AR08

BRISBANE MARKETS LIMITED

ANNUAL REPORT

2008

OUR MISSION IS TO PROVIDE INFRASTRUCTURE AND SERVICES TO FACILITATE THE DEVELOPMENT AND OPERATION OF A WORLD-CLASS MARKETING AND DISTRIBUTION HUB FOR FRESH

PRODUCE AND FLOWERS

TABLE OF CONTENTS

TITLE HERE SAFETY 3 CORPORATE AND TRAINING PROFILE Company Profile Providing staff and tenants with Workplace Health and Safety Objectives (WH&S) programs including the Brisbane Markets Safety Induction program, forklift operation, first aid and Our History general safety awareness continues to present solid results.

The Formation of Brisbane Markets Limited Additionally the focus on clear and precise signage and line-marking throughout the site has again a reduction 6 IMPORTANCE WITHIN THEseen INDUSTRY in accidents throughout the year by a further 25%.

Queensland’s Central Market Hub Statistics MARKETS NEWIndustry BRISBANE Brisbane Markets at a Glance REGULATIONS Company Highlights Key representative groups within the Markets including Brismark, the Market Tenants’ Committee and Brismark’s Junior REPORTS Executive Committee supported the introduction and 8 enforcement of revised Brisbane Markets Regulations.

Chairman’s Report The regulations cover a diverse range of areas and will CEO’s Report further aid in promoting the efficient and effective operation of while assisting AND all users in addressing WH&S 12the Markets PERFORMANCE ACHIEVEMENTS issues.

Finance and Administration To support the Brisbane Financial Results Markets Regulations, BML introduced an Infringement Management System which has Property enabled the ongoing monitoring of infringements occurring within Operations the Markets. It also allows ease of identification of repeatSite offenders so that appropriate follow-up action can Infrastructure be taken inclusive of the issuing of warning letters and Marketing and Communications monetary sanctions.

Retail Markets

STAFF In accordance with the provisions of the Workplace Relations Act, the BML (Operational Employees) Collective Agreement 2006 was introduced in November. The new agreement now provides more flexibility with the addition of revised job classifications that have proved to better facilitate the operational needs of the Markets.

21 OUR SITE PRESENTATION PEOPLE AND CLEANLINESS Management Team Boardinitiatives of Directors Operational including the annual Markets Clean Up Day, revised cleaning rosters and advanced pest management programs have all contributed to improving 24 INVESTMENT IN INDUSTRY the aesthetics of the site in addition to preserving a high Investment standard of WH&S. Master Planning Brisbane Markets tenants and staff continue to be more diligent in maintaining the high standards of presentation 26 YEAR IN REVIEW through recycling and refinement of processes.

30 ANOTHER YEAR ON audit is currently A comprehensive waste management under Horticulture review that will seeofBML raise the standard even Code Conduct further in 2008.

32 CORPORATE DIRECTORY ACCESS AND SECURITY A decline of public entering the Market due to a 32steady SHARE TRADING number of factors, including the success of the Saturday Fresh Market, encouraged BML to review general public weekday entry. This resulted in public access to the Brisbane Produce Market being restricted to Wednesdays, Thursdays and Fridays without adversely affecting the functionality of the Markets. This allows the public to enjoy the many advantages of purchasing fresh produce through the Markets.

BML’s commitment to Markets security saw the upgrading of CCTV coverage throughout the site with the installation of an additional 12 cameras bringing the total number of cameras to 47. The increased focus in this area has proved beneficial in capturing footage relating to inappropriate activity and various accidents/incidents on site.

Brisbane Markets is located on Sherwood Road at Rocklea.

How to get there: By car: Take the Sherwood Road exit off the Ipswich Motorway and travel west for 700m.

Car parking is available off Sherwood Road.

By rail: The closest train station is located at Station Road at Rocklea (about a 790m walk).

By bus: The Great Circle Bus Line (route 598/599) stops right outside the Markets.

For more information visit www.transinfo.com.au or call 13 12 30.

2

BML ANNUAL REPORT 2008

Brisbane Markets is located at Rocklea, just 11 kilometres from Brisbane’s CBD, and incorporates the Brisbane Produce Market, Brisbane Flower Market, Brisbane MarketPlace retail markets precinct and the Brisbane Markets South Gate industrial estate.

As Queensland’s only central fruit and vegetable market, the Brisbane Produce Market is the state’s most important centre for the marketing and distribution of fresh fruit and vegetables. It recorded annual trade of 578,568 tonnes of produce, up by 3.9% on the throughput figure for last financial year. This produce, as assessed by the independent consulting firm Market Information Services, was valued as more than $1.074 billion, up by 6.3% on the value figure for the last financial year.

Brisbane Markets Limited (BML) is the owner of the Brisbane Markets and is responsible for the ongoing development and management of the site.

It operates on a commercial basis as an unlisted public company, with in excess of 150 predominantly industry-based shareholders, including growers, wholesalers, secondary wholesalers, retailers and the industry organisation Brismark.

BML and its related entities (referred to hereafter as “BML” or “the group”) strive to provide internationalstandard facilities and services at the Brisbane Markets.

These include facilities and services for fruit, vegetable and flower wholesalers, retailers, provedores, secondary wholesalers, food processors, transporters, exporters, industry organisations and Market support businesses.

COMPANY OBJECTIVES The primary objectives of BML are to: 1. Facilitate the efficient and effective operation of the Brisbane Markets.

2. Provide world-class infrastructure and services to facilitate the marketing and distribution of fresh produce to domestic and international customers.

3. Work with industry stakeholders and alliance partners in pursuing opportunities to enhance the level of services offered to tenants and the role of the Markets in the marketing and distribution of fresh and processed produce and flowers.

4. Facilitate the ongoing growth of the Brisbane Markets through the development of Brisbane Markets South Gate and the redevelopment of the Centre Courtyard area.

CORPORATE PROFILE TITLE TO GO HERE

COMPANY PROFILE

5. To promote the role and importance of the Brisbane Markets and the benefits of fresh fruit and vegetables to the industry and consumers.

6. Achieve a commercial rate of return for investors.

BML ANNUAL REPORT 2008

3

CORPORATE PROFILE

OUR HISTORY

4

In August 2002, the state government and Brisbane Market Corporation entered into a contract to sell the Brisbane Markets for $74 million to Landacq Limited, today known as Brisbane Markets Limited (BML).

On 30 September 2002, in what was a seamless transition, BML took over the ownership and management of the Brisbane Markets site.

The sale was unique. BML comprises 150 industry shareholders including the wholesaler service organisation Brismark which is the major shareholder. Brismark and BML have a joint CEO and a cooperative relationship including shared resources.

This ownership and management structure has worked extremely well, with Brismark providing input to BML on matters of strategic and operational importance to the wholesaling sector.

BML ANNUAL REPORT 2008

Landacq Limited formed in 1994, with some 32 shareholders, all of whom were primary wholesalers in the Brisbane Markets, together with Brismark.

Landacq Limited was managed by Brismark, with Brismark's Chief Executive Officer being its Managing Director.

In 2000/01, Brismark conducted a detailed decision model analysis comparing moving to a new greenfield site and construction of a new Central Market with buying the existing Market site and gradually redeveloping it to meet the needs of the industry.

This analysis highlighted the preferred option of purchasing and redeveloping the existing site.

The push to get the state government to relinquish ownership of the Markets had been a Brismark objective for a number of years and when the government decided to sell in December 2001, Landacq Limited was identified as an appropriate legal entity to be a bidding vehicle in the government sale process.

The state government's decision to dispose of the asset by way of an open public tender created significant challenge, however, due to the competitive process which resulted, involving competing consortia including property developers, investment banks and superannuation funds.

To use Landacq Limited as the bidding entity, the company was fully restructured, a new constitution was put in place and a management agreement drawn up such that while Brismark would fund the bid, if it was successful, Brismark would be reimbursed for the expenditure incurred and be paid capital-raising and success fees.

The bidding process involved four stages over some 10 months. The winning bid valued the site and business operations as at 30 September 2002 at $74 million.

Landacq Limited subsequently changed its name to Brisbane Markets Limited and the Boards of each organisation reaffirmed their commitment to a structure that sees both organisations share a single CEO as an appropriate and effective way of maximising the benefits of what had been achieved.

