of $0.900 million (30 June 2011: $0.900 million provided by CNPR Groupformerly Centro Properties Group) to Bankstown Sub Trust No.1 in order to meet its obligations. This related party loanwas entered into at arm's length and incurs a variable market interest rate.

(d) Financing arrangements

The Group did not have any unused loan facilities as at the current or prior period reporting date.

(e) Fair values

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

The net fair value of cash and cash equivalents and non interest bearing monetary financial assets and liabilities of CMCS28 Group approximates their carrying amounts. The net fair value of interest bearing liabilities at amortised costsapproximates their carrying amounts. The net fair value of other monetary financial assets and liabilities is based uponmarket prices where a market exists or is determined by discounting the expected future cashflows by the current interestrates for assets and liabilities with similar risk profiles.

-28-



11 Current liabilities - ProvisionsCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Provision for distribution 472 475472 475

(a) Movements in provisions



2012 2011$'000 $'000

Provision for distributionOpening balance at 1 July 475 475Amounts incurred and charged 9,971 1,899Distributions paid (9,974) (1,899)Closing balance at 30 June 472 475

12 Derivative financial instrumentsCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Interest rate swap contracts - 2,573Total current derivative financial instrument liabilities - 2,573

13 Other financial liabilitiesCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Performance fees (a) 3,357 -Deferred management fees 4,197 4,197

7,554 4,197

-29-



13 Other financial liabilities (continued)The reconciliation below details the movements for the year:


2012 2011$'000 $'000

Performance fees movementOpening balance at 1 July - -Increase in financial liability 3,357 -Closing balance at 30 June 3,357 -

Deferred management fees movementOpening balance at 1 July 4,197 4,190Increase in financial liability - 7Closing balance at 30 June 4,197 4,197

(a) Performance fees

The Responsible Entity will be entitled to a performance fee if following the sale of the properties and wind up, or onrollover, the amount available to be paid to investors (which is represented by the unit value), is greater than the value ofequity subscribed at the start of the current investment term as a result of the Net Asset Backing ("NAB") now being higherthan the fee threshold as prescribed per the Trust's Constitution.

14 Contributed equity(a) Units issued



2012 2011No. '000 No. '000

Number of unitsOpening balance at 1 July 94,964 94,964Issued during the year - -Redeemed during the year - -Closing balance at 30 June 94,964 94,964



2012 2011$'000 $'000

Opening balance at 1 July 80,563 80,563Return of capital (8,072) -Closing balance at 30 June 72,491 80,563

-30-



15 Underlying earningsUnderlying earnings is a financial measure that represents the profit/(loss) under Australian Accounting Standardsadjusted for certain unrealised and non-cash items, reserve transfers, capital transactions and other non-core items. Underlying earnings is used by the Board to make strategic decisions and as a guide to assessing an appropriatedistribution to announce.

In accordance with the Trust's Constitution, the amounts distributed to unitholders are at the discretion of the ResponsibleEntity.


2012 2011$'000 $'000

Net profit for the year 2,099 21,589Adjusted for:Fair value adjustment within equity accounted investments (4,043) (16,083)Unrealised movement on mark to market of derivatives 36 123Other Responsible Entity fees 3,357 7Underlying earnings 1,449 5,636

16 Net tangible asset backing (NTA)CMCS 28 Group

30 June 30 June2012 2011

Net tangible assets attributable to unitholders ($'000) 89,743 95,006

(a) Basic

Number of unitsNumber of units outstanding at the end of the year used in calculating basic net tangibleasset backing per unit ('000) 94,964 94,964

Basic NTA ($) 0.95 1.00

The basic NTA stated above classifies equity notes as a liability.

