Macquarie Goodman Industrial Trustarsn 091 213 839 Annual Repor T 2004

industrial

MACQUARIE GOODMAN INDUSTRIAL TRUST ARSN 091 213 839 ANNUAL REPORT 2004 Macquarie Goodman Industrial Trust

MGI is Australia’s largest listed industrial property trust. Our objective is to develop MGI’s brand as the leading industrial and business space provider in Australia and New Zealand.

Our Customer Service Model is designed to identify the diverse property requirements of MGI’s customers and deliver a complete property solution through a range of superior products and services.

$ 4.09bn 10.0 %

% 53.6% 19.8

increase in net profit growth in distributions total return delivered to of total assets increas- from $113.2 million from 12.23 cents per Unitholders as a result ing 43.4% from $2.85 to $173.9 million unit to 13.45 cents of distribution growth cou- billion, delivered via per unit pled with a 10.5% increase acquisition and devel- in unit price from $1.52 to opment activity $1.68 per unit

2 Case Studies 26 Senior Executives 46 Directors’ Report 89 Property Trusts Managed 8 Chairman’s Letter 28 Property Portfolio to Unitholders by Macquarie Goodman 10 Our People – Location Map 49 Financial Report and its Associates 12 Responsible Entity’s Report – Development Pipeline 85 Independent Audit Report 91 Glossary of Terms 24 Board of Directors of the – Portfolio Summary 86 Top 20 Unitholders IBC Corporate Directory

Contents Responsible Entity 40 Corporate Governance 87 Investor Relations Annual Report 2004

MGI’s portfolio consists of 126 properties specialising in warehouse/distribution centres, industrial estates, business parks and office parks. The portfolio is valued at $3.9 billion and houses 580 customers.

Ultimately, our aim is to create Unitholder wealth through a secure and increasing income stream, the potential for capital growth and the flexibility of a highly liquid trust.

$ sqm 2.7bn 395,000

402,000sqm

market capitalisation up of existing space leased, of new development 59.8% from $1.7 billion, strengthening the space completed or ranking MGI as the 53rd weighted average lease commenced, assisting expiry profile to underpin the largest listed entity on future income stream the Australian Stock Exchange

This Annual Report for the year ended 30 June 2004 has been prepared by Macquarie Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL 223621) (“Macquarie Goodman”) as the Responsible Entity for Macquarie Goodman Industrial Trust (ARSN 091 213 839) (“MGI”). The information in this Annual Report is general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making any decision relating to your investment or financial needs. This Annual Report is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in Australian currency unless otherwise stated.

1 Macquarie Goodman Industrial Trust

Slough Business Park

2 Annual Report 2004

Realising the potential

CASE STUDY 1 LOCATION: When we acquired Slough located 20 kilometres west of the Sydney CBD; Business Park as part of the prominent location within the established industrial area of Silverwater, NSW; and Colonial First State Industrial positioned on the corner of Silverwater Road and Property Trust in April 2003, Holker Street. INFRASTRUCTURE: its occupancy rate was 90% Direct access to Victoria Road, Parramatta Road and and weighted average the M4 Motorway. lease term was 1.4 years. ACQUISITION HISTORY: Formed part of the property portfolio held by Colonial First State Industrial Property Trust, which was acquired by MGI We implemented our in April 2003. Customer Service Model, STRATEGY: Implement our Customer Service Model with: driving an effective leasing plan, the development of new relationships with customers developing strong relationships based on a property partnership approach; an intensive leasing programme to improve occupancy with customers and undertaking and the lease expiry profile; and intensive asset management. proactive asset management through rebranding and implementation of a capital works programme. Now, just over 12 months later, RATIONALE: to increase the occupancy rate from 90% and weighted the occupancy rate has risen average lease term from 1.4 years on acquisition; and to 95% and the weighted to improve the overall quality and ongoing management of the property to retain existing and attract prospective average lease term is 3.9 years. customers. The Park has been transformed OUTCOME: approximately 39,000 sqm or 55% of space leased, into an integral component representing $4.5 million in net rental income; of MGI’s Western Sydney portfolio. an improved occupancy rate of 95% and weighted average lease term of 3.9 years as at 30 June 2004; and a high quality asset contributing a cost effective property solution to MGI’s Western Sydney portfolio.

3 Macquarie Goodman Industrial Trust

Lidcombe Business Park

4 Annual Report 2004

Success from synergy

CASE STUDY 2 LOCATION: This property embodies the combined located 16 kilometres west of the Sydney CBD; and strengths of each component positioned on a prime site fronting Parramatta Road and also bounded by Birnie and Bachell Avenues in of our Customer Service Model. Lidcombe, NSW. INFRASTRUCTURE: Seven years ago, we identified superior access to the regional road network via Parramatta Road and the M4 Motorway; and the need for quality industrial excellent local infrastructure and amenities developed by space in Sydney’s west. the NSW Government for the Sydney Olympics in 2000. ACQUISITION HISTORY: Choosing a practical location, Stage 1 acquired in September 1997; we embarked on the development Stage 2 acquired in April 2001; and of a business park that would Stage 3 acquired in March 2002. be a stand-out in its market. COMPLETION: June 2004 When the last of the three stages STRATEGY: to develop a leading business park in one of the traditional was completed in June this year, Western Sydney industrial precincts from the ground up; and the property delivered a to achieve a commercially superior return, compared to 97% occupancy rate, a solid alternative investment opportunities in the area. weighted average lease term RATIONALE: to fulfil a shortage in the Western Sydney market of quality and an outstanding yield. industrial space with an excellent location, access, amenity and the ability to expand. It is a premier example of how OUTCOME: our integrated product and service MGI developed Lidcombe Business Park into a premier offerings can deliver exceptional business park; the property features quality, scale, flexibility and results to Unitholders. accessibility to major road infrastructure; and on completion, the property was valued at $139.5 million and delivered a 97% occupancy rate, a weighted average lease term of 7.6 years and a net passing rental of $10.7 million per annum.

5 Macquarie Goodman Industrial Trust

Chifley Business Park

6 Annual Report 2004

Meeting customer needs

CASE STUDY 3 LOCATION: The property market in Melbourne’s located 22 kilometres south east of the Melbourne CBD; south east is undergoing a change – situated on Centre Dandenong Road in Mentone, Vic; and warehouse and industrial space alone occupies the north east corner of Moorabbin Airport. INFRASTRUCTURE: is no longer adequate for potential Access to major arterial roads including Nepean Highway, customers. There is now a defined Warrigal Highway and Boundary Road. need for quality office space and HISTORY: Secured in April 2000 on a long-term leasehold basis from it is on this basis that we are Moorabbin Airport Corporation. transforming Chifley Business Park. STRATEGY: to extract higher investment returns by increasing the office Our first step in repositioning the component of the facility; and property was securing the 100% to reposition the property due to growing demand for dedicated office accommodation from local users currently office commitment from Simplot. occupying aged and inadequate facilities. We are confident that our plans to RATIONALE: to capitalise on the changing business dynamics of mould the environment with Melbourne’s south east precinct with increased commercial components, following the first 100% office commitment amenities such as a café, crèche, from Simplot for 10 years; and gym and extensive car parking will to equip the estate with amenities such as a café, crèche, gym and extensive car parking in a superbly landscaped attract high quality customers to add environment to attract and retain customers.

to the already impressive list, which OUTCOME: includes Coca-Cola Amatil, Rayovac, existing product comprises a high quality estate in Melbourne’s south east with a customer list that includes Storpak, Swing Gifts and VisyPET. Coca-Cola Amatil, Rayovac, Storpak, Swing Gifts and VisyPET; Chifley Business Park reflects redirection to office reflects our ability to adapt the built product to suit changing market conditions; and our ability to anticipate the market average return of over 9% on investment and weighted and the needs of our customers. average lease term of 10.3 years. We have now adapted an existing property to successfully capitalise on those opportunities.

Artist’s Impression

7 Macquarie Goodman Industrial Trust

Chairman’s Letter

“The past year has seen many milestones achieved for MGI. The advancement of the development pipeline, takeover of AMP Industrial Trust and strong leasing results, led to healthy growth in distributions to Unitholders.”

David Clarke, AO Chairman

GROWTH IN NET PROFIT GROWTH IN NET TANGIBLE ASSETS AND DISTRIBUTIONS PER UNIT 200 $M 1.50 $ CPU 14

160 1.40 13

120 1.30 12

80 1.20 11

40 1.10 10

NTA (LHS) 0 1.00 9 DPU (RHS) Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04

8 Annual Report 2004

Dear Unitholder

On behalf of the Board, I am pleased to present this report In June 2004, we were delighted to offer Unitholders the to the Unitholders of MGI for the year ended 30 June 2004. opportunity to purchase additional units under the Unit Purchase Plan (“UPP”). The UPP offered units at a discount and without For 2004, MGI achieved substantial results with an increase in brokerage and transaction costs. The level of participation from gross property income of 74.5% to $327.5 million, growth in net profit of 53.6% to $173.9 million and importantly, enhancements Unitholders was encouraging, with approximately $31 million in distributions to Unitholders of 10.0% to 13.45 cents per unit, raised to fund MGI’s ongoing development pipeline as well as compared to the previous year. The uplift in operating results was reduce debt over the short term. predominantly attributable to the acquisition of AMP Industrial My fellow Directors and I would like to thank James Kennedy, Trust (“AIP”) in August 2003 and the ongoing efforts of our team who retired from the Board this year, for his contribution and in delivering the Customer Service Model. commitment as an Independent Director. We would also like to MGI’s performance was again strong for the year with a total welcome Anne Keating who was appointed as an Independent return to Unitholders of 19.8% compared to the UBS Industrial Director this year. Anne is a professional director with board 200 Accumulation Index return of 14.3% and the S&P/ASX 200 positions in a range of industries including advertising, insurance, Property Accumulation Index return of 17.2%. The unit price rose property, construction, banking and medical research. by 10.5% to $1.68 per unit compared to the end of last year. Once again, thank you to our Unitholders for their loyalty Our Customer Service Model delivered significant portfolio results and support and we look forward to another successful year from both an organic and acquisition perspective for the year. in 2005. Around 395,000 sqm of new space was completed or commenced, Yours faithfully 402,000 sqm of existing space was leased and 17 additional properties were secured along with the AIP portfolio. This activity grew total assets by 43.4% to $4.09 billion and supported MGI’s occupancy, weighted average lease expiry and retention rates.

To fund the transactions during the year, MGI raised $162 million with the top up of Notes under its existing Commercial Mortgage Backed Securities programme, increased its syndicated multi- option facility to $575 million and added a $225 million syndicated standby facility. In addition, two institutional placements and the David Clarke, AO Distribution Reinvestment Plan raised $382.7 million, taking MGI’s Chairman market capitalisation to $2.7 billion.

RESULTS OVERVIEW CHANGE 2004 2003 % Gross property income ($M) 327.5 187.7 74.5 Net profit (before Performance Fee) ($M) 191.1 113.2 68.8 Net profit (after Performance Fee) ($M) 173.9 113.2 53.6 Distributions to Unitholders ($M) 200.5 113.2 77.1 Basic earnings per unit (before Performance Fee) (¢) 13.15 12.19 7.9 Basic earnings per unit (after Performance Fee) (¢) 11.97 12.19 (1.8) Distributions per unit (¢) 13.45 12.23 10.0 Tax deferred portion (%) 52.3 36.2 44.5 Management expense ratio (%)(1) 0.56 0.50 (12.0) Total assets ($M) 4,087.5 2,850.2 43.4 Total borrowings ($M) 1,459.1 1,016.5 43.5 Total equity ($M) 2,511.6 1,755.8 43.0 Market capitalisation ($M) 2,703.1 1,692.0 59.8 Underlying total borrowings to total assets (%)(2) 33.1 32.9 (0.6) Net tangible asset backing per unit ($)(3) 1.40 1.34 4.5 Unit price ($) 1.68 1.52 10.5 Number of units on issue (M) 1,609.0 1,113.2 44.5 Number of Unitholders 22,466 15,613 43.9 Distribution yield (%)(4) 8.0 8.0 –

(1) The management expense ratio excludes the Performance Fee of $17.2 million. (2) Underlying gearing sets off the deferred equity contribution of $104.4 million which is recorded as a receivable from Ascendas Funds Management (Australia) Pty Limited for the acquisition of 25% of Colonial First State Industrial Property Trust and offsets it against the borrowings of $422 million from Commonwealth Managed Investment Limited. Cash held at 30 June 2004 of $51.4 million is also offset against total borrowings. (3) Net tangible backing per unit is calculated using net tangible assets excluding outside equity interests. (4) The distribution yield is calculated by dividing the total distribution per unit by the unit price at the end of the year.

9 Macquarie Goodman Industrial Trust

Our People

2 3

1 2 3 4 Gregory Goodman David van Aanholt Tony D’Addona Carolyn Scobie Chief Executive Officer Chief Operating Officer Investment Manager General Counsel and Heads up the Group’s overall Development and Property Services Joint Company Secretary operations and strategic Project Management Ensures the team maintains Legal and Compliance planning Charged with the planning the high quality standard of Controls MGI’s legal and and direction of MGI’s MGI’s portfolio compliance responsibilities development pipeline

10 Annual Report 2004

Our team’s strategic input into the management of MGI ensures Unitholders receive secure income returns and potential for capital growth. From sourcing to acquisition, design to development, our strong culture of teamwork ensures that all aspects of the management of MGI are performed to the highest level. This means that ultimately, the best possible returns are delivered to Unitholders.

7 9 6 5 8

5 6 7 8 9 Michael O’Sullivan Nick Kurtis Jim Neville Jayne Gerrie Mark Alley Executive Corporate Fund Manager General Manager Corporate Group Chief Financial Services Funds Management People and Services Communications Manager Officer and Joint Company Secretary Corporate Services Manages the performance Administers our team’s Communications Responsible for financial of MGI human resources and Drives the communications, Finance due diligence and corporate IT needs investor relations and Heads up the financial finance and structuring marketing programmes and capital management functions

11 Macquarie Goodman Industrial Trust

Responsible Entity’s Report

“A dedicated team delivering a proven Customer Service Model has produced a 10% increase in distributions and a total return of 19.8% to Unitholders over the past year.”

Nick Kurtis Fund Manager

MGI’S TOTAL RETURN

130 INDEX

120

110

MGI 100 UBS Industrial 200 Accumulation Index S&P/ASX 200 Property Accumulation 90 Index Jun 03 Jul 03 Aug 03 Sep 03 Oct 03 Nov 03 Dec 03 Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04

Source: UBS

12 Annual Report 2004

The Year in Summary

It has been another rewarding year with Unitholders enjoying Our team has built valuable property partnerships with both a 10% increase in distributions to 13.45 cents per unit. existing and new customers, which has assisted MGI in commanding a strong presence in the industrial and business The basis for this growth was: space market in Australia and New Zealand. the successful takeover of AMP Industrial Trust (“AIP”); MGI’s portfolio is performing well with a high occupancy rate the leasing of 402,000 sqm of existing space; and of 98% and weighted average lease expiry profile of 5.1 years. Customer retention has been recorded at 83% for the year and the completion or commencement of 395,000 sqm of 81% on a rolling four year period, which is testament to our new development space. Customer Service Model. A large component of MGI’s success is an ongoing focus on Building on the momentum generated this year, MGI’s direction the performance of its underlying assets and the sourcing and in 2005 will focus on organic growth through advancing the securing of development opportunities. Our proven Customer development pipeline, sustaining high occupancy levels and Service Model has been integral in delivering a total return to maintaining the underlying assets to a high standard. Unitholders of 19.8% over the past year and 17.3% per annum over the past three years.

TOP 25 CUSTOMERS (BY NET INCOME)

TOP 25 Toll CUSTOMERS Coles Linfox ACI Patrick CSC Australia Woolworths Hewlett-Packard Coca-Cola Amatil Carter Holt Harvey ResMed AUSDOC State Government of NSW UPS Logistics Group Smorgon Steel Fletcher Building Network Ten New Wave Transport Fuji Xerox Metcash Exel Brambles Eagle Global Logistics The Laminex Group Optus 036912 15 $M

Portside Distribution Centre in Banksmeadow, NSW was acquired as part of Exel’s new purpose-built facility at GreystanesPark in Prospect, NSW the AIP portfolio

13 Macquarie Goodman Industrial Trust

Underlying Portfolio These results clearly display the positive momentum of the industrial property sector with continued demand for quality Our property services team has responded to customer accommodation managed by a committed, long-term landlord. requirements with the successful lease negotiation of 402,000 sqm of existing space, totalling $44.3 million WEIGHTED AVERAGE LEASE EXPIRY in total annual net rental. PROFILE (BY NET PROPERTY INCOME)

The new leases have assisted in maintaining MGI’s occupancy 50 % rate of 98% and weighted average lease term of 5.1 years. They have been secured with a net increase in average rentals 40 of 3.3% over the previous passing rentals, highlighting the quality of the underlying portfolio and the performance of the industrial property market. Significantly, they also deliver ongoing 30 stability in income returns offered through a diverse range of high profile customers.

Our Customer Service Model is at the heart of our business. 20 It is designed to identify the diverse property requirements of our customers and provide a complete property solution through 10 a range of superior products and services. From sourcing and planning to creating and managing a customer’s property solution – our approach is designed to deliver mutually 0 profitable partnerships with our customers over the long term. <1 1-22-3 3-4 4-5 >5 Years

14 Annual Report 2004

The following table provides the major leasing transactions completed during the year: LETTABLE AREA NET RENT LEASE TERM PROPERTY CUSTOMER SQM $M PA YEARS

Macquarie Corporate Park, North Ryde, NSW ResMed 11,125 3.1 1 Cambridge Office Park, Epping, NSW Unilever 7,414 2.2 5 Port Wakefield Distribution Centre, Gepps Cross, SA Coles 26,124 2.1 2 Acacia Ridge Business Park, Acacia Ridge, Qld Australian Retail Logistix 40,635 1.6 3 Portside Distribution Centre, Banksmeadow, NSW Gazal Apparel 10,767 1.2 5 Link Business Park, North Ryde, NSW Konica 5,563 1.1 10 Chullora Distribution Centre, Chullora, NSW Energy Australia 15,235 1.0 8 Mitchell Industrial Estate, Alexandria, NSW Kuehne & Nagel 9,563 1.0 3 Davis Distribution Centre, Wetherill Park, NSW DTM 8,914 0.8 10 Brodie Industrial Park, Rydalmere, NSW Hewlett-Packard 6,753 0.7 5

Development Pipeline

It was a strong year for MGI’s development pipeline, with over The development pipeline is primarily located on Australia’s 395,000 sqm of new development stock either completed or eastern seaboard, where 80% of the nation’s gross domestic commenced. product is generated. The pipeline is well serviced by key road infrastructure, which facilitates the efficient transportation of Approximately 192,000 sqm of new space with an estimated goods across our customers’ distribution bases. end value of $256 million was completed during the year, returning an average initial yield on investment of 8.7%. More than 80% of developments were precommitted to customers prior to completion, strengthening MGI’s lease expiry profile and underpinning its future income stream. DEVELOPMENTS COMPLETED OR COMMENCED

For the year ahead, MGI has a total of 203,000 sqm of 225,000 sqm development works underway with an estimated end value of $233 million. At this time, the projects are on average 200,000 78% precommitted with an average yield of 8.7% and a weighted average lease term of 9.3 years. 175,000

Our development pipeline is fundamentally designed to capitalise 150,000 on the following: 125,000 ability to offer a wide range of industrial and business space solutions to our customers; 100,000 expansion into new markets; 75,000 continued third party investment in infrastructure; 50,000 Completed forecast growth in the transport and storage sectors Developments of the economy; and Developments 25,000 Commenced transformation of assets to a better use. Jun 02 Jun 03 Jun 04 Jun 05

ResMed was retained at Macquarie Corporate Park in North Ryde, NSW Unilever re-signed its lease for a further five years at Cambridge Office Park during the year in Epping, NSW

15 Macquarie Goodman Industrial Trust

The major developments completed this year include: LETTABLE LEASE INITIAL ESTIMATED PRACTICAL AREA TERM YIELD END VALUE COMPLETION PROPERTY SQM YEARS % $M DATE

New South Wales Sydney West Campus Business Park, Homebush – Building B 7,129 7 8.6 10.9 Jun 04 – Building D 17,237 5(1) 8.4 21.2 Oct 03 Lidcombe Business Park, Lidcombe – Building E 11,308 7(1) 9.3 15.2 Jun 04 – Building F 10,893 7(1) 9.3 14.2 Oct 03 46,567 6 8.8 61.5

Sydney Outer West Erskine Park Industrial Estate, Erskine Park – Building 4A 17,445 10 9.0 20.8 Dec 03 GreystanesPark West, Prospect – Building 4 12,750 5 8.5 15.1 Mar 04 MFive Industry Park, Moorebank – Building 3B 11,300 10 9.5 12.2 May 04 41,495 7 9.0 48.0

Sydney South Airgate Business Park, Mascot – Building 3A 10,170 8 8.3 17.0 Jun 04 – Building 3B 4,130 10 8.3 6.7 Jun 04 14,300 9 8.3 23.7

Sydney North Talavera Corporate Centre, North Ryde – Stage 1 20,271 10 8.2 78.0 Oct 03

Victoria Chifley Business Park, Mentone – Building 3A (Expansion) 6,717 9 8.2 4.1 Oct 03 – Building 4A 21,000 7(1) 9.7 13.4 May 04 – Building 5 7,047 10 9.2 4.3 Aug 03 Angliss Distribution Centre, Laverton North – Building 3 16,640 10 8.5 10.3 Feb 04 – Building 4A 3,400 5 8.9 2.4 Jun 04 – Building 4B 1,400 5 8.9 1.0 Jun 04 Sunshine Distribution Centre, Sunshine – Expansion 5,124 14 9.0 1.8 Jul 03 Clayton Business Park, Clayton – Building B1 3,500 8 8.6 3.7 Jun 04 64,828 8 9.3 41.0

Auckland The Gate Industry Park, Penrose – Building D1 4,551 12 9.7 4.0 Nov 03 Total 192,012 8 8.7 256.3

(1) Average lease term for multi-tenanted stage.