CORPORATE PROFILE

THE FORMATION OF BRISBANE MARKETS LIMITED

COMPARATIVE FINANCIAL PERFORMANCE AND GROWTH STATISTICS NOTE: BML adopted the new Australian International Accounting Standards (AIFRS) during the 2006 financial year.

Brisbane Market Corporation 2000/01*

Brisbane Markets Limited 2007/08

Change

$ 14,923,201

$ 25,226,865 (excluding revaluation)

69%

32

50 #

56%

$ 6,248,470

$ 20,330,466 ($ 11,590,689 excluding revaluation)

225%

Marketing Expenditure

$ 383,102

$ 616,852

61%

Maintenance Expenditure

$ 381,002

$ 952,999

150%

Capital Expenditure (excludes new buildings)

$ 228,361

$ 450,593

97%

$ 2,390,372

$ 471,249^

(80%)

Market Throughput Value+

$ 652,000,000

$ 1,074,928,943

65%

Market Volume in tonnes @

604,662

578,568

(4%)

Revenue Number of Permanent Staff Earnings before Interest and Tax

Depreciation and Amortisation

* Information provided by the state government during the open public tender process. This was the last full financial year of operation for the BMC # Full time equivalents ^ Due to AIFRS change – depreciation no longer charged for buildings + Market Throughput Value as assessed by Market Information Services @ Volume in 2007/08 continued to show the impact of Cyclone Larry, Citrus Canker and the droughts of recent years BML ANNUAL REPORT 2008

5

IMPORTANCE WITHIN THE INDUSTRY

QUEENSLAND’S CENTRAL MARKET HUB

6

Central Markets provide the major marketing and distribution points of the nation’s supply of fresh fruit, vegetables and in some instances, flowers.

Brisbane Markets is Queensland’s sole wholesale fresh fruit and vegetable market and one of six Central Markets found in Australia.

It is the centrepiece for the selling and distribution of horticulture produce that is trucked, railed, shipped and flown from throughout Australia and overseas to the Rocklea site.

Brisbane Markets’ 52 primary wholesalers and an additional 93 support businesses act as a clearing house for approximately 7,000 growers who supply produce.

Its wholesalers compete with each other in one location, each trying to get the best price for the produce they sell.

Prices change on a daily basis, influenced by supply and demand, with factors such as size, quantity and quality also playing a part.

A further 1,000 buyers, including fruit and vegetable retailers, secondary wholesalers, provedores, restaurants, cafes, food service businesses and exporters source their fresh produce requirements from the Markets. These buyers inspect the wide variety and range of products available and compare various grades and prices to ensure they are getting the best produce available at a fair market price on the day.

Brisbane Markets is part of a thriving national fresh produce industry which includes some 400 Market wholesalers, 18,400 growing establishments and a diverse array of buyers, with an estimated 25 million transactions taking place per year. About 95% of Australia’s fruit and vegetable growing establishments supply product to a Central Market, making the Central Market System an integral part of the fresh fruit and vegetable supply chain.

Other Central Markets are located in Adelaide, Melbourne, Newcastle, Perth and Sydney.

INDUSTRY STATISTICS Central Market tenants are active participants in all sectors of the supply chain. The six Central Markets provide the industry with:

BML ANNUAL REPORT 2008

•

400 primary wholesalers/marketers

•

Total throughput of more than $5 billion

•

Total throughput volume of approximately 4 million tonnes

•

More than 11,000 Market-based employees nationally

•

Investment of more than $1 billion in industry by Market owners and tenants

COMPANY HIGHLIGHTS

•

Brisbane Markets occupies 77 hectares of land at Rocklea, just 11 kilometres from the Brisbane CBD.

•

It incorporates the Brisbane Produce Market, Brisbane Flower Market, Brisbane MarketPlace retail markets precinct and the Brisbane Markets South Gate industrial precinct.

In upholding our mission to provide infrastructure and services to facilitate the development and operation of a world-class marketing and distribution hub for fresh produce and flowers, the key achievements in the 2008 year were as follows:

•

An average of 600,000 tonnes of fresh fruit and vegetables pass through the Brisbane Produce Market each year.

•

52 primary wholesalers operate at the site as well as an additional 93 support businesses.

•

More than 4,000 people work or do business at the Brisbane Markets on a daily basis.

•

In excess of 7,000 growers supply produce for sale at the Brisbane Markets, annually.

The Markets have a total lettable area in excess of 138,000 square metres including:

•

27 warehouses covering a lettable area of more than 88,750 square metres.

•

Fruit and vegetable selling floor warehouses covering an area in excess of 18,300 square metres.

•

Land leases covering an area in excess of 21,000 square metres.

•

Commercial buildings with a total lettable area of 2,688 square metres while the total retail area is 7,034 square metres.

•

Brisbane Markets Commercial Centre houses a post office, bank, butcher, seafood outlet, food outlets, stationer, hairdresser, barber, aquarium shop and a service station.

The market value of Brisbane Markets’ investment properties recorded a $6.12 million net increase for the year ending 30 June 2008, resulting in the value of the Brisbane Markets site increasing to $128.150 million.

The company recorded another strong year in revenue generation with an increase in Group Revenues (excluding revaluation revenue) of 6.9%.

A Rights Issue to eligible shareholders was fully subscribed and raised $9.96 million to progress planned development projects.

Payment of an annual dividend of nine cents per share fully franked in line with policy plus a special dividend payment of 0.5 cents per share, fully franked. This is a total dividend of 9.5 cents compared to a total dividend of 9 cents in 2006/07.

The Brisbane Produce Market recorded annual trade in excess of 578,568 tonnes, up by 3.9% on the throughput for last financial year.

Brisbane Produce Market’s annual throughput value, set a new record with an assessed value of $1.074 billion being recorded in 2007/08, up by 6.3% on the 2006/07 financial year.

Maintaining 100% occupancy rate for warehouses and selling floors, with 98% occupancy rate for commercial tenancies.

The purchase of 9.7 hectares of land adjacent to the existing South Gate precinct for $7 million.

The purchase of 1.74 hectares of land at Larapinta, Brisbane, for $4.982 million.

Progression of the construction of the $33 million, 16,063 square metre South Gate East warehouse facility which features state-of-the art cold rooms, fast cooling facilities and commercial office premises.

IMPORTANCE WITHIN THE INDUSTRY

BRISBANE MARKETS AT A GLANCE

MX Connect (telecommunications) continued its roll-out.

Water consumption reduced across the Market’s site by more than 55% since the first imposition of water restrictions in 2005.

The retail market recorded an increase in revenue generation of 3%.

Appointment of a key manager in the marketing and communication section.

BML ANNUAL REPORT 2008

7

REPORTS 8

On behalf of the directors of Brisbane Markets Limited (BML), I am pleased to report on the financial year ending 30 June 2008, and to reflect on the year’s achievements.

BML ANNUAL REPORT 2008

The group recorded operating revenue of $33.966 million for the 2007/08 financial year and a net profit after tax of $16.524 million which includes an increase of $8.739 million in the value of the investment property held.

As at 30 June 2008, the company had total assets of $161.526 million and net assets of $86.006 million.

Industry-based ownership has been rewarded with the company consistently paying dividends in line with policy and the asset growing considerably in value. Shareholders received fully franked dividends totalling 9.5 cents per share for the year.

It was also pleasing to see that the Brisbane Produce Market posted an assessed value of fruit and vegetable throughput levels reaching 578,568 tonnes at a record value of $1.074 billion. This was a strong increase on the 2006/07 financial year results being a 6.3% increase in value and a 3.9% increase in volume.

Since purchasing the Brisbane Markets in 2002, BML continues to go from strength to strength. Whilst not the largest Central Market in the country, Brisbane Markets continues to be recognised for its innovative strategies, operational initiatives and its leadership in the fresh produce industry.

The BML Board maintains an excellent relationship with key stakeholders in the industry. In building the image and profile of the organisation, I have hosted numerous visits by industry stakeholders and politicians to the Market during the course of the year, and maintained an involvement with the Central Markets Association of Australia, being the national peak industry organisation representing Australia’s six Central Markets.

The 2007/08 year was a critical year for the company with the consolidation of a number of major projects including the South Gate East development, the purchase of a 9.7 hectare parcel of land immediately adjacent to the Brisbane Markets site (from the Queensland Department of Primary Industries and Fisheries), the purchase of the 1.74 hectare Larapinta site and further work on the implementation of the Master Plan for the site.

