AR07

BML Annual Report 2007 3

PERFORMANCE AND ACHIEVEMENTS

MISSIONOur 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.

4 BML Annual Report 2007

TABLE OF CONTENTS

3 Corporate Profile

Company profile

Objectives

Our history

The purchase

6 Importance within the industry

Queensland’s Central Market hub

Industry statistics

Brisbane Markets at a glance

Company highlights

8 Chairman’s Report

10 CEO’s Report

12 Performance & Achievements

Finance and Administration

Property

Operations

Site Infrastructure

Marketing and Communications

Retail Markets

21 Our People

Management Team

Board of Directors

24 Five Years of Ownership

Developing the culture

Engagement with industry

Leading industry

Community engagement

Market development

30 Lost Opportunity

32 Corporate Directory

32 Share Trading

The 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.


CORPORATE PROFILE

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 records annual trade averages of over 600,000 tonnes of produce valued at more than $1.011 billion in 2006/07, up by 4% on the throughput figure for the prior 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 international-standard 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.

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.

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.

ObjectivesThe primary objectives of BML are to:

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

The sale was unique. BML comprises 150 industry shareholders including the wholesaler service organisation Brismark that 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.


CORPORATE PROFILE

The story of how Landacq Limited became the successful bidder in a competitive tender process is just a small part of Queensland’s Central Markets 43 year history at the Rocklea site and 135 year history in Brisbane.

Brisbane Markets itself has operated for almost 135 years after it was established in Market Street, in Brisbane city, in the 1870s, by fruit and vegetable traders who received their produce and made deliveries by river barges. With the arrival of trains, the Markets were relocated to Roma Street in 1894, where they came under the control of Brisbane City Council, and they expanded into Turbot Street. The Queensland Government moved the site to Rocklea on 31 August 1964.

Since this date, the Brisbane Markets has grown substantially with additional land bought for expansion and the construction of numerous warehouses, distribution centres and other buildings.

A truck delivering to a typical trading floor at

the Roma Street Markets. The clash between market

vehicles and the morning peak hour traffic became

the dominant factor in calls to relocate the inner-city

market to Rocklea.

OUR HISTORY


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.

Over the past five years under BML, committees have been established to provide forums for other Market tenants and industry participants including growers, retailers and consumers. The result has been an environment of cooperation and consultation enabling constructive outcomes of benefit to the entire industry.

Landacq Limited formed in 1994 to acquire a block of land which could be a suitable greenfield site for a new fruit and vegetable market.

It had 32 shareholders, all of whom were primary wholesalers in the Brisbane Markets. The company acquired land at Yatala and existed with this sole asset and net assets of $4.8 million as at 30 June 2001.

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 market, with buying the existing Markets site and gradually redeveloping it to meet the needs of the industry.

This decision model analysis, conducted with external third party input (Andersens Consulting), clearly showed that acquiring the existing site was the preferred option.

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 a suitable legal entity to be a bidding entity for the Brisbane Markets.

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

In order to use Landacq Limited as the bidding entity, the company was fully restructured and additional capital had to be raised, a new constitution was put in place and a management agreement drawn up such that while Brismark would fund the bid, if it were successful, Brismark would gain a significant and appropriate benefit by way of expenditure reimbursement, together with capital raising and success fees.

NOTE: BML adopted the new Australian International Accounting Standards (AIFRS) during the 2006 financial year.

Brisbane Market Corporation 2000/01

Brisbane Markets Limited 2006/07

Change

Revenue $ 14,923,201 $ 23,600,094 (excluding revaluation)

58%

Number of permanent staff 32 50 # 56%

Earnings before interest and tax $ 6,248,470 $ 16,586,551 ($ 11,627,070 excluding revaluation)

86%

Marketing Expenditure $ 383,102 $ 663,423 73%

Maintenance Expenditure $ 381,002 $ 882,652 131%

Capital Expenditure (excludes new buildings) $ 228,361 $ 754,991 231%

Depreciation and Amortisation $ 2,390,372 $ 434,990 ^ (82%)

Market Throughput Value $ 652,000,000 $ 1,011,133,623 55%

Market Volume in tonnes @ 604,662 556,982 (8%)

# Full time equivalents.^ Due to AIFRS change – depreciation no longer charged for buildings.@ Volume declined in 2006/07 due to the impact of Cyclone Larry and drought.

THE PURCHASE

COMPARATIVE FINANCIAL PERFORMANCE AND GROWTH STATISTICS


IMPORTANCE WITHIN THE INDUSTRY

Brisbane Markets is Queensland’s only 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.

A Central Market is the major distribution point of the nation’s fresh fruit, vegetables and, in some instances, flowers.

Brisbane Markets’ 56 primary fruit and vegetable and flower wholesalers and an additional 93 support businesses act as a clearinghouse for about 9,000 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 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/marketers 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 statisticsCentral Market tenants are active participants in all sectors of the supply chain. Australia’s six Central Markets provide the fruit and vegetable industry with:

• Over400primary wholesalers/marketers

• Totalthroughputofmorethan$6 billion

• Totalthroughputvolumeofapproximately 4 million tonnes

• Morethan11,000Market-based employees nationally

• Investmentofmorethan$1 billion in the horticulture industry by Market owners and tenants.

BML director and former Queensland Premier the Hon Michael Ahern was awarded the Officer of the Order of Australia and the prestigious Service to Primary Industries Award for his commitment, innovation and contribution to the industry.

QUEENSLAND’S CENTRAL MARKET HUB


IMPORTANCE WITHIN THE INDUSTRY

Brisbane Markets at a glanceBrisbane Markets occupies a 72-hectare parcel 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.

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

56 primary fruit and vegetable and flower 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.

Approximately 9,000 growers supply produce for sale at the Brisbane Markets annually.

The Markets have a total lettable area in excess of 145,000 square metres including:

• 26 warehouse and five selling floor buildings covering a leased area of more than 107,000 square metres, with in excess of 50,000 square metres being temperature-controlled.

• Fruit and vegetable selling tenancies covering an area of 18,300 square metres.

• Land leases and licences covering an area in excess of 29,000 square metres.

• Commercial buildings have a total lettable area of 3,027 square metres while total retail area is 6,807 square metres.

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

Company highlightsIn 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 2007-year were as follows:

The market value of Brisbane Markets’ investment properties recorded a $3.47 million net increase as at 30 June 2007 resulting in the market value rising to $111.5 million.

The company recorded another strong year in revenue generation with an increase in Group Revenues (excluding revaluation revenue) of 7.3% and an increase in Net Profit After Tax (excluding revaluation impact) of 12.4%.

Continued payment of annual dividend of eight cents/share, fully franked, in line with policy plus a special dividend payment of one cent per share.

The Brisbane Produce Market recorded annual trade in excess of 556,982 tonnes of produce valued at more than $1.011 billion, up by 4% on the throughput value for the last financial year.

Maintaining 100% occupancy rate for warehouses and selling floors, with 97% occupancy rate for commercial centre tenancies.

BML worked with tenants to reduce site water consumption by 25% and met Level 5 water reduction targets.

Strong industry support for proposed strategic direction of organisation.

Brisbane Markets took on a Go for 2&5 sub-licence to encourage Queenslanders to eat more fruit and vegetables.