16 Annual Report 2004

New space committed during the year includes: LETTABLE LEASE NET INITIAL ESTIMATED AREA TERM RENT YIELD END VALUE PROPERTY STAGE CUSTOMER SQM YEARS $M PA % $M

New South Wales Sydney West Campus Business Park, Homebush A1 Nissan 6,128 5 0.74 8.0 9.3 A1 Ateco Automotive 2,096 10 0.50 8.0 6.3 E Uncommitted 12,600 – 1.46 8.5 17.2 Homebush Corporate Park, Homebush 1 Rural Fire Service 5,800 10 2.20 9.4 23.4 26,624 7 4.90 8.7 56.1

Sydney Outer West GreystanesPark West, Prospect 1 Linfox 15,750 5 1.67 8.5 19.6 GreystanesPark East, Prospect 1A 3M 11,700 10 1.28 8.3 15.5 Erskine Park Industrial Estate, Erskine Park 1B Packcentre 13,600 10 1.26 9.1 13.9 Cumberland Industrial Estate, Smithfield 3 DHL Danzas Air 10,300 5 1.20 9.2 13.0 51,350 8 5.41 8.7 62.0 Victoria Northgate Distribution Centre, Somerton 1B SCA Hygiene 13,900 2 0.99 10.1 9.8 2A Nylex 14,500 10 0.77 8.1 9.5 Chifley Business Park, Mentone 6A Simplot 6,700 10 0.85 8.1 10.5 4B Rayovac 5,800 10 0.39 8.3 4.7 5B Storpak 7,048 10 0.31 9.2 3.4 6B Uncommitted 2,450 – 0.41 8.1 5.1 2B Uncommitted 1,360 – 0.10 9.1 1.1 Angliss Distribution Centre, Laverton North 1 Uncommitted 12,600 – 0.79 8.5 9.3 Westlink Distribution Centre, Laverton North 2 Uncommitted 8,400 – 0.50 8.9 5.6 72,758 7 5.11 8.7 59.0 Queensland Crestmead Distribution Centre, Crestmead 1 Metcash 36,150 15 2.38 8.2 28.8 Auckland The Gate Industry Park, Penrose B1 Recall 5,200 15 0.55 8.3 6.6 D1 Norman Ellison 4,397 9 0.39 8.9 4.4 Central Park Corporate Centre, Greenlane 8 Uncommitted 6,290 – 1.60 9.9 16.2 15,887 12 2.54 9.3 27.2 Total 202,769 9 20.34 8.7 233.0

Campus Business Park at Homebush, NSW under construction Brand new purpose-built facility for USG Interiors at The Gate Industry Park in Penrose, Auckland

17 Macquarie Goodman Industrial Trust

Importantly, 82% of the projects completed or committed its ready accessibility to a large workforce; and were secured on MGI’s existing landholdings, enabling us to an ideal position within the next natural release of major organically maintain control of the quality of product to be held industrial land in Sydney’s west. by MGI over the long term.

We are confident that the roll out of our development pipeline Highbrook Business Park, East Tamaki, Auckland will continue to accommodate the future space requirements of In June 2004, MGI exchanged contracts to acquire a our existing and prospective customers in key growth markets. shareholding in Highbrook Development Limited (“Highbrook”), subject to regulatory approvals. Highbrook owns 153 hectares Major Contributors of land on Auckland’s Waiouru Peninsula in East Tamaki known as Highbrook Business Park. M7 Business Hub, Eastern Creek, NSW In December 2003, MGI entered into an agreement with MGI will acquire a 37.5% interest in Highbrook for $29.8 million. Brickworks Limited to develop a large industrial and business Macquarie Goodman Management Limited (“MGM”) will also estate at Eastern Creek, subject to planning approvals. acquire a 37.5% interest for $29.8 million, with the remaining 25.0% balance to be retained by interests associated with the The estate is well positioned adjacent to the intersection of the Estate of Sir Woolf Fisher and Noel Robinson, Chairman M4 Motorway and the Westlink M7, which is due for completion of Highbrook. in mid 2006. The site comprises 150 hectares of land and will feed MGI’s development pipeline in this prime Western Sydney The investment involves one of the largest and most strategic industrial precinct over the medium term. business landholdings in New Zealand. MGI’s development pipeline within the Auckland market is set to support its This strategic initiative will invigorate our development pipeline customers over the long term with major developments at and allow us to build on the success of other major Western The Gate Industry Park in Penrose, Savill Link in Otahuhu Sydney initiatives including Lidcombe Business Park in and now Highbrook Business Park. Lidcombe, GreystanesPark in Prospect, Erskine Park Industrial Estate in Erskine Park and MFive Industry Park in Moorebank. The supply of vacant commercial and industrial land in Auckland, particularly single large holdings such as Highbrook Business Our vision is for M7 Business Hub to become the preferred Park, is diminishing. The overall scale of the property and location for industrial and business park users in Sydney’s west. flexibility of lot sizes and land uses that can be offered, are The masterplan recognises the existing and unique opportunities expected to create their own market momentum. The rate of the site presents. land take-up is forecast to accelerate as these features support M7 Business Hub has been designed to exploit a range of end an increasing market trend for both owner occupiers and uses including warehouse/distribution centres, industrial estates, customers who demand larger premises. business parks, service-based retail, bulky goods centres, Highbrook Business Park will be developed into a leading wholesale and distribution sales facilities, an hotel and/or a motel. business park in 10 stages, with approximately 107 hectares of The key ingredients to its success include: land being utilised for business accommodation. The balance of the site provides public open space, including access to around its significant size and scale, which ensure effective 12 kilometres of adjoining coastline. masterplanning;

the strategic location close to existing and committed infrastructure projects;

Architectural sketch of the planned boulevarde at M7 Business Hub in Eastern Creek, NSW

18 Annual Report 2004

Portfolio Additions

MGI secured a number of property acquisitions during the year. A number of the sites acquired adjoin MGI’s existing facilities, These properties have enhanced MGI’s offerings to customers which allow it to capitalise on redevelopment opportunities, as well as improved geographic and asset class diversification, provide growth for customers and accumulate product in customer numbers and distributions per unit. growth markets.

Details of the investment and development properties secured are: INVESTMENT ACQUISITION PURCHASE PRICE MAJOR PROPERTIES DATE $M CUSTOMERS

Penrose Industrial Estate, Penrose, Auckland Sep 03 25.0 Turners Auctions Euston Business Park, Alexandria, NSW Oct 03 46.0 KONE Elevators, Federal Express Macquarie Corporate Park, Building C, North Ryde, NSW Jan 04 5.0 Hicom International Westlink Distribution Centre, Laverton North, Vic Feb 04 5.1 Toyota Smithfield Industrial Estate, Stage 3, Smithfield, NSW Mar 04 2.9 DTM Centenary Distribution Centre, Stage 1, Moorebank, NSW Jun 04 44.0 Woolworths Fletcher Site, Penrose, Auckland Jun 04 31.3(1) Fletcher Building Botany Grove Business Park, Stage 4, Botany, NSW (2) 4.8 Vacant HP House, Viaduct Harbour, Auckland (2) 11.4(1) Hewlett-Packard Wodonga Distribution Centre, Wodonga, Vic (2) 3.6 Recall

DEVELOPMENT ACQUISITION PURCHASE PRICE MAJOR PROPERTIES DATE $M CUSTOMERS

Keysborough Distribution Centre, Stage 2, Keysborough, Vic Jul 03 1.4 HASH 5200 Crestmead Distribution Centre, Crestmead, Qld Apr 04 28.8(3) Metcash Kingsford Smith Industrial Estate, Alexandria, NSW Jun 04 33.5 Goodman Fielder Savill Link, Otahuhu, Auckland Jun 04 14.9(1) Vacant Land Highbrook Business Park, East Tamaki, Auckland (2) 29.8 Vacant Land Forrester Distribution Centre, Stage 2, St Marys, NSW (2) 6.0 Vacant Land Centenary Distribution Centre, Stage 2, Moorebank, NSW (2) 18.5 Fowles Auctions

(1) Purchase price reflects MGI's 50% interest. (2) Contracts have been exchanged with settlement to occur after the balance date. (3) Estimated completion value.

Penrose Industrial Estate in Penrose, Auckland was acquired in September 2003 Euston Business Park in Alexandria, NSW was acquired for $46 million during the year

19 Macquarie Goodman Industrial Trust

Corporate Transactions

Takeover of AIP New Zealand Alliance The major transaction during the year was the takeover During the year, MGI embarked on an expansion of its of AIP, which added 27 properties at a total cost of New Zealand holdings through a strategic joint ownership $614.6 million. The many benefits of the takeover to arrangement with Macquarie Goodman Property Trust (“MGP”), Unitholders include: which is listed on the New Zealand Exchange.

increased earnings and distributions; In addition, MGM acquired the management company and an enlarged portfolio; became a cornerstone investor of MGP. enhanced geographic and asset class diversification; and MGI’s Unitholders will benefit from earnings accretion, a larger customer base. diversification across 13 assets that are all based in the key industrial market of Auckland and greater scale It also provides reduced exposure to fluctuations in any through exposure to a larger asset and customer base. Our particular market as well as greater flexibility to accommodate Auckland-based team has also been considerably enhanced our customers’ needs. with an increase in property professionals from four to 18.

Since completing the alliance, the co-owners have made a number of key investments including the 26.5 hectare Savill Link in Otahuhu, Auckland and 8.1 hectare Fletcher Site in Penrose, Auckland.

GEOGRAPHIC DIVERSIFICATION ASSET CLASS DIVERSIFICATION

Auckland Business Parks Warehouse/ Victoria 5% 26% Distribution Centres 15% 30% Queensland Other 4% 1% Other 2% New South Wales Industrial Estates 75% Office Parks 23% 19%

Showground Business Park in Castle Hill, NSW was acquired as part A 50% interest in IBM Centre in Auckland was acquired under the of the AIP portfolio co-ownership arrangement with MGP

20 Annual Report 2004

Revaluation Performance Divestment Plan

This year, we revalued 23 of MGI’s properties resulting in an Over the year, we sold Dansu Court Business Park and parts of increase of $36.3 million or 5.4% over the previous book values. Wedgewood Business Park in Hallam, Vic for a combined sale price of $43.7 million. Only two small properties remain for sale, The principal factors behind the increases in value were intensive which we anticipate will occur over the short term. asset management and strong demand for quality industrial properties in well located areas. In addition, other non-core assets were sold for a total sale price of $5.0 million. We will continue our process of reviewing MGI’s The combination of these factors has seen the average portfolio to maximise value to Unitholders over the medium to capitalisation rate for the revalued properties decrease from long term. 8.8% to 8.4%. The strongest increases in value were recorded in the South Sydney, Sydney Outer West and Victorian markets.

The summary details of the properties that were revalued follow: WEIGHTED AVERAGE CAPITALISATION RATE BOOK VALUE VALUATION INCREASE INCREASE 2003 2004 REGION $M $M $M % % %

New South Wales Sydney Outer West 91.7 99.4 7.7 8.4 9.0 8.7 Sydney South 186.9 202.4 15.5 8.3 8.9 8.2 Sydney West 183.6 190.9 7.3 4.0 8.6 8.4 Sydney North 143.4 146.4 3.0 2.1 8.7 8.1 Victoria 45.9 48.1 2.2 4.8 8.9 8.4 Other 17.4 18.1 0.6 3.4 10.2 10.0 Total 668.9 705.2 36.3 5.4 8.8 8.4

Performance Fee

During the half year ended 31 December 2003, in its capacity The proposal will consider: as the Responsible Entity, Macquarie Goodman earned a the use of the S&P/ASX 200 Property Accumulation Index Performance Fee equating to $17.2 million. (“Benchmark Index”) at the volume weighted average price As outlined at the half year, we are reviewing the current as opposed to Benchmark Index closing prices moving Performance Fee structure and maintain our intention forward; and to present a proposal on a revised structure to Unitholders a cap and deferral on the total Management Fee payable by no later than the Annual Unitholders’ Meeting to be held in any one year of any overperformance. later this year.

Millennium Centre in Greenlane, Auckland (50%) was also acquired under the Mitchell Industrial Estate in Alexandria, NSW increased in value by 15% as a co-ownership arrangement with MGP result of its revaluation in June

21 Macquarie Goodman Industrial Trust

Capital Strategy

With our constant focus on positive capital management and In managing MGI’s capital requirements, we raised $382.7 million a gearing ratio of 33.1% at the end of the year, we believe in new equity for MGI during the year bringing its market that MGI is well placed to continue the roll out of its active capitalisation to $2.7 billion, which represents 4.4% of the development pipeline. S&P/ASX 200 Property Index. MGI is Australia’s largest listed industrial property trust and the seventh largest listed property MGI currently has 76% of its debt hedged with a weighted trust. average duration of 3.4 years. The hedging for the next 12 months has been secured at an average rate of 5.8%, The equity was raised via the following methods and applied to including line fees and margins. the repayment of debt, funding of the development pipeline and acquisitions:

UNITS ISSUE FUNDS ISSUED PRICE RAISED METHOD DATE M $ $M

Distribution Reinvestment Plan (“DRP”) (underwritten) August 2003 22.6 1.51 34.2 Institutional Placement October 2003 57.3 1.44 82.5 DRP (underwritten) November 2003 30.7 1.49 45.7 DRP (underwritten) February 2004 30.2 1.65 49.8 Institutional Placement March 2004 91.5 1.64 150.0 DRP May 2004 12.3 1.67 20.5 Total 244.6 382.7

In June 2004, MGI announced a Unit Purchase Plan (“UPP”). In December 2003, MGI undertook a top up issue of Notes It was an initiative to provide eligible Unitholders with the under its current Commercial Mortgage Backed Securities opportunity to purchase additional units at a discount and programme. A total of $162 million was raised through the issue without brokerage and transaction costs. to repay bank debt and for ongoing working capital. The Notes have a scheduled maturity that is co-terminus with the original The UPP raised approximately $31 million, with 32% of programme. Unitholders taking advantage of the offer. The issue price of $1.64 under the UPP was the same as that offered to institutional MGI increased its syndicated multi-option facility to $575 million Unitholders under the placement in March 2004. and added a $225 million syndicated standby facility during the year.

In 2005, we will continue to effectively manage MGI’s debt position and raise equity when appropriate.

CSC Australia’s new Australian headquarters at Talavera Corporate Park in Stramit’s purpose-built facility at Erskine Park Industrial Estate in Erskine Park, North Ryde, NSW was completed in October 2003 NSW was completed in December 2003

22 Annual Report 2004

MGI in 2005

The year’s results were driven by our team of dedicated property The team will produce this organic growth through sourcing professionals, which secured strong leasing results on the precommitments to further the development pipeline, proactive underlying portfolio, significant commitments within the lease management to sustain high occupancy levels and development pipeline and a number of strategic acquisitions. intensive portfolio management to ensure the underlying properties are of the highest standard. MGI’s Unitholders have benefitted from this performance, receiving one of the highest returns in the listed property trust We are committed to developing MGI’s brand as the leading sector with a one year total return of 19.8% and a three year industrial and business space and service provider. total return of 17.3% per annum, outperforming both the UBS We will continue to create Unitholder wealth through a secure Industrial 200 Accumulation Index and the S&P/ASX 200 and increasing income stream, the potential for capital growth Property Accumulation Index. and the flexibility of a highly liquid trust. Our Customer Service Model will continue to deliver complete property solutions to our customers through our superior level of customer service and high quality, well located properties. This forms a fundamental platform for MGI’s continuing solid performance.

The Australian economy has performed well over the past year and, importantly, we expect a stable economic outlook for 2005. The dual-focussed nature of MGI’s underlying portfolio and development pipeline will capitalise on this forecast to organically grow and improve its portfolio and customer base.

The Laminex Group occupies 26,000 sqm of tailor-made space at AUSDOC’s purpose-built facility at MFive Industry Park in Moorebank, NSW GreystanesPark in Prospect, NSW

23 Macquarie Goodman Industrial Trust

Board of Directors of the Responsible Entity

Mr David Clarke, AO – Chairman Mr Gregory Goodman – Chief Executive Officer

Appointed 26 October 2000 Appointed 17 January 1995

David is the Executive Chairman of Macquarie Bank Limited. Greg is the Chief Executive Officer of the Macquarie Goodman He was previously Managing Director and then Chairman of Group and is responsible for its overall operations and the Macquarie Bank’s predecessor organisation, Hill Samuel Australia implementation of its strategic plan. He has 22 years of Limited. David was educated at Sydney University (BEcon (Hons)) experience in the property industry with significant expertise and Harvard University (MBA). David holds an honorary degree in the industrial property arena. Greg was the co-founder of of Doctor of Science in Economics from Sydney University Macquarie Goodman Industrial Trust and has played an integral (Hon DScEcon). role in establishing its specialist position in the marketplace through various corporate transactions, including takeovers, David has extensive experience as a chairman and is currently mergers and acquisitions. Recently, he was involved in the listing Chairman of Macquarie CountryWide Management Limited, of Singapore’s first listed industrial property trust, Ascendas Real Macquarie Office Management Limited and Macquarie ProLogis Estate Investment Trust, and the repositioning of Macquarie Management Limited, the management companies of Macquarie Goodman Property Trust in New Zealand. CountryWide Trust, Macquarie Office Trust and Macquarie ProLogis Trust. He is also Chairman of McGuigan Simeon Wines Mr Patrick Allaway – Independent Director Limited, the Wine Committee of the Royal Agricultural Society of New South Wales, Sydney Advisory Board of the Salvation Army, Appointed 27 May 2003 Opera Australia Capital Fund and Sydney University Football Patrick was educated in South Africa before coming to Australia Club Foundation. to attend Sydney University where he attained a Bachelor of Arts and Bachelor of Laws. He is the Non-executive Chairman of Reino International Limited, an Australian parking systems technology and service provider. Patrick is also Joint Managing Director of Saltbush Funds Management, a boutique funds management group focussed on the alternative asset class, and a director and trustee of Giant Steps Endowment Fund, which was established to raise funds for children with autism.

Patrick has extensive experience in senior management roles in international companies, including Citibank and Swiss Bank Corporation, in Australia and abroad. He was previously Managing Director and an executive board member of SBC Warburg Global Investment Bank, based in London (now UBS).

Mr David Clarke, AO – Chairman Mr Gregory Goodman – Chief Executive Officer

Mr Patrick Allaway – Independent Director

24 Annual Report 2004

Ms Anne Keating – Independent Director Mr James Hodgkinson – Alternate Director for Mr David Clarke Appointed 6 February 2004 Appointed 21 February 2003 Anne was the General Manager, Australia of United Airlines from 1993 to 2001. She is now a professional director with board James is an Executive Director of Macquarie Bank Limited, positions in a range of industries including advertising, insurance, joint Head of Macquarie Bank Group’s Property Investment property, construction, banking and medical research. She is Management Division and Country Head, Property Investment on the boards of Insurance Australia Group Limited, Macquarie Management North America. He also has overall responsibility Leisure Management Limited, STW Communications Group Limited, for Property Investment Management’s activities in Asia, Mutual Community General Insurance Pty Limited and Spencer focussing on listed property trust development and core Street Station Redevelopment Limited. Anne is also a member of real estate investment. the Advisory Council of ABN AMRO Australia and New Zealand and James was Chief Executive Officer of Macquarie Industrial an inaugural director of the Victor Chang Cardiac Research Institute. Trust for six years prior to that trust’s merger with Macquarie Ms Lynn Wood – Independent Director Goodman Industrial Trust in October 2000. He has responsibility for the management teams for Macquarie CountryWide Trust, Appointed 30 December 2002 Macquarie DDR Trust, Macquarie ProLogis Trust and Lynn obtained a Masters in Arts (Psychology) at Sydney Macquarie Bank Limited’s investment in Macquarie Goodman University and an MBA from the Australian Graduate School of Management Limited. Management. She is a member of the Foreign Investment Review Board, a compliance committee member of Barclays Global Investors Australia Limited and Mellon Global Investments, a Fellow of the Australian Institute of Company Directors, a director of the MS Society of NSW and President of Women Chiefs of Enterprises-International (NSW Division).

Lynn’s previous board memberships include Schroders Australia Limited, Schroders Australia Property Management Limited, Sedgwick (Holdings) Pty Limited, NSW Lotteries Corporation and the Investment Funds Association of Australia (now IFSA). Her career in financial services began at American Express, including a posting in Hong Kong. Lynn was awarded the Centenary Medal for service to Australian society through business and finance in 2003.

Ms Anne Keating – Independent Director Ms Lynn Wood – Independent Director

Mr James Hodgkinson – Alternate Director for Mr David Clarke

25 Macquarie Goodman Industrial Trust

Senior Executives

Property

Mr David van Aanholt – Chief Operating Officer Mr Nick Kurtis – Fund Manager

David is the Chief Operating Officer of the Macquarie Goodman Nick’s primary focus is the day-to-day operations of Macquarie Group. He works closely with the Chief Executive Officer and the Goodman Industrial Trust. He is directly responsible for the Board on the strategic direction of the business. David heads up implementation and review of acquisition and leasing strategies the investment programme for the Group and has the day-to-day and the overall financial and portfolio performance of the trust. responsibility for the project and development management Nick has 10 years of experience in the property funds team. He has over 16 years of experience in the property management industry. Prior to joining Macquarie Goodman, industry including valuation, asset management, development he held various positions with PricewaterhouseCoopers, management and funds management. National Australia Bank and Tyndall Funds Management.