-31-



16 Net tangible asset backing (NTA) (continued)(b) Adjusted


2012 2011

Net assets attributable to unitholders ($'000) 89,743 95,006

Adjusted for:Equity notes ($'000) 36,600 40,000

Net tangible assets attributable to unitholders used in calculating adjusted net tangibleassets backing per unit ($'000) 126,343 135,006

Number of unitsNumber of units outstanding at the end of the year used in calculating adjusted nettangible asset backing per unit ('000) 94,964 94,964

Adjusted for:Equity notes ('000) 40,000 40,000

Number of units outstanding at the end of the year used in calculating adjusted nettangible asset backing per unit ('000) 134,964 134,964

Adjusted NTA ($) 0.94 1.00

The adjusted NTA stated above classifies equity notes as if they were unitholders' funds. The equity notes initially have aface value of $1.00. On 10 February 2012, a capital distribution of 8.50 cents per note was paid to the equity noteholdersreducing its face value to $0.915 at 30 June 2012. The equity notes will have a face value of $0.915 on conversion if theNTA is less than $0.915.

17 Cash flow informationCMCS 28 Group

30 June 30 June2012 2011$'000 $'000

Net profit for the year 2,099 21,589Amortisation of financing costs 1,260 1,022Other Responsible Entity fees 3,357 7Fair value adjustment within equity accounted investments (4,043) (16,083)Unrealised movement on mark to market of derivatives 36 123Doubtful debts - 136Increase in assets

Trade and other receivables (3,868) (1,549)Other assets - (1,843)

(Increase)/decrease in liabilitiesTrade and other payables (688) 61

Net cash (outflow)/inflow from operating activities (1,847) 3,463

-32-



18 Financial risk managementThis note details the requirements of AASB 7 Financial Instrument Disclosures, which mandates disclosures regardingonly financial assets and financial liabilities. As a result, these disclosures, in particular the sensitivity analysis, do not takeinto account movements in non-financial assets such as investment property and investments accounted for using theequity method.

The Group's activities may expose it to a variety of financial risks: market risk (including interest rate risk and price risk),credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financialmarkets and seeks to minimise potential adverse effects on the financial performance of the Group. To the extent thatthey are able to access them, the Group uses derivative financial instruments sourced from Major Trading Banks, such asinterest rate swaps, to manage its exposures to interest rate risk.

Risk management is carried out by Funds Management ("Management") under policies approved by the Board andsubject to periodic review. Management identifies, evaluates and manages financial risks and report to the Boardperiodically on the Group's derivative and debt positions and compliance with policy.

CMCS 28 Group holds the following financial instruments:


2012 2011$'000 $'000

Financial assetsCash and cash equivalents 5,133 6,775Trade and other receivables 2,525 1,603

7,658 8,378

Financial liabilitiesTrade and other payables 1,219 710Borrowings 193,670 211,267Provision for distribution 472 475Other financial liabilities 7,554 4,197Derivative financial instruments - 2,573

202,915 219,222

(a) Market risk

Market risk is the risk that changes in market prices, such as interest rates and unit prices, will affect future cash flows orthe fair value of financial instruments.

(i) Price riskThe Group is not exposed to any significant concentrations of price risk.

(ii) Interest rate riskThe Group's interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flowinterest rate risk and borrowings issued at fixed rates that are measured at fair value expose the Group to fair valueinterest rate risk.

There are a number of factors taken into consideration when deciding how to manage interest rate risk amongst whichinclude, the current variable interest rate debt, any pre-existing interest rate hedges, the remaining term of the Group andany potential current asset sales within the Group which may result in repayment of debt.

Following the risk assessment for the Group, the Group's operating unit decided not to hedge its variable rate debt for theyear ending 30 June 2012. In view of the short remaining term to maturity and potential asset sales, it is unlikely that anyhedging will be undertaken. However, Management will revisit its hedging strategy as part of its debt renegotiations withfinanciers.

-33-



18 Financial risk management (continued)As at the reporting date, the Group had the following variable rate instruments outstanding:

30 June2012

30 June2011

$'000 $'000

Related party loan 900 900Borrowings - 170,367Interest rate swaps (notional principal amount) - (125,000)Net exposure to cash flow interest rate risk(i) 900 46,267

(i) Net exposure represents the difference between the outstanding variable rate borrowings and the notional amount forinterest rate swap contracts.