Introduction of an innovative telecommunications Business User Group facility named MX Connect, a service offering tenants community buying power, cheaper rates and the ability to design their own fixed line and mobile phone services communication system.

Creation of a Property department in anticipation of a growing property portfolio.

Property transaction activity increased in 2006 resulting in a record number of lease assignments approved and completed.

A 25% reduction in on-site accidents.

Construction began on the $30 million, 15,600 square metre South Gate warehouse facility which will feature state-of-the-art cold rooms, fast cooling facilities and commercial office premises.

Upgrade of the weekend retail markets site included an improved pedestrian area, power upgrade and increased shaded dining area to meet the expansion of the Saturday Fresh Market and continued growth of the Sunday Market.

Appointment of two new key managers in the finance and administration department and marketing and communication department and the appointment of a new manager in the newly created Property department.

BML director and former Queensland Premier the Hon Michael Ahern was awarded an Officer of the Order of Australia. He was also awarded the prestigious Service to Primary Industries Award for his commitment, innovation and contribution to the industry.


Chairman’s ReportOn behalf of the directors of Brisbane Markets Limited (BML), I am pleased to report on the financial year ending 30 June 2007, and to reflect on the achievements of the past five years.

The group recorded operating revenue of $28.560 million for the 2006/07 year and a net profit after tax of $9.821 million which includes an increase of $4.959 million in the value of the investment property held. Such a strong performance shows the business confidence within the Markets and reflects the importance of its role as a major economic and employment hub.

This is BML’s 5th Annual Report since purchasing the Brisbane Markets in 2002 during which time BML has gone from strength to strength. While not the largest Central Market in the country, the management, innovative strategies and operational excellence have seen Brisbane Markets recognised as a leader in the fresh produce industry.

BML acknowledges the support given by shareholders, particularly those who came on board when the Prospectus was first issued early in 2002. Their faith in what could be achieved under industry-based ownership has been rewarded with the company consistently paying dividends in line with policy and the asset growing considerably in value.

Shareholders have received an annual

dividend of eight cents per share, fully franked, with a further special dividend of

one cent per share.


CHAIRMAN’S REPORT

Shareholders have received an annual dividend of eight cents per share, fully franked, with a further special dividend of one cent per share, fully franked, in 2006 and 2007. This remains a conservative approach and reflects the financial demands to bring the South Gate development on line, ongoing growth of the organisation and plans for further significant investment in site development projects.

As an unlisted public company, the directors and management recognise the need for a fair return to shareholders whilst striving for excellence in financial management and customer service. This balance can be difficult at times with many millions of dollars having been spent over the past five years with the company’s commitment to site maintenance and infrastructure upgrading, marketing, communications and the operational effectiveness of the Market.

The confidence and certainty which industry-based ownership of the Markets has brought has been a significant factor in the major increase in investment in Market infrastructure over the past five years, with much more to come in the not too distant future.

The coming year, however, is a critical year for the consolidation of a number of major projects including the South Gate warehouses and commercial offices, a new access road, car parks and building platform at the western end of the site, and further work on the Master Plan.

I would like to thank the CEO, Andrew Young, and his staff, for their commitment and hard work over the past five years. I would also like to thank members of our Advisory Committees and my fellow directors for their valued contribution.

In particular, I congratulate Mike Ahern, who received an Order of Australia Award earlier this year. Mike was also the recipient of the prestigious Service to Primary Industries Award for his commitment, innovation and contribution to the industry. Both were well deserved and fitting tributes for his efforts over many years.

We look forward to the year ahead.

Tony Joseph Chairman


CEO’s ReportThe company achieved another strong result for the 2006/07 financial year. Significant progress was also achieved in relation to the three major projects which lay the foundations for the future growth and development of the site.

These three projects are the South Gate development, the acquisition of the Queensland Department of Primary Industries and Fisheries (QDPI&F) land and the Masterplanning Development Application.

Construction of the South Gate development commenced in June. This 15,600 metres squared building represents a $30 million project which has signalled the high level of confidence that exists in the industry and the commitment which BML has to meeting stakeholder needs.

A negotiated outcome has finally been achieved in relation to the Masterplanning Development Application. This took three years, but resulted in approval being obtained for a new access road into the Markets, two new car parks and a new building platform all to the west of the existing site. Work to progress these projects will commence over the forthcoming financial year.

The contract to purchase a 9.7ha parcel of QDPI&F land immediately adjacent to the South Gate site was executed on 30 June 2007 and settled on 24 August 2007 for a purchase price of $7 million plus GST. The purchase of this land had been under negotiation for two and a half years and will provide for future expansion of the site and consolidation of access and traffic flow.

The conceptual Masterplan for the site, first developed four and a half years ago, is now being revised in conjunction with ongoing work to progress further with the relevant approval and development processes relating to the above projects.

CEO’S REPORT

Financial PerformanceBML adopted the new international accounting standards (AIFRS) from the 2005/06 year. The major change is that investment property is no longer depreciated but is reported at its fair market value. Any increase/decrease in the value of the investment property held is taken up through the Income Statement.

The group achieved total revenue for the 2006/07 year of $28.560 million, including an increase in investment property held of $4.959 million. The net profit before tax was $13.944 million

As at 30 June 2007, the company had total assets of $119.1 million and net assets of $67.6 million.

To finance the construction of the South Gate building and the purchase of the QDPI&F land, the company has secured additional debt funding. This will result in an increased level of interest payments as this capital expenditure is progressed with rental income relating to the new South Gate building due to come on line in May 2008.

Return to ShareholdersThe company declared a final dividend of eight cents per share along with a special dividend of one cent per share in relation of the 2006/07 year, taking the total dividend to nine cents per share. As at the close of the financial year, shares were trading at $3, up from $2.10 a year ago.

The BML Board has maintained the level of return to shareholders, noting that additional interest expenditure will be incurred over the coming financial year ahead of the new South Gate rental revenue.

Chief Executive Officer ANDREW YOUNG

The group achieved total revenue for the 2006/07 year of $28.560 million, including an increase in

investment property held of $4.959 million. The net profit before tax was $13.944 million.


MaintenanceThroughout the year, site infrastructure has focused on upgrading in the areas of fire detection, electrical infrastructure, telecommunications infrastructure and refurbishment work relating to a number of toilet facilities and commercial offices.

Due to the ongoing drought conditions, the need to progress the development of a Water Efficiency Management Plan was a priority and a number of projects have been progressed to assist in meeting the required reductions in site water usage.

The coming year will see an even greater focus on maintenance with work done over the past two years yielding positive outcomes. The focus on upgrading and the refurbishment of dock levellers, toilet facilities, electrical infrastructure and fire and smoke detection will continue.

Retail MarketsBML’s weekend retail markets continue to perform to a high standard, with over 10,000 visitors every weekend.

A number of initiatives were progressed during the year to improve the presentation and aesthetics of the site. Brisbane MarketPlace is widely recognised as the leading retail market in Brisbane.

Marketing and CommunicationsBML continues to work with Brismark in having a joint Marketing and Communications team. Its focus is on core programs with objectives relating to representing and promoting the wholesaling sector of the industry, promoting healthy eating, increasing the consumption of fresh fruit and vegetables and gaining recognition for the Markets as an important economic and employment hub within the Queensland economy.

TelecommunicationsThe Brisbane Markets telecommunications service branded MX Connect was launched in June, offering tenants access to AAPT fixed-line services and Vodafone’s mobile telephone services. Work to market this new service is being progressed.