Mr Tony D’Addona – Investment Manager

Tony is Investment Manager for the Macquarie Goodman Group with the primary responsibility for its Property Services division. He is responsible for implementing leasing and capital expenditure strategies, co-ordinating valuations and managing the operating performance of the existing assets of Macquarie Goodman Industrial Trust, as well as involvement in acquisitions and disposals of assets. Tony has over 12 years of experience in the property industry, in asset and portfolio management related roles.

Mr David van Aanholt – Chief Operating Officer Mr Nick Kurtis – Fund Manager

Mr Tony D’Addona – Investment Manager

26 Annual Report 2004

Corporate

Ms Carolyn Scobie – General Counsel and Joint Mr Anthony Rozic – Chief Financial Officer, MGI Company Secretary Anthony is the Chief Financial Officer of Macquarie Goodman Carolyn is the General Counsel and Joint Company Secretary of Industrial Trust and is responsible for its financial management, the Macquarie Goodman Group. She is directly responsible for taxation, compliance and reporting obligations. Anthony has over the corporate legal activities of the Group and oversees all legal eight years of experience in the property investment industry and matters relating to property and compliance. Carolyn has over eight years of experience in the chartered accounting profession 14 years of legal experience in corporate and commercial in Australia. Prior to joining the Macquarie Goodman Group, he property areas including three years within the legal profession was Head of Finance for the Property Division of AMP Capital and six years as in-house Counsel with Kumagai Australia Group. Investors Limited. She holds a Masters of Arts from Sydney University, a Bachelor of Arts/Bachelor of Laws from the Australian National University Ms Jayne Gerrie – Corporate Communications Manager and a Graduate Diploma in Company Secretarial Practice. Jayne heads up Macquarie Goodman Group’s corporate communications, including media relations, brand management, Mr Mark Alley – Group Chief Financial Officer advertising, website development and internal and external and Joint Company Secretary communications. She also manages investor relations, corporate Mark is Chief Financial Officer and Joint Company Secretary of and property related marketing campaigns and the customer the Macquarie Goodman Group. He is directly responsible for relationship management programme. Jayne has over 15 years the overall financial management and reporting of the Group. of experience in the funds management industry and was Mark has over 20 years of experience in finance, property previously employed as investor relations manager for investment and development in Australia, New Zealand and Capcount Property Trust. Europe. Previously, he was the Group Financial Controller of Ipoh Limited and before that the Finance Director of a private group of property companies. Mark is a Certified Practising Accountant and holds a Bachelor of Commerce and Administration.

Ms Carolyn Scobie – General Counsel Mr Mark Alley – Group Chief Financial Officer and Joint Company Secretary and Joint Company Secretary

Mr Anthony Rozic – Chief Financial Officer, MGI Ms Jayne Gerrie – Corporate Communications Manager

27 Macquarie Goodman Industrial Trust

Property Portfolio

Warehouse/ Distribution Centres

Industrial Estates

Business Parks

Office Parks

Suburban Commercial Buildings

28 Annual Report 2004

Location Map

Australia

Northern Territory

Queensland

Western Australia 6 3 Brisbane South Australia

New South Wales 1 – Perth 2 – 59 13 Sydney 12 4 Adelaide Victoria Auckland 20 5 Melbourne Tasmania Hobart 1 –

Number of properties in each region New Zealand Investment Properties Development Properties

Total number of properties 126

Flexibility, quality and location are all core ingredients of MGI’s $3.9 billion portfolio of warehouse/distribution centres, industrial estates, business parks and office parks. Our Customer Service Model coupled with this vast portfolio cater for the diverse property requirements of MGI’s 580 customers. In turn, this assists to sustain high occupancy and retention rates.

29 Macquarie Goodman Industrial Trust

Development Pipeline

TOTAL DEVELOPABLE COMMITTED COMMITTED UNCOMMITTED SITE AREA SITE AREA SITE AREA SITE AREA PROPERTIES SQM SQM % SQM

New South Wales Sydney West Homebush Corporate Park, Homebush 122,760 7,300 6 115,460 Campus Business Park, Homebush 111,580 70,616 63 40,964 Lidcombe Business Park, Lidcombe 65,541 65,541 100 – 299,881 143,457 48 156,424

Sydney Outer West M7 Business Hub, Eastern Creek 1,050,000 – – 1,050,000 GreystanesPark, Prospect 241,600 127,576 53 114,024 Erskine Park Industrial Estate, Erskine Park 192,000 60,440 31 131,560 MFive Industry Park, Moorebank 172,800 105,900 61 66,900 Cumberland Industrial Estate, Smithfield 75,010 75,010 100 – Forrester Distribution Centre, Stage 2, St Marys 51,180 – – 51,180 Centenary Distribution Centre, Stage 2, Moorebank 32,900 – – 32,900 1,815,490 368,926 20 1,446,564

Sydney South Airgate Business Park, Mascot 75,500 49,500 66 26,000 Kingsford Smith Industrial Estate, Alexandria 39,778 – – 39,778 115,278 49,500 43 65,778

Sydney North Talavera Corporate Centre, North Ryde 41,325 22,475 54 18,850 The Precinct Corporate Centre, North Ryde 16,240 4,465 27 11,775 Macquarie Corporate Park, Building C, North Ryde 6,000 – – 6,000 Pinnacle Office Park, North Ryde 4,900 – – 4,900 68,465 26,940 39 41,525 Victoria Chifley Business Park, Mentone 251,060 208,860 83 42,200 Northgate Distribution Centre, Somerton 139,970 100,390 72 39,580 Angliss Distribution Centre, Laverton North 103,190 56,070 54 47,120 Clayton Business Park, Clayton 24,500 8,000 33 16,500 Westlink Distribution Centre, Laverton North 16,000 – – 16,000 534,720 373,320 70 161,400 Queensland Acacia Ridge Business Park, Acacia Ridge 199,500 – – 199,500 Crestmead Distribution Centre, Crestmead 121,520 121,520 100 – Queensport Quays Business Park, Murarrie 82,486 – – 82,486 403,506 121,520 30 281,986 Auckland Highbrook Business Park, East Tamaki 401,250 – – 401,250 Savill Link, Otahuhu 132,787 – – 132,787 The Gate Industry Park, Penrose 132,670 92,700 70 39,970 Central Park Corporate Centre, Greenlane 25,000 – – 25,000 691,707 92,700 13 599,007 Total 3,929,047 1,176,363 30 2,752,684

30 Annual Report 2004

Portfolio Summary

TOTAL MARKET TERMINAL BOOK VALUE LETTABLE CAPITALISATION CAPITALISATION LATEST 30 JUNE SITE AREA OFFICE WAREHOUSE AREA RATE RATE VALUATION VALUATION 2004 OCCUPANCY MAJOR PROPERTY HECTARES SQM SQM SQM % % $M DATE $M % CUSTOMERS

Warehouse/Distribution Centres MFive Industry Park, 19.6 5,700 44,927 50,627 8.00 8.25 39.5 Dec 01 96.7 84 AUSDOC, Toll, Moorebank, NSW Victa Lawncare GreystanesPark, Prospect, NSW East (Stage 1) 13.6 2,092 25,593 27,685 8.25 8.50 24.6 Jun 01 47.3 100 The Laminex Group, West (Stage 2) 10.5 5,140 38,000 43,140 8.25 8.50 19.5 Jun 02 40.7 100 Exel, Linfox(1) 24.1 70,825 44.1 88.0 100 Roberts Distribution Centre, Chullora, NSW Building A 4.6 943 18,670 19,613 9.25 10.75 25.0 Dec 02 25.2 100 Toll Building B 6.2 799 32,175 32,974 9.25 10.00 32.0 Mar 03 34.8 100 Toll 10.8 52,587 57.0 60.0 100 Forrester Distribution Centre, 12.3 263 60,176 60,439 8.50 9.00 55.0 Jun 04 55.0 100 ACI St Marys, NSW Reservoir Distribution Centre, 10.6 2,722 46,570 49,292 8.75 9.25 47.0 Sep 03 52.6 100 Canon Australia Wetherill Park, NSW New Wave Transport Centenary Distribution Centre, Moorebank, NSW Stage 1 7.2 1,903 40,562 42,465 8.50 9.00 44.0 Jun 04 46.4 100 Woolworths Stage 2(2) 4.7 – – 13,500 8.50 9.00 18.5 Jun 04 – 100 Fowles Auctions 11.9 55,965 62.5 100 Portside Distribution Centre, 4.7 4,552 25,818 30,370 8.25 8.50 43.0 Sep 03 46.2 100 Gazal Apparel, Banksmeadow, NSW Russ Australia Forsyth Distribution Centre, 14.5 1,734 50,286 52,020 9.75 11.00 36.4 Mar 03 38.4 100 Coles Hoppers Crossing, Vic Great West Distribution Centre, 7.2 1,757 26,347 28,104 8.75 9.25 37.5 Jun 04 37.5 100 Patrick Arndell Park, NSW Wyndham Distribution Centre, 12.4 2,344 51,524 53,868 9.00 9.50 36.0 Jun 03 36.1 100 Toll Laverton, Vic Smithfield Distribution Centre, 7.9 1,615 57,335 58,950 11.00 11.50 34.0 Jan 03 36.0 100 Coca-Cola Amatil, Smithfield, NSW Kmart

(1) Precommitment with practical completion due in October 2004. (2) Settlement scheduled after the balance date.

MFive Industry Park, Moorebank, NSW Forrester Distribution Centre, St Marys, NSW

31 Macquarie Goodman Industrial Trust

Portfolio Summary TOTAL MARKET TERMINAL BOOK VALUE LETTABLE CAPITALISATION CAPITALISATION LATEST 30 JUNE SITE AREA OFFICE WAREHOUSE AREA RATE RATE VALUATION VALUATION 2004 OCCUPANCY MAJOR PROPERTY HECTARES SQM SQM SQM % % $M DATE $M % CUSTOMERS

Chullora Distribution Centre, Chullora, NSW Stage 1 3.0 1,545 20,360 21,905 8.75 9.75 23.6 Sep 03 25.4 100 Energy Australia Stage 2 1.7 246 14,985 15,231 9.50 10.75 9.5 Sep 03 10.6 100 McPhersons 4.7 37,136 33.1 36.0 100 Northgate Distribution Centre, Somerton, Vic Stages 1 and 2 7.7 224 40,388 40,612 8.25 8.75 26.1 Jun 02 31.6 100 Nylex, SCA Hygiene Stage 3 7.4 – ––––3.3Dec 01 3.7 – Vacant Land 15.1 40,612 29.4 35.3 100 Southend Distribution Centre, 4.3 1,789 28,034 29,823 8.00 8.50 35.0 Jun 04 35.0 100 Recall Mascot, NSW Westall Distribution Centre, 9.1 2,580 56,291 58,871 8.00 8.75 30.6 Sep 03 32.8 100 Smorgon Steel Laverton North, Vic Laverton Distribution Centre, 12.1 437 50,493 50,930 8.25 8.75 30.6 Jun 04 30.6 100 ACI Laverton North, Vic Kingston Distribution Centre, 8.0 1,535 38,508 40,043 9.00 9.50 27.9 Jun 03 28.0 100 Kmart Braeside, Vic Davis Distribution Centre, Wetherill Park, NSW Stage 1 3.1 3,772 13,186 16,958 8.75 9.25 16.3 Sep 03 19.8 100 DTM Stage 2 2.0 – 5,527 5,527 8.50 9.25 7.4 Sep 03 6.2 100 New Food Coatings 5.1 22,485 23.7 26.0 100 Hampton Park Distribution Centre, 12.0 2,320 36,524 38,844 9.00 9.50 22.4 Sep 03 24.3 100 Coles Myer Hampton Park, Vic Miller Distribution Centre, 7.4 1,407 11,992 13,399 8.75 9.25 21.2 Jun 04 21.2 100 BHP Transport Villawood, NSW Fitzgerald Distribution Centre, 15.1 916 21,864 22,780 9.00 9.50 21.0 Jun 03 21.1 100 Patrick Laverton, Vic Berkeley Distribution Centre, 6.5 500 29,647 30,147 9.50 11.50 19.1 Jun 03 19.5 100 Master Foods Berkeley Vale, NSW Angliss Distribution Centre, 10.4 567 20,849 21,416 8.25 9.00 4.2 Nov 01 17.7 100 Kimberly-Clark, Laverton North, Vic Australia Post Port Wakefield Distribution Centre, 11.3 4,320 21,804 26,124 11.50 11.75 16.1 Sep 03 17.5 100 Coles Gepps Cross, SA Holroyd Distribution Centre, 2.9 2,361 14,692 17,053 9.25 9.50 16.0 Sep 03 17.3 100 Ramset Fasteners Smithfield, NSW

Northgate Distribution Centre, Somerton, Vic Angliss Distribution Centre, Laverton North, Vic

32 Annual Report 2004

Villawood Distribution Centre, 3.1 1,046 14,520 15,566 9.25 9.50 15.3 Sep 03 17.1 100 Australia Post Villawood, NSW Hume Distribution Centre, 2.6 1,641 14,420 16,061 9.00 9.50 17.0 Jun 03 17.0 100 Detagna Chullora, NSW Boundary Distribution Centre, 9.7 1,037 22,990 24,027 9.50 9.75 15.5 Dec 02 15.6 100 Caterpillar Logistics Laverton, Vic Crestmead Distribution Centre, 18.3 2,400 71,712 74,112 8.25 8.75 8.1 Dec 03 15.2 100 Metcash(1) Crestmead, Qld Tranzport Distribution Centre, 2.2 4,720 7,100 11,820 9.25 10.00 13.3 Mar 03 14.7 100 Air International Port Melbourne, Vic Sunshine Distribution Centre, 4.4 804 17,602 18,406 8.25 9.00 13.1 Jun 04 13.1 100 AUSDOC Sunshine, Vic Sheffield Distribution Centre, 7.5 1,360 18,205 19,565 9.25 9.75 12.6 Jun 04 12.6 100 Patrick Welshpool, WA Britton Distribution Centre, 2.2 342 12,568 12,910 9.25 9.75 12.3 Jun 03 12.3 100 Tyre Marketers Smithfield, NSW Federation Distribution Centre, 5.0 484 15,957 16,441 10.00 10.50 10.8 Mar 03 11.4 100 Toll Laverton North, Vic Auckland Distribution Centre, 10.2 2,031 35,994 38,025 11.75 11.50 18.5 Dec 03 11.3 100 Ford NZ, Linfox Manukau, Auckland Woodlands Distribution Centre, 2.5 2,290 8,839 11,129 8.75 9.00 10.7 Sep 03 11.3 100 Crane Distribution Braeside, Vic Keysborough Distribution Centre, Keysborough, Vic Stage 1 1.4 687 6,188 6,875 10.75 11.50 6.6 Mar 03 7.0 100 TDG Distribution Stage 2 2.9 – 3,612 3,612 12.50 13.00 1.4 Jun 03 1.7 100 National Fleet Services 4.3 10,487 8.0 8.7 100 Montague Distribution Centre, 0.8 1,411 4,584 5,995 11.25 11.75 7.8 Mar 03 8.6 100 Qld State Library West End, Qld Holbeche Distribution Centre, 2.2 396 5,441 5,837 9.25 9.75 7.8 Jun 03 7.8 100 Westgate Logistics Arndell Park, NSW Lytton Distribution Centre, 2.2 322 8,246 8,568 8.50 9.25 1.6 May 02 7.5 100 ACI Lytton, Qld Gippsland Distribution Centre, 2.6 306 10,151 10,457 9.50 9.75 6.1 Sep 03 6.3 100 Amerind Dandenong, Vic

(1) Precommitment with practical completion due in November 2004.

Hume Distribution Centre, Chullora, NSW Lytton Distribution Centre, Lytton, Qld

33 Macquarie Goodman Industrial Trust

Westlink Distribution Centre, 3.2 342 7,402 7,744 9.50 10.00 5.3 Jan 04 5.7 100 Toyota Laverton North, Vic Bradford Distribution Centre, 4.9 333 11,380 11,713 10.75 11.25 3.8 Dec 03 3.8 100 Patrick Cavan, SA Nestlé Building, Wiri, 2.7 830 9,317 10,147 10.75 11.25 3.5 Mar 04 3.7 100 Nestlé New Zealand Manukau, Auckland Burnie Distribution Centre, 4.0 216 5,200 5,416 13.50 14.00 1.7 Dec 03 1.7 100 Toll Burnie, Wivenhoe, Tas

Industrial Estates Discovery Cove Industrial Estate, 7.6 16,949 32,773 49,722 8.25 8.75 70.6 Dec 03 70.8 90 DHL International, Banksmeadow, NSW Eagle Global Logistics Alexandria Industrial Estate, 6.1 3,826 39,774 43,600 9.00 9.75 49.5 Mar 03 55.7 93 Bremick, Alexandria, NSW Fantastic Furniture Mitchell Industrial Estate, 5.4 5,906 30,931 36,837 8.25 8.75 43.8 Dec 03 44.8 91 Kuehne & Nagel, Alexandria, NSW Toll Kingsford Smith Industrial Estate, 4.0 – – 15,000 – – 33.8 May 04 40.3 100 Goodman Fielder Alexandria, NSW Erskine Park Industrial Estate, 27.9 1,452 29,000 30,452 8.50 9.00 11.3 Nov 02 38.3 100 Packcentre(1), Stramit Erskine Park, NSW Gateway Industrial Estate, 4.6 5,989 21,976 27,965 8.75 9.25 32.0 Mar 03 35.3 100 Fujitsu, Sanyo Arndell Park, NSW The Gate Industry Park, 15.4 – – 59,196(2) 9.25 10.50 41.9 Dec 03 35.2 100 Carter Holt Harvey, Penrose, Auckland Edwards Dunlop, USG Interiors Smithfield Industrial Estate, Smithfield, NSW Stage 1 2.8 2,511 14,273 16,784 10.00 10.50 13.3 Mar 03 14.9 98 Coghlan Stage 2 2.9 1,631 13,262 14,893 10.00 10.50 12.3 Mar 03 13.7 100 Speedy Corporation Stage 3 1.1 – 3,951 3,951 10.00 10.50 2.6 Mar 04 3.1 – – 6.8 35,628 28.2 31.7 88 Portside Industrial Estate, 6.0 1,601 43,758 45,359 10.50 11.00 31.0 Jan 03 31.5 100 Linfox Port Melbourne, Vic Burrows Industrial Estate, 4.1 2,920 24,101 27,021 8.50 9.00 30.5 Dec 03 31.3 93 ExpoHire, Alexandria, NSW Sealed Air Cumberland Industrial Estate, 7.5 1,641 26,906 28,547 8.50 8.75 29.0 Sep 03 30.2 100 DHL Danzas Air, Toll Smithfield, NSW

(1) Precommitment with practical completion due in May 2005. (2) Includes 11,566 sqm under development.