The equity notes does not attract a variable interest rate, instead it is linked to the distribution rate paid to ordinaryunitholders plus a margin of 0.25% is paid on the equity notes. Interest entitlements do not accumulate. Refer to Note 10.

Interest rate swapsAt 30 June 2012, there are no interest rate swaps over the loan principal outstanding (2011: 72.34%). The existing interestrate swap was terminated on 20 January 2012.

At 30 June 2011, the interest rate swap contract required settlement of net interest swap receivable or payable each 90days. These dates corresponded with the dates on which interest was payable on the underlying debt. The contracts weresettled on a net cash basis.

At balance date, the details of interest rate swap contracts are:

30 June2012

30 June2011

NotionalPrincipal

Settlement

NotionalPrincipal

Settlement$'000 $'000

Less than 1 year - 125,000- 125,000

Maturities of financial liabilities

The cash flows have been estimated using forward interest rates applicable at the balance date.

The following table indicates the period in which the cash flows associated with derivatives held by CMCS 28 Group thatare cash flow hedges are expected to occur.

CMCS 28 Group - At 30 June 2012 Less than 6months

6 - 12months

1 - 2 years 2 - 5 years Over 5years

Totalcontractual

cash flows(1)

CarryingAmountassets/

(liabilities)$'000 $'000 $'000 $'000 $'000 $'000 $'000

Derivative financial instruments - - - - - - -Total derivatives - - - - - - -

-34-



18 Financial risk management (continued)CMCS 28 Group - At 30 June 2011 Less than 6

months6 - 12

months1 - 2 years 2 - 5 years Over 5 years Total

contractualcash flows(1)


(liabilities)$'000 $'000 $'000 $'000 $'000 $'000 $'000

DerivativesDerivative financial instruments (1,347) (1,307) - - - (2,654) (2,573)Total derivatives (1,347) (1,307) - - - (2,654) (2,573)

(1) For interest rate swap contracts and variable debt the cash flows have been estimated using forward interest ratesapplicable at the balance date.

Sensitivity analysisWhile interest rates can move up or down, having regard to the forward interest rate curve for BBSW at 30 June 2012, thetables below disclose the impact that a 25 basis point (bps) (i.e. -0.25% / +0.25%) (2011: -20bps / +50bps) shift in theinterest rates would have on the Group’s post-tax profits and other comprehensive income ("OCI"). The sensitivities havebeen reassessed by Group Treasury during the financial year in light of the current interest rate curve. This should not beconsidered a projection.

CMCS 28 Group Interest rate risk-0.25% +0.25%

30 June 2012Post-tax profit

or (loss) OCIPost-tax profit

or (loss) OCI$'000 $'000 $'000 $'000

Financial liabilitiesInterest bearing liabilities 2 - (2) -

Total increase/ (decrease) 2 - (2) -

CMCS 28 Group Interest rate risk-0.2% +0.5%

30 June 2011Post-tax profit

or (loss) OCIPost-tax profit

or (loss) OCI$'000 $'000 $'000 $'000

Financial liabilitiesDerivatives - financial instruments (434) - 1,082 -Interest bearing liabilities 346 - (864) -

Total increase/ (decrease) (88) - 218 -

(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to theGroup. These counterparties include, but are not limited to, entities within Centro Retail Australia, banks and tenants atrental properties. Procedures have been established to ensure that the Group deals only with approved counterpartiesand the risk of loss is mitigated.

Counterparty exposure is measured as the aggregate of all obligations of any single legal entity or economic entity to theGroup, after allowing for appropriate set offs which are legally enforceable.

Tenant risk assessments are performed taking into consideration the financial background of the tenant and the amount ofany guarantee provided under their lease. Derivative counterparties and cash transactions are limited to high credit qualityfinancial institutions.

The maximum exposure to credit risk at the balance date is the carrying amount of the Group's financial assets.