StaffThe group’s permanent staff as at 30 June 2007 numbered 50 including one contracted financial accountant who has since joined the company on a permanent basis. Casual staff members are also employed by the subsidiary company Brisbane MarketPlace Pty Ltd, to work as a part of our retail markets team. The growth of staff numbers is both justified and necessary, and reflects the breadth of BML’s role.

Acknowledgement and thanksAs at 30 September 2007, BML celebrated five years of ownership of the Brisbane Markets. The company is well poised to build on the strength and achievements of the past five years, with a tremendous outlook ahead for future growth.

I thank the BML Chairman, Tony Joseph, and fellow Board Members for their strategic input and support throughout the year. I also acknowledge and thank my management team and staff for their ongoing contributions and commitment in delivering the strong results being achieved by the company.

Andrew Young Chief Executive Officer

CEO’S REPORT

Market ThroughputThe Brisbane Produce Market throughput volume was down in the 2006/07 year, mainly due to the effects of drought and Cyclone Larry. However, values increased by 4.1% reaching a new record high of $1.011 billion.

Throughput input figures remain strong and Market stakeholders are maintaining a significant level of confidence in the industry. This is driving business growth and the investment in new coolrooms, which have expanded by a further 35,000 square metres. This is an increase of some 44% since 2002.

PropertyOccupancy levels within the Brisbane Produce Market and the associated warehouse areas remain at 100%, with a 97% occupancy rate for commercial tenancies.

In recognition of the substantial focus by the company on property, a new Property department was created during the year.

OperationsIn conjunction with revised Brisbane Markets Regulations, the roll out of a new site induction video was successful, and will be compulsory viewing for all Market users, including tenants and contractors.

The continuing focus on site cleanliness and security is yielding results, with initiatives being assessed to ensure that ongoing improvements result.

The Operations team works to provide site access and security 24 hours a day seven days a week, with the additional focus on promoting compliance with the Brisbane Markets Regulations.


PERFORMANCE & ACHIEVEMENTS

Achievements during the financial year include:

Asset RevaluationIn line with International Financial Reporting Standards a revaluation of investment properties as at 30 June 2007 has again occurred. This has resulted in a net increase of $3.47 million in the net assets of the group and this is reflected in the financial results. The market value of the investment properties as advised by LandMark White Brisbane Pty Ltd is $111.5 million.

Long Term DebtWith the development of the South Gate precinct underway the company has undertaken negotiations with Westpac Banking Corporation to extend the current cash advance facility to provide capital funds for its completion. These negotiations continued at the end of the financial year with a successful conclusion in August 2007 providing BML with security for the South Gate development and purchase of land from the Queensland State Government at rates which will be favourable to the company.

This renegotiation allows BML to undertake the development of the warehouse and commercial facility that will generate significant revenue for future periods.

Financial PerformanceThe company has enjoyed another strong year in revenue generation with an increase in group revenues (excluding revaluation revenue) of 7.3% and an increase in net profit after tax (excluding revaluation impact) of 12.4%.

Despite the increase in net profit after tax there has been no deterioration in operations and maintenance services throughout the organisation with those areas being an ongoing focus of management.

TelecommunicationsDevelopment of an innovative approach to the provision of telecommunications services within the Brisbane Markets community has seen the introduction of the MX Connect facility. While the introduction is still in the early stages the facility is designed to allow tenants to design their own communication system within the framework supported by collaboration between BML, AAPT and Vodafone including fixed-line and mobile phone services.

The advantages offered to tenants through the system are significant in terms of equipment, connectivity, service and costs and there is a large amount of interest in the project that will progress through the next financial year.

Going ForwardThe main focuses for the Finance and Administration area for the future will be the development and introduction of enhanced support services for the company through the provision of accurate and useful information, development of internal systems to support the business in decision making and the ongoing refinement and introduction of current initiatives. There will be conception and submission of further areas of service development for all areas of the organisation.

Finance and Administration Manager JOY WILLIAMS

The financial year ended 30 June 2007 has resulted in another strong performance by the group as comparative

revenues continue to increase and resource optimisation

remains a focus.

FINANCE AND ADMINISTRATION


2007 REVENUE BREAKDOWN

64% Rentals and recoveries $ 15,016,244

22% Service revenue $ 5,305,711

8% Parking and licences $ 1,932,710

5% Retail markets $ 1,198,067

1% Other income $ 147,362

Total $ 23,600,094

64%

22%

8%5%

1%

64%

22%

8%5%

1%


AIFRS 2007 $

AIFRS 2006 $

AIFRS 2005 $

AGAAP 2005 $

Operating Revenues 23,600,094 21,977,260 20,710,883 20,710,883

Increase in Value of Investment Properties 4,959,481 1,589,395 13,929,635 -

Total Revenues 28,559,575 23,566,655 34,640,518 20,710,883

Operating Expenses 11,538,034 10,627,255 9,847,234 9,847,234

Net Profit Before Income Tax and Interest and Depreciation

17,021,541 12,939,400 24,793,284 10,863,649

Depreciation Expense 434,990 400,157 408,874 2,437,986

Net Profit Before Income Tax & Interest 16,586,551 12,539,243 24,384,410 8,425,663

Interest Expense 2,642,144 2,740,791 2,897,410 2,897,410

Net Profit Before Income Tax Expense 13,944,407 9,798,452 21,487,000 5,528,253

Income Tax Expense 4,123,126 2,949,216 6,528,320 1,876,813

Net Profit After Tax 9,821,281 6,849,236 14,958,680 3,651,440

Dividend Paid 3,015,000 2,680,000 2,680,000 2,680,000

Dividend Proposed Since 30/06/07, payable October 2007

1,675,000 1,675,000 1,340,000 1,340,000

Total Assets 119,093,524 110,767,129 112,806,564 113,019,486

Total Liabilities 51,447,351 49,926,454 56,135,125 56,882,281

Total Equity 67,646,173 60,840,675 56,671,439 56,137,205

Net Tangible Assets Per Share 201.92 cents 181.34 cents 169.17 cents 165.73 cents

Earnings Per Share 29.32 cents 20.17 cents 44.65 cents 10.90 cents

EPS Adjusted for Revaluation Impact 19.25 cents 17.12 cents 15.55 cents 10.90 cents

FINANCIAL RESULTS



PROPERTYBML has restructured the Property services area in anticipation of a growing property portfolio that is set to increase significantly from April 2008 when BML’s first major development, South Gate Industrial Park, comes on line.

The main business focus for the Property department will be to support future development projects, expand property management services, and manage all leasing/property transactions.

Property transaction activity at the Brisbane Markets continued to increase in 2006 during which a record number of lease assignments were approved and completed.

The high number of transactions evidences an increasing demand for premises in the Brisbane Markets from wholesaling, secondary wholesaling and retailing sectors.

Additionally, a substantial number of applications for tenant improvements show that tenants continue to invest in upgrading their premises to incorporate coldroom facilities. A survey conducted by BML shows that more than 58% of selling floors and 65% of warehouse was taken up with coldrooms.