Riverside Centre, Parramatta, NSW Reserve Industrial Estate, Ermington, NSW

34 Annual Report 2004

Botany Bay Industrial Estate, 3.0 5,225 19,744 24,969 8.75 9.00 30.5 Sep 03 30.0 93 Associated Customs Botany, NSW Agents, TranzLink Brisbane Gate Industrial Park, 8.1 2,198 41,802 44,000 8.75 9.00 27.5 Sep 03 27.2 100 Bridgestone Australia, Hendra, Qld Linfox Riverside Centre, 2.3 4,687 10,155 14,842 8.75 9.00 21.5 Sep 03 24.3 91 Hagar B&R, Parramatta, NSW InchCape Automotive Arcadia Industrial Estate, 6.8 3,966 32,040 36,006 11.25 11.50 16.5 Mar 03 22.7 89 Campbells Cash Coopers Plains, Qld & Carry, Tyremaster Brodie Industrial Estate, 3.7 2,498 17,318 19,816 9.75 10.25 20.3 Mar 03 22.5 92 Eagle Global Logistics, Rydalmere, NSW Hewlett-Packard Reserve Industrial Estate, 2.5 1,632 11,181 12,813 8.50 8.75 18.6 Sep 03 19.5 100 Computershare, Ermington, NSW Goodman Fielder Biloela Industrial Estate, 3.7 1,622 19,045 20,667 9.00 9.50 19.0 Jun 04 19.0 100 OneSteel Trading, Villawood, NSW Grimwood Heating Savill Link, Otahuhu, Auckland 26.5 – ––––16.7 Sep 03 15.4 – Vacant Land Penrose Industrial Estate, 8.8 4,768 26,374 31,142 9.50 10.00 30.1 Dec 03 15.4 100 Gilbarco, Penrose, Auckland Turners Auctions Tingalpa Industrial Estate, 1.9 3,005 8,579 11,584 10.50 11.00 11.5 Mar 03 12.8 100 Queensco Unity Tingalpa, Qld Dairy Foods Co-op Ferntree Industrial Estate, 4.3 4,022 16,484 20,506 9.75 10.25 11.4 Sep 03 12.7 100 Onga Proprietary, Notting Hill, Vic Sipca Australia Westcove Industrial Estate, 0.8 1,294 5,500 6,794 9.00 9.50 11.5 Mar 03 12.6 100 Doubleday Australia Lane Cove, NSW Abbott Industrial Estate, 2.4 2,572 9,281 11,853 9.75 10.25 12.1 Jun 03 12.2 100 Salmat Chester Hill, NSW Homebush Bay Industrial Estate, 1.2 1,705 7,229 8,934 9.00 9.50 11.2 Jun 04 11.2 88 Bayer Chemicals Homebush Bay, NSW Greensquare Industrial Estate, 0.7 2,090 4,006 6,096 8.25 9.00 10.3 Mar 03 10.9 100 Allders International Alexandria, NSW Citiport Industrial Estate, 3.2 2,730 11,723 14,453 9.00 9.50 10.7 Sep 03 10.5 100 Mayvic Eagle Farm, Qld Pavesi Industrial Estate, 1.6 1,511 6,016 7,527 8.75 9.50 8.8 Mar 03 9.3 100 RS Components Smithfield, NSW Woodpark Industrial Estate, 1.5 889 7,621 8,510 9.75 10.25 6.9 Dec 03 7.0 100 Electrical Home Aids Smithfield, NSW Healey Industrial Estate, 2.9 2,085 9,798 11,883 10.50 10.75 6.9 Dec 03 6.9 93 Australian Char, Dandenong, Vic Carter Holt Harvey

Discovery Cove Industrial Estate, Banksmeadow, NSW Greensquare Industrial Estate, Alexandria, NSW

35 Macquarie Goodman Industrial Trust

Business Parks Lidcombe Business Park, 6.7 14,228 57,283 71,511 8.25 8.75 139.5 Jun 04 139.5 97 CBA, Fisher & Paykel, Lidcombe, NSW Nick Scali, Tradelink Campus Business Park, 12.6 – – 44,812(1) 8.50 9.00 45.0 Jul 01 105.7 94 Fuji Xerox, Nissan(2), Homebush, NSW Optima Technology Solutions, UPS Logistics Group Slough Business Park, 9.6 15,907 55,177 71,084 9.25 9.75 84.5 Mar 03 93.5 95 AEMS, Optus, Silverwater, NSW EMI Music Clayton Business Park, 31.0 13,000 127,000 140,000 10.50 10.50 73.3 Jan 03 80.4 100 Australian Independent Clayton, Vic Wholesalers, Holden Motor Sport, Linfox Acacia Ridge Business Park, Acacia Ridge, Qld Stage 1 17.7 4,102 82,666 86,768 11.00 12.00 35.0 Jan 03 41.9 100 Patrick, Woolworths Stage 2 20.0 16.6 Jan 03 19.4 – – 37.7 86,768 51.6 61.3 100 Botany Grove Business Park, Botany, NSW Stages 1 and 2 5.3 7,915 13,781 21,696 8.50 8.75 37.0 Jun 03 37.6 100 Com Tech Communications, UPS Logistics Group Stage 3 1.4 2,454 7,463 9,917 8.50 8.75 13.0 Jun 03 16.8 100 Penfold Buscombe Stage 4 – – ––––4.5May 03 5.1 – – 6.7 31,613 54.5 59.5 100 Chullora Business Park, 10.7 10,910 35,619 46,529 8.50 9.00 59.0 Sep 03 58.2 100 Liquorland, Chullora, NSW New Wave Logistics, Sony Australia Airgate Business Park, Mascot, NSW Stage 1 4.4 – – 12,433 8.00 8.50 22.5 Dec 03 31.2 100 TNT Stage 2 3.3 – – 14,300 8.00 8.50 9.0 Dec 02 24.7 100 Exel, Hellmann Worldwide Logistics 7.7 26,733 31.5 55.9 100 Euston Business Park, 2.7 11,057 10,673 21,730 8.75 9.00 46.0 (3) 49.1 100 Federal Express, Alexandria, NSW Harvey World Travel, KONE Elevators

(1) Includes 8,531 sqm currently under development. (2) Precommitment with practical completion in September 2004. (3) Stage 1 valued in July 2003 and Stage 2 valued in September 2003.

Airgate Business Park, Mascot, NSW Botany Grove Business Park, Botany, NSW

36 Annual Report 2004

Chifley Business Park, 28.5 – – 88,885 8.75 9.25 6.4 Jun 02 44.0 86 Coca-Cola Amatil, Mentone, Vic Storpak, VisyPET St Peters Business Park, 3.4 5,002 16,792 21,794 8.00 8.50 37.8 Sep 03 39.2 100 UPS Logistics St Peters, NSW Group, Optus TransTech Business Park, 3.4 6,500 18,032 24,532 9.00 9.50 38.7 Dec 03 39.0 91 Hewlett-Packard Lane Cove, NSW Talavera Business Park, North Ryde, NSW Building A 1.2 4,006 3,137 7,143 9.00 9.50 15.1 Jun 02 15.6 100 ADI Building B 1.3 5,697 2,405 8,102 9.00 9.50 18.9 Jun 03 19.0 90 Damovo, Kyocera Mita 2.5 15,245 34.0 34.6 95 Forestridge Business Park, 1.6 13,605 3,687 17,292 9.75 10.50 33.1 Jun 03 34.1 86 Dell Computers, Frenchs Forest, NSW Prentice Hall Link Business Park, North Ryde, NSW Building A 0.9 3,888 1,675 5,563 8.25 8.50 11.3 Sep 03 12.1 100 Konica Building B 0.8 6,344 1,187 7,531 9.00 9.50 19.1 Mar 03 20.6 84 ResMed 1.7 13,094 30.4 32.7 91 Showground Business Park, 5.7 9,646 14,175 23,821 9.00 9.25 28.0 Sep 03 30.3 100 Tarkett Sommer, Castle Hill, NSW Waterford Wedgwood Enterprise Park, 3.8 6,070 15,614 21,684 9.50 10.00 27.9 Jun 03 28.4 95 American Express, Gladesville, NSW Beckman Coulter Waterloo Business Park, 1.6 7,466 4,806 12,272 9.00 9.50 22.6 Jun 03 23.3 96 BTAS, Douglas Hanly North Ryde, NSW Moir Pathology, Proteome Systems Ferntree Business Park, 4.1 10,637 4,323 14,960 9.60 10.00 22.2 Sep 03 21.2 100 Drager Australia, Notting Hill, Vic GE Capital Seville Business Park, 2.7 4,908 15,773 20,681 10.25 11.00 17.2 Jun 02 17.7 86 Packcentre Villawood, NSW Peninsula Business Park, 1.9 3,011 9,087 12,098 9.25 9.50 15.8 Sep 03 17.5 100 Blackmores, Brookvale, NSW Magnamail Pacific View Business Park, 1.7 4,393 4,043 8,436 8.75 9.25 15.7 Dec 03 15.7 76 Imaging Innovations, Frenchs Forest, NSW Linvatec, Pharmaxis Orion Business Park, 0.6 3,165 3,320 6,485 8.75 9.25 12.7 Jun 04 12.7 100 Hypercom Australia, Lane Cove, NSW Pall Corporation

TransTech Business Park, Lane Cove, NSW Forestridge Business Park, Frenchs Forest, NSW

37 Macquarie Goodman Industrial Trust

Queensport Quays Business Park, 13.6 – ––––5.5Sep 02 10.8 – Vacant Land Murarrie, Qld Chase Business Park, 0.8 1,699 3,538 5,237 10.00 10.50 9.3 Mar 03 10.0 90 Evans and Peck, Chatswood, NSW Hal Data Services Citylink Business Park, 1.0 2,830 2,696 5,526 8.75 9.25 9.3 Sep 03 9.1 100 Isuzu – GMA, Port Melbourne, Vic Lanier Australia Dansu Court Business Park, 0.9 558 3,841 4,399 9.50 10.00 2.4 Jun 04 2.4 100 Rumortex Hallam, Vic Wedgewood Business Park, 0.7 861 2,609 3,470 9.50 10.00 2.0 Jun 04 2.0 100 AL-KO International Hallam, Vic

Office Parks Talavera Corporate Centre, 4.1 22,416 – 22,416 7.75 8.25 33.0 Apr 02 106.7 100 CSC Australia North Ryde, NSW CityWest Office Park, 1.0 25,904 – 25,904 8.50 9.00 100.0 Jun 02 101.4 93 Hutchison 3G, Pyrmont, NSW Macquarie Radio, Network Ten, Sydney FM Radio Homebush Corporate Park, 13.2 5,800 46,467 – 8.50 9.00 33.0 Jan 02 93.9 100 Rural Fire Service Homebush, NSW Macquarie Corporate Park, North Ryde, NSW Building A 1.6 8,845 2,279 11,124 8.25 8.75 34.0 Feb 02 36.5 100 ResMed Building B 1.7 14,687 – 14,687 8.50 8.75 45.5 Jun 03 45.6 100 Fuji Xerox Building C 0.6 510 1,030 1,540 10.75 11.00 5.0 Dec 03 5.4 100 Hicom International 3.9 27,351 84.5 87.5 100 Binary Centre, 1.8 17,712 – 17,712 7.75 8.25 79.3 Jun 04 79.3 94 Hewlett-Packard North Ryde, NSW Warringah Corporate Centre, Frenchs Forest, NSW Stage 1 1.6 13,309 – 13,309 10.25 10.25 37.0 Sep 01 43.2 76 Yum Restaurants Stage 2 0.7 – ––––2.9Sep 01 3.4 Vacant Land 2.3 13,309 39.9 46.6 76 Cambridge Office Park, 1.3 12,816 – 12,816 9.00 9.25 41.0 Jun 03 41.3 99 Baptist Community Epping, NSW Services, Unilever Fletcher Site, 8.1 – – 48,527 8.75 9.25 32.8 Apr 04 32.8 100 Fletcher Building Penrose, Auckland

CityWest Office Park, Pyrmont, NSW Binary Centre, North Ryde, NSW

38 Annual Report 2004

Central Park Corporate Centre, 6.2 25,244 25,244 10.50 11.00 48.6 Dec 03 32.5 100 Armourguard Greenlane, Auckland Security, Fonterra Pinnacle Office Park, North Ryde, NSW Stage 1 2.4 7,595 4,845 12,440 9.00 9.50 25.2 Mar 03 26.6 100 Fujitsu, National Australia Bank Stage 2 0.5 – ––––3.7Mar 03 3.9 Vacant Land 2.9 12,440 28.9 30.5 100 Hurstville Office Park, 0.9 10,018 – 10,018 9.50 10.00 28.8 Jun 03 28.9 94 CBA, Hurstville, NSW Qantas Staff Credit Union The Precinct Corporate Centre, 1.6 7,697 – 7,697 8.25 8.50 22.1 Dec 01 25.4 96 CSIRO, North Ryde, NSW Seven Sydney Millennium Centre, 1.4 15,575 – 15,575 9.00 9.50 8.9 Mar 04 19.9 100 Genesis Power, Greenlane, Auckland Mighty River Power IBM Centre, Auckland 0.2 6,190 – 6,190 9.25 9.75 9.2 Mar 04 9.8 100 Boffa Miskell, IBM New Zealand BTI House, 0.3 4,797 – 4,797 9.25 9.75 7.4 Mar 04 7.8 100 BTI New Zealand, Newmarket, Auckland Sony Music Vector House, 0.2 4,699 – 4,699 9.25 9.75 7.1 Mar 04 7.5 100 Public Trust, Vector Newmarket, Auckland Ricoh Building, 0.3 3,015 1,872 4,887 10.50 11.00 3.3 Mar 04 3.7 100 Ricoh New Zealand, Parnell, Auckland Travelplan Holidays Kodak Building, 0.4 2,849 2,771 5,620 10.00 10.50 3.3 Mar 04 3.5 93 Kodak New Zealand, Parnell, Auckland Travelplan Holidays Windsor Court, 0.1 2,261 – 2,261 9.50 10.00 3.0 Mar 04 3.0 100 BMG New Zealand, Parnell, Auckland Caltex, Walters Powell & Tamatekapua EDS Building, 0.5 2,757 – 2,757 10.00 10.50 2.6 Mar 04 2.9 100 EDS (NZ) Mt Wellington, Auckland HP House, – 7,369 – 7,369 9.50 10.00 22.7 May 04 (1) 100 Bayleys Real Estate, Viaduct Harbour, Auckland Hewlett-Packard

Suburban Commercial Buildings Ashfield Corporate Centre, Ashfield, NSW 0.6 9,705 3,317 13,022 8.75 9.25 38.0 Dec 02 40.1 100 NSW Land & Housing Corporation Gordon Corporate Centre, Gordon, NSW 0.4 7,440 – 7,440 9.25 9.75 25.0 Jun 03 25.6 75 Sun Microsystems (1) Settlement scheduled after the balance date.

Central Park Corporate Centre, Greenlane, Auckland BTI House, Newmarket, Auckland

39 Macquarie Goodman Industrial Trust

Corporate Governance

The Board and Management The Board of Macquarie Goodman is responsible for all aspects Mr David Clarke’s role as leader of the Board includes ensuring that of the management of MGI including ultimate responsibility for its the Board functions as an effective and cohesive group as well as corporate governance practices. Macquarie Goodman has working with the Chief Executive Officer on strategic direction for adopted an overall corporate governance framework that the Macquarie Goodman Group. It includes formulation of the is designed to meet best practice and recognises that an Board meeting agendas and materials and management of Board effective corporate governance culture is critical to success. meetings to ensure the best performance of each participant. He also acts as a representative of, and spokesperson for, the Board. The Board is responsible for the continuing growth and success of MGI. To this end, the Board monitors management’s Mr Gregory Goodman’s role as Chief Executive Officer is to performance on behalf of Unitholders and is engaged with support and encourage his management team to deliver the management to ensure the appropriate development and strategy developed by management and the Board. His role execution of Macquarie Goodman’s strategy for MGI. involves an intimate knowledge of all aspects of the business and communication of strategy both to the Board, the management The Board has adopted a charter that is focussed on team and to stakeholders. giving direction and the exercise of critical but independent judgement in setting Macquarie Goodman’s objectives and To ensure that Directors clearly understand the corporate overseeing their implementation. expectations of them, Macquarie Goodman has developed a formal letter of appointment. The letter outlines the terms of a The Board’s functions include: Director’s appointment and includes matters such as powers and working with management to formulate the strategic duties, attendance at meetings, disclosure of interests, removal direction of MGI; and resignation and the terms of the securities trading policy. (ASX Recommendation 1.1) reviewing progress on strategy; developing key policies which impact on MGI; Board Structure approving strategic alliances; A majority of the Board comprises Independent Directors. Of monitoring organisational performance against set targets; the five Board members, Mr Patrick Allaway, Ms Anne Keating ensuring compliance with statutory, financial and social and Ms Lynn Wood are Independent Directors. Their biographies responsibilities; and appear on pages 24 and 25 of this Annual Report. As Directors of Macquarie Goodman, they have been assessed for ensuring business risks are appropriately identified independence using the Guidelines. (ASX Recommendations and managed. 2.1 and 2.5)

The Board has also developed a statement of delegated authority They were originally proposed for positions on Macquarie to management. This delegated authority clarifies which matters Goodman’s Board by the Nomination Committee of the Board of are dealt with by the Board and which are the responsibility of MGM. As a result of their initial appointment by the Nomination management. It includes areas such as finance, corporate and Committee of MGM, they have also been assessed for property transactions. (ASX Recommendation 1.1) independence in respect of their role on the Board of Macquarie The roles of Chief Executive Officer and Chairman have been Goodman and in respect of their relationship with MGM. separated at Macquarie Goodman. This separation avoids Mr Patrick Allaway, Ms Anne Keating and Ms Lynn Wood are concentrations of influence, increases accountability Independent Directors (in accordance with the Guidelines), to stakeholders and is in keeping with the Australian Stock which means: Exchange Limited (“ASX”) Corporate Governance Council Principles of Good Corporate Governance and Best Practice they are not members of management; Recommendations (“Guidelines”). (ASX Recommendation 2.3) they are not substantial shareholders of MGM or substantial Mr David Clarke is the Non-executive Chairman and Mr Gregory Unitholders of MGI for which Macquarie Goodman is the Goodman is Chief Executive Officer of Macquarie Goodman Responsible Entity; and Macquarie Goodman Management Limited (“MGM”). they are not associated directly with a substantial shareholder MGM is the parent company of Macquarie Goodman. of MGM or Unitholder of MGI;

40 Annual Report 2004

within the past three years, they have not been employed The Board has also adopted policies to ensure that the in an executive capacity by MGM, Macquarie Goodman or independence of Directors is assessed annually and that they another group member, or been a Director after ceasing to inform the Chairman prior to accepting new Board appointments. hold such employment; Directors are also required to confirm their availability to adequately perform their role on an annual basis. They are within the past three years, they have not been a principal entitled to take independent legal advice at Macquarie of a material professional adviser or a material consultant to Goodman’s expense should they believe it necessary to MGM, Macquarie Goodman or another group member, or an adequately perform their role. (ASX Recommendation 2.5) employee materially associated with any service provider; The Independent Directors are encouraged to meet without they are not a material supplier or customer of MGM, management present through the Independent Directors’ Macquarie Goodman or another group member; Committee. As described below, the Independent Directors’ they have no material contractual relationship with MGM, Committee has a particular focus on related party transactions Macquarie Goodman or another group member other than as between Macquarie Goodman and MGM as well as Macquarie a Director of Macquarie Goodman or, in the case of Ms Lynn Bank Limited. Wood, as an independent Compliance Committee member; they have not served on the Board for a period which could, Role of the Chairman or could reasonably be perceived to, materially interfere with The Chairman of Macquarie Goodman is Mr David Clarke who their ability to act in the best interests of Macquarie has been a Non-executive Director of both Macquarie Goodman Goodman; and and MGM since October 2000. Mr David Clarke is also Executive they are free from any interest and business or other Chairman of Macquarie Bank Limited. He has extensive relationship which could, or could reasonably be perceived experience as a chairman and is currently Chairman of the to, materially interfere with their ability to act in the best responsible entities of a number of other listed property trusts. interests of Macquarie Goodman as Responsible Entity He brings to the position an in-depth knowledge of not only the for MGI. property funds management business but also skill and experience (ASX Recommendation 2.5) in the fields of finance, corporate advisory and accounting. In an ever more complex business environment, the Board believes that The make up of the Board is as follows: Macquarie Goodman benefits from Mr Clarke’s knowledge and DIRECTOR DESCRIPTION experience as a non-executive chairman.

Mr David Clarke Non-executive Director Macquarie Goodman considers that the introduction of an Mr Gregory Goodman Executive Director independent Chairman would not adequately compensate Mr Patrick Allaway Independent Director Macquarie Goodman for the loss of Mr David Clarke’s Ms Anne Keating Independent Director contribution. (ASX Recommendations 2.2 and 2.5) Ms Lynn Wood Independent Director Mr James Hodgkinson Alternate Director The majority independent non-executive Board has considered for Mr David Clarke this issue and endorses Mr David Clarke’s role as Chairman, even though he is not an Independent Director. As recommended The biographical details of the Board appear on pages 24 in the Guidelines, the Board of Macquarie Goodman has a and 25 of this Annual Report. majority of Independent Directors who bring to the Board a broad range of skills. (ASX Recommendations 2.2 and 2.5) The Board considers that a material professional adviser or material consultant is one that derives more than 5% of its firm’s Macquarie Goodman has taken a number of steps to further revenue from Macquarie Goodman. The Board considers that strengthen the composition of the Board. These include the a substantial shareholder or Unitholder would hold more than appointment of a Lead Independent Director and the 10% of MGM’s issued capital or 10% of MGI’s issued capital. establishment of the Independent Directors’ Committee. Mr Allaway is the Chairman of the Audit Committee and Chairman of the Independent Directors’ Committee which, as described below, has been established to discuss key issues such as related party transactions. (ASX Recommendation 1.1)

41 Macquarie Goodman Industrial Trust

Corporate Governance

Board Committees The Board has established a number of committees to assist it Mr Ray Kellerman in discharging its responsibilities. These include the Compliance, Independent Member Due Diligence, Independent Directors’ and Audit Committees, Ray has over 15 years of experience in the funds management which meet regularly and make recommendations to the Board and corporate and structured finance industries. He has where appropriate. specialised in legal and compliance activities and worked Compliance Committee on some of Australia’s largest and most complex funds management, infrastructure and project financings. He was The Compliance Committee comprises Mr Michael Braham with Perpetual Trustees Australia for 10 years before establishing (Chairman), Mr George Forster, Mr Raymond Kellerman, his own compliance consulting and advisory business in 2001. Macquarie Goodman’s Independent Director Ms Lynn Wood Ray currently acts as a compliance committee, audit and risk and Macquarie Goodman’s Fund Manager Mr Nick Kurtis. committee member and director for a number of major fund Ms Sheelagh Callaghan is the Compliance Officer and Secretary managers and financial institutions. to the Compliance Committee. The make up and biographical details of the Compliance Committee are as follows: Ms Lynn Wood

Mr Michael Braham Independent Member Please refer to page 25 of this Annual Report. Independent Chairman Michael is chairman and director of several listed and unlisted Mr Nick Kurtis companies and he is also a member of various compliance Non-independent Member committees. Formerly, he was a partner of a major accounting Please refer to page 26 of this Annual Report. firm, investment banker and Regional Commissioner for New South Wales with the Australian Securities & Investments The Compliance Committee is responsible for monitoring MGI’s Commission (“ASIC”). compliance with its Compliance Plan. As MGI is a registered managed investment scheme, it is required to lodge its Mr George Forster Compliance Plan with ASIC. The Compliance Plan outlines the Independent Member procedures that Macquarie Goodman must adopt to ensure George has over 20 years of experience in legal, corporate compliance with its various statutory obligations in managing secretarial, compliance, management and risk matters. He holds MGI, as a managed investment scheme and an Australian Commerce and Law degrees from the University of New South Financial Services Licensee. Wales and is a Fellow of the Australian Institute of Company Macquarie Goodman’s Compliance Officer is responsible Directors. Previously, George was a partner at Freehills and held for reviewing and monitoring the efficiency of the compliance legal, company secretarial and compliance roles for other large systems on an ongoing basis. This includes the implementation public companies.