REPORTS

CHAIRMAN’S REPORT

In the coming year, a number of further projects identified in the Master Plan will be progressed. This will see the ongoing growth of the total value of assets held by BML and growth in the role and importance of the Brisbane Markets site as a marketing and distribution hub.

I extend my thanks to my fellow directors along with the CEO, Andrew Young, and his staff, for their commitment and valued contribution over the past year.

We have an excellent team and I look forward to the year ahead.

Tony Joseph Chairman

The Board has also been active in relation to a process of Strategic Review, with an updated planning document providing an ongoing basis for organisational growth and development.

CHAIRMAN TONY JOSEPH

BML ANNUAL REPORT 2008

9

REPORTS

CEO’s REPORT The 2007/08 financial year has seen the ongoing consolidation and growth of the organisation.

Efforts to maximise BML’s developable footprint within the Brisbane Markets site are giving the company certainty as the various stages of the Brisbane City Council’s (BCC’s) planning and approval process are worked through in relation to key development projects.

The group has maintained its focus on all key areas of operations, property development, site infrastructure maintenance and upgrading and property management.

Some of the major achievements throughout the year include:

10

BML ANNUAL REPORT 2008

•

Finalisation of the purchase of the 9.7 hectare Queensland Department of Primary Industries and Fisheries (QDPI&F) site (now called South Gate Stage 2) – August 2007. A development application relating to this area has been lodged with the BCC.

•

Progression of the South Gate East development – with construction continuing throughout the financial year – commenced May 2007, completed August 2008.

•

Settlement of the Master Planning Development Application (final approval was received in May 2008 through a Planning and Environment Court judgement) and lodgement of a subsequent application to progress with the civil works relating to the construction of the new western access road, car parks and building platform. This application is currently being considered by the BCC with a further decision pending.

•

Purchase of the 1.74 hectare Larapinta site for $4,981,800. This land is opposite the Woolworths Distribution Centre, and offers a number of strategic options for BML. Consideration is currently being given to the conceptual design of a temperature-controlled warehouse for the site.

•

Finalisation of the share offer to shareholders with $9.96 million raised for ongoing development projects – February 2008.

•

Representation on a Horticulture Industry Strategic Plan Leadership group, a joint industry and government funded initiative looking at the development of a Strategic Plan, titled “Future Focus”, for the whole of the fresh produce industry. This project is due to conclude in the first half of 2009.

•

The reviewed Master Plan for the upgrading and redevelopment of the site was released for stakeholder information and review in December 2007. This was followed by appointment of a project team including project managers, AAP and construction managers, Wiley and Co. in February 2008 and the progression of information workshops for tenants in June and July 2008.

•

Other achievements are as detailed under the department performance reports, which are included under subsequent headings of this report.

The group achieved total revenues for the 2007/08 financial year of $33.966 million, including an increase in the value of investment property held of $8.739 million. The net profit before tax was $16.524 million.

As at 30 June 2008, the group had total assets of $161.526 million and net assets of $86.006 million.

During the course of the year, the company secured long-term hedges against interest rate movements, providing greater levels of certainty given the prospect of unfavourable movements in interest rates.

RETURN TO SHAREHOLDERS The company declared a final dividend of 4.5 cents per share, together with a special dividend of 0.5 cents per share, in relation to the 2007/08 financial year, taking the total dividend to 9.5 cents per share, fully franked. As at the close of the financial year, shares were trading at $3.60 per share, up from $3.00 a year ago.

The annual dividend paid in respect of the financial year of 9.5 cents per share fully franked is up by 0.5 cents per share (5.5%) on the full dividend paid in respect of 2006/07 financial year.

MARKET THROUGHPUT The assessed volume and value of market throughout for the 2007/08 year were up on the prior year.

Volume increased by 3.9% to 578,568 tonnes, while value increased by 6.3% to $1.074 billion.

The throughput volume remains down on the peak tonnages which occurred prior to Cyclone Larry, Citrus Canker and the droughts of recent years.

DEPARTMENTAL PERFORMANCE The reports by managers responsible for the departments within the company, on the following pages, give a more detailed overview of the highlights throughout the financial year.

The financial results of the group, as shown, highlight a further strong performance with an investment in ongoing growth, and increases in the value of the assets held.

The establishment of a Property Department has been a tremendous success with a strong and effective focus given to the array of property management functions. Significant areas addressed throughout the year included property transaction requirements, policy development, market rent reviews and working with the eight South Gate East warehouse tenants in relation to their tenancy fit-out requirements.

The Operations area maintained its focus on site presentation, cleanliness and security, and introduced a range of initiatives to assist in making improvements in these areas.

REPORTS

FINANCIAL PERFORMANCE

BML's substantial commitment to site infrastructure and maintenance is increasingly paying dividends, with significant initiatives in relation to electrical infrastructure upgrading, fire services upgrading and water efficiency projects.

The Marketing and Communications team has performed successfully in the conduct of a range of events, and the major programs run in conjunction with Brismark. This approach provides a cost-effective and efficient means by which to support initiatives where areas of common interest exist.

The Retail Markets operated by Brisbane MarketPlace Pty Ltd, perform a valuable role in increasing the levels of out-of-hours site utilisation and in providing an effective revenue stream.

STAFF The group’s permanent staff as at 30 June 2008 numbered 50 full-time equivalents. Additional casual staff members are employed by the subsidiary company, Brisbane MarketPlace Pty Ltd, as part of its retail market operations. Additional resources are being added in key areas to support growth of the company.

ACKNOWLEDGEMENT AND THANKS The ongoing strong performance of the company is based upon the collective efforts of the team, including the Board, management team and staff.

I thank the BML Chairman, Tony Joseph, Deputy Chairman Tony Kelly and fellow directors Peter Betros, Don Jackson, Mike Ahern, Peter Tighe and Noel Greenhalgh for their commitment and support throughout the year. I also thank my management team and staff for their ongoing efforts and dedication.

Andrew Young Chief Executive Officer

CEO ANDREW YOUNG

BML ANNUAL REPORT 2008

11

PERFORMANCE AND ACHIEVEMENTS

FINANCE AND ADMINISTRATION The financial year ended 30 June 2008 resulted in another strong performance by the group with revenues continuing to rise and capital investment and resource optimisation being areas of focus. Achievements during the financial year include the following: ASSET REVALUATION In line with International Financial Reporting Standards a revaluation of investment properties as at 30 June 2008 occurred. Over the financial year this has resulted in a net increase of $6.12 million in the net assets of the group and is reflected in the financial results. The market value of the investment properties, as advised by LandMark White Brisbane Pty Ltd, is $128.15 million. This revaluation includes land adjoining South Gate East which was bought from the Queensland Government in 2007. It does not include a block of land at Larapinta that was bought in June 2008.

LONG-TERM DEBT The increased debt funding facility negotiated in December 2007 provided an opportunity to enhance the management of long-term interest rates through the use of interest rate swaps.

The current swaps were due to terminate and revert to floating rates in October 2010 and October 2015. The prevailing fiscal climate provided an opportunity to benefit from a transfer to longer-term and swaps were negotiated for 20, 15 and 10-year periods giving certainty of rates over a longer period for planning purposes. This negotiation was to take effect from 4 July 2008. It demonstrates the confidence of bankers in the ongoing growth and management of BML.

CONTRIBUTED EQUITY A Rights Issue to eligible shareholders, on the basis of one offer share for every eight existing shares, was made with the proceeds being used to progress BML’s planned development of the Brisbane Markets site. The offer was fully subscribed and raised funds of $9.96 million.

FINANCIAL PERFORMANCE BML has enjoyed another strong year in revenue generation with an increase of 6.9% in group revenues (excluding asset revaluation revenue). This is a strong result with investment in the infrastructure of the site through repairs and maintenance projects and the level of operational services remaining at the same high level throughout the organisation.

Investment in capital projects that underpin future revenue generation streams for the group will show a return in late 2008 with the completion and handover of the South Gate East facility. This investment was funded by increased borrowings that have resulted, as budgeted, in a decrease in net profit for the 2007/08 financial year.

FINANCE AND ADMINISTRATION MANAGER JOY WILLIAMS

12

BML ANNUAL REPORT 2008

INFORMATION TECHNOLOGY (IT) AND SERVICE PROVISION Throughout the 2007/08 financial year, BML developed a platform to expand its telecommunications services to tenants.