Details of assets that have been impaired can be found in the trade and other receivables note.

-35-



18 Financial risk management (continued)

(c) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Typically the Groupensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including theservicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably bepredicted, such as natural disasters.

Prudent liquidity risk management involves monitoring the forecast cash flow position, maintaining sufficient cash, theavailability of funding through an adequate amount of committed credit facilities (subject to availability) and the ability toclose-out market positions.

The Group manages liquidity risk by continuously monitoring forecast and actual cashflows and where possible matchingthe maturity profiles of financial assets and liabilities. The Group holds a large portion of its investments in direct propertywhere there is not an immediate liquid market, however the underlying investment properties of these funds are stable(with a high occupancy rate and a weighted average lease term by income greater than the debt facility term) andtherefore management expects that sufficient cash flows will continue to be generated and available to meet cash outflowliabilities arising from the day to day operations of the Group.

Maturities of financial liabilitiesThe tables below analyse the Group's financial liabilities into relevant maturity groupings based on the remaining term atthe reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscountedcash flows. For variable debt the cash flows have been estimated using forward interest rates applicable at the balancedate.


6 - 12months

1 - 2 years 2 - 5 years Over 5years

Totalcontractual

cash flows(1)


(liabilities)$'000 $'000 $'000 $'000 $'000 $'000 $'000

Non-derivatives

Trade and other payables (1,219) - - - - (1,219) (1,219)Borrowings - variable rate (904) - - - - (904) (900)Borrowings - fixed rate (6,185) (6,085) (163,484) - - (175,754) (156,170)Equity notes (412) (412) (37,012) - - (37,836) (36,600)Provision for distributions (472) - - - - (472) (472)Other financial liabilities (7,554) - - - - (7,554) (7,554)Total non-derivatives (16,746) (6,497) (200,496) - - (223,739) (202,915)


6 - 12months

1 - 2 years 2 - 5 years Over 5 years Totalcontractual

cash flows(1)


(liabilities)$'000 $'000 $'000 $'000 $'000 $'000 $'000

Non-derivatives

Trade and other payables (710) - - - - (710) (710)Borrowings - variable rate (176,678) - - - - (176,678) (171,267)Equity notes (450) (40,450) - - - (40,900) (40,000)Provision for distributions (475) - - - - (475) (475)Other financial liabilities - (4,197) - - - (4,197) (4,197)Total non-derivatives (178,313) (44,647) - - - (222,960) (216,649)

(1) For interest rate swap contracts and variable debt the cash flows have been estimated using forward interest ratesapplicable at the balance date.

-36-



18 Financial risk management (continued)

(d) Fair value estimation

The net fair value of financial assets and financial liabilities of the Group approximate their carrying value.

The Group uses various methods in estimating the fair value of a financial instrument. The methods used comprise thefollowing inputs:• Level 1 - quoted prices in active markets;

• Level 2 - inputs other than quoted prices in active markets that are observable for the asset or liability, eitherdirectly or indirectly; or

• Level 3 - inputs are not based on observable market data (unobservable inputs).

The classification of the Group's financial assets and liabilities are summarised below.

CMCS 28 Group - as at 30 June 2012 Level 1 Level 2 Level 3$'000 $'000 $'000

LiabilitiesDerivatives used for hedging - - -Total liabilities - - -

CMCS 28 Group - as at 30 June 2011 Level 1 Level 2 Level 3$'000 $'000 $'000

LiabilitiesDerivatives used for hedging - 2,573 -Total liabilities - 2,573 -

The Group's derivative financial instruments were not traded in active markets, hence they are considered to include Level2 inputs. Fair values are estimated using valuation techniques, including use of recent arm's length market transactions,reference to current fair value of another instrument that is substantially the same or discounted cash flow techniques.

There were no transfers between Level 1, Level 2 and Level 3 fair value measurements during the current or previousfinancial year.

(e) Hedge accounting

The following table indicates the hedge effectiveness of CMCS 28 Group cash flow hedges.