Mr Michael Braham Mr George Forster

Mr Ray Kellerman

42 Annual Report 2004

of appropriate policies and procedures to ensure Macquarie Details of Macquarie Goodman’s related party transactions Goodman complies with its statutory obligations under the are disclosed in the financial statements in this Annual Report. Corporations Act 2001 and other relevant legislation. The Compliance Officer also regularly reports to the Compliance Audit Committee Committee on the operation of compliance procedures. The Board has established an Audit Committee to assist it in discharging its responsibilities. The Audit Committee operates Due Diligence Committee under the terms of the formal charter, a copy of which is available The Board establishes a Due Diligence Committee whenever an on Macquarie Goodman’s website within the Corporate offer document, such as a prospectus, is to be issued by Macquarie Governance section. (ASX Recommendations 4.2 and 4.4) Goodman to raise additional funds or to enter a major transaction. The Audit Committee has a minimum of three members. The Due Diligence Committee will usually include at least one Appointed by the Board, all members of the Committee are Independent Director of Macquarie Goodman and other relevant Independent Directors of Macquarie Goodman. Mr Patrick Allaway personnel considered appropriate for that particular transaction. is the Chairman of the Audit Committee. (ASX Recommendation 4.3) Independent Directors’ Committee The duties and responsibilities of the Audit Committee As described above, the Board has formally established the include to: Independent Directors’ Committee to oversee Macquarie Goodman’s Related Party Policy. It documents all categories provide advice to the Board; of related party fees and the process for approving them. For review the audit plan and reports with the external auditors; transactions involving related parties of Macquarie Goodman, the Policy ensures all related party transactions conform to the review the half year and annual financial statements; requirements of the Corporations Act 2001, any other relevant review the independence and objectivity of the external legislation and best practice. auditors annually; and

The Policy sets out the processes to be followed when engaging obtain regular updates from management on key enterprise- in related party transactions. The Policy has been formally wide risks faced by MGI. reviewed and signed off by an external law firm and is followed for all related party transactions. The Audit Committee reports to the Board on the outcome of its reviews and discussions with the external auditors and its The Related Party Policy requires Macquarie Goodman to obtain findings on matters which have or are likely to have a material independent external advice on market rates and ranges as well impact on the operating results or financial position of MGI. as methods of charging and paying fees. Macquarie Goodman then requires related parties to submit capability statements The Audit Committee during the year ended 30 June 2004 outlining the services to be provided, the capabilities of the comprised Mr Patrick Allaway, Ms Anne Keating (appointed individual(s) providing the services, the fees to be charged 6 February 2004), Mr James Kennedy (resigned 5 February 2004) and when and how those fees will be charged and paid. and Ms Lynn Wood.

Related party transactions and fees are reviewed by the Biographical details for the current Audit Committee members, Independent Directors’ Committee on a bi-monthly basis and being Mr Allaway, Ms Keating and Ms Wood, are provided on are then referred to the Board, with a recommendation as to pages 24 and 25 of this Annual Report. (ASX Recommendation approval or otherwise. If a Director is connected to a relevant 4.5) related party, the Director does not vote on any resolutions applying to that related party.

Ms Lynn Wood Mr Nick Kurtis

43 Macquarie Goodman Industrial Trust

Corporate Governance

Meetings of the Audit Committee and Directors’ attendance during the year are shown below: NAME 16 JULY 2003 4 AUGUST 2003 4 DECEMBER 2003 2 FEBRUARY 2004 14 MAY 2004

Mr Patrick Allaway In attendance In attendance In attendance In attendance In attendance Ms Anne Keating ––––In attendance Mr James Kennedy In attendance In attendance In attendance In attendance – Ms Lynn Wood In attendance In attendance In attendance In attendance In attendance

(ASX Recommendation 4.5)

The Chief Executive Officer and the Chief Financial Officer have The Board of Macquarie Goodman has unfettered access to provided the Board with written confirmation that Macquarie information through the Chief Executive Officer and Company Goodman’s financial reports present a true and fair view and Secretaries of Macquarie Goodman. are in accordance with the relevant accounting standard. (ASX Recommendation 4.1) Remuneration Nomination Committee of MGM Macquarie Goodman is entitled to be paid fees under the terms Macquarie Goodman is a wholly-owned subsidiary of MGM, of MGI’s Constitution for managing MGI in its capacity as an integrated property company listed on ASX. Accordingly, Responsible Entity. Macquarie Goodman is also entitled to recover Macquarie Goodman does not have a Nomination Committee expenses from MGI where those expenses are appropriately of its own. However, as a wholly-owned subsidiary of MGM, it is incurred in accordance with MGI’s Constitution. Macquarie the Nomination Committee of MGM which proposes Directors for Goodman may be further entitled to an indemnity from the assets the Board of Macquarie Goodman. The Non-executive Directors of MGI where it is acting on behalf of MGI in the absence of fraud, of Macquarie Goodman are appointed for a three year term, negligence and where it is not in breach of MGI’s Constitution. after which they must be recommended for re-appointment. Please refer to Note 23 to the financial statements for details of (ASX Recommendations 2.4 and 2.5) the services and fees recovered by the Macquarie Goodman Group from MGI. (ASX Recommendations 9.1 and 9.5) Should a vacancy arise, Directors are recommended for the Board of Macquarie Goodman based on the appropriate skills Non-executive Directors of Macquarie Goodman are paid and experience necessary for the Board to carry out its Directors’ fees only and are not remunerated in any other way. responsibilities effectively. All executives involved in the management of MGI are employees of MGM and are not remunerated by MGI. As MGI has no The Board reviews its performance and that of its committees employees, it does not have a staff remuneration policy every two years. An assessment of the Board’s performance or a remuneration committee. (ASX Recommendations 9.2, was conducted during the year ended 30 June 2004. The 9.3 and 9.4) process for conducting the Board’s performance review was agreed by the Board and consisted of each Director completing a self-assessment questionnaire, which also elicited comments Code of Conduct and key issues the Director wished to raise. Macquarie Goodman believes that ethical and responsible decision The questionnaires completed by the Directors covered matters making is critical to the success of MGI’s business. It also believes such as: that the transparency of these processes promotes market and Unitholder confidence in MGI’s integrity and sustainability. the Board’s contribution to developing strategy and policy; Macquarie Goodman’s Code of Conduct outlines the ethical interaction between the Board and management and standards and personal conduct expected of all Directors, between Board members; committee members and employees and makes compliance the Board’s processes to monitor business performance and with these standards a condition of appointment and ongoing compliance, control risk and evaluate management; employment. Expectations regarding the treatment of confidential information and adherence to trading blackouts are made explicit. Board composition and structure; and (ASX Recommendations 3.1 and 10.1) the operation of the Board, including the conduct of Board The Code expressly states that employees must not breach meetings, committee meetings and group behaviours. the insider trading rules set out in the Corporations Act 2001. It is proposed that the next review will take place prior to 30 June The employee must ensure that he or she will not purchase or 2006. (ASX Recommendations 8.1 and 8.2) otherwise trade in the securities of any listed entity related to or in any way whatsoever associated with Macquarie Goodman, All new Directors of Macquarie Goodman are provided with including but not limited to MGM and MGI, so as to breach the an induction that includes a property tour of some of the assets insider trading laws. of MGI.

44 Annual Report 2004

Employees must not trade in securities of MGM or MGI without Unitholders are invited to attend the Annual Unitholders’ Meeting the prior approval of the Chief Executive Officer of MGM and must of MGI. The Board views this meeting as an excellent forum in observe the following blackout periods: which to discuss issues relevant to MGI. The Board encourages the full participation of Unitholders at these meetings to ensure six weeks prior to the release of half yearly and annual results a high level of accountability and identification with Macquarie to ASX; and Goodman’s strategy and objectives. at any time when privy to price sensitive information. To maximise the effectiveness of communication at the Annual (ASX Recommendation 3.2) Unitholders’ Meeting, Macquarie Goodman also requires its external auditors to attend the Meeting and be prepared to The Code empowers all employees with responsibility for reporting answer Unitholder questions about the conduct of the audit, unethical or corrupt conduct. Macquarie Goodman will take as well as the preparation and content of the Independent Audit whatever action it considers appropriate in the circumstances, Report. (ASX Recommendation 6.2) including disciplining or dismissing those involved in the conduct. The Communications Strategy is available on MGI’s website. The Code also sets out the performance management processes for MGM’s employees, including its senior executives. (ASX Recommendation 8.1) Risk Management

A summary of the Code is available on MGI’s website. Effective risk management is a fundamental part of Macquarie Goodman’s business strategy. Recognising and managing risk is central to the business and to protecting Unitholders’ interests Continuous Disclosure and value. Macquarie Goodman operates within the overall risk Macquarie Goodman is committed to providing Unitholders, guidelines and specific parameters set by the Board. Each regulators and the market with timely, balanced and readily transaction is comprehensively analysed to understand the available disclosure of material information concerning risk involved. Macquarie Goodman and MGI. The Board has adopted a Risk Management Plan which outlines To that end, Macquarie Goodman has developed and the roles and responsibilities of key risk management personnel, implemented a Continuous Disclosure Policy for MGI that risk reporting procedures and a process for monitoring and outlines the procedures followed internally to ensure timely reviewing risk management controls. (ASX Recommendation 7.1) and full disclosure of all material through the ASX. Responsibility for managing risk lies initially within the business Compliance with the Policy is monitored on a monthly basis unit concerned, working within the strategy outlined by the Board. by internal compliance audits. The results of the monitoring The Audit Committee has, as part of its charter, a formal role audits are reported to the Compliance Committee each quarter. in the oversight of risk management practices within Macquarie Compliance with the Policy is also monitored at least annually by Goodman. The Audit Committee works closely with the Board to an independent Compliance Plan auditor and the results of these ensure that risk management issues are identified and addressed audits are also reported to the Compliance Committee. in accordance with the risk management strategy.

MGI’s website contains media announcements, newsletters, External auditors review Macquarie Goodman’s Compliance Plan. annual reports and frequently asked questions and answers. The auditors provide the results of the audits to both the Audit Macquarie Goodman’s Continuous Disclosure Policy is available and Compliance Committees and also attend the meetings to on MGI’s website within the Corporate Governance section. discuss the results with committee members. (ASX Recommendation 5.1) Macquarie Goodman has outsourced its internal audit function to an external third party service provider, which is conducting Communications Strategy a three year rolling internal audit programme of Macquarie Goodman’s key business processes. Macquarie Goodman respects the rights of Unitholders and has implemented a number of processes in order to facilitate the The Chief Executive Officer and the Chief Financial Officer have effective and efficient exercise of those rights by all Unitholders. also provided the Board with written confirmation that: (ASX Recommendation 6.1) the statement given to the Board on the integrity of MGI’s Macquarie Goodman also ensures that information is regularly financial statements is founded on a sound system of risk communicated to Unitholders through a number of media management and internal compliance and control which including half yearly and annual reports, newsletters, general implements the policies adopted by the Board; and communications and ASX announcements. Macquarie Goodman’s risk management and internal Key financial information and stock performance are available compliance and control system are operating efficiently on MGI’s website in the form of summarised statistics. and effectively in all material respects. (ASX Recommendation 7.2)

45 Macquarie Goodman Industrial Trust

Directors’ Report to Unitholders

The Directors of Macquarie Goodman Funds Management Limited (“Macquarie Goodman”), the Responsible Entity for Macquarie Goodman Industrial Trust (“MGI”), present their Directors’ Report on MGI and its controlled entities (“Consolidated Entity”) for the year ended 30 June 2004 (“year”) and the audit report thereon.

1. Directors The Directors of Macquarie Goodman at any time during, or since the end of, the year are:

Mr David Clarke, AO (Chairman) Appointed 26 October 2000 Mr Gregory Goodman (Chief Executive Officer) Appointed 17 January 1995 Mr Patrick Allaway (Independent Director) Appointed 27 May 2003 Ms Anne Keating (Independent Director) Appointed 6 February 2004 Mr James Kennedy, AO, CBE (Independent Director) Appointed 26 October 2000, resigned 5 February 2004 Ms Lynn Wood (Independent Director) Appointed 30 December 2002 Mr James Hodgkinson (Alternate Director for Mr David Clarke) Appointed 21 February 2003

2. Directors’ Meetings The number of Directors’ meetings held during the year and the number of meetings attended by each of the Directors of Macquarie Goodman during the year ended 30 June 2004 were as follows: AUDIT INDEPENDENT BOARD COMMITTEE DIRECTORS’ MEETINGS MEETINGS COMMITTEE MEETINGS DIRECTOR HELD ATTENDED HELD ATTENDED HELD ATTENDED

Mr David Clarke 11 11 –––– Mr Gregory Goodman 11 11 –––– Mr Patrick Allaway 11 115588 Ms Anne Keating 551144 Mr James Kennedy 774433 Ms Lynn Wood 11 115588

Directors were absent from meetings where they had a personal interest in matters being discussed.

3. Principal Activities The principal activity of the Consolidated Entity during the year was property investment.

There were no significant changes in the nature of the Consolidated Entity’s activities during the year.

4. Distributions The total distribution paid or declared during the year was 13.45 cents per unit (2003: 12.23 cents per unit). Further details of distributions paid or declared during the year are set out in Note 6 to the financial statements.

5. Review of Operations The performance of the Consolidated Entity, as represented by the results of its operations for the year, was as follows: CONSOLIDATED 2004 2003 $M $M

Gross property income 327.5 187.7 Net profit attributable to Unitholders 173.9 113.2

The Directors of Macquarie Goodman have received a declaration from the Chief Executive Officer and Group Chief Financial Officer stating that the financial statements of the Consolidated Entity present a true and fair view, in all material respects, of MGI’s financial condition and operational results and are in accordance with the relevant accounting standards.

46 Annual Report 2004

6. Value of Assets CONSOLIDATED 2004 2003 $M $M

Carrying value of assets 4,087.5 2,850.2

The carrying value of the Consolidated Entity’s assets is derived using the basis set out in Note 1 to the financial statements.

7. Units on Issue The movement in units on issue in MGI during the year is set out below: CONSOLIDATED 2004 2003 M M

Ordinary units issued during the year 495.8 356.0 Ordinary units on issue 1,609.0 1,113.2

8. State of Affairs During the year, MGI acquired AMP Industrial Trust (“AIP”) (renamed Macquarie Goodman Thomas Trust) by issuing 0.811 of an MGI unit, plus $0.05 cash paid by Macquarie Goodman Management Limited (“MGM”), for each AIP unit. MGI issued 251,259,609 units for a total non-cash consideration of $381.9 million.

MGI and MGM each own 50% of Macquarie Goodman Vineyard Pty Limited (“MGV”). On 22 December 2003, MGV entered into a binding Heads of Agreement with Brickworks Limited to develop a substantial industrial business park at Eastern Creek in NSW to be known as the M7 Business Hub. Under the terms of the agreement, MGI will pay for infrastructure works and has provided The Austral Brick Company Pty Limited (“Austral”) with a put option that gives Austral the right to require MGV to purchase unsold saleable lots of land. The transaction is subject to the satisfaction of statutory planning requirements.

On 15 March 2004, MGI purchased the Uniting Church Trust Association’s 50% holding in Carter Street Trust for $34 million. As at 30 June 2004, MGI held a 100% interest in Carter Street Trust.

On 1 April 2004, MGI entered into a co-ownership arrangement with Macquarie Goodman Property Trust (“MGP”), which is listed on the New Zealand Exchange. Under the co-ownership arrangement, MGI sold 47% of the beneficial interests in its properties (excluding development properties) in New Zealand and its investment in Auckland Business Park Pty Limited to MGP. In return, MGP sold 53% of the beneficial interests in its core properties to MGI. This resulted in each party becoming tenants in common of the combined portfolio in New Zealand. Each party’s assets were independently valued at 31 December 2003 to determine the proportion of the beneficial interest to be sold. Consideration for the sale paid by each party amounted to $58.5 million. On 3 June 2004, MGP paid $7.2 million to MGI to acquire a further 3% share in the pooled portfolio. The result of this transaction is that MGI and MGP each have an equal 50% interest in the pooled assets.

9. Events Subsequent to Balance Date The Directors are not aware of any matters or circumstances not otherwise dealt with in the Directors’ Report or the Financial Report that have significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in financial years subsequent to the year ended 30 June 2004.

10. Likely Developments and Expected Results of Operations On 9 June 2004, MGI announced its intention to acquire a 37.5% interest in Highbrook Development Limited (“Highbrook”) for $29.8 million, to be paid in three instalments over two years. Highbrook owns 153 hectares of land on Auckland’s Waiouru Peninsula in East Tamaki, which will be developed into a business park. The transaction is subject to consent by the Overseas Investment Commission and the satisfaction of other statutory requirements.

MGI made an announcement on 21 June 2004 stating that MGI’s anticipated distribution for the quarter ended 30 June 2004 would be 3.375 cents per unit payable on 9 August 2004. MGI’s Distribution Reinvestment Plan for the quarter ended 30 June 2004 will be underwritten by Goldman Sachs JBWere.

47 Macquarie Goodman Industrial Trust

Directors’ Report to Unitholders

On 23 June 2004, MGI announced that it would be offering a Unitholder Purchase Plan (“UPP”) which opened on 1 July 2004 and closed on 30 July 2004. Under the terms of the UPP, Unitholders were able to purchase up to a maximum of $5,000 of ordinary units in MGI with no brokerage or transaction costs. The units were issued at $1.64 per unit and rank equally in all respects with MGI’s existing ordinary units from the date of allotment.

Other likely developments include the adoption of International Financial Reporting Standards from 1 July 2005, requiring the implementation of a formal plan to address:

(a) financial reporting accounting policy changes;

(b) assessment of impact on proposed significant transactions; and

Further information as to likely developments in the operations of the Consolidated Entity and the expected results of those operations in subsequent financial years has not been included in the Directors’ Report because disclosure of the information would be likely to result in unreasonable prejudice to the Consolidated Entity.

11. Interests of the Responsible Entity The Responsible Entity, Macquarie Goodman, did not hold any units either directly or indirectly in the Consolidated Entity at any time during the financial year and up to the date of the Directors’ Report.

12. Insurance and Indemnification of Officers and Auditors During the year and up to the date of the Directors’ Report, no insurance premiums were paid for out of the assets of MGI in relation to insurance cover provided to either the officers of Macquarie Goodman or the auditors of MGI. So long as the officers of Macquarie Goodman act in accordance with MGI’s Constitution and the law, the officers remain indemnified out of the assets of MGI against losses incurred while acting on behalf of MGI. The auditors of MGI are in no way indemnified out of the assets of MGI.

13. Fees Paid to and Interests Held by Related Entities and Directors Fees were paid or are payable to MGM, Macquarie Bank Limited (“MBL”) and their associates for services provided during the year. Details of these fees and the interests of the Responsible Entity, Directors of the Responsible Entity and other related party information are set out in Note 23 to the financial statements.

14. Environmental Regulations The operations of the Consolidated Entity are subject to environmental regulations under Commonwealth and State legislation.

To the best of the Directors’ knowledge, the operations of the Consolidated Entity have been undertaken in compliance with the environmental regulations in each jurisdiction where the Consolidated Entity operates and to which the Consolidated Entity is subject.

15. Rounding The Consolidated Entity applied the requirements of Australian Securities & Investments Commission (“ASIC”) Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order amounts in the Financial Report and the Directors’ Report have been rounded off to the nearest hundred thousand dollars, unless otherwise stated.

The Directors’ Report is made in accordance with a resolution of the Directors.

David Clarke, AO Gregory Goodman Chairman Director

Sydney, 5 August 2004

48 Annual Report 2004

Statements of Financial Performance for the year ended 30 June 2004

CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 NOTE $M $M $M $M

Revenue from ordinary activities Gross property income 327.5 187.7 – – Other income 2 121.2 130.0 269.6 293.4 Total revenue 448.7 317.7 269.6 293.4

Property expenses 3 (55.8) (35.9) – – Borrowing costs 3 (52.9) (20.0) (70.7) (44.8) Trust expenses (4.0) (2.5) (2.4) (1.5) Management fee 4 (16.6) (9.4) (5.4) (2.7) Carrying value of investment properties sold (105.3) (1.2) – (4.5) Carrying value of part sale of a controlled entity (4.5) (126.7) – (126.7) Total expenses (239.1) (195.7) (78.5) (180.2)

Share of net profit from associated entities 19 2.3 4.3 – –

Profit from ordinary activities before performance fee 211.9 126.3 191.1 113.2 Performance fee 4(b) (17.2) – (17.2) – Profit from ordinary activities 194.7 126.3 173.9 113.2 Net profit attributable to outside equity interests 17(b) (20.8) (13.1) – – Net profit attributable to Unitholders 173.9 113.2 173.9 113.2 Non-owner transaction changes in equity Net increase in reserves 36.3 33.0 – – Total transactions and adjustments recognised directly in equity 36.3 33.0 – – Total changes in equity from non-owner related transactions attributable to Unitholders 210.2 146.2 173.9 113.2

Net profit attributable to Unitholders 173.9 113.2 173.9 113.2 Transfer from reserves 16 26.6 – 26.6 – Distributions provided for or paid to Unitholders 200.5 113.2 200.5 113.2

Basic earnings per ordinary unit (after performance fee) (¢) 7 11.97 12.19 Diluted earnings per ordinary unit (after performance fee) (¢) 7 11.97 12.19 Basic earnings per ordinary unit (before performance fee) (¢) 13.15 12.19 Distribution per ordinary unit (¢) 6 13.45 12.23

The Statements of Financial Performance are to be read in conjunction with the accompanying notes.