A new data switch network was prepared for introduction in August 2008, which will allow tenants to transfer data between selling floor and warehouse locations without using the internet.

The MX Connect phone network, launched in May 2007, allows tenants to design their own communication system within the current framework as well as provide tenants with flexibility and a competitive price. A continuing roll-out of this service has seen significant savings for each tenant who subscribes. The roll-out of the network will also allow BML to provide a high-speed internet service to tenants over the coming year.

Other projects progressed included: •

Substantial upgrades to the BML computer network including: - An additional server - Several new user terminals

•

Sourcing technologies to increase work-place efficiency.

- Hand-held PDA devices have been provided to Market Officers, which give them up-to-date market information. This technology provides the Market Officers the ability to scan for information from car registration details to the name and contact details of every person with registered access to the Markets.

GOING FORWARD The main focus for the Finance, IT & Service and Administration area for the next financial year will be the consolidation of advances and enhancements, including those that have occurred in reporting and accounting areas. Performance management including expenditure control, service development in support and utilities, and identification of both internal and external opportunities for optimal resource utilisation will be priorities for 2008/09.

5% 2%

FINANCIAL RESULTS 24%

2008 REVENUE BREAKDOWN Rentals and Recoveries

$

15,488,309

61%

Service Revenue

$

5,972,738

24%

Parking and licences

$

2,077,737

8%

Retail markets

$

1,188,326

5%

Other income

$

499,756

2%

Total $

$

25,226,865

Operating Revenues

61%

AIFRS 2008 $

AIFRS 2007 $

Rentals Recoveries (61%) 2005 AIFRS 2006 and AIFRS 2005 AGAAP Service Revenue (24%) $ $ $

25,226,865

23,600,094

21,977,260 20,710,883 Retail Markets (5%)

Parking and licences (8%)

20,710,883

Increase in Value of Investment Properties

8,739,777

4,959,481

Other Income (2%) 1,589,395 13,929,635

Total Revenues

33,966,642

28,559,575

23,566,655

34,640,518

20,710,883

Operating Expenses

13,164,927

11,538,034

10,627,255

9,847,234

9,847,234

Net Profit Before Income Tax and Interest and Depreciation

20,801,715

17,021,541

12,939,400

24,793,284

10,863,649

471,249

434,990

400,157

408,874

2,437,986

Net Profit Before Income Tax and Interest

20,330,466

16,586,551

12,539,243

24,384,410

8,425,663

Interest Expense

3,805,606

2,642,144

2,740,791

2,897,410

2,897,410

Net Profit Before Income Tax Expense

16,524,860

13,944,407

9,798,452

21,487,000

5,528,253

Income Tax Expense

4,948,166

4,123,126

2,949,216

6,528,320

1,876,813

Net Profit After Tax

11,576,694

9,821,281

6,849,236

14,958,680

3,651,440

Dividend Paid

3,182,500

3,015,000

2,680,000

2,680,000

2,680,000

Dividend Proposed Since 30/06/08, payable October 2008

1,884,375

1,675,000

1,675,000

1,340,000

1,340,000

Total Assets

161,526,886

119,093,524

110,767,129

112,806,564

113,019,486

Total Liabilities

75,520,269

51,447,351

49,926,454

56,135,125

56,882,281

Total Equity

86,006,617

67,646,173

60,840,675

56,671,439

56,137,205

Net Tangible Assets Per Share

228.21 cents

201.92 cents

181.34 cents

169.17 cents

165.73 cents

Earnings Per Share#

30.72 cents

29.32 cents

20.17 cents

44.65 cents

10.90 cents

EPS Adjusted for Revaluation Impact#

14.48 cents

19.25 cents

17.12 cents

15.55 cents

10.90 cents

Depreciation Expense

-

PERFORMANCE AND ACHIEVEMENTS

8%

# Note: 2008 figure is based on increased contributed capital of 37,687,500 shares while all other years are based on 33,500,000.

Comparable ratios Earnings Per Share 34.56 cents; EPS Adjusted for Revaluation Impact 16.30 cents.

BML ANNUAL REPORT 2008

13

PERFORMANCE AND ACHIEVEMENTS

PROPERTY In its first year of full operation, the Property department focused on a number of key projects including South Gate East, together with the review of new and existing policies and manuals that support lease and regulation requirements and enhance site operational activities.

In line with the department’s core business activities, there was a strong focus on the management of leases, occupancy levels, asset protection and return on investment for the broad spectrum of industrial, commercial and retail properties that comprise the Brisbane Markets.

SOUTH GATE EAST Work progressed on the state-of-the-art South Gate East warehouse and commercial centre development throughout the 2007/08 financial year with an August 2008 completion date.

Eight existing BML tenants committed to taking all available warehouse space prior to construction commencing.

A fit-out manual was developed in order to preserve the structural integrity, image, quality and standard of South Gate East. This manual sets the minimum standard for tenant fit-out works and will be modified and adapted for wider use throughout the Brisbane Markets.

Some 40% of the South Gate East Commercial Centre was pre-leased to existing Brisbane Markets tenants.

POLICY REVIEW A review of the Leasing Consent Policy occurred to ensure that all future incoming tenants are committed to acting in the best interests of the Brisbane Markets and the fruit and vegetable industry.

The main areas of this review included: •

Policy Development In conjunction with the Operations Department, the following policies were developed:

•

Policy on Conduct at the Brisbane Markets.

This document formalises the manner in which BML will deal with illegal or prohibited acts within the Markets.

•

Waste and Pest Management Policy.

This policy will be released in the first quarter of the new financial year. The proposed outcomes of this policy are to: enhance site presentation, provide a framework for waste management and removal for tenants, provide a clear set of guidelines for cleaning requirements and provide a framework for pest management for tenants.

PROPERTY MANAGER TRICIA WILLIAMS

14

BML ANNUAL REPORT 2008

VALUATIONS BML uses a rental rate review process when negotiating new lease terms to ensure that rental rates within the Brisbane Markets are relevant and current when assessed against the broader property market. Independent valuation firm LandMark White has been retained to conduct the market rent reviews and provided recommendations.

During 2007/08 market rent valuations were carried out on the CHEP Australia Limited land lease; Buildings L; L1 (the George Spencer Building); O, P and U.

OCCUPANCY LEVELS As at 30 June, 2008 occupancy levels within the Brisbane Produce Market continue to remain at 100% while the Commercial buildings (Buildings G, G1 and G2) achieved occupancy levels of 98%.

PROPERTY TRANSACTIONS During the 2007/08 financial year 50 lease transactions were processed. The majority of these transactions related to an exercise of option by tenants for a further term.

Lease assignments were the second highest category of lease dealings.

While the greater part of leases assigned were to existing tenants, a number of new tenants were approved including Perfection Fresh Brisbane Pty Ltd, Fresh Produce Group of Australia Pty Ltd, Workteq Pty Ltd, George Manettas and Tsambica Manettas, and Noel Joliffe.

TENANT IMPROVEMENTS Tenant investment into the improvement of BML’s properties remains high. Throughout the financial year, BML received 17 applications for alterations and additions to premises, excluding the extensive investment South Gate East tenants have committed towards their fit-out works including refrigeration plant, equipment and racking.

ANCILLARY PRODUCTS The sale of ancillary products remains popular with selling floor tenants. BML received five applications in the 2007/08 financial year including a request by Spar Fresh Pty Ltd to sell “retail ready” meat products from its subleased premises in Building E. The addition of meat products to the approved ancillary products list was approved subject to a number of conditions including tenants’ providing evidence of all food safety standards being met and restricting the sale of meat to Buildings A and E.

LETTABLE AREA CATEGORY

NUMBER

LETTABLE AREA (M2)

Selling Floor Warehouses

5

18,361

Multi-Tenanted High Clearance Warehouses with Docks

5

19,098

Multi-Tenanted High Clearance Warehouses without Docks

7

21,911

Sole Occupant High Clearance Warehouses with Docks

8

33,825

Multi-Tenanted Low Clearance Warehouses

8

13,514

Retail*

5

7,034

Commercial Offices*

5

2,688

Mobile Aerials

2

110

Land Lease

2

21,539

TOTAL

44

138,080

#

PERFORMANCE AND ACHIEVEMENTS

BRISBANE MARKETS BY PRECINCT AND BUILDING TYPE

*Retail and Commercial Offices leases are typically located in the same buildings # Includes service station site

BML ANNUAL REPORT 2008

15

PERFORMANCE AND ACHIEVEMENTS

OPERATIONS Throughout 2007/08, BML continued to provide a high standard of support for more than one million Market users.