Occupancy LevelsThe rising demand for tenancies within the Brisbane Produce Market has kept occupancy levels at 100% for a number of years and 2006 was no exception. South Gate also maintained a 100% occupancy rate for building and land leases. A new land lease was this year issued to Pure Logistics Cold Chain Pty Ltd for 1,679 square metres of hardstand at the rear of Building B1 (formerly known as the ID Transport Building). Furthermore, the South Gate Warehouse Development has been fully pre-tenanted with existing BML tenants.

Occupancy rates at the Commercial Centre were affected by the sale of the Mr Corks business to Coles Group Limited in December 2006 which resulted in this company terminating the Mr Corks tenancy. Occupancy within the Commercial Centre is now at 97%. BML continued its objective to upgrade the Commercial Centre where there was opportunity and, as a result, three retail premises were refurbished during the year.

Property Manager TRICIA WILLIAMS

JE Tipper’s FIL OZDOWSKI assesses some of the new technology being introduced into the Markets, part of the new equipment on offer with the MX Connect telecommunications upgrade.

In 2006/07 a new Property department was created

in anticipation of a growing property portfolio

and increasing property transaction activity.



Property TransactionsProperty transactions were finalised for lease renewals, new leases, lease assignments and subleases.

Property transactions were predominantly for lease assignments, a large number of which resulted from tenants restructuring their businesses. However, leases were also assigned to a number of new tenants together with the return of two previous tenants – South Queensland Banana Ripeners Pty Ltd and W&S Grainger Pty Ltd / BJ & C Edmonds Pty Ltd.

New tenants include Pure Logistics Cold Chain Pty Ltd, Rigas Enterprises, Fruit Service Pty Ltd, Queensland Fresh Cuts Pty Ltd and Grewal Trading Pty Ltd.

The sale of ancillary products remains popular with wholesalers.

Brisbane Markets has about 70,000 square metres of temperature-controlled storage.

Tenant ImprovementsBML tenants continue to invest in infrastructure for cold chain management through the installation of coldrooms and the enclosure and refrigeration of premises. This financial year, BML received 24 tenant applications to upgrade premises. in order to provide comprehensive data on tenant improvements, BML has conducted a survey of selling floors, Brisbane Produce Market warehouses, Flower Markets a nd South Gate warehouses to determine the percentage of coldroom facilities within these premises as follows:

Precinct % Lettable Area with Coldroom Facilities

Square Metres of Coldroom Facilities

Selling Floors 58% 10,615 m²

Brisbane Produce Market warehouses

65% 50,510 m²

South Gate warehouses 79% 7,430 m²

Flower Market warehouses 41% 835 m²

While all selling floors were included in this survey, it is worthwhile breaking out the percentage figures for Central Trading Area Selling Floors – Buildings B, C and D – which have a total of 67%, 73% and 67% respectively of lettable area converted to coldroom facilities.

These figures represent a significant investment by tenants to ensure that produce is stored and sold in an optimum condition.

Sale of Ancillary ProductsThe sale of ancillary products remains popular with wholesalers. The list of products authorised for sale has expanded and will continue to be reviewed by BML from time to time. Twenty wholesalers have been authorised to sell products including dried fruit, eggs, nuts, oils and dipping sauces as an adjunct use (secondary to the sale of fresh fruit and vegetables). Four wholesalers have been authorised to sell ancillary products as a primary use (to the exclusion of fresh fruit and vegetables) including deli lines, snack foods and eggs.


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

Access and SecurityA steady decline of public entering the Market due to a 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.

During 2006/07, BML reinforced its commitment in areas relating to workplace safety, market cleanliness, security and compliance with the Brisbane Markets Regulations by developing programs that facilitated the growing needs of all Markets users.

Furthermore, the Markets community has continued to provide solid support for BML initiatives, enabling improvements in operational productivity to be successfully undertaken throughout the site.

Safety and TrainingProviding staff and tenants with Workplace Health and Safety (WH&S) programs including the Brisbane Markets Safety Induction program, forklift operation, first aid and general safety awareness continues to present solid results.

Additionally the focus on clear and precise signage and line-marking throughout the site has again seen a reduction in accidents throughout the year by a further 25%.

Site Presentation and Cleanliness Operational initiatives including the annual Markets Clean Up Day, revised cleaning rosters and advanced pest management programs have all contributed to improving the aesthetics of the site in addition to preserving a high standard of WH&S.

Brisbane Markets tenants and staff continue to be more diligent in maintaining the high standards of presentation through recycling and refinement of processes.

A comprehensive waste management audit is currently under review that will see BML raise the standard even further in 2008.

StaffIn 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.

New Brisbane Markets RegulationsKey representative groups within the Markets including Brismark, the Market Tenants’ Committee and Brismark’s Junior Executive Committee supported the introduction and enforcement of revised Brisbane Markets Regulations.

The regulations cover a diverse range of areas and will further aid in promoting the efficient and effective operation of the Markets while assisting all users in addressing WH&S issues.

Markets Officer MAX MOLLER issues an infringement notice. A new BML Infringement Management System has helped identify repeat offenders.

Operations Manager JOHN MORRISSEY

OPERATIONS



BML has had a busy year with an ongoing focus on infrastructure upgrading and site maintenance.

Infrastructure ProjectsThe Maintenance department has undertaken numerous new projects to improve the function, operation and safety of the site.

Continuing on with a program of installing automatic fire detection, monitored systems have been fitted throughout Buildings J, K, V, S and T. These systems utilise state-of-the-art addressable loop technology to allow the rapid pinpointing of the exact device that is in alarm.

With the growth of the retail markets, several projects have been undertaken including a new pedestrian entry incorporating automatic turnstiles and a substantial power upgrade to cope with the expansion of the Saturday Fresh Market.

Electrical infrastructure upgrades continue to be a major focus with the replacement of the O Block substation transformer to contend with coldroom growth as well as new and upgraded supplies to tenants such as a 1,000 amp supply in Y Block and a 400 amp supply in P Block.

Other projects have included:

• generatorbackuptoZBlockandSouth Gate pump stations

• backuppowersupplyandsecurityupgrade to the MD110 control room (the MD110 is the Private Automatic Exchange that powers the MX Connect project)

• upgradestothetelecommunicationscabling across the markets

• establishmentofmaintenancestores

• therefitofseveralCommercialCentre tenancies.

Maintenance team member KENDON BRODERICK works on a project as part of the preventive maintenance program.

Site Infrastructure Manager ANDREW MAY

SITE INFRASTRUCTUREMaintenanceThe move towards the implementation of a complete preventive maintenance program was progressed. This has been formalised with the development of a computerised log of preventive maintenance works as well as the development of documented maintenance schedules for a diverse range of BML assets from engine-driven cleaning and gardening equipment through to docklevellers, pump stations and generators.

The BML maintenance team undertook a substantial amount of the refurbishment work performed on the Commercial Centre. Working through a detailed survey, this project was completed quickly, economically and safely.

Continuing on with warehouse toilet refurbishments, O, P and R block toilets join the long list of facilities that have been refurbished and refitted in a durable, high-standard manner by the BML maintenance team.

With over four years of continuous, problem-free operation since the last major refurbishment, the front pump station has again been overhauled. This vital piece of infrastructure dates back to the original Markets and conveys all sewage from South Gate and the market selling floor buildings.

The reactive nature of the Markets subsoils and the dry conditions that have been experienced over the past year have caused numerous problems including the rupture of water reticulation pipe work and the cracking of AC pavement. BML maintenance has been busy addressing these issues to protect and maintain these assets for the future.