49 Macquarie Goodman Industrial Trust

Statements of Financial Position as at 30 June 2004

CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 NOTE $M $M $M $M

Current assets Cash assets 18(a) 51.4 12.4 49.2 5.4 Receivables 8 85.8 15.3 105.7 44.5 Other 9 16.5 10.7 1.8 1.1 Total current assets 153.7 38.4 156.7 51.0

Non-current assets Receivables 8 57.3 111.9 1,376.8 835.0 Investment properties 10 3,855.0 2,656.5 – – Investments accounted for using the equity method 19 6.5 35.1 – – Other financial assets 11 – – 2,104.6 1,736.9 Other 9 15.0 8.3 1.7 2.2 Total non-current assets 3,933.8 2,811.8 3,483.1 2,574.1 Total assets 4,087.5 2,850.2 3,639.8 2,625.1

Current liabilities Payables 12 55.4 30.5 28.1 10.4 Provisions 13 60.1 39.5 54.3 34.4 Interest bearing liabilities 14 219.1 – 207.0 – Total current liabilities 334.6 70.0 289.4 44.8

Non-current liabilities Payables 12 1.3 7.9 41.5 – Interest bearing liabilities 14 1,240.0 1,016.5 1,142.4 1,135.2 Total non-current liabilities 1,241.3 1,024.4 1,183.9 1,135.2 Total liabilities 1,575.9 1,094.4 1,473.3 1,180.0 Net assets 2,511.6 1,755.8 2,166.5 1,445.1

Equity Contributed equity 15 2,140.3 1,392.3 2,140.3 1,392.3 Reserves 16 109.3 101.5 26.2 52.8 Total Parent Equity interests 2,249.6 1,493.8 2,166.5 1,445.1 Outside equity interests 17 262.0 262.0 – – Total equity 2,511.6 1,755.8 2,166.5 1,445.1

The Statements of Financial Position are to be read in conjunction with the accompanying notes.

50 Annual Report 2004

Statements of Cash Flows for the year ended 30 June 2004

CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 NOTE $M $M $M $M

Cash flows from operating activities Property income received 319.6 203.8 – 1.6 GST collected 55.5 20.4 – 0.2 Property expenses paid (71.2) (34.0) – (1.2) Trust expenses paid (4.4) (2.5) (1.5) (1.8) GST paid (58.9) (39.4) (0.1) (0.6) Distributions received from associated entities 3.4 3.2 3.4 3.2 Interest and other borrowing costs paid (83.1) (38.6) (73.5) (41.1) Interest received 11.4 0.8 40.2 18.2 Distribution received from controlled entities – – 213.5 98.2 Management fee (16.5) (9.4) (5.4) (2.6) Net cash provided by operating activities 18(b) 155.8 104.3 176.6 74.1

Cash flows from investing activities Payments for investment properties and developments (517.7) (348.5) – – Payments for the purchase of controlled entities 20 (89.2) (231.8) (89.2) (214.2) Proceeds from part sale of investment in a controlled entity 20 1.2 18.5 – 18.5 Payments for the purchase of equity investments (1.8) – (1.8) – Proceeds from sale of investment properties 54.8 1.2 – – Loans from/(to) associated entities 0.8 (4.0) – (4.0) Loans to controlled entities – – (445.0) (379.3) Net cash used in investing activities (551.9) (564.6) (536.0) (579.0)

Cash flows from financing activities Proceeds from issue of units to Unitholders 232.5 457.4 232.5 457.4 Repayment of borrowings on purchase of a controlled entity – (24.8) – – Issue costs paid (16.9) (11.0) (13.9) (7.1) Proceeds from borrowings 646.0 378.4 545.0 378.4 Repayment of borrowings (376.1) (274.5) (330.1) (274.5) Distributions paid Unitholders (30.3) (55.1) (30.3) (55.1) RePS holders (10.5) (8.9) – – Other parties (9.6) – – – Net cash provided by financing activities 435.1 461.5 403.2 499.1

Net increase/(decrease) in cash held 39.0 1.2 43.8 (5.8) Cash at the beginning of the year 12.4 11.2 5.4 11.2 Cash at the end of the year 18(a) 51.4 12.4 49.2 5.4

The Statements of Cash Flows are to be read in conjunction with the accompanying notes.

51 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

1. Statement of Significant Accounting Policies (a) Basis of Preparation The Financial Report is a general purpose financial report which has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”), the Corporations Act 2001 and the requirements of MGI’s Constitution dated 13 December 1989, as amended. It has been prepared on the basis of historical costs and, except where stated, does not take into account changing money values or fair values of non-current assets and liabilities. The accounting policies adopted are consistently applied by each entity in the Consolidated Entity and, except where there is a change in accounting policy, are consistent with those applied in the 30 June 2003 Annual Financial Report. Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures.

(b) Principles of Consolidation Controlled Entities The consolidated financial statements of the economic entity include the financial statements of MGI (“Parent Entity”) and its controlled entities. The balances and effects of transactions between entities in the Consolidated Entity are eliminated on consolidation. Where an entity either began or ceased to be controlled during the financial year, the results are included only from the date control commenced or up to the date control ceased. Outside interests in the equity and results of the entities that are controlled by the Parent Entity are shown as separate items in the consolidated financial statements.

Associates Associates are those entities over which the Consolidated Entity exercises significant influence, but not control. In the consolidated financial statements, investments in associates are accounted for using the equity method. Under this method, the Consolidated Entity’s share of post-acquisition profits or losses of associates is recognised in the consolidated Statements of Financial Performance, and its share of post-acquisition movement in reserves is recognised in consolidated reserves. Cumulative post-acquisition movements in financial performance and reserves are adjusted against the cost of the investment.

New Zealand Co-ownership Arrangements The Consolidated Entity brings to account its proportionate share of assets, liabilities, revenues and expenses arising from properties held under co-ownership arrangements from the date the co-ownership agreement was effective.

(c) Revenue Recognition Rent Rent is brought to account on an accruals basis and, if not received at balance date, is reflected in the Statements of Financial Position as a receivable or if paid in advance, as rental in advance. Lease incentives are reflected in the Statements of Financial Position as other assets and amortised over the period of the lease.

Interest Interest is brought to account on an accruals basis and, if not received at balance date, is reflected in the Statements of Financial Position as a receivable.

Distributions Dividend revenue is recognised net of any franking credits. Revenue from distributions from controlled entities is recognised by the Parent Entity when they are declared by the controlled entities. Revenue from distributions from associates and other investments is recognised when distributions are accrued. Distributions received out of pre-acquisition reserves are eliminated against the carrying amount of the investment and not recognised in revenue.

Recoverable Outgoings Recovery of certain outgoings is accrued on an estimated basis and adjusted when the actual amounts are invoiced to respective customers.

52 Annual Report 2004

1. Statement of Significant Accounting Policies continued

(c) Revenue Recognition continued Asset Sales The gross proceeds of asset sales are included as revenue of the Consolidated Entity when contracts for the sale have been settled. The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.

(d) Taxation Under current Australian income tax legislation, the Consolidated Entity is not liable for income tax, provided that each year the taxable income and any taxable capital gain derived from the sale of an asset is fully distributed to Unitholders. Realised capital losses are not distributed to Unitholders but are retained in the Consolidated Entity to be offset against any future realised capital gains. Tax allowances for building and plant and equipment depreciation are distributed to Unitholders in the form of tax deferred components of distributions. Any discounting of capital gains that may occur in lieu of indexation of capital gains are distributed to Unitholders in the form of tax deferred components of distributions.

(e) Foreign Currency Translation Translation of Controlled Foreign Operations All assets and liabilities denominated in currencies other than Australian dollars are translated into Australian currency at rates of exchange current at balance date, while revenues and expenses are translated at average rates applicable during the year. Equity items are translated at historical rates. Exchange differences arising on translation are taken to the foreign currency translation reserve.

Transactions Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the transactions. Amounts receivable and payable in foreign currencies at reporting date are translated at the rates of exchange ruling on that date. Exchange differences relating to amounts receivable and payable in foreign currencies are brought to account as exchange gains or losses in the Statements of Financial Performance in the year in which the exchange rates change, except where: (a) hedging specific anticipated transactions or net investments in self-sustaining operations; (b) amounts receivable or payable in foreign currency form part of a net investment in a self-sustaining foreign operation. In this case, the exchange difference, together with any related income tax expense/revenue, is transferred to the foreign currency translation reserve on consolidation; and (c) acquiring a qualifying asset.

(f) Investment Properties Investment properties comprise investment interests in land and buildings (including integral plant and equipment) held for the purpose of letting to produce rental income. Land and buildings (including integral plant and equipment) comprising investment properties, are regarded as composite assets and are disclosed as such in the financial statements. Where a contract of purchase includes a deferred settlement arrangement, the acquisition value is determined as the cash consideration payable in the future, discounted to present value at the date of acquisition. The fair value basis is used to measure the carrying amount of investment properties. An independent valuation of investment properties is obtained at least every three years to use as a basis for measuring the fair value of the properties. The independent registered valuer determines the market value based on a willing, but not anxious, buyer and seller, a reasonable period to sell the property, and that the property is reasonably exposed to the market. Where an investment property is acquired, the property is carried at cost which includes the costs of acquisition. At reporting dates occurring between obtaining independent valuations, the Directors review the carrying value of the Consolidated Entity’s investment properties to be satisfied that, in their opinion, the carrying value of the investment properties is not materially different to the fair value of the investment properties at that date.

53 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

1. Statement of Significant Accounting Policies continued

(f) Investment Properties continued Revaluation increments are credited directly to an asset revaluation reserve. Revaluation decrements are taken directly to the asset revaluation reserve to the extent that such decrements are reversing amounts previously credited to that reserve that are still available in that reserve. Revaluation decrements in excess of amounts available in the reserve are charged to the Statements of Financial Performance. Subsequent revaluation increments that recover amounts previously charged to the Statements of Financial Performance are, to that extent, credited to the Statements of Financial Performance.

Disposal of Revalued Assets The gain or loss on disposal of previously revalued properties is calculated as the difference between the carrying amount of the property at the time of the disposal and the proceeds on disposal and is included in the Statements of Financial Performance in the year of disposal. Any related revaluation increment in the asset revaluation reserve at the time of disposal is transferred to the capital profits reserve.

(g) Development Costs of Investment Properties From time to time, the Consolidated Entity will undertake development of investment properties in order to enhance marketability for customers. The cost of any development is reflected as part of the cost of the investment property. The carrying amounts of non-current assets valued on the cost basis are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is recognised as an expense in the net profit or loss in the reporting period in which it occurs. Costs of development includes the costs of all materials used in construction, costs of managing the project, holding costs and borrowing costs incurred during construction. The Consolidated Entity’s policy is to obtain an independent valuation at practical completion of each development in order to assess fair value. The carrying amount of the completed development is subject to the policies in Note 1(f).

(h) Depreciation Investment properties are not depreciated. Buildings and plant integral to the property are classified as investment properties and accordingly are not depreciated. The properties are subject to continual maintenance and regularly revalued on the basis described in Note 1(f). Taxation allowances for building, plant and equipment depreciation are claimed by the Consolidated Entity and are declared as tax deferred components of distributions.

(i) Investments in Controlled Entities Investments in controlled entities are carried in the Parent Entity’s financial statements at the lower of cost and recoverable amount. The carrying amounts of investments in controlled entities are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is recognised as an expense in the net profit or loss in the reporting period in which it occurs. Distributions are brought to account in the Statements of Financial Performance when they are declared by the controlled entities.

(j) Deferred Leasing and Tenancy Costs Expenditure on direct leasing and tenancy costs is deferred and amortised over the lease term in proportion to the rental income recognised in each financial year.

(k) Borrowing Costs Expenditure incurred in obtaining debt finance is deferred and written off over the period of the finance facility. Borrowing costs relating to a qualifying asset are capitalised as part of the cost of that asset using a weighted average cost of debt. Qualifying assets are assets which take more than 12 months to get ready for their intended use or sale. All other borrowing costs are expensed as incurred.

(l) Receivables Rental debtors to be settled within 30 days are carried at amounts due. The collectibility of rental debts is assessed at balance date and specific provision is made for any doubtful accounts.

(m) Payables Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to MGI or the Consolidated Entity. Non-current liabilities are discounted and recorded at their net present value.

54 Annual Report 2004

1. Statement of Significant Accounting Policies continued (n) Interest Bearing Liabilities Bank loans are recognised at their principal amount, subject to offset arrangements. Interest expense is accrued at the contracted rate and included in Note 12. Debentures, bills of exchange and notes payable are recognised when issued at the net proceeds received, with the premium or discount on issue amortised over the period to maturity. Interest expense is recognised on an effective yield basis.

(o) Issue Costs Transaction costs arising on the issue of equity are offset directly against the proceeds from the issue of units.

(p) Derivatives Derivative financial instruments designated as hedges are effective as hedges of underlying exposures and are accounted for on the same basis as the underlying exposure. Derivative financial instruments are not held for speculative purposes and are designated prospectively so that it is clear when an anticipated transaction has or has not occurred. Derivative financial instruments are designated as hedges only when it is probable that the anticipated transaction will occur as designated. The Consolidated Entity has entered into interest rate swap agreements to hedge against the risk of an increase in interest rates on the Consolidated Entity’s debt. The net amounts receivable and payable under the swap agreements are accounted for on an accruals basis and are included in interest expense. The Consolidated Entity has entered into forward foreign exchange contracts to hedge against the risk of a decrease in the value of the New Zealand dollar which affects the value of net income received from its New Zealand investments. Costs incurred at inception are deferred and then taken to the Statements of Financial Performance on settlement of the contracts as designated. Forward foreign exchange contracts which give rise to a financial liability denominated in a foreign currency are revalued at rates of exchange current at balance date. The net amounts receivable or payable and the associated gains and losses are initially booked to the Statements of Financial Position and recognised in the Statements of Financial Performance when the anticipated transaction has occurred as designated.

(q) Earnings per Unit (“EPU”) Basic EPU is calculated by dividing net profit after income tax attributable to Unitholders of the Parent Entity, excluding any costs of servicing equity other than ordinary units, by the weighted average number of ordinary units outstanding during the financial year. Diluted EPU is calculated by dividing the basic EPU earnings, adjusted by the after-tax effect of financing costs associated with dilutive potential ordinary units and the effect on revenues and expenses of conversion to ordinary units associated with dilutive potential ordinary units, by the weighted average number of ordinary units and dilutive potential ordinary units.

(r) Goods and Services Tax (“GST”) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the relevant tax authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the relevant tax authority is included as a current asset or liability in the Statements of Financial Position. Cash flows are included in the Statements of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the relevant tax authority are classified as operating cash flows.

(s) Use and Revision of Accounting Estimates The preparation of the Financial Report requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

55 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

2. Other Income CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Revenue from Operating Activities Distributions from controlled entities – – 224.3 138.6 Distributions from associates – – 2.3 4.3 Interest income from controlled entities – – 34.9 17.4 – – 261.5 160.3 Revenue from Outside Operating Activities Proceeds from sale of investment properties 108.0 1.3 – 4.5 Proceeds from sale of part investment in a controlled entity 4.6 126.6 – 126.6 Interest received or due and receivable from banks 2.4 0.8 1.9 0.7 Interest received or due and receivable from related parties 6.2 1.3 6.2 1.3 121.2 130.0 269.6 293.4

3. Profit from Ordinary Activities Profit from Ordinary Activities has been Arrived at After Crediting/(Charging) the Following Items: Gross property income 327.5 187.7 – – Recoverable outgoings (49.3) (31.2) – – Amortisation of deferred leasing and tenancy costs (5.0) (2.8) – – Other non-recoverable outgoings (1.5) (1.9) – – Property expenses (55.8) (35.9) – – Net property income 271.7 151.8 – – Net profit on sale of investment properties 2.7 – – – Borrowing costs paid or due and payable to other persons (75.5) (39.4) (65.0) (39.1) Borrowing costs paid or due and payable to controlled entities – – (5.7) (5.7) Capitalised borrowings costs(1) 22.6 19.4 – – (52.9) (20.0) (70.7) (44.8) Net expense for bad and doubtful debts (0.1) – – –

(1) Borrowing costs were capitalised to investment properties under development at a weighted average interest rate of 6.12% per annum (2003: 6.50% per annum).

4. Management Fee The Responsible Entity for MGI is Macquarie Goodman, a wholly-owned subsidiary of MGM. Under the terms of MGI’s Constitution, the Responsible Entity is entitled to receive the following remuneration from MGI, comprising a Base Fee and a Performance Fee: (a) Base Fee (i) 0.50% per annum of the value of the total assets of the Consolidated Entity up to $700 million; plus (ii) 0.45% per annum of the value of the total assets of the Consolidated Entity over $700 million. The Base Fee is payable monthly. CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $ $ $ $

Base Fee earned 16,624,950 9,415,426 5,369,508 2,649,619

56 Annual Report 2004

4. Management Fee continued (b) Performance Fee In addition to the Base Fee, the Responsible Entity is entitled to a Performance Fee paid for by the issue of units in MGI or cash in certain circumstances to the Responsible Entity. Payment of the Performance Fee is dependent upon the relative cumulative performance of MGI to the S&P/ASX 200 Property Accumulation Index (“Benchmark Index”). The Benchmark Index represents the accumulated (both capital and income) returns of those securities which make up the Benchmark Index. If MGI’s performance during each half year is higher than the percentage increase in the Benchmark Index for the same period, then the Responsible Entity is entitled to a Performance Fee equal to: (i) 5% of the total increased Unitholder value from outperformance; plus (ii) 15% of the total increased Unitholder value above 2% nominal outperformance per annum (1% for the half year). The increased Unitholder value is measured as the market capitalisation of MGI at the commencement of the relevant period, multiplied by the nominal percentage of performance of MGI relative to the Benchmark Index for that period. The Performance Fee is calculated and payable, if entitled, each half year at December and June. The relative performance of MGI to the Benchmark Index was: CONSOLIDATED CONSOLIDATED 30 JUNE 31 DECEMBER 30 JUNE 31 DECEMBER 2004 2003 2003 2002

Accumulated MGI performance (%) 4.30 69.60 49.20 37.41 Accumulated Benchmark Index performance (%) 13.60 63.86 59.81 45.27 Accumulated (underperformance)/outperformance (%) (9.30) 5.74 (10.61) (7.86) Market capitalisation of MGI at the relevant date ($M) 2,481.7 1,718.0 1,400.1 1,086.1

CONSOLIDATED 2004 2003 $M $M

Performance Fee earned 17.2 –

The Performance Fee was earned in the period to 31 December 2003 and has been transferred from the asset revaluation reserve (refer Note 16) and included in other creditors and accruals (refer Note 12). Fees paid to the Macquarie Goodman Group for other services to MGI are described in Note 23.

5. Auditors’ Remuneration CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $000 $000 $000 $000 KPMG Australia Audit and review of financial reports 308 144 266 68 Non-audit services: –Taxation services 163 80 147 38 – Other services – Compliance 44 33 41 25 – Investigative accounting 198 8 198 8 KPMG New Zealand Non-audit services: –Taxation services 13 – – – – Other services – Investigative accounting 13 – – – 739 265 652 139

57 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

6. Distributions TOTAL TAX CGT DISTRIBUTION AMOUNT DEFERRED CONCESSION TAXABLE CPU $M % % %

Distributions paid or proposed: 2004 distributions for the quarters ended: 30 September 2003 3.325 45.7 31 December 2003 3.375 49.7 31 March 2004 3.375 50.8 30 June 2004 3.375 54.3 Total distribution for the year ended 30 June 2004 13.450 200.5 52.3 4.3 43.4

2003 distributions for the quarters ended: 30 September 2002 3.038 23.2 31 December 2002 3.038 25.9 31 March 2003 3.075 29.7 30 June 2003 3.075 34.4 Total distribution for the year ended 30 June 2003 12.226 113.2 36.2 – 63.8

7. EPU CONSOLIDATED 2004 2003 CPU CPU

Basic EPU 11.97 12.19 Diluted EPU 11.97 12.19 Weighted average number of ordinary units on issue used in the calculation of basic and diluted EPU 1,453,505,011 928,333,884

Net profit used in calculating the basic and diluted EPU was derived as follows: CONSOLIDATED 2004 2003 $M $M

Net profit 194.7 126.3 Outside equity interests (20.8) (13.1) Basic/diluted earnings 173.9 113.2

Macquarie Goodman Capital Trust (“MGA”) has issued Reset Preference Units (“RePS”). These units have the ability to convert to either: (a) cash; or (b) ordinary units of MGI. Since 28 May 2004, RePS holders can elect to convert their holding to MGI units. The number of ordinary units issued on conversion will be at least equal to the minimum conversion number which is 60 to the first reset date (also refer to Note 17).

58 Annual Report 2004

8. Receivables CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Current Trade debtors 4.4 3.1 0.1 0.3 Rent debtors 9.1 5.8 – – Distribution receivable – – 51.2 41.4 Other debtors 20.7 6.5 2.6 2.8 Provision for doubtful debts (0.2) (0.1) – – Loan to related parties(1) 51.8 – 51.8 – 85.8 15.3 105.7 44.5 Non-current Loans to associated entities(2) 4.5 5.3 4.5 5.3 Loan to related parties(1) 52.6 106.6 52.6 106.6 Loans to controlled entities(3) – – 1,319.7 723.1 Other debtors 0.2 – – – 57.3 111.9 1,376.8 835.0

(1) Loan to related parties relates to the 25% share from Ascendas Funds Management (Australia) Pty Limited (“Ascendas”) on the $426.6 million deferred settlement on the acquisition of Colonial First State Industrial Property Trust. The loan has been stated at a fair value of $104.4 million (2003: $106.6 million) with the fair value amount amortised on the terms and conditions set out in Note 14. The effective interest rate after the fair valuation is 5.4% per annum. (2) Loans to associated entities relates to a 50% interest in Auckland Business Park Pty Limited. The loans are interest bearing at a rate of 6.12% per annum with no specified period of time for repayment. Carter Street Trust was an associated entity until 15 March 2004 when it became a controlled entity (refer to Note 11(a) for further details). At 30 June 2004, the loan from MGI to Carter Street Trust is included in loans to controlled entities. (3) Loans to controlled entities includes advances to fund the development of properties (interest bearing 6.12% per annum (2003: 6.5% per annum)) and loans for the acquisition of investment properties (non-interest bearing).