The Market community’s ongoing support for BML initiatives enabled improvements to workplace safety, waste management and security to be seamlessly introduced throughout the site.

SITE PRESENTATION AND CLEANLINESS

The Brisbane Market Regulations were reviewed prompted by both the establishment of the South Gate East development and revised policies relating to leasing, waste management and conduct.

It was another record year for Market throughput with increased demands to manage the site’s presentation met without issue.

BML introduced a multilingual safety induction program with the Market Regulations, induction DVD and entry signage now available in English, Vietnamese and Mandarin.

Reusable cardboard recycling volumes increased 20% over the 2006/07 year highlighting the ongoing commitment and efforts made by the Market community to decrease the impact on the environment.

This initiative will assist more Market users in gaining an understanding of basic functionality of the Market and increase compliance with the Market Regulations.

Plans were finalised for the Market waste transfer station, adjacent to O Block, to undergo a major refurbishment in the next financial year.

SITE FACTS AND FIGURES NUMBER OF

#2007/08

#2006/07

FORKLIFTS

STAFF

Registered Forklifts

293

317

As the BML site continued to experience growth, the Operations department focused on the educational and development requirements of its staff members to ensure continuous improvement with the evolving operational demands of the Market.

Forklift Operator Permits*

938

879

926

934

Allocated

900

874

Covered unloading heavy vehicle truck parks and early access parks

144

145

The BML Workplace Safety Committee worked diligently in addressing potential safety issues. The committee’s aim is to minimise workplace accidents and improve work methods across the business.

BUYERS Access cards issued CAR PARKS

ACCESS AND SECURITY

# Averaged over the 2007/08 and 2006/07 financial year

BML has continued to invest heavily in site security with up to 47 closed-circuit television (CCTV) cameras installed throughout the site monitored 24 hours a day by BML staff members.

* The number of forklift operator permits issued has increased 7% since the last financial year and 46% since 2004/05

An emphasis on security patrols has aided in decreasing incidents of inappropriate or illegal activity over the previous year, providing tenants with the comfort of knowing their businesses are secured.

OPERATIONS MANAGER JOHN MORRISSEY

16

MARKET REGULATIONS AND INDUCTION PROGRAM

BML ANNUAL REPORT 2008

BML has built on its previous efforts in the areas of effective site improvements and preventative maintenance.

INFRASTRUCTURE PROJECTS

Other projects have included:

Upgrades to BML’s electrical infrastructure have been an ongoing priority in the 2007/08 financial year with improvements including a new:

•

Installation of automatic fire detection systems in three warehouses and an office block.

•

The establishment of a maintenance program for all portable fire equipment throughout the site.

•

Substation board at V Block to service major warehouses.

•

Set of distribution boards to a number of trading floors.

•

Building distribution board at V Block.

•

Distribution boards throughout T Block.

Priorities for the 2008/09 financial year include: •

a focus on fire safety (to comply with the introduction of AS1851-2005).

•

a review of the fire doors and the emergency lighting, which were inherited from the Queensland Government.

•

the construction of a new 500m2 waste management facility, with integrated sump and water treatment.

•

a further focus on water savings through a leak detection audit and the use of alternative supplies such as captured rainwater for non-potable uses.

Many of these boards are modular and flexible in design to allow them to be recycled into future buildings.

A number of sewage pumping stations were upgraded offering improved reliability and early detection of problems.

Work continued on the MD110 PAX telecommunication network with all Line Interface Modules and associated interface hardware now supplied with an uninterrupted power supply and automatic diesel generators.

BML’s Site Infrastructure department were involved in addressing security and service requirements for the South Gate East development.

2008 NUMBER OF FACILITIES OPERATED AND MAINTAINED BY BML Fire Extinguishers

85

It was another excellent year for safety within the Maintenance department highlighting the ongoing commitment to the education and training of staff. Staff members were trained in confined space entry, first aid and oxygen administration, safe evaluated work platform operation and electrical switchboard rescue.

Fire Hydrants

131

Fire Hose Reels

275

Dock Levellers

115

The support and co-operation of Brisbane Markets' tenants ensured water consumption was reduced across the Markets site by more than 55% since the first imposition of water restrictions in 2005. This result was achieved through a series of water-saving measures including water-efficient cleaning practices, upgrades of infrastructure, capture and reuse as well as process improvement. The work has included major projects such as mezzanine toilet upgrades.

Sewage Pumping Stations

9

Electrical Substations

22

Back Flow Prevention Devices

70

CCTV Cameras

47

Fire Indicator Panels

30

Lifts

1

Generators (Back-Up Power Supply)

5

Public Toilet Blocks

19

Total Toilets (Cubicles)

357

Light Poles

566

Area Lighting Control Boards

67

LPG Facility

1

Water Meters

197

Trade Waste Meters

14

Electricity Meters

363

PERFORMANCE AND ACHIEVEMENTS

SITE INFRASTRUCTURE

SITE INFRASTRUCTURE MANAGER ANDREW MAY

BML ANNUAL REPORT 2008

17

PERFORMANCE AND ACHIEVEMENTS

MARKETING AND COMMUNICATIONS The combined BML and Brismark marketing and communications team of four continued to focus on a coordinated community and industry program, consolidating both organisations’ resources for a common goal.

MARKETING AND COMMUNICATIONS BML continued its public relations and media campaign to gain positive media coverage for Brisbane Markets, its initiatives and position on industry issues. Editorial coverage saw issues and events such as the Horticulture Code of Conduct, BML expansion, Australian Competition and Consumer Commission (ACCC) grocery price inquiry, Fresh Tastes program and retailer awards, 2007 Mango Auction and the Brisbane Produce Market, Brisbane Flower Market and Brisbane MarketPlace gain effective coverage.

A suite of advertisements appeared in industry publications to reinforce corporate branding, positioning and services to the industry.

BML’s CEO, Andrew Young continued his weekly ‘Comment’ column in Queensland Country Life’s Horticulture section and continued to ensure a regular and high profile voice for Brisbane Markets issues and positions.

Fresh Source magazine is the Brisbane Markets bimonthly magazine aimed at growers, wholesalers, retailers and other industry players. The magazine now brings Brisbane Markets and industry issues to over 5,000 growers, households and organisations throughout Queensland and Australia wide.

BML’s website www.brisbanemarkets.com.au was redesigned in January 2008 and has experienced an increase of more than 100% unique visitors since this time.

The site continues to be a popular source of information on the Markets, upcoming events, news, pricing updates and other relevant information.

18

BML ANNUAL REPORT 2008

The Fresh Tastes retail development program is custom designed to support fruit and vegetable retailers who buy produce from the Brisbane Markets. The number of retailers in the program increased from 146 at the end of the 2006/07 year to 150 at the end of the 2007/08 year.

Notably retailer participation in Fresh Tastes activities increased substantially with more retailers using the Fresh Tastes brochures and poster suite in their stores and effectively utilising other parts of the program. More than 12,000 entries were received from stores across South East Queensland in the Fresh Tastes Win $1,500 of Fruit and Vegetables consumer competition.

The Fresh Tastes Retailer of the Year was announced at the Brisbane Markets gala dinner, which was held at the Brisbane Convention and Exhibition Centre and treated more than 700 guests to a night of entertainment. Farmer Joe’s Country Market at Kedron won the prestigious award for 2007 ahead of another 29 high quality finalists.

QUEENSLAND KIDS FRESH NET (QKFN) QKFN was launched in 2003 as an initiative to improve the education and promotion of health and nutrition within the school community.

In the 2007/08 financial year the number of Queensland schools registered in the QKFN program increased by 10% to 724.

Marketing and Communications staff members visited more than 100 schools and presented the Apples ain’t Apples presentation educating over 5,500 primary school children about fruit and vegetables and gave samples of different types of apples.

A further 13 schools and a total of 400 students toured the Markets to learn more about its operations and the different types of fruit and vegetables available. The QKFN team also presented at Ag Ed days at numerous regional agricultural shows.

Fruit characters Oscar Orange, Summa Strawberry, Bazza Banana and Megabite Apple took turns in visiting schools and other events to promote healthy eating and the consumption of fruit and vegetables.