Environment and SafetyArguably the most significant issue looming over businesses in south east Queensland is the drought and lack of water storage infrastructure. With the cooperation of tenants, BML has met its Level 5 water reduction targets (a 25% reduction). As one of the region’s top 100 water users, BML has prepared and submitted a Water Efficiency Management Plan (WEMP) as part of its compliance with water restrictions.

Water-saving projects being progressed include the upgrade of:

• tapsandshowersthroughoutthesite to AAA-rated fixtures

• allpublictoiletstosix-litreflushes

• allurinalsonsitetocomplywithwater-efficient status.

BML is working with the State Government and Brisbane Water to undertake further water-saving projects including further toilet upgrades and rainwater capture and re-use.

BML has redesigned and installed an upgrade to the gross pollution trap to the rear of the South Gate site substantially reducing the quantity of rubbish escaping into this waterway.

It was an excellent year for safety within the maintenance department and it included a number of training programs in line with an ongoing commitment in this area.

Staff members have been trained in switchboard rescue, fire fighting, elevated work platform operation and the safe handling of asbestos. The latter follows on from a site-wide audit of asbestos-containing building materials and provides the maintenance personnel with the licence and skills to safely work on buildings containing these products.


Media and CommunicationsBML continued its public relations and media campaign to gain positive media coverage for BML, its initiatives and position on industry issues.

A combination of editorial coverage and advertising saw issues such as the Horticulture Code of Conduct, Fresh Tastes program and retailer awards, 2006 Mango Auction, and the growing Brisbane MarketPlace gain effective coverage.

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

CEO Andrew Young’s weekly ‘Comment’ column in Queensland Country Life horticulture section also 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 5000 households and organisations throughout Queensland and Australia wide.

The Brisbane Markets website www.brisbanemarkets.com.au recorded 248,533 hits on the site, an increase of more than 23% on the previous year. This site continues to be a popular source of information on the Markets, upcoming events, news, pricing updates and other relevant information.

The third annual Brisbane Produce Market Handbook was released and distributed with Fresh Source Magazine early in 2007. This high-quality publication, aimed at grower and industry groups to promote the Brisbane Markets, wholesalers and transporters, was also distributed at industry events and was available on request from BML and Brismark. A PAX Directory of contacts was also released at this time with a full range of Markets tenant details as a resource for tenants, their staff and regular Markets users.

Corporate Communications Manager INGRID LARKIN

Fresh Tastes Retailer ProgramThe Fresh Tastes retail development program is custom-designed to support fruit and vegetable retailers who purchase produce from the Brisbane Markets. This year the number of retailers in the program has seen a small increase from 131 at the end of the 2005/06 year to 146 at the end of the 2006/07 year.

Notably retailer participation in Fresh Tastes activities has increased substantially with more retailers using the Fresh Tastes brochures in their stores and effectively utilising other parts of the program. More than 7,500 entries were received from stores across south east Queensland in the Fresh Tastes Win $1,000 worth of Fruit and Vegetables competition. The competition had increased sponsorship and support from industry partners providing prizes.

The Fresh Tastes Retailer of the Year was announced at the Brisbane Produce Market gala dinner, which was held at the Brisbane Convention and Exhibition Centre and treated more than 600 guests to a night of entertainment with a James Bond 007 theme. Fresh Extremes Fruit Market at Albany Creek won the prestigious award for 2006 ahead of another 29 high-quality finalists.

The Marketing and Communications team continued to provide services to both BML and Brismark.

MARKETING AND COMMUNICATIONS



Queensland Kids Fresh Net (QKFN)QKFN was developed in 2003 to improve approaches to the education and promotion of health and nutrition within the school community. This year the number of schools registered in the QKFN program increased by 24% to 660 Queensland schools.

Marketing and Communications staff visited 111 schools and presented the Apples ain’t Apples presentation educating more than 7,700 primary school children about fruit and vegetables and gave samples of different types of apples. A further 10 schools and more than 300 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 regional agricultural shows in Toowoomba and on the Gold Coast.

Fruit character Oscar Orange joined the Brisbane Markets team and took turns with veterans Summa Strawberry, Bazza Banana and Megabite Apple in going to schools and other occasions to promote healthy eating.

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 with a total of 831,704 unique visitors from Queensland to the site over the financial year. This was over 25% more unique visitors than in the previous year.

BML has also cemented its ties with the Queensland Association of School Tuckshops (QAST) and has spoken at and participated in their events. This continuing dialogue with QAST and its members along with the distribution of the popular Canteen Fresh publication and the annual QKFN Tuckshop competition in August/September aims to encourage tuckshop conveners to effectively market fresh fruit and vegetables to school children. These initiatives are now particularly popular as the Queensland Government Smart Choices — Healthy Food and Drink Supply Strategy for Queensland Schools initiative became mandatory in all schools from 1 January 2007.

Brisbane Markets and Community Events and Sponsorships The Brisbane Markets ‘Golf and Trivia’ challenge held on 21 July was extremely popular with 113 challengers vying for the coveted champions trophy. BML runs this event for principals of tenant companies and event sponsors as a social and networking event.

BML again sponsored the Brisbane Markets Agricultural Hall at the Royal Queensland Show (Ekka) which ran from Thursday 10 to Saturday 19 August 2006. BML ran two successful display areas. Fresh Tastes retailers dazzled crowds with cooking demonstrations and taste testing and children took part in free kids cooking classes while their parents watched on.

The 2006 Mango Auction raised awareness of the incoming summer fruit season as well as $50,238 for nominated charities Life Education Queensland and Redkite. Retailer Carlo Lorenti from Clayfield Markets Fresh paid $26,000 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.

Children learned more about fruit and vegetables through school presentations and hearing songs from the F&V Gang dancers.


BML’s focus on developing facilities at the weekend markets, and the growing popularity of food markets, is promoting a continuing pattern of growth.

Average customer attendance now stands at over 10,000 per week with stalls occupied averaging over 460 per week.

The Saturday Fresh Market is becoming strongly identified as a place where the public can be part of the BML community and enjoy the benefits of good quality produce at prices well under the supermarket chain stores.

The positive feedback from customers of the weekend markets continues to strengthen and enhance the reputation and image of BML and Brisbane MarketPlace (BMP).

Financial highlights for the year are:

• grossrevenuesincreasedbyover 15%

• grossreturntoBMLincreasedby over 25%

• employmentexpenditurereduced by 6%.

Retail Markets Manager KEN KAY

More than 10,000 people visit the Retail Markets each weekend to spice up their shopping experience.

Operational Highlights• Theentrytothemarketsfronting

Sherwood Road is a heavy traffic area and highly visible to the public. During the year BMP upgraded this area by installing turnstiles, shade cover, a new change booth and fencing to secure the site. The upgrade has dramatically improved the presentation of the site as well as facilitating a more streamlined flow of pedestrian traffic into and out of the markets.

• WiththeSouthGatewarehousedevelopment commencing and increasing traffic flow into the precinct, traffic management and parking area control have required constant revision and reorganisation. Although the reduction in parking area has deteriorated Sunday Market attendance, actions to improve the organisation and control of remaining parking facilities have still allowed some growth in total attendance.

• Thediningareawasfurtherupgraded with a new shade sail installed to increase the level of shade and usable area. Live entertainment is provided every Saturday and Sunday and is proving to be a popular addition to the food court.