The interest rate swap contract held by CMCS 28 Group was terminated on 24 January 2012.

CMCS 28 Group - At 30 June 2012 FinancialInstrument

Fair Value Balance inHedgereserve

Ineffectivenessrecognised in

P&L

Amounttransferredfrom hedgereserve to

P&L$'000 $'000 $'000 $'000

Type of HedgeCash flow hedge IRS - - (2,573) 2,609

- - (2,573) 2,609

-37-



18 Financial risk management (continued)CMCS 28 Group - At 30 June 2011 Financial

InstrumentFair Value Balance in

Hedgereserve

Ineffectivenessrecognised in

P&L

Amounttransferredfrom hedgereserve to

P&L$'000 $'000 $'000 $'000

Type of HedgeCash flow hedge IRS (2,573) 2,609 (2,485) 2,608

(2,573) 2,609 (2,485) 2,608

Hedge reserve – cash flow hedges

The hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recogniseddirectly in equity. Amounts are recognised in the Income statement when the associated hedged transaction affects profitand loss.

Management has cancelled the hedge designation effective 1 January 2010 as hedge accounting was no longerconsidered to be beneficial to the Group.

All movement in the mark to market derivatives since 1 January 2010 have been recognised directly in profit or loss.Amounts previously recognised in the cash flow hedge reserve which remained in the reserve until the original hedgedtransaction affected profit or loss have now been fully reclassified to profit or loss, upon the termination of interest rateswap contracts.

19 Capital risk managementManagement's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it cancontinue to provide returns for unitholders and benefits for other stakeholders and, wherever possible, to maintain anoptimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of distributions paid to unitholders,return capital to unitholders, issue new units (subject to investor approval) or sell assets.

Consistent with other direct retail property schemes in the industry, the Group monitors capital on the basis of the gearingratio.

The gearing ratio has been calculated in accordance with ASIC RG 46 (issued on 2 September 2008) which is calculatedusing the following formula:

Gearing Ratio = Total interest bearing liabilities (excluding equity notes) ÷ Total assets

Total interest bearing liabilities excludes equity notes which are deemed payable to certain unitholders at the end of thesyndicate term, or may be converted into ordinary units (under certain circumstances).

The gearing ratio at 30 June 2012 and 2011 were as follows:


2012 2011$'000 $'000

Interest bearing liabilitiesBorrowings 157,500 171,900Related party loans 900 900Total interest bearing liabilities (excluding equity notes) 158,400 172,800

AssetsCash and cash equivalents 5,133 6,775Investment accounted for using the equity method 285,000 305,850Trade and other receivables 2,525 1,603Deferred transaction costs (note 10) 1,330 1,533Total assets 293,988 315,761

Gearing ratio %53.88 %54.72

-38-



20 Related party transactions(a) Associates

Interests in associates are set out in note 8.

(b) Key Management Personnel

Key Management Personnel ('KMP') are defined in AASB 124 Related Party Disclosures as those having the authority andresponsibility for planning, directing and controlling the activities of the Group. The Responsible Entities meet thedefinition of KMP as they have authority in relation to the activities of the Group.

Fees paid/payable to the Responsible Entities during the year totalled $1,536,176 (2011: $1,503,168).

(c) Transactions with related parties

The following transactions occurred with related parties:


2012 2011$ $

Key Management Personnel (i)Responsible Entity management fees 1,515,787 1,503,168Taxation recovery costs 9,874 -Legal recovery costs 10,515 -

1,536,176 1,503,168

AssociatesDistribution received/receivable from associates 21,009,748 20,880,631

21,009,748 20,880,631

Other related parties Taxation recovery costs 7,052 10,326Legal recovery costs 7,510 17,500Interest on interest bearing liabilities 56,986 59,196Interest on equity notes 869,058 900,000

940,606 987,022

(i) Transactions with Key Management Personnel represent fees paid/payable to the Responsible Entities of the Groupduring the year, including fees paid/payable to CPT Manager Limited, Centro MCS Manager Limited and RetailResponsible Entity Limited.