The www.freshforkids.com.au website, licensed from the Sydney Markets and promoted to children as part of the QKFN Program continues to gain a strong number of visitors from Queensland with a total of 640,114 unique visitors over the financial year.

BML cemented its ties with the Queensland Association of School Tuckshops (QAST) and has spoken at and participated in its events. This continuing dialogue with QAST and its members, along with the distribution of the popular Canteen Fresh publication and tuckshop competition, aims to encourage tuckshop conveners to effectively market fresh fruit and vegetables to school children.

BRISBANE MARKETS AND COMMUNITY EVENTS AND SPONSORSHIPS The Brisbane Markets Golf challenge held in July was extremely popular with over 100 challengers vying for the coveted champion’s trophy. BML ran this event for principals of tenant companies and event sponsors as a social and networking event.

BML again sponsored the Brisbane Markets Agriculture Hall at the Royal Brisbane show (EKKA), and ran two successful display areas. Fresh Tastes retailers dazzled crowds with over 50 cooking demonstrations and taste testing. More than 1,000 children took part in free kids cooking classes while their parents watched on.

The 2007 Mango Auction raised awareness of the incoming summer fruit season as well as $41,000 for nominated charities Life Education Queensland and Redkite. Fresh Tastes retailer Robbie Guardala, from Fruity Capers, paid $15,000 for the symbolic first tray of mangoes.

BML partnered with Keep Australia Beautiful Queensland as naming rights sponsor of Brisbane Markets Health and Nutrition Award in the Green and Healthy Schools program.

BML also supported the Royal Children’s Hospital Working Wonders Fit 4 Fun program encouraging children to achieve healthy eating and exercise goals. BML partnered with Primary Industries Week and were involved in the education of hundreds of children at Rural Discovery Day.

PERFORMANCE AND ACHIEVEMENTS

FRESH TASTES RETAILER PROGRAM

BML supported the 2008 Australian Chamber of Fruit and Vegetable Industries Conference, Fruition, by being a sponsor and co-hosting the 2008 Gala dinner in March.

MARKETING AND COMMUNICATIONS MANAGER ANN-MARIE JOHANSEN

BML ANNUAL REPORT 2008

19

PERFORMANCE AND ACHIEVEMENTS

RETAIL MARKETS BML recorded another strong performance from Brisbane MarketPlace (BMP) for the 2007/08 financial year.

Positioned as Brisbane’s largest weekend retail markets BMP continued to enjoy customer attendance at more than 10,000 per week and occupied stalls averaging over 460 per week. The steady growth of the previous financial years continued with increases in both customer numbers and revenue levels.

OPERATIONAL HIGHLIGHTS:

It also marked the start of a new retail market expansion with the establishment and operation of a gourmet food market at the Brookwater Golf Club. The Brookwater Gourmet Market is managed by BMP and operates the first Sunday of each month.

•

•

Gross revenue increased by over 3%.

•

Gross return to BML increased by over 3%.

•

Licence fees paid to BML surpassed $1 million.

•

Customer attendance grew to more than 500,000 per annum.

•

Commencement of Brookwater Gourmet Market.

ANNUAL PROFIT AND LICENCE FEES PAID BY BMP TO BML In the four years that BML has operated and managed the weekend retail markets there has been an increase of 168% in profit and licence fees paid.

2004*

$399,660

2005

$656,427

2006

$817,802

2007

$1,042,503

2008

$1,071,625

* BMP commenced operation and management in November 2003. For comparison purposes actual results have been annualised.

BML ANNUAL REPORT 2008

Stall Management: Implementation of a stall management system.

Critical data such as stall numbers, fees collected and levies recovered can now be thoroughly analysed.

Food Court: Discontinued the sale of food to concentrate on the sale of beverages only. This resulted in a reduction of staff numbers, an increase in the sales of drinks and improvements in the level of service supporting the dining area.

Major highlights for BMP for the year 2007/08 included:

RETAIL MARKETS MANAGER KEN KAY

20

•

Rationalisation of food court traders and stall fees providing a greater range and quality of foods sold.

Relocation of the BMP Information Booth to the food court area providing better service to our customers.

•

Waste Removal: Waste removal levies for the Saturday Fresh Market were overhauled and are now based on a userpays principle, effectively reducing the volume of waste materials brought into the retail markets and encouraging stallholders to be more conscious in sorting organic waste from cardboard.

OUR PEOPLE

MANAGEMENT TEAM

Andrew Young – Chief Executive Officer Joy Williams – Finance and Administration Manager Tricia Williams – Property Manager John Morrissey – Operations Manager Ann-Marie Johansen – Marketing and Communications Manager Andrew May – Site Infrastructure Manager Ken Kay – Retail Markets Manager Deborah Sherman – Executive Assistant Julian Kreundl – Service Development Manager

SHAREHOLDERS

BOARD OF DIRECTORS

CHIEF EXECUTIVE OFFICER

Service Development Manager

Finance and Administration Manager

Operations Manager

Corporate Communications Manager

Property Manager

Site Infrastructure Manager

Retail Markets Manager

BML ANNUAL REPORT 2008

Executive Assistant/PA

21

OUR PEOPLE

BOARD OF DIRECTORS BML employs 46 full-time, 2 part-time and 4 casual staff, while Brisbane MarketPlace employs 1 full-time and up to 30 casual staff.

The group has a strong commitment to the professional development of its employees and all operational staff members enjoy employment conditions covered by a Certified Agreement. A high priority is placed on the development and improvement of Workplace Health and Safety regulations at the Markets for the benefit of all staff and Market users.

ANTHONY (TONY) JOSEPH (Chairman) Tony is a director of a number of private companies with interests in fruit and vegetable wholesaling and exporting with 37 years’ experience in the Brisbane Markets. Since 1994, Tony has been Managing Director of Alfred E Chave Pty Ltd, an established business with a long and successful history of trading in the Brisbane Markets. Tony has been on the Board of The Queensland Chamber of Fruit and Vegetable Industries (Brismark) Executive since 1982, five of those as President, and was a long-standing member of the Brisbane Market Trust prior to corporatisation by the state government.

Tony did two and half years’ National Service with the Australian Army including a seven-month tour of duty in Vietnam in the early 1970s.

TONY KELLY (Bachelor of Laws) Tony is a qualified lawyer having graduated from the University of Queensland in 1984. His work in the legal profession included time as a judge’s associate and commercial law experience with a leading Brisbane law firm.

In 1987 he commenced with the Carter & Spencer Group where he remained until 2004, having been appointed a director from 1992. Tony has been involved in the fresh produce industry for over twenty years. He is also a former director and president of Brismark, and director and vice president of the Australian Chamber of Fruit and Vegetable Industries Limited. Tony is currently the Chairman of the Brisbane Lions AFL Football Club and Director of the Gladstone Ports Corporation.

PETER TIGHE Peter is a director of a number of private companies with interests in fruit and vegetable wholesaling and marketing.

His family has a long history in the Markets and Peter is a second-generation member with 30 years’ experience in fruit and vegetable wholesaling. For the past 25 years, he has been Managing Director of J H Leavy & Co. Peter has also been a director of Brismark since 1988.

TONY JOSEPH

22

BML ANNUAL REPORT 2008

TONY KELLY

PETER TIGHE

ANDREW YOUNG

Andrew has a history of employment in agriculture with extensive experience in policy formulation, service development and business management. His experience in the industry includes his involvement in communication with the relevant agencies within the state and federal government and addressing national issues through both the Australian Chamber of Fruit and Vegetable Industries and the Central Markets Association of Australia. He has had extensive involvement in relation to the reviews of legislation impacting upon the operation of Market wholesalers, the Central Markets and the current proposal to regulate the industry. He has had an active involvement in addressing issues impacting on the marketing sector of the horticultural industry and has conducted extensive research on Central Markets in Australia, Asia, Europe and the USA. Andrew is currently Chief Executive Officer of Brismark, and Chief Executive Officer of BML.

THE HON MICHAEL AHERN AO (Bachelor of Agricultural Science, Honorary Doctorate of Queensland University of Technology) Former Queensland Premier the Hon Michael Ahern was a member of the Australian Department of Industry, Technology and Communications Ministerial Council for three years. While Minister for Industry, Small Business and Technology, Mr Ahern developed the first technology strategy for Queensland and was the state’s first technology Minister.

Mr Ahern was also formerly Primary Industries Minister and a member of the Australian Fisheries Council, Minister for Health and Environment and State Treasurer.