• Facilitiestomeetthepowerand plumbing requirements of stalls operating in the food court were also upgraded to allow the expansion of the dining area and reduce WH&S issues. The previous mix of extension cords and hoses running through the area has been eliminated and a far safer and visibly superior outcome has been the result.

RETAIL MARKETS



OUR PEOPLE

Andrew Young – Chief Executive Officer

Joy Williams – Finance and Administration Manager

Tricia Williams – Property Manager

John Morrissey – Operations Manager

Ingrid Larkin – Corporate Communications Manager

Andrew May – Site Infrastructure Manager

Ken Kay – Retail Markets Manager

Deborah Sherman – Executive Assistant/PA

BML employs 46 full-time, 2 part-time, 3 casual and 1 contract staff member, while Brisbane MarketPlace employs 1 full-time and up to 30 casual staff to ensure the efficient operation of the Retail Markets.

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 WH&S regulations at the Markets for the benefit of all staff and Markets users.

SHAREHOLDERS

BOARD OF DIRECTORS

CHIEF EXECUTIVE OFFICER

Finance and Administration

Manager

Corporate Communications

Manager

Operations Manager

Property Manager

Retail Markets Manager

Site Infrastructure

Manager

Executive Assistant/PA

MANAGEMENT TEAM

BML’s Management team (from left) Andrew May, Tricia Williams, John Morrissey, Ingrid Larkin, Andrew Young, Deborah Sherman, Joy Williams and Ken Kay.


OUR PEOPLE

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 longstanding 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. He was involved in wholesaling, export and import, and business development in the fresh produce industry. Tony is a former Director and President of Brismark, Director and Vice President of the Australian Chamber of Fruit and Vegetable Industries Limited and is currently Chairman of the Brisbane Lions AFL Football Club.

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 25 years’ experience in fruit and vegetable wholesaling. For the past 20 years, he has been Managing Director of Osric Investments Pty Ltd, which trades as J H Leavy. Peter has also been a Director of Brismark since 1988.

BOARD OF DIRECTORS

TONY JOSEPH TONY KELLY PETER TIGHE THE HON MICHAEL AHERN OA

The Hon Michael Ahern OA (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 Representative by the Queensland Government to promote Trade and Investment with Africa, the Middle East and India. He is also Chairman of Indue Group of Companies, 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.

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 DBCT Holdings, Chairman of the Mardi Jackson Foundation and Director of Golden Casket Ltd, 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.

Noel GreenhalghNoel 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 (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 150 people.

Peter is a former Director of the Brisbane Market Authority (1996 to 1999), is currently a Director of the Queensland Rugby League and the Chairman of Queensland Rugby League’s Southern Division.

DONALD JACKSON PETER BETROSNOEL GREENHALGH ANDREW YOUNG

Andrew Young (Bachelor of Commerce, Bachelor of Agricultural Science (Hons), Diploma of Corporate Management)

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 on the Central Markets system. 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.

BML Annual Report 06-07 25


FIVE YEARS OF OWNERSHIP

DEVELOPING THE CULTURE Over the past five years, 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.

Internally, BML’s emphasis on building relationships and operational effectiveness, improving safety and developing its people has seen the organisation create a flexible, goal-focused and worker-friendly environment.

Within the Markets, the close ties and sharing of resources with wholesalers’ service organisation Brismark, along with renewed stakeholder consultation, has fostered an environment of cooperation and united vision. Key factors in developing the culture include:

Cool chain and quality awareness – over the past decade, the importance of the cool chain has become topical for Market users. Over the past five years the level of temperature-controlled coldrooms increased by 35,000 square metres or more than 44%; in 2006/07 wholesalers adopted the Australian fresh produce quality standards called FreshSpecs; growth in scientific based cool room and coolchain enhancement products being used and sold within the Markets.

Technology and telecommunications upgrade – introduction of new software and an ongoing IT upgrading including improved CCTV security camera access, laying of new telecommunications cabling and improved PABX services, staff training and equipment upgrades on new software and hardware.

Shared resources – BML and Brismark share the same CEO, jointly fund promotional and industry campaigns, hold combined staff social functions, share training resources, and resource a joint Marketing and Communications department.

Community buying power – introduction of community buying power for tenants to access electricity and, as of 2007, improved fixed-line and mobile rates through the MX Connect project to create savings.

Stakeholder involvement – regular communication and workshops held with wholesalers and tenants; social events held such as golf days, Christmas get-togethers, barbecues and the annual Mango Auction; conducting surveys and research; encouragement of key stakeholders on advisory committees and involvement in stakeholder issues and events.

Environmental awareness – staging of the annual Markets clean up; recycling of rubbish; office space, sponsorship and support for the Oxley Creek Catchment Area and its projects; water reduction initiatives, water efficiency management plans and working closely with the State Government and Brisbane Water to undertake further water-saving projects.

Onsite safety – regular BML staff safety training; upgrade of building fire systems; stronger and more widely distributed Brisbane Markets Regulations; additional Markets Officer staffing at peak times; improved traffic conditions, signage and clearer line markings; and stronger enforcement of regulations.

Staff development – ongoing training and development on a staff-wide, team or individual basis; expanded, upgraded offices; support of social and staff-run charitable events; performance-based pay incentives; encouragement and recognition for new ideas and outstanding results.

Training and development – introduction and mandatory viewing for Brisbane Markets users of a safety induction video; BML staff members receive regular workplace health and safety training; study support for career-based training and are asked to clarify their work performance training goals annually; and sponsorship of Markets attendees and staff at major industry events.



ENGAGEMENT WITH INDUSTRYBML has taken a proactive stance in engaging industry so it can gain first-hand feedback regarding relevant issues and identify where Brisbane Markets needs to do more in relation to the representation and services it provides.

In 2004 and 2005 BML joined with Brismark to contribute substantial funds to communicate with growers, government and the media at significant industry events such as the mango, banana, melon and cucurbit, strawberry, vegetable and low chill conferences.

This work was stepped up in 2006/07 and has included:

• SponsorshipandtradeshowexhibitsfortheAustralianMangoIndustryConference and Australian Banana Industry Congress on the Gold Coast, the Australian Vegetable Industry Conference 2007 and Produce Marketing Association conferences in Sydney and the Australian Custard Apple and Sweet Persimmon conference on the Sunshine Coast. CEO Andrew Young was a panellist and a guest speaker at a number of these events.

• Co-sponsorshipoftheGayndahOrangeFestival.

• PrimaryIndustriesWeekinvolvement,whereMarketingandCommunicationsstaff gave fruit and vegetable presentations and apple samples at ‘Rural Discovery Days’ in Brisbane and Ag-Ed during the Toowoomba and Gold Coast Shows and sponsored a range of networking events.

• SponsorshipoftheBowenDistrictFruitandVegetableGrowersGalaDinneraswell as providing funds and a speaker for the annual Queensland Strawberries Association dinner on the Sunshine Coast.

• Hostinggrowerdelegations,includingatourofBrisbaneMarkets, educational forums and breakfasts for Grape Connect early table grape growers, Young Stanthorpe delegates, Central North Coast Queensland growers, Young Growers Leadership course participants, Carnarvon’s Sweeter Banana Co-Operative delegates, and other groups such as Australian Quarantine and Inspection Service managers, University of Queensland Gatton students, industry journalists, chefs, Queensland Department of Primary Industries and Fisheries hosted overseas missions as well as individual growers seeking advice.