-39-



20 Related party transactions (continued)

(d) Outstanding balances

The following balances are outstanding at the reporting date in relation to transactions with related parties:


2012 2011$ $

Receivables from:Associates

Distribution receivables 2,512,072 1,590,3032,512,072 1,590,303

Payables to:Responsible Entity management fees 121,035 130,409

121,035 130,409

Other related parties Accrued interest on equity notes 204,750 224,384Accrued interest on related party loan 1,334 -

206,084 224,384

Associates of the Responsible Entity held 28,860,858 ordinary units and 40,000,000 equity notes in CMCS 28 Group.

(e) Terms and conditions

Units issued to related parties are on the same terms and conditions as all other issued units.

Outstanding balances are unsecured and are repayable in cash.

Transactions between related parties are on normal commercial terms and conditions no more favourable than thoseavailable to other parties unless otherwise stated.

21 Remuneration of auditorsDuring the year the following fees were paid or payable for services provided by the auditor and/or its related practices:


2012 2011$ $

(a) Audit services

Audit and review of financial reportsErnst & Young 51,069 41,200

22 CommitmentsCMCS 28 Group has no capital, finance lease, operating lease or remuneration commitments in existence at the reportingdate which have not been recognised as liabilities.

-40-



23 ContingenciesAt the date of this report, the Directors are not aware of any contingent liabilities that may have a material impact on theGroup's financial position, results of its operations or cash flows.

24 Events occurring after the reporting periodPut Option Notice under the Flexible Exit Mechanism

As previously reported the Group reached the end of its investment term on 30 June 2012. On 10 August 2012, theResponsible Entity of the Group, Retail Responsible Entity Limited, issued a Put Option Notice under the Flexible ExitMechanism to all CMCS 28 unitholders.

Unitholders who elect to exit the Group under the Put Option will have all (but not part) of their units acquired by CRL.Unitholders had until 7 September 2012 to elect whether to exit under this Put Option.


Unitholders who exit the Group via the Flexible Exit Mechanism would be expected to receive an amount which isequivalent to the estimated Net Asset Backing (“NAB”) of $0.915 per unit with value date on approximately 5 October2012. This NAB takes into account the performance fee payable to the Responsible Entity which has been calculated inaccordance with the Group's constitution and the original prospectus issued for the Group.

In the event CRL doesn't call all units the Group will continue with remaining investors for a further term of three years until30 June 2015 or the Responsible Entity may still decide that the Group's investment property should be sold.

Except for the matters discussed above, no other matter or circumstance has arisen in the interval between 30 June 2012and the date hereof that has significantly affected, or may significantly affect:(a) the Group's operations in future financial years;(b) the results of those operations in future financial years; or(c) the Group's state of affairs in future financial years.

-41-

Liability limited by a scheme approved under Professional Standards Legislation

Independent auditor's report to the unitholders of Centro MCS 28 and Controlled Entities

We have audited the accompanying financial report of Centro MCS 28 and Controlled Entities (the Trust ), which comprises the balance sheet as at 30 June 2012, consolidated income statement, the

consolidated statement of comprehensive income, the consolidated statement of changes in equity and the cash flow statement for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the Trust and the entities it controlled at year end or from time to time during the financial year.

Directors' responsibility for the financial report

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

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of Retail Responsible Entity Limited a

Opinion

In our opinion:

a. the financial report of Centro MCS 28 and Controlled Entities is in accordance with the Corporations Act 2001, including:

i giving a true and fair view of the Trust's financial position as at 30 June 2012 and of its performance for the year ended on that date; and

ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and

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

Ernst & Young

D.J. Shewring Partner Melbourne 13 September 2012

Documents

Responsible Entity Retail Responsible Entity Limited · Manager Limited occurred on 23 November 2011. Change of Responsible Entity to Retail Responsible Entity Limited On 11 January