Mr Ahern is appointed the Special Trade Advisor by the Queensland Government to promote Trade and Investment.

He is Chair of the Australian Liver Foundation, Member of the Board of Governors of the ATSE Clunies Ross Foundation, Chairman of Directors of McIntosh Financial Planning Pty Ltd, Chair of the Family Care Friendly Society and Chair of the Family Care Medical Services Ltd.

MICHAEL AHERN

DONALD JACKSON

DONALD JACKSON Don has had an extensive business career and over the past 21 years has held various positions including State Manager of Penfolds Wines, General Sales Manager and Director of Power Brewing Co., Chairman/Managing Director of Dalrymple Bay Coal Terminal Holdings, Chairman of the Mardi Jackson Foundation and Director of Sunshine Coast Turf Club and Sunshine Coast Helicopter Rescue Service.

In addition, Don has been actively involved with numerous sporting and recreational clubs and associations. He is a Director and Life Member of the Brisbane Broncos Football Club, and is a Hall of Fame member of the Queensland Restaurant and Caterers Association and Queensland Hotels Association.

OUR PEOPLE

ANDREW YOUNG (Bachelor of Commerce, Bachelor of Agricultural Science (Hons), Diploma of Corporate Management)

PETER BETROS (Bachelor of Arts, Diploma of Education) Peter has had an extensive career in the fresh fruit and vegetable industry, being a director of the Betros Bros group of companies since 1983. During this time he has been actively involved in all aspects of running this family-owned fruit and vegetable retailing, wholesaling and provedoring business, which employs more than 180 people. Peter has visited the Markets as a buyer every day since 1983.

Peter is a former director of the Brisbane Market Authority (1996 to 1999), currently a Director of the Australian Rugby League, the Queensland Rugby League and the Chairman of the South-East Queensland Division of the Queensland Rugby League.

NOEL GREENHALGH Noel has a comprehensive knowledge of the fruit and vegetable industry, having been Managing Director of RW Pascoe, a leading Brisbane Markets fruit and vegetable wholesaling business since 1989. During this time he has been involved with all aspects of running this successful business. Born and raised in Ireland, Noel played professional soccer for his country at youth level before coming to Australia on a visa to play soccer in 1987 and staying on.

Noel has also been a director of Brismark since 2000.

PETER BETROS

NOEL GREENHALGH

BML ANNUAL REPORT 2008

23

INVESTMENT IN INDUSTRY

INVESTMENT BML has transformed the Markets from the long-held rigidity of being a Queensland Government-owned facility to becoming an active industry-focused, community and environmentally responsible organisation.

The close ties and sharing of resources with wholesalers’ service organisation Brismark, along with strong stakeholder consultation, continues to foster a co-operative and united vision for the future operation and development of the Markets.

INFRASTRUCTURE BML’s vision to further develop the Brisbane Markets site into a world-class facility in the warehousing, marketing and distribution of fresh produce and flowers has progressed.

This is a tremendous achievement by Brisbane Market stakeholders who have continued to respond to the challenges of staying relevant and competitive in a rapidly changing and highly competitive industry.

SOUTH GATE DEVELOPMENT In May 2007 the first sod was turned on construction of BML’s $33 million multi-tenant South Gate East office and warehousing development.

At completion, in August 2008, this new facility will add a further 14,000m² of temperature-controlled cool rooms taking the overall growth since 2002, when including additional tenant-fit installed cool rooms, to in excess of 35,000m².

The new facility will assist meeting the growing demand for warehouse space within the Brisbane Markets. It includes new warehouses, state-of-the-art cold rooms and fast cooling facilities and commercial office premises.

The building, which comprises warehouse and office space totalling 16,089m2, on a 45,000m2 site, is an important addition to what the Brisbane Markets offers to the fresh produce industry.

South Gate East reflects Brisbane Markets Limited’s commitment to Queensland’s horticulture industry and the business confidence, which the wholesaling sector of the industry has in relation to the future of the industry.

24

BML ANNUAL REPORT 2008

INVESTMENT IN INDUSTRY

MASTER PLANNING

MASTER PLANNING The South Gate East precinct is the first of a number of initiatives that will see the ongoing upgrading and development of the Brisbane Markets site over the next 10 years. Further projects proposed under the Master Plan will see new buildings gradually replacing older facilities in what will be in excess of a further $100 million facelift for the site.

BML successfully purchased 9.7 hectares of land, adjacent to its existing South Gate precinct, from the state government.

The Queensland Department of Primary Industries and Fisheries once occupied the $7 million site.

The ultimate aim is for the Brisbane Markets facility to have the flexibility to respond to stakeholder requirements and provide the highest order of facilities to meet the needs of the industry.

BML ANNUAL REPORT 2008

25

YEAR IN REVIEW

A

B

C

YEAR IN REVIEW It was another year of progress for Brisbane Markets with infrastructure improvements moving forward and industry engagement continuing to be a priority.

In line with BML’s primary objectives the following takes a glimpse at the issues and events that made 2007/08 such a success.

Facilitate the efficient and effective operation of the Brisbane Markets.

A Brisbane Markets wholesalers took part in a busy Work Safe Week 2007 to learn more about reducing accidents on site.

B Reusable cardboard recycling volumes increased 20% Multilingual safety induction program Upgrades to electrical infrastructure Tenant co-operation in reducing water consumption 17 applications for alterations and additions to tenant premises (excluding South Gate East) A new data switch network was prepared

Provide world-class infrastructure and services to facilitate the marketing and distribution of fresh produce to domestic and international customers.

BML finalised its purchase from the state government of 9.7 hectares of land adjacent to its existing South Gate precinct for $7 million.

BML purchased 1.74 hectares of land at Larapinta for $4.982 million.

Tenants continued to invest in coldroom up grades with 62,541 square me tres now covered. So me 67% of warehouses and 59% of selling floo rs are temperature-controlled .

aste general w tonnes of large skips.

2 2 d ve o rem 18 an Up Day ble timber waste in la Market Cle The 2007 r 12 tonnes of recyc he and a furt

G

H

I

D

E

F

Work with industry stakeholders and alliance partners in pursuing opportunities to enhance the level of services offered to tenants and the role of the Markets in the marketing and distribution of fresh and processed produce and flowers.

C Brisbane Markets CEO Andrew Young was named as one of the 13-member Produce Marketing Association Australia-New Zealand Country Council to guide the organisation on the best value and services it can provide to the Australasian area.

Since 2004 BML has continued to join with Brismark to contribute substantial funds to communicate with growers, government and media at significant industry events.

Over 23 industry groups with over 400 people including growers, industry associations, food service representatives and media took the opportunity to tour the Brisbane Produce Markets trading floor area through a tailored delegation programs.

D Brisbane Produce Markets Grower survey flagged the issues raised from over 800 growers, with one lucky entrant (Sib Rapisarda) winning a Toyota Hilux.

E Grower organisations were the winners with Brisbane Produce Market sponsoring the Australian Custard Apple and Sweet Persimmon Industry conference, Australian Melon Conference, Bowen District Growers Association’s gala dinner, Queensland Strawberry Growers Association conference and the Stanthorpe Apple and Grape Harvest Festival.

Over 150 d Fruit and elegates attende d Fruition Vegetable sponsore 2 d by BM Industries Confere 008, Annual Cha L in Brisb m nce, hos ane. ted by B ber of rismark,

STRENGTH BUILT THROUGH SUCCESS

Contributing its expertise and resources towards the Central Markets Association of Australia offering full support on industry issues with Andrew Young acting as spokesperson on the Horticulture Code of Conduct issue.

A range of initiatives areTHROUGH funded to help build the STRENGTH BUILT SUCCESS relationships with growers: Fresh Source, Grower Hotline 1800 631 002 Free Call Service, Dedicated Industry Liaison Officer, Fresh Test, Grower Delegations, Grower Kits, Wall Planner, Industry Representation, Regional Tours, Industry Promotions and Sponsorships.

STRENGTH BUILT THROUGH SUCCESS

F Brisbane Flower Markets experience a busy Valentine’s Day and Mother’s Day. G Industry Liaison Officer met with farmers in the Bundaberg and Wide Bay region, Granite Belt, Burdekin and the Bowen regions to enhance relationships and discuss numerous industry issues that affected both growers and the Central Markets system.