• Sponsorshipofthe2007BrisbaneProduceMarketInnovativeMarketingAwardat the Vegetable Industry Awards in Sydney, hosted by AUSVEG. Victorian Brassica grower and distributor John Said from Fresh Select won the award.

• Continuingacomprehensivegrowerliaisonprogramincludingregionalvisitstothe Lockyer Valley, Sunshine Coast, Ayr and Bowen regions.

• CommissioningaRoyMorganResearchsurveyinMaytoidentifygrowers’viewson the Horticulture Code of Conduct and related industry issues.

Victorian Brassica grower and distributor JOHN SAID from Fresh Select won the 2007 Brisbane Produce Market Innovative Marketing Award at the Vegetable Industry Awards in Sydney.

A range of initiatives are funded to help build the relationship with the growers and include:

Promotion of the Marketline 1800 631 002 Free Call service

Contributing materials and information toward a Growers Information Kit

Grower-focused, informative articles and advertising in industry magazines

Production of a Brisbane Produce Market Handbook featuring primary wholesalers, transporters and key contacts

Continued resourcing of an industry liaison officer dedicated to building relationships and working with growers

Publication of the bimonthly magazine Fresh Source that communicates directly to growers.


The Queensland horticulture industry has needed a positive influence working to create an environment of leadership and cooperation. Brisbane Markets has stepped up to fulfil that role.

Brisbane Markets’ wholesaler service organisation Brismark works closely with BML, standing as one voice on industry issues and committing funds and resources to joint Brisbane Produce Market projects.

In 2006/07 this work involved:

• Jointliaison,lobbyingandmediaonprojects including an overly onerous biosecurity inspection regime between Australian states, food labelling, Food Standards Australia New Zealand regulation and health claims changes; national framework for control of chemicals of security concern, FoodSafe Queensland’s egg safety scheme concerns, supply chain challenges, grower-related issues and the mandatory Horticulture Code of Conduct.

• Hostingofacross-industryissuesmanagement group called the Marriott Group Forum to find a cooperative approach and strong lobbying voice on concerns affecting Australia’s horticulture industry.

• Inputintothevisionbeingdevelopedfor Australia’s horticulture industry through the AUSVEG/Australian Vegetable Industry Development Group 2020 Strategic Plan, Queensland Department of Primary Industries and Fisheries/Growcom Future Directions Plan (an updated Horticulture Industry Development Council document produced in the late 1990s) and the Horticulture Australia Limited proposal for a Horticulture Industry Strategic Plan proposal.


LEADING INDUSTRY

• CommissioningaRoyMorganResearch survey of growers to promote debate over the Federal Government’s approach to policy setting within the fruit and vegetable industry. The survey focused on 600 responses from a database of 3000 predominantly Queensland-based growers.

• Activeadoption,endorsementandpromotion of new specifications for Class One produce with the release of the wholesaling sector’s national fresh produce quality standards called FreshSpecs.

• Contributingitsexpertiseandresourcestoward the Central Markets Association of Australia offering full support on industry issues with CEO Andrew Young acting as its spokesperson on the Horticulture Code of Conduct issue.


COMMUNITY ENGAGEMENTBML embraced the use of its Go for 2&5 sublicence from Horticulture Australia Limited in 2006 and used it heavily when engaging the community over the past financial year, co-branding its promotional material and messages with the Go for 2&5 logos.

Brisbane Markets has long been a supporter of educating the community on the benefits of increasing its consumption of fresh fruit and vegetables. However, taking on the Go for 2&5 sublicence was a great outcome for the horticulture industry which stands to benefit from consumers adopting a healthier lifestyle and increasing the amount of fruit and vegetables they consume.

Over the past five years BML has progressed its community engagement programs to assist consumers to learn about, touch and eat more fresh produce through a number of joint programs.

In 2006/07 these have included:

• AttendingtheProduceMarketingAssociation’sSydneysymposium on Mastering the Supply Chain which focused on food service, consumer research and marketing.

• A20%jumpinthenumberofschoolsregisteringwiththepopularQueenslandKids Fresh Net program (QKFN) with 650 participating schools working with BML to educate young Queenslanders on the importance of a healthy and balanced lifestyle. Work has included early morning market tours, teacher resource packs, annual tuckshop competition, distribution of Canteen Fresh newsletter, posters and materials as well as classroom and country show educational sessions.

• AdditionofOscarOrangetotheF&VGangfruitcharacterteamofBazzaBanana,Megabite Apple and Summa Strawberry. The characters made regular appearances at educational school visits, fetes, kids shows and regional festivals.

• Promotingthewww.freshforkids.com.auandwww.marketfresh.com.auwebsites.

• Some146independentgreengrocersregisteredtoreceivefreepromotionalkits, posters, aprons, newsletter, media opportunities, in-store demonstrations, competitions and the opportunity to take part in a Retailer of the Year mystery shopping campaign. The program is designed to foster excellence in fresh produce retailing and encourage the public to buy from their local greengrocer.

• Stagingoftheannual2006BrisbaneProduceMarketMangoAuction,whichraisedmore than $50,000 to aid the largest non-government provider of drug and health education in Australia – Life Education Queensland – and Redkite, which provides emotional and financial support to children affected by cancer and their families.

• BMLsponsoredtheBrisbaneMarketsAgricultureHallattheRoyalQueenslandShow (Ekka) and conducted Fresh Taste retailer cooking demonstrations and taste testing as well as free children’s cooking classes to capture the attention of 500,000 visitors to the event.

2006 Mango King CARLO LORENTI with his wife Susan and children Jamie and Julian paid $26,000 for the first tray of mangoes to assist childrens charities.

F&V Gang member SUMMA STRAWBERRY is a regular at educational school visits.

Providing community sponsorships including:

Donating money and fresh produce for the 2006 Golden Casket Variety Special Children’s Christmas Party that touched the lives of 2,500 ill, intellectually or physically impaired or underprivileged children.

Tonnes of fruit and vegetables each month to Foodbank, supplied by Brisbane Market wholesalers. Foodbank is a non-profit organisation, which feeds more than 15,000 Queenslanders weekly through 120 welfare agency clients statewide.

Numerous children’s educational events including the Royal Children’s Hospital Working Wonders Fit 4 Fun program launch, Life Education Queensland’s Healthy Harold Day, numerous school fetes and events.

Donation and staffing for the Oxley Creek Catchment Association Business Clean Up Day event.

Donation and support for the Australian Red Cross’s Chefs Gone Bananas appeal to aid the banana industry after Cyclone Larry.

A fundraising barbecue raising $10,000 for an ill Markets employee, Mark Plunkett, who required essential medical equipment.


Coldroom expansionSince gaining ownership of the Markets, tenants have invested millions of dollars in coldrooms to meet the growing demand for temperature-controlled facilities. In 2002, it was estimated that 48% of warehouses and 20% of selling floors were temperature-controlled, an area of approximately 48,100 square metres.

Since the industry takeover of the site, there has been a surge in confidence and tenants have continued to invest money in their businesses. Some 67% of warehouses and 56% of selling floors are now temperature-controlled with more planned.

This equates to an overall area today of 69,400 square metres, an increase of 44% over five years.