9. Other Assets CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Current Prepayments 10.2 6.9 0.4 0.3 Deferred borrowing costs 1.3 0.8 1.4 0.8 Deferred leasing and tenancy costs 5.0 3.0 – – 16.5 10.7 1.8 1.1 Non-current Prepayments 0.5 0.9 0.5 0.9 Deferred borrowing costs 1.3 1.3 1.2 1.3 Deferred leasing and tenancy costs 13.2 6.1 – – 15.0 8.3 1.7 2.2

10. Investment Properties CONSOLIDATED 2004 2003 $M $M

Carrying amount at the beginning of the year 2,656.5 1,603.4 Acquisitions 932.8 843.2 Capital expenditure 334.7 179.1 Disposals (105.3) (1.2) Valuation increment 36.3 32.0 Carrying amount at the end of the year 3,855.0 2,656.5

59 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

10. Investment Properties continued PURCHASE TOTAL PRICE COST COST INCLUDING INCLUDING SINCE BOOK BOOK ACQUISITION CAPITAL INDEPENDENT LAST VALUE VALUE ACQUISITION COSTS EXPENDITURE VALUATION VALUATION REVALUATION 30 JUNE 04 30 JUNE 03 PROPERTIES DATE $M $M DATE $M $M $M $M

Warehouse/Distribution Centres

MFive Industry Park, Moorebank, NSW 20 Dec 01 42.4 96.7 1 Dec 01 39.5 – 96.7(1) 84.6 GreystanesPark, Prospect, NSW – East, Stage 1 14 Dec 01 26.4 47.3 30 Jun 01 24.6 – 47.3(1) 40.8 – West, Stage 2 14 Feb 03 20.7 40.7 24 Jun 02 19.5 – 40.7(1) 22.3 47.1 88.0 44.1 – 88.0 63.1 Roberts Distribution Centre, Chullora, NSW – Building A 26 Oct 00 21.1 21.7 31 Dec 02 25.0 0.2 25.2 25.1 – Building B 8 Apr 03 34.7 34.8 1 Mar 03 32.0 – 34.8(1) 34.8 55.8 56.5 57.0 0.2 60.0 59.9 Forrester Distribution Centre, St Marys, NSW 10 Apr 01 50.1 50.2 30 Jun 04 55.0 – 55.0 50.6 Reservoir Distribution Centre, Wetherill Park, NSW 29 Aug 03 52.6 52.6 30 Sep 03 47.0 – 52.6(1) – Centenary Distribution Centre, Moorebank, NSW(2) 25 Jun 04 46.4 46.4 1 Jun 04 44.0 – 46.4(1) – Portside Distribution Centre, Banksmeadow, NSW 29 Aug 03 45.5 46.2 30 Sep 03 43.0 – 46.2(1) – Forsyth Distribution Centre, Hoppers Crossing, Vic 8 Apr 03 38.4 38.4 1 Mar 03 36.4 – 38.4(1) 38.4 Great West Distribution Centre, Arndell Park, NSW 26 Oct 00 27.4 32.8 30 Jun 04 37.5 – 37.5 35.0 Wyndham Distribution Centre, Laverton, Vic 16 Oct 98 32.4 32.8 30 Jun 03 36.0 0.1 36.1 36.0 Smithfield Distribution Centre, Smithfield, NSW 13 Dec 02 35.3 36.0 1 Jan 03 34.0 – 36.0(1) 35.5 Chullora Distribution Centre, Chullora, NSW – Stage 1 29 Aug 03 25.4 25.4 30 Sep 03 23.6 – 25.4(1) – – Stage 2 29 Aug 03 10.6 10.6 30 Sep 03 9.5 – 10.6(1) – 36.0 36.0 33.1 – 36.0 – Northgate Distribution Centre, Somerton, Vic – Stages 1 and 2 19 Sep 01 3.0 31.6 30 Jun 02 26.1 – 31.6(1) 28.1 – Stage 3 19 Dec 01 3.6 3.7 1 Dec 01 3.3 – 3.7(1) 3.7 6.6 35.3 29.4 – 35.3 31.8 Southend Distribution Centre, Mascot, NSW 29 Jun 98 25.6 28.3 30 Jun 04 35.0 – 35.0 33.0 Westall Distribution Centre, Clayton, Vic 29 Aug 03 24.5 32.8 30 Sep 03 30.6 – 32.8(1) – Laverton Distribution Centre, Laverton North, Vic 4 Oct 01 6.7 25.0 30 Jun 04 30.6 – 30.6 27.3 Kingston Distribution Centre, Braeside, Vic 3 Feb 97 21.7 26.6 30 Jun 03 27.9 0.1 28.0 27.9 Davis Distribution Centre, Wetherill Park, NSW – Building A 29 Aug 03 17.9 19.8 30 Sep 03 16.3 – 19.8(1) – – Building B 29 Aug 03 6.1 6.2 30 Sep 03 7.4 – 6.2(1) – 24.0 26.0 23.7 – 26.0 – Hampton Park Distribution Centre, Hampton Park, Vic 29 Aug 03 24.0 24.3 30 Sep 03 22.4 – 24.3(1) – Miller Distribution Centre, Villawood, NSW 26 Oct 00 18.3 19.1 30 Jun 04 21.2 – 21.2 20.1 Fitzgerald Distribution Centre, Laverton North, Vic 26 Oct 00 18.4 22.1 30 Jun 03 21.0 0.1 21.1 21.0 Berkeley Distribution Centre, Berkeley Vale, NSW 26 Oct 00 10.2 17.2 30 Jun 03 19.1 0.4 19.5 19.1 Angliss Distribution Centre, Laverton North, Vic 06 Dec 02 4.5 17.7 02 Nov 01 4.2 – 17.7(1) 5.4 Port Wakefield Distribution Centre, Gepps Cross, SA 29 Aug 03 17.5 17.5 30 Sep 03 16.1 – 17.5(1) –

60 Annual Report 2004

Warehouse/Distribution Centres continued Holroyd Distribution Centre, Smithfield, NSW 29 Aug 03 17.3 17.3 30 Sep 03 16.0 – 17.3(1) – Villawood Distribution Centre, Villawood, NSW 29 Aug 03 17.1 17.1 30 Sep 03 15.3 – 17.1(1) – Auckland Distribution Centre, Manukau, Auckland(3) 12 Mar 03 15.7 – 1 Jan 03 16.7 – – 17.6 Hume Distribution Centre, Chullora, NSW 26 Oct 00 15.2 15.5 30 Jun 03 17.0 – 17.0 17.0 Boundary Distribution Centre, Laverton North, Vic 26 Oct 00 7.3 14.9 31 Dec 02 15.5 0.1 15.6 15.5 Crestmead Distribution Centre, Crestmead, Qld 28 Apr 04 5.8 15.2 9 Dec 03 8.1 – 15.2(1) – Tranzport Distribution Centre, Port Melbourne, Vic 8 Apr 03 14.7 14.7 1 Mar 03 13.3 – 14.7(1) 14.7 Sunshine Distribution Centre, Sunshine, Vic 25 Jun 02 9.9 13.7 30 Jun 04 13.1 – 13.1 12.2 Sheffield Distribution Centre, Welshpool, WA 26 Oct 00 12.5 12.5 30 Jun 04 12.6 – 12.6 12.0 Britton Distribution Centre, Smithfield, NSW 3 Jul 97 9.6 10.5 30 Jun 03 12.3 – 12.3 12.3 Federation Distribution Centre, Laverton North, Vic 8 Apr 03 11.4 11.4 1 Mar 03 10.8 – 11.4(1) 11.4 Woodlands Distribution Centre, Braeside, Vic 29 Aug 03 11.3 11.3 30 Sep 03 10.7 – 11.3(1) – Keysborough Distribution Centre, Keysborough, Vic – Stage 1 8 Apr 03 7.0 7.0 1 Mar 03 6.6 – 7.0(1) 7.0 – Stage 2 3 Jul 03 1.6 1.7 23 Jun 03 1.4 – 1.7(1) – 8.6 8.7 8.0 – 8.7 7.0 Montague Distribution Centre, West End, Qld 8 Apr 03 8.6 8.6 1 Mar 03 7.8 – 8.6(1) 8.6 Holbeche Distribution Centre, Arndell Park, NSW 26 Oct 00 6.0 6.1 30 Jun 03 7.8 – 7.8 7.8 Lytton Distribution Centre, Lytton, Qld 9 Oct 02 1.8 7.5 10 May 02 1.6 – 7.5(1) 7.2 Gippsland Distribution Centre, Dandenong, Vic 29 Aug 03 6.2 6.3 30 Sep 03 6.1 – 6.3(1) – Westlink Distribution Centre, Laverton North, Vic 12 Feb 04 5.7 5.7 29 Jan 04 5.3 – 5.7(1) – Bradford Distribution Centre, Cavan, SA 26 Oct 00 3.4 3.4 31 Dec 03 3.8 – 3.8 3.7 Nestlé Building, Wiri, Manukau, Auckland 1 Apr 04 3.7 3.7 31 Mar 04 3.5 – 3.7(1) – Burnie Distribution Centre, Burnie, Wivenhoe, Tas 26 Oct 00 1.9 1.9 31 Dec 03 1.7 – 1.7 1.7 Bonds Distribution Centre, Punchbowl, NSW Sold – – – – – – 3.5

Industrial Estates Discovery Cove Industrial Estate, Banksmeadow, NSW 26 Oct 00 56.1 66.3 31 Dec 03 70.6 0.2 70.8 65.9 Alexandria Industrial Estate, Alexandria, NSW 8 Apr 03 54.3 55.7 1 Mar 03 49.5 – 55.7(1) 54.3 Mitchell Industrial Estate, Alexandria, NSW 28 Jun 95 25.9 39.0 31 Dec 03 43.8 1.0 44.8 37.9 Kingsford Smith Industrial Estate, Alexandria, NSW(2) 30 Jun 04 40.3 40.3 31 May 04 33.8 – 40.3(1) – Erskine Park Industrial Estate, Erskine Park, NSW 28 Nov 02 12.1 38.3 6 Nov 02 11.3 – 38.3(1) 15.7 Gateway Industrial Estate, Arndell Park, NSW 8 Apr 03 35.3 35.3 1 Mar 03 32.0 – 35.3(1) 35.3 The Gate Industry Park, Penrose, Auckland 31 May 02 29.7 35.2 1 Jun 02 28.5 – 35.2(1) 48.1 Smithfield Industrial Estate, Smithfield, NSW – Stage 1 8 Apr 03 14.5 14.9 1 Mar 03 13.3 – 14.9(1) 14.5 – Stage 2 8 Apr 03 13.4 13.7 1 Mar 03 12.3 – 13.7(1) 13.4 – Stage 3 30 Mar 04 3.0 3.1 18 Mar 04 2.6 – 3.1(1) – 30.9 31.7 28.2 – 31.7 27.9

61 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

Industrial Estates continued

Portside Industrial Estate, Port Melbourne, Vic 13 Dec 02 31.3 31.5 1 Jan 03 31.0 – 31.5(1) 31.4 Burrows Industrial Estate, Alexandria, NSW 28 Jun 95 19.2 23.5 31 Dec 03 30.5 0.8 31.3 28.4 Cumberland Industrial Estate, Smithfield, NSW 29 Aug 03 25.4 30.2 30 Sep 03 29.0 – 30.2(1) – Botany Bay Industrial Estate, Banksmeadow, NSW 29 Aug 03 29.8 30.0 30 Sep 03 30.5 – 30.0(1) – Brisbane Gate Industrial Park, Hendra, Qld 29 Aug 03 27.1 27.2 30 Sep 03 27.5 – 27.2(1) – Riverside Centre, Parramatta, NSW 29 Aug 03 24.1 24.3 30 Sep 03 21.5 – 24.3(1) – Arcadia Industrial Estate, Coopers Plains, Qld 8 Apr 03 18.3 22.7 1 Mar 03 16.5 – 22.7(1) 18.3 Brodie Industrial Estate, Rydalmere, NSW 8 Apr 03 22.4 22.5 1 Mar 03 20.3 – 22.5(1) 22.4 Reserve Industrial Estate, Ermington, NSW 29 Aug 03 19.3 19.5 30 Sep 03 18.6 – 19.5(1) – Biloela Industrial Estate, Villawood, NSW 28 Jun 95 15.3 16.2 30 Jun 04 19.0 – 19.0 17.4 Savill Link, Otahuhu, Auckland(2) 14 Jun 04 15.7 15.7 24 Mar 04 16.3 – 15.7(1) – Penrose Industrial Estate, Penrose, Auckland 2 Sep 03 29.2 15.4 2 Sep 03 16.7 – 15.4(1) – Tingalpa Industrial Estate, Tingalpa, Qld 8 Apr 03 12.7 12.8 1 Mar 03 11.5 – 12.8(1) 12.7 Ferntree Industrial Estate, Notting Hill, Vic 29 Aug 03 15.6 12.7 30 Sep 03 11.4 – 12.7(1) – Westcove Industrial Estate, Lane Cove, NSW 8 Apr 03 12.6 12.6 1 Mar 03 11.5 – 12.6(1) 12.6 Abbott Industrial Estate, Chester Hill, NSW 17 Apr 96 9.7 12.1 30 Jun 03 12.1 0.1 12.2 12.1 Homebush Bay Industrial Estate, Homebush Bay, NSW 8 Nov 02 11.2 11.2 30 Jun 04 11.2 – 11.2(1) 11.2 Greensquare Industrial Estate, Alexandria, NSW 8 Apr 03 10.9 10.9 1 Mar 03 10.3 – 10.9(1) 10.8 Citiport Industrial Estate, Eagle Farm, Qld 29 Aug 03 10.2 10.5 30 Sep 03 10.7 – 10.5(1) – Pavesi Industrial Estate, Smithfield, NSW 8 Apr 03 9.2 9.3 1 Mar 03 8.8 – 9.3(1) 9.2 Woodpark Industrial Estate, Smithfield, NSW 15 Feb 96 4.7 6.2 31 Dec 03 6.9 0.1 7.0 6.1 Healey Industrial Estate, Dandenong, Vic 26 Oct 00 6.5 6.7 30 Jun 03 6.9 – 6.9 6.9

Business Parks Lidcombe Business Park, Lidcombe, NSW 26 Sep 97 63.2 132.6 30 Jun 04 139.5 – 139.5 115.1 Campus Business Park, Homebush, NSW 29 Jun 01 36.7 105.7 1 Jul 01 45.0 – 105.7(1) 63.6 Slough Business Park, Silverwater, NSW 8 Apr 03 92.3 93.5 1 Mar 03 84.5 – 93.5(1) 92.3 Clayton Business Park, Clayton, Vic 13 Dec 02 75.2 80.4 1 Jan 03 73.3 – 80.4(1) 76.1 Acacia Ridge Business Park, Acacia Ridge, Qld – Stage 1 13 Dec 02 38.3 41.9 1 Jan 03 35.0 – 41.9(1) 38.8 – Stage 2 13 Dec 02 16.9 19.4 1 Jan 03 16.6 – 19.4(1) 17.5 55.2 61.3 51.6 – 61.3 56.3 Botany Grove Business Park, Botany, NSW – Stage 1 26 Oct 00 14.5 16.7 30 Jun 03 16.6 – 16.7 16.8 – Stage 2 26 Oct 00 10.3 20.9 30 Jun 03 20.4 – 20.9 20.5 – Stage 3 18 Dec 01 9.3 16.2 30 Jun 03 13.0 3.8 16.8 16.7 – Stage 4(2) (4) 4.7 5.1 12 May 03 4.5 – 5.1(1) – 38.8 58.9 54.5 3.8 59.5 54.0 Chullora Business Park, Chullora, NSW 29 Aug 03 58.2 58.2 30 Sep 03 59.0 – 58.2(1) –

62 Annual Report 2004

Business Parks continued Airgate Business Park, Mascot, NSW – Stage 1 26 Oct 00 24.8 26.1 31 Dec 03 22.5 8.7 31.2 29.2 – Stage 2 26 Oct 00 9.4 25.2 31 Dec 02 9.0 15.7 24.7 10.0 34.2 51.3 31.5 24.4 55.9 39.2 Euston Business Park, Alexandria, NSW 9 Oct 03 48.4 49.1 1 Sep 03 46.0 – 49.1(1) – Chifley Business Park, Mentone, Vic(5) 4 Apr 00 6.0 44.0 30 Jun 02 6.4 – 44.0(1) 24.0 St Peters Business Park, St Peters, NSW 29 Aug 03 39.2 39.2 30 Sep 03 37.8 – 39.2(1) – TransTech Business Park, Lane Cove, NSW 18 Oct 96 30.2 38.0 31 Dec 03 38.7 0.3 39.0 37.7 Talavera Business Park, North Ryde, NSW – Building A 27 Nov 00 14.9 15.6 30 Jun 02 15.1 – 15.6 15.3 – Building B 26 Oct 00 14.5 18.7 30 Jun 03 18.9 0.1 19.0 18.9 29.4 34.3 34.0 0.1 34.6 34.2 Forestridge Business Park, Frenchs Forest, NSW 8 Apr 03 33.1 34.1 1 Mar 03 33.1 – 34.1(1) 33.1 Link Business Park, North Ryde, NSW – Building A 29 Aug 03 12.1 12.1 30 Sep 03 11.3 – 12.1(1) – – Building B 8 Apr 03 20.1 20.6 1 Mar 03 19.1 – 20.6(1) 20.1 32.2 32.7 30.4 – 32.7 20.1 Showground Business Park, Castle Hill, NSW 29 Aug 03 30.2 30.3 30 Sep 03 28.0 – 30.3(1) – Enterprise Park, Gladesville, NSW 26 Oct 00 23.1 25.0 30 Jun 03 27.9 0.5 28.4 27.9 Waterloo Business Park, North Ryde, NSW 26 Oct 00 15.2 21.6 30 Jun 03 22.6 0.7 23.3 22.6 Ferntree Business Park, Notting Hill, Vic 29 Aug 03 21.1 21.2 30 Sep 03 22.2 – 21.2(1) – Seville Business Park, Villawood, NSW 26 Oct 00 16.9 17.4 30 Jun 02 17.2 0.5 17.7 17.6 Peninsula Business Park, Brookvale, NSW 29 Aug 03 17.3 17.5 30 Sep 03 15.8 – 17.5(1) – Pacific View Business Park, Frenchs Forest, NSW 31 May 96 10.9 14.4 31 Dec 03 15.7 – 15.7 14.3 Orion Business Park, Lane Cove, NSW 8 Nov 02 11.7 11.9 30 Jun 04 12.7 – 12.7 11.8 Queensport Quays Business Park, Murarrie, Qld 9 Oct 02 5.9 10.8 1 Sep 02 5.5 – 10.8(1) 8.7 Chase Business Park, Chatswood, NSW 8 Apr 03 9.7 10.0 1 Mar 03 9.3 – 10.0(1) 9.7 Citylink Business Park, Port Melbourne, Vic 29 Aug 03 9.0 9.1 30 Sep 03 9.0 – 9.1(1) – Dansu Court Business Park, Hallam, Vic(6) 26 Oct 00 28.5 2.7 30 Jun 04 2.4 – 2.4 24.2 Wedgewood Business Park, Hallam, Vic(6) 26 Oct 00 22.8 2.3 30 Jun 04 2.0 – 2.0 22.4 Office Parks

Talavera Corporate Centre, North Ryde, NSW 30 Apr 02 40.3 106.7 30 Apr 02 33.0 – 106.7(1) 84.2 CityWest Office Park, Pyrmont, NSW 16 Jun 99 69.5 90.4 30 Jun 02 100.0 1.4 101.4 101.3 Homebush Corporate Park, Homebush, NSW(2)(7) 15 Feb 02 34.1 88.3 16 Jan 02 66.0 27.9 93.9 – Macquarie Corporate Park, North Ryde, NSW – Building A 15 Mar 02 36.5 36.5 14 Feb 02 34.0 – 36.5(1) 36.5 – Building B 16 Jun 99 40.8 44.0 30 Jun 03 45.5 0.1 45.6 45.5 – Building C 14 Jan 04 5.2 5.4 1 Dec 03 5.0 – 5.4(1) – 82.5 85.9 84.5 0.1 87.5 82.0