STRENGTH BUILT THROUGH SUCCESS

rstanding orandum of Unde Signing of a Mem tion cia so As s er ow ict Gr with Bowen Distr

J

K

L

YEAR IN REVIEW

Brisbane Markets CEO Andrew Young appointed to 26-person Future Focus Industry Leadership Group to provide insight into the strategic issues confronting horticulture.

M

N

n raised more Markets Mango Auctio The Annual Brisbane te and Life dki Re s ritie cha n’s than $40,000 for childre h Fresh Tastes retailer Robby wit Education Queensland s, Toowong, crowned the 2007 per Guardala from Fruit Ca y of mangoes g the symbolic first tra Mango King after buyin for $15,000.

To promote the role and importance of the Brisbane Markets and the benefits of fresh fruit and vegetables to the industry and consumers.

H Farmer Joe’s Country Market was named the Fresh Tastes Retailer of the Year at the annual Brisbane Produce Market Gala Dinner.

I

J Over 1,000 kids donned chef hats to learn to cook while local Fresh Tastes greengrocers dazzled show visitors with their cooking prowess at the Brisbane Markets Agriculture Hall for the 10-day 2008 Royal Queensland Show.

K Fresh Tastes Retailers Information Sessions held to assist the independent greengrocers.

Media Visits. Industry and mainstream media continued their interest in the BML brands with a focus on the Brisbane Produce Market, Brisbane Market South Gate, Brisbane Flower Market and Brisbane MarketPlace.

L New look BML website has seen more industry and customers log-on to www.brisbanemarkets.com.au than ever before.

M N The Brisbane Markets Queensland Kids Fresh Net team visited over 100 Queensland schools, presented to more than 5,500 students and conducted 13 tours of the Brisbane Markets, hosting more than 400 students to educate young Queenslanders on the importance of a healthy, balanced diet.

YEAR IN REVIEW

O 150 independent greengrocers registered for the Fresh Tastes program, a custom-designed program designed to foster excellence in fresh produce retailing and to encourage the public to buy from their local greengrocer.

KIN G O F F RU IT

Facilitate the ongoing growth of the Brisbane Markets through the development of Brisbane Markets South Gate and the redevelopment of the Centre Courtyard area.

Construction progresses on the $33 million multi-tenant South Gate East warehouse and commercial centre.

28

BML ANNUAL REPORT 2008

Pictured at the first sod tur ning were (from left Mark McNab, BML CE ) O Andrew Young, BM McNab Constructions and APP Assistant Pro L Chairman Tony Jos eph ject Manager Alex Gu nawan.

O

YEAR IN REVIEW Achieve a commercial rate of return for investors.

A 6.9% increase in Group Revenues (excluding revaluation revenue) A Rights Issue to eligible shareholders was fully subscribed and raised $9.96 million Payment of annual dividend of 9 cents/share fully franked in line with policy plus a special dividend payment of 0.5 cents per share, fully franked.

This is a total dividend of 9.5 cents compared to a total of 9 cents in 2006/07

29

NOVEMBER

2007

ANOTHER YEAR ON

HORTICULTURE CODE OF CONDUCT • First meeting of Horticulture Code Committee.

• Chairman of the Horticulture Code Committee releases a call for industry’s views on the impact and effectiveness of the code.

JANUARY Submissions by Brisbane Markets Limited and Brismark to the Horticulture Code Committee.

FEBRUARY • Horticulture Code Committee considers submissions from industry.

• ACCC inquiry into the competitiveness of retail prices for standard groceries progresses with the release of an Issues Paper. The enquiry also to review the effectiveness of the Horticulture Code of Conduct.

2008

MARCH Public submission to ACCC Grocery Inquiry by Brismark and BML.

APRIL Public hearing – Brisbane hearing attended by principals of Brisbane Markets and CEO.

MAY ACCC inquiry into the competitiveness of retail grocery industry and effectiveness of the Horticulture Code of Conduct continues with public hearings.

JUNE • Public submission on Horticulture Code lodged by Brismark and BML. • Supplementary public submission on Horticulture Code lodged by Brismark.

JULY ACCC report and recommendations released to be reviewed.

(FROM LEFT) PRODUCE AND GROCERY INDUSTRY CODE OMBUDSMAN DAVID NEWTON, BIANCA KEYS, ASSISTANT HORTICULTURE MEDIATION ADVISER, BRISMARK GENERAL MANAGER IAN MAIN AND BML CEO ANDREW YOUNG DISCUSS THE HORTICULTURE CODE OF CONDUCT AT A WHOLESALERS’ AWARENESS WORKSHOP

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BML ANNUAL REPORT 2008

The Australian government implemented the much-debated Horticulture Code of Conduct on 14 May 2007.

The introduction of the code followed criticism voiced strongly by various sectors of the industry in relation to the mandatory imposition of an unworkable commercial relationship between growers and wholesalers. BML has continued to seek amendments to the code due to its unworkable nature.

Feedback from growers and wholesalers continued to highlight ongoing concerns with the prescriptive, inflexible code that excluded retailers, processors and exporters who buy direct from growers.

A change in federal government, in November 2007, resulted in a commitment to review the code in conjunction with the Australian Competition and Consumer Commission (ACCC) review of the retail grocery industry.

The wholesaling sector was cautiously optimistic that the ACCC’s recommendations regarding the effectiveness of the Horticulture Code of Conduct may finally result in amendments that would assist making the code workable.

There are concerns about a number of the recommendations and how the detail will be developed but there is also optimism that the industry could finally move towards a code that can have wider industry support and endorsement.

MOVING FORWARD MOVING FORWARD A workable code would be welcomed by the wholesaling sector, but the recommendation to remove the flexibility and protection offered by pre-Code contracts is a concern.

There remains a strong commercial argument that traders and growers should be allowed some flexibility to agree to commercial arrangements which contract out of certain prescriptive requirements of the code.

It is now important for the federal government, and in particular Minister for Agriculture, Fisheries and Forestry Tony Burke, to maintain the momentum through a process which ensures a commercial and focused approach to implementing amendments to the code.

Brisbane Markets wholesaler representative organisation Brismark and BML will maintain their stance in seeking greater flexibility and an outcome which is both cost effective and workable for the wholesaling sector of the industry.

BML ANNUAL REPORT 2008

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CORPORATE DIRECTORY

DIRECTORS Anthony John Joseph Anthony Robert Kelly Andrew Alexander George Young Donald Stanley Jackson Michael John Ahern Peter Gerard Tighe Peter Joseph Betros Noel Anthony Greenhalgh COMPANY SECRETARY Joy Lindsay Williams ADMINISTRATION AND REGISTERED OFFICE Upper Level Brisbane Markets Commercial Centre Sherwood Road, Rocklea Qld 4106 T: (07) 3915 4200 F: (07) 3915 4291 E: admin@brisbanemarkets.com.au W: www.brisbanemarkets.com.au SHARE REGISTRY Link Market Services Level 22, 300 Queen Street Brisbane Qld 4106 E: registrars@linkmarketservices.com.au W: www.linkmarketservices.com.au AUDITORS AND INDEPENDENT ACCOUNTANT Pitcher Partners Chartered Accountants Level 21, 300 Queen Street Brisbane Qld 4000 SOLICITORS Hopgood Ganim Lawyers Level 8 Waterfront Place 1 Eagle Street, Brisbane Qld 4000

SHARE TRADING As an unlisted public company, shares in BML are not traded on the Australian Stock Exchange or any other share trading exchange system. BML does, however, maintain a register of parties interested in buying shares in the company and offers guidance in the process.

If a shareholder is wanting to sell shares in the company and advises BML, the information will be circulated to all parties who have expressed an interest in buying shares, and the individuals concerned can then negotiate a price and progress the sale.

If a sale is finalised, BML’s share registry, Link Market Services, must be sent a copy of the original stamped transfer form so that the change of ownership can be recorded on the company’s share register.

People interested in buying or selling shares in BML, or who need any information in this regard, may register their interest by contacting Deborah Sherman at BML on (07) 3915 4200.

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BML ANNUAL REPORT 2008

Brisbane Markets Limited ACN 064 983 017 ABN 39 064 983 017 Upper Level, Brisbane Markets Commercial Centre, Sherwood Road, Rocklea PO Box 80, Brisbane Markets 4106 Telephone: (07) 3915 4200 Facsimile: (07) 3915 4291 www.brisbanemarkets.com.au admin@brisbanemarkets.com.au