South Gate developmentIn 2003 BML completed the construction of ID Transport’s (now Pure Logistics) facility in the South Gate precinct. The 4,500 square metre facility was purpose-built, fully temperature-controlled and features a 445 square metre two-storey office and a 312 square metre workshop for servicing trucks.

In 2006/07 the expansion continued. The first sod was turned on construction of BML’s $30 million South Gate office and warehousing development.

When it is completed in 2008, a further 14,000 square metres of temperature-controlled coldrooms will be added, taking the overall growth since 2002 to in excess of 35,000 square metres.

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

MARKET DEVELOPMENTBML’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 led by

the industry-based consortium.

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. Developments include:



Master PlanningThe South Gate precinct is the first of a number of initiatives that will see improvements to the Brisbane Markets site over the next 10 years estimated to be worth more than $100 million.

On 30 June 2007, BML finalised contractual arrangements with the State Government to purchase 9.7 hectares of land, adjacent to its existing South Gate precinct, from the State Government. This land was once part of a QDPI&F research station and was acquired for $7 million.

The Master Plan for the overall Brisbane Markets site over the next 10 years includes:

• establishmentofnewcarparkingareas and an access road to the west of the site

• upgradeoftheCentreCourtyardarea to modernise the selling floor areas

• creationofanewbusinesshub

• ongoingdevelopmentoftheSouthGate site (including the QDPI&F site)

• redevelopmentofnineolderwarehouse buildings and the construction of new warehouses.

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

Maintenance and upgradesIn addition to the investment by stakeholders, BML has also concentrated on improving the site with a multimillion-dollar investment in site maintenance and infrastructure upgrading.

In 2003 BML appointed a Site Infrastructure Manager to be responsible for the development and implementation of a comprehensive site maintenance program. Under BML, this work has received a priority and budget for improvement and upkeep unparalleled in Brisbane Markets history.

Retail MarketsBML’s weekend Markets have grown from once leasing out the Sunday Market operations up until 2004/05 when BML expanded its operations to conduct and manage the retail market itself. It also developed the Saturday Fresh Market to showcase the fresh food industry.

In 2006/07 there was further consolidation of Brisbane MarketPlace as the leading retail market site in Brisbane. In the past financial year, revenues have increased by almost 15% and its gross return to BML has increased by 25% providing a firm foundation to continue developing this popular facility.

In 2006/07 there was further consolidation of Brisbane MarketPlace as the leading retail market site in Brisbane.

An artist’s impression of the $30 million South Gate office and warehousing development


LOST OPPORTUNITY

HORTICULTURE CODE OF CONDUCTAfter months of political shifts and lobbying, the Australian Government implemented the much-debated mandatory Horticulture Code of Conduct on 14 May 2007 losing all opportunity for Central Markets wholesalers to negotiate a fair, commercial and cost-effective outcome.

The lost opportunity comes from the mandatory imposition of an unworkable commercial relationship, which has seen the code fail to gain broader industry acceptance.

Feedback from growers and wholesalers has highlighted ongoing concerns with the prescriptive, inflexible code that excludes retailers, processors and exporters who buy direct from growers.

BML has continued to seek amendments since neither the overwhelming tide of grower support for the code, nor the flood of grower complaints predicted by some grower organisations following its introduction eventuated.

While being disappointed with the outcome but accepting that the code is in place and must be adhered to, BML has maintained its stance to uphold the regulation but seek an early review and amendments which can make it more flexible and cost effective.

2006/07 code negotiation highlights included:

Regulation and red tape have increased over the past five years despite a Federal Government Productivity Commission review of the Regulatory Burden on Business.

The Productivity Commission was directed by the Treasurer to review the regulatory burden imposed on a range of primary industries, including agriculture.

The benefits of slashing government red tape and the associated increased productivity were highlighted as offering a potential $100 billion benefit to Australia’s economy

The Banks Report (January 2006) was specific about the recommended process to be followed to halt the dramatic growth in business regulations that has occurred over the past decade.

However, many of the Banks Report recommendations were ignored by the Federal Government. The result is that in 2006/07 more regulation was introduced.

On a Federal level, opportunity was lost for the horticulture industry to negotiate a fair, commercial and cost-effective Horticulture Code of Conduct.

Brisbane Markets wholesalers attend information meetings on the Horticulture Code of Conduct.

Australian Competition and Consumer Commission’s

KONRAD CHMIELEWSKI discusses Horticulture Code of Conduct

enforcement issues on a visit to Brisbane Markets

Industry and wholesalers lobbying for a whole-of-chain approach consistent with the Centre of International Economics (CIE) report. The CIE held public forums throughout Australia to discuss a draft code but the final report was not released for review by industry.

The option was put to industry for a voluntary but enforceable code but the Nationals negotiated a backflip – agreement reached to introduce a mandatory code covering just the wholesaling sector. Retailers (including supermarkets), processors and exporters are exempted.

Release of the final code version reveals it is likely to be costly to implement and will require changes to how 90% of the industry operates. Fears were expressed it will cause massive change, introduce new and unnecessary costs and promote confusion.

15 December 2006 was the last day for growers and wholesalers to put in place pre-existing contracts that would see them avoid the prescriptive new code.

Release of the final, dramatically cut down Regulation Impact Statement version by the Federal Government reveals costs of the code are “expected to outweigh” the benefits.

The Australian Competition and Consumer Commission began a comprehensive awareness campaign for growers and wholesalers around Australia.

The code was introduced on 14 May 2007, which was marked with confusion, growers being roused from their beds to discuss prices and produce arriving without code-required paperwork.


MOVING FORWARDBrisbane Markets wholesaler representative organisation Brismark has worked closely with the Australian Competition and Consumer Commission (ACCC) to pursue compliant template Horticulture Produce Agreements that are effective for both wholesalers and growers under the Horticulture Code of Conduct.

It is also looking forward to working with the Horticulture Code Administration Committee (CAC), a cross-section of industry members appointed by the Federal Agriculture Minister to provide advice on issues including operation, effectiveness and the impact of the code.

The future success of the code is about engagement. BML and Brismark will be seeking the support of the CAC for amendments being recommended to the Federal Agriculture Minister to provide for workable and cost-effective code regulations.


SHARE TRADINGAs 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) 3379 1062.

DirectorsMichael John AhernPeter Joseph BetrosNoel Anthony Greenhalgh Donald Stanley Jackson Anthony John Joseph Anthony Robert Kelly Peter Gerard Tighe Andrew Alexander George Young

Company SecretaryJoy Lindsay Williams

Administration and Registered OfficeUpper Level Brisbane Markets Commercial Centre Sherwood Road Rocklea Queensland 4106

Telephone: (07) 3915 4200 Facsimile: (07) 3915 4291

Email: [email protected] Website: www.brisbanemarkets.com.au www.brisbanemarketplace.com.au

Share RegistryLink Market Services Level 22 300 Queen Street Brisbane Queensland 4106

Email: [email protected] Website: www.linkmarketservices.com.au

Auditors and Independent AccountantPitcher Partners Chartered Accountants Level 21 300 Queen Street Brisbane Queensland 4000

SolicitorsHopgood Ganim Lawyers Level 8 Waterfront Place 1 Eagle Street Brisbane Queensland 4000

CORPORATE DIRECTORY

AR07

Documents

Transcript of AR07