63 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

Office Parks continued

Binary Centre, North Ryde, NSW 1 Mar 02 77.4 79.3 30 Jun 04 79.3 – 79.3 (1) 77.5 Warringah Corporate Centre, Frenchs Forest, NSW – Stage 1 9 Nov 01 40.2 43.2 1 Sep 01 37.0 – 43.2 (1) 41.9 – Stage 2(2) (4) 3.0 3.4 1 Sep 01 2.9 – 3.4 (1) 3.1 43.2 46.6 39.9 – 46.6 45.0 Cambridge Office Park, Epping, NSW 16 Jun 99 36.1 37.4 30 Jun 03 41.0 0.3 41.3 41.0 Fletcher Site, Penrose, Auckland(2) 25 Jun 04 32.8 32.8 2 Apr 04 32.8 – 32.8 (1) – Central Park Corporate Centre, Greenlane, Auckland 31 Oct 02 43.6 32.5 24 Sep 02 46.1 – 32.5 (1) 47.9 Pinnacle Office Park, North Ryde, NSW – Stage 1 8 Apr 03 26.5 26.6 1 Mar 03 25.2 – 26.6 (1) 26.6 – Stage 2 8 Apr 03 3.2 3.9 1 Mar 03 3.7 – 3.9 (1) 3.1 29.7 30.5 28.9 – 30.5 29.7 Hurstville Office Park, Hurstville, NSW 16 Jun 99 22.9 24.0 30 Jun 03 28.8 0.1 28.9 28.8 The Precinct Corporate Centre, North Ryde, NSW 19 Dec 01 22.3 25.4 1 Dec 01 22.1 – 25.4 (1) 24.8 Millennium Centre, Greenlane, Auckland 1 Apr 04 37.7 19.9 31 Mar 04 18.9 – 19.9 (1) – IBM Centre, Auckland 1 Apr 04 9.8 9.8 31 Mar 04 9.2 – 9.8 (1) – BTI House, Newmarket, Auckland 1 Apr 04 7.8 7.8 31 Mar 04 7.4 – 7.8 (1) – Vector House, Newmarket, Auckland 1 Apr 04 7.5 7.5 31 Mar 04 7.1 – 7.5 (1) – Ricoh Building, Parnell, Auckland 1 Apr 04 3.5 3.5 31 Mar 04 3.3 – 3.5 (1) – Kodak Building, Parnell, Auckland 1 Apr 04 3.5 3.5 31 Mar 04 3.3 – 3.5 (1) – Windsor Court, Parnell, Auckland 1 Apr 04 3.0 3.0 31 Mar 04 3.0 – 3.0 (1) – EDS Building, Mt Wellington, Auckland 1 Apr 04 2.9 2.9 31 Mar 04 2.6 – 2.9 (1) –

Suburban Commercial Buildings Ashfield Corporate Centre, Ashfield, NSW 16 Jun 99 30.1 41.6 31 Dec 02 38.0 2.1 40.1 38.9 Gordon Corporate Centre, Gordon, NSW(5) 16 Jun 99 19.3 20.1 30 Jun 03 25.0 0.6 25.6 25.0 3,124.2 3,742.9 3,347.0 66.0 3,855.0 2,656.5

Other Auckland Distribution Centre, Manukau, Auckland(3) 12 Mar 03 15.7 – 1 Jan 03 16.7 – 11.3 –

Properties held by MGA. Properties held on a 75/25 joint venture basis by MGI and Ascendas respectively. Properties held on a 50/50 co-ownership basis with MGP as at 30 June 2004. (1) There have been no revaluations of these properties since acquisition. Current book values are being carried at total cost. (2) All properties except: Centenary Distribution Centre, Moorebank, NSW; Kingsford Smith Industrial Estate, Alexandria, NSW; Botany Grove Business Park, Stage 4, Botany, NSW; Homebush Corporate Park, Homebush, NSW; Warringah Corporate Centre, Stage 2, Frenchs Forest, NSW; Fletcher Site, Penrose, Auckland; and Savill Link, Otahuhu, Auckland are pledged as security for borrowing arrangements. (3) During the year, MGI sold 50% of Auckland Business Park Pty Limited to MGP. As a result of this transaction, Auckland Business Park Pty Limited became an associate and is accounted for using the equity method. For further information regarding this transaction refer to Note 11(c). (4) Contracts have been exchanged with settlement scheduled after 30 June 2004. (5) All investment properties are held on a freehold basis with the exception of Chifley Business Park, Mentone, Vic and Gordon Corporate Centre, Gordon, NSW where the land is held on a leasehold basis. (6) A portion of the property costing $1.19 million was sold during the half year ended 31 December 2002 and a further portion costing $42.7 million was sold during the year ended 30 June 2004. (7) The balance of the 50% of Homebush Corporate Centre, Homebush, NSW was acquired during the year.

64 Annual Report 2004

11. Other Financial Assets CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M

Investments in associated entities at cost – – 1.8 34.0 Investments in controlled entities – – 2,102.8 1,702.9 – – 2,104.6 1,736.9

INTEREST HELD 2004 2003 NOTE % % Associated Unit Trust Carter Street Trust 11(a) – 50.0 Controlled Unit Trusts Macquarie Industrial Trust 100.0 100.0 O’Riordan Street Unit Trust 100.0 100.0 Homebush Subtrust 100.0 100.0 Carter Street Trust 11(a) 100.0 – Penrose Trust 100.0 100.0 MGA 17(a) 99.8 99.8 –Biloela Street Unit Trust 99.8 99.8 – BDE Unit Trust 99.8 99.8 – Macquarie Goodman Commercial Property Trust 99.8 99.8 –Waterloo Road Office Trust 99.8 99.8 – Cambridge Office Park Trust 99.8 99.8 – Liverpool Road Trust 99.8 99.8 – Saunders Street Trust 99.8 99.8 – 828 Pacific Highway Trust 99.8 99.8 Binary No. 1 Trust 100.0 100.0 – Binary No. 2 Trust 100.0 100.0 Riverside No. 4 Unit Trust 100.0 100.0 – Riverside No. 3 Unit Trust 100.0 100.0 – Riverside No. 2 Unit Trust 100.0 100.0 – Riverside Unit Trust 100.0 100.0 Orion Road Trust 100.0 100.0 Hill Road Trust 100.0 100.0 Clayton 1 Trust 100.0 100.0 –Clayton 2 Trust 100.0 100.0 –Clayton 3 Trust 100.0 100.0 Port Melbourne 1 Trust 100.0 100.0 – Port Melbourne 2 Trust 100.0 100.0 – Port Melbourne 3 Trust 100.0 100.0 Smithfield Property Trust 100.0 100.0 – Smithfield Property Trust No. 2 100.0 100.0 MGA IPT 17(b) 75.0 75.0 – MGA Industrial Subsidiary Trust No. 3 17(b) 75.0 75.0 – MGA Industrial Subsidiary Trust No. 1 17(b) 75.0 75.0 – MGA Industrial Subsidiary Trust No. 2 17(b) 75.0 75.0 MGA Direct Property Trust (“MGA DPT”) 17(b) 75.0 75.0 Thomas Trust(1) 100.0 – Macquarie Goodman Thomas Trust 100.0 –

65 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004 continued

11. Other Financial Assets continued INTEREST HELD 2004 2003 NOTE % %

Controlled Unit Trusts continued Euston Road Trust(1) 100.0 – Euston Road Subtrust(1) 100.0 – Highbrook Trust(1) 100.0 – Liverpool Showgrounds Trust(1) 100.0 – Liverpool Showgrounds Subtrust(1) 100.0 –

All trusts were established under Australian jurisdiction.

Associated Companies MGV(2) 11(b) 50.0 – Auckland Business Park Pty Limited 11(c) 50.0 –

Controlled Companies Tallina Pty Limited 100.0 100.0 Tidecard Pty Limited 100.0 100.0 Mintbail Pty Limited 100.0 100.0 Union Trustee (Canberra) Limited 100.0 100.0 01 Pty Limited 100.0 100.0 02 Pty Limited 100.0 100.0 Binary Centre Pty Limited 100.0 100.0 Riverside 1 Pty Limited 100.0 100.0 Riverside 2 Pty Limited 100.0 100.0 Riverside 3 Pty Limited 100.0 100.0 Tranway Pty Limited 100.0 100.0 Tranway No. 1 Pty Limited(2) 100.0 – Oxcap Pty Limited 100.0 100.0 Ashcap Pty Limited 100.0 100.0 CityCap Pty Limited 100.0 100.0 Suncap Pty Limited 100.0 100.0 Auckland Business Park Pty Limited – 100.0 Clayton Business Park Pty Limited 100.0 100.0 Graham Street F Pty Limited 100.0 100.0 Clyvina Pty Limited 100.0 100.0 Keeto Pty Limited 100.0 100.0

(1) Trusts established during the year ended 30 June 2004. (2) Companies established during the year ended 30 June 2004. All companies were incorporated in Australia except Auckland Business Park Pty Limited which was incorporated in New Zealand.

(a) On 15 March 2004, MGI purchased the Uniting Church Trust Association’s 50% holding in Carter Street Trust for $34 million. As a result, at 30 June 2004 MGI held 100% of the units issued by Carter Street Trust. (b) MGI and MGM each own 50% of MGV. On 22 December 2003, MGV entered into a binding Heads of Agreement with Brickworks Limited to develop a substantial industrial business park at Eastern Creek in NSW to be known as the M7 Business Hub. Under the terms of the agreement, MGI will pay for infrastructure works and has provided Austral with a put option which gives Austral the right to require MGV to purchase unsold saleable lots of land. The transaction is subject to the satisfaction of statutory planning requirements.

66 Annual Report 2004

11. Other Financial Assets continued (c) On 1 April 2004, MGI entered into a co-ownership arrangement with MGP. Under the co-ownership arrangement, MGI sold 47% of the beneficial interests in its properties (excluding development properties) in New Zealand and its investment in Auckland Business Park Pty Limited to MGP. In return, MGP sold 53% of the beneficial interests in its core properties to MGI. This resulted in each party becoming tenants in common of the combined portfolio in New Zealand. Each party’s assets were independently valued at 31 December 2003 to determine the proportion of the beneficial interest to be sold. Consideration for the sale paid by each party amounted to $58.5 million. On 3 June 2004, MGP paid $7.2 million to MGI to acquire a further 3% share in the pooled portfolio. The result of this transaction is that MGI and MGP each have an equal 50% interest in the pooled assets. Included in the assets and liabilities of the Consolidated Entity are the following items representing the assets and liabilities held under the co-ownership arrangements.

CONSOLIDATED 2004 2003 $M $M

Current assets 2.5 – Non-current assets 176.9 – Current liabilities 0.1 –

Refer to Notes 21 and 22 for details of commitments and contingent liabilities.

12. Payables CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Current Trade creditors 4.3 2.6 – – Rental in advance 9.3 2.7 – – Deferred settlements 7.5 9.7 – – Other creditors and accruals 34.3 15.5 28.1 10.4 55.4 30.5 28.1 10.4

Non-current Rental in advance – 0.7 – – Deferred settlements 0.1 7.2 – – Loan from controlled entity – – 41.5 – Other creditors and accruals 1.2 – – – 1.3 7.9 41.5 –

67 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

13. Provisions CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M

Provision for distribution to: Unitholders(1) 54.3 34.4 54.3 34.4 RePS holders 2.6 2.6 – – Other parties 3.2 2.5 – – 60.1 39.5 54.3 34.4

Provision for Distribution to Unitholders Opening balance 34.4 22.4 34.4 22.4 Payment of distributions (180.6) (101.2) (180.6) (101.2) Provision for distribution 200.5 113.2 200.5 113.2 Closing balance 54.3 34.4 54.3 34.4

Provision for Distribution to RePS Holders Opening balance 2.6 – – – Payment of distributions (10.4) – – – Provision for distribution 10.4 2.6 – – Closing balance 2.6 2.6 – –

Provision for Distribution to Other Parties Opening balance 2.5 – – – Payment of distributions (9.6) – – – Provision for distribution 10.3 2.5 – – Closing balance 3.2 2.5 – –

(1) The distribution for the quarter ended 30 June 2004 of $54.3 million will convert to units under the Distribution Reinvestment Plan (“DRP”) which has been fully underwritten by Goldman Sachs JBWere.

68 Annual Report 2004

14. Interest Bearing Liabilities CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Current Other loans – deferred payment(1) 219.1 – 207.0 –

Non-current Bank loans – secured(2) 308.5 151.2 308.5 151.2 Other loans – CMBS(3) 721.0 422.0 488.0 422.0 Other loans – deferred payment(1) 210.5 443.3 210.5 426.6 Other loans – controlled entity(4) – – 135.4 135.4 1,240.0 1,016.5 1,142.4 1,135.2

(1) MGI has interest bearing deferred payments of $429.6 million (2003: $443.3 million). Of this amount, $417.5 million (2003: $426.7 million) relates to the fair value of the deferred payment owed to Commonwealth Managed Investments Limited on the acquisition of Colonial First State Industrial Property Trust in April 2003. Commonwealth Managed Investments Limited can call for repayment of these deferred payments in tranches of up to $205 million by 31 January 2005 which attracts a coupon rate of 8.1% per annum and a further $205 million by 1 April 2006 which attracts a coupon rate of 8.4% per annum. The effective interest rate after fair valuation is 5.4% per annum. An amount of $12.1 million (2003: $16.6 million) representing a portion of the purchase price (including interest) for Campus Business Park, Homebush, NSW acquired during 2001, has been deferred for up to five years. The amount is repayable with interest at commercial rates as tenanted developments are completed. The full sum of $12.1 million is expected to be repaid within 12 months. (2) MGI has a $575 million (2003: $300 million) syndicated multi-option facility and a $225 million syndicated standby facility with National Australia Bank Limited and Westpac Banking Corporation. Security is by way of first or second ranking mortgages and charges over various assets. These facilities are available to 30 April 2006. An amount of $205.7 million (2003: $86.9 million) is denominated in New Zealand dollars. Any resulting foreign currency exposure is hedged by corresponding New Zealand property assets and capital additions purchased with the proceeds (refer to Note 25(c)). (3) MGI has Commercial Mortgage Backed Securities (“CMBS”) of $721 million (2003: $422 million). Standard & Poor’s has rated $511 million at AAA, $109 million at AA and $101 million at A. Security is by way of first registered mortgages and charges over various assets. The sum of $233 million of CMBS matures on 7 September 2006 and $488 million on 7 November 2006. (4) MGI has a $135.4 million loan payable to MGA. Interest is calculated on the loan at the average monthly money market interest rate.

CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M

Financing Arrangements The Consolidated Entity has access to the following bank facilities: –Total facilities available 800.0 300.0 800.0 300.0 Facilities utilised at balance date: – Loans drawn down (308.5) (151.2) (308.5) (151.2) – Bank guarantees (120.2) (125.5) (120.2) (125.5) Facilities not utilised at balance date 371.3 23.3 371.3 23.3

The Consolidated Entity has access to the following CMBS facilities: –Total facilities available 721.0 422.0 488.0 422.0 – Facilities utilised at balance date (721.0) (422.0) (488.0) (422.0) Facilities not utilised at balance date – – – –

69 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

15. Contributed Equity CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M

1,608,969,088 (2003: 1,113,171,601) fully paid ordinary units on issue 2,189.7 1,425.1 2,189.7 1,425.1 Issue costs(1) (49.4) (32.8) (49.4) (32.8) 2,140.3 1,392.3 2,140.3 1,392.3

Reconciliation of Units on Issue 757,130,197 Units on issue at 30 June 2002 921.6 921.6 Units issued for: 5,996,549 DRP – 8 August 2002(2) 8.4 8.4 84,791,860 Placement – 2 September 2002 116.2 116.2 6,498,336 DRP – 1 November 2002(2) 9.4 9.4 94,935,215 Placement – 13 December 2002 134.8 134.8 17,974,177 DRP – 7 February 2003(2) 26.0 26.0 16,064,245 UPP – 26 March 2003(3) 22.8 22.8 109,265,618 Placement – 9 April 2003 156.2 156.2 20,515,404 DRP – 2 May 2003(2) 29.7 29.7 1,113,171,601 Units on issue at 30 June 2003 1,425.1 1,425.1 1,425.1 1,425.1 Units issued for: 53,987,885 Acquisition of AIP units – 24 July 2003 82.1 82.1 3,138,697 Acquisition of AIP units – 28 July 2003 4.8 4.8 10,473,891 Acquisition of AIP units – 31 July 2003 15.9 15.9 4,278,987 Acquisition of AIP units – 4 August 2003 6.5 6.5 9,385,069 Acquisition of AIP units – 7 August 2003 14.3 14.3 22,606,472 DRP – 7 August 2003(2) 34.2 34.2 6,676,577 Acquisition of AIP units – 11 August 2003 10.1 10.1 12,278,956 Acquisition of AIP units – 14 August 2003 18.7 18.7 33,054,824 Acquisition of AIP units – 18 August 2003 50.2 50.2 53,164,424 Acquisition of AIP units – 21 August 2003 80.8 80.8 10,290,671 Acquisition of AIP units – 25 August 2003 15.6 15.6 35,975,526 Acquisition of AIP units – 28 August 2003 54.7 54.7 5,329,826 Acquisition of AIP units – 1 September 2003 8.1 8.1 43,380,316 Placement – 1 October 2003 62.5 62.5 13,224,276 Acquisition of AIP units – 20 October 2003 20.1 20.1 13,888,889 Placement – 29 October 2003 20.0 20.0 30,741,837 DRP – 3 November 2003(2) 45.7 45.7 30,193,410 DRP – 6 February 2004(2) 49.8 49.8 91,463,415 Placement – 19 March 2004 150.0 150.0 12,263,539 DRP – 3 May 2004(2) 20.5 20.5 1,608,969,088 Units on issue at 30 June 2004 2,189.7 2,189.7

(1) Issue costs associated with the issue of units have been directly paid from the proceeds of the issues. These costs have been deducted from the contributed equity in the Statements of Financial Position, rather than charged as an expense of MGI, as they are considered to form part of the net equity raised. (2) MGI has established a DRP which has been in operation since the quarter ended 30 June 2000. Under the DRP, holders of ordinary units may elect to have all or part of their distribution entitlement satisfied by the issue of new ordinary units rather than being paid in cash. Units are issued under the DRP at a discount to the issue price, at the discretion of the Board. The distribution was fully underwritten for the quarters ended 30 September 2003, 31 December 2003 and 30 June 2004. (3) MGI continued with the UPP which was introduced in November 2001. Unitholders are able to purchase up to a maximum of $5,000 worth of ordinary units in MGI under the UPP or similar arrangement in any consecutive 12 month period, with no brokerage or transaction costs. The new ordinary units rank equally in all respects with MGI’s existing ordinary units from the date of allotment.

Terms and Conditions Unitholders are entitled to receive distributions as declared from time to time and are entitled to one vote per unit at Unitholders’ meetings. In the event of winding up of MGI, ordinary Unitholders rank after all other Unitholders and creditors and are fully entitled to any proceeds of liquidation.

70 Annual Report 2004

16. Reserves CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Reserves Asset revaluation reserve 107.2 98.0 – – Capital profits reserve 2.9 2.5 26.2 52.8 Foreign currency translation reserve (0.8) 1.0 – – Total reserves 109.3 101.5 26.2 52.8

Asset Revaluation Reserve Opening balance 98.0 66.0 – – Increase on revaluation of investment properties 36.3 32.0 – – Transfer to capital profits reserve (0.5) – – – Transfer to retained earnings: – Performance Fee (17.2) – – – – Other (9.4) – – – Closing balance 107.2 98.0 – –

The asset revaluation reserve includes the net revaluation increments and decrements arising from the revaluation of non-current assets measured at fair value in accordance with AASB 1041. Capital Profits Reserve Opening balance 2.5 2.5 52.8 52.8 Transfer from asset revaluation reserve 0.4 – – – Transfer to retained earnings: – Performance Fee – – (17.2) – – Other – – (9.4) – Closing balance 2.9 2.5 26.2 52.8

Upon disposal of revalued assets, any related revaluation standing to the credit of the asset revaluation reserve is transferred to the capital profits reserve, in accordance with Note 1(f). Foreign Currency Translation Reserve Opening balance 1.0 – – – Net exchange differences on conversion of self-sustaining operation (1.8) 1.0 – – Closing balance (0.8) 1.0 – –

The foreign currency translation reserve records the foreign currency differences arising from the translation of self-sustaining foreign operations in New Zealand or the translation of foreign currency monetary items forming part of the net investment in New Zealand (refer to Note 1(e)). Retained Earnings Opening balance – – – – Transfer from asset revaluation reserve 26.6 – – – Transfer from capital profits reserve – – 26.6 – Net profit attributable to Unitholders 173.9 113.2 173.9 113.2 Distributions to Unitholders (200.5) (113.2) (200.5) (113.2) Closing balance – – – –

71 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

17. Outside Equity Interests Total Outside Equity Interests CONSOLIDATED 2004 2003 NOTE $M $M

RePS 17(a) 135.3 135.3 MGA IPT/MGA DPT 17(b) 126.7 126.7 262.0 262.0

(a) RePS were issued at a face value of $100 per security resulting in outside equity interests of: 1,400,000 RePS on issue 140.0 140.0 Issue costs (4.7) (4.7) Outside equity interests – RePS 135.3 135.3

RePS holders are not entitled to a share of any other post-issuance reserves which may exist in MGA. RePS are a class of securities that provide preferential distributions fixed for an initial period, the first being a minimum of four years. The fixed return provides for a distribution rate of 7.5% per annum. Upon expiry of the initial period, known as a reset date, the issuer may convert RePS holdings into ordinary units in MGI at a 3% discount at the Responsible Entity’s discretion, which will rank equally in all respects with existing ordinary units. (b) The sale of 25% in MGA IPT and MGA DPT resulted in outside equity interests of: CONSOLIDATED 2004 2003 $M $M

Interest in retained earnings at the beginning of the year – – Interest in profit from ordinary activities 10.3 2.6 Interest in distributions (10.3) (2.6) Interest in retained earnings at the end of the year – – Interest in unit capital 102.7 102.7 Interest in reserves 24.0 24.0 Outside equity interests – MGA IPT/MGA DPT 126.7 126.7

Net Profit Attributable to Outside Equity Interests RePS 10.5 10.5 MGA IPT/MGA DPT 10.3 2.6 20.8 13.1

72 Annual Report 2004

18. Notes to the Statements of Cash Flows (a) Reconciliation of Cash For the purpose of the Statements of Cash Flows, cash includes cash on hand and at bank and short-term deposits at call. Cash as at the end of the financial year as shown in the Statements of Cash Flows is reconciled to the related items in the Statements of Financial Position as follows: CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M

Cash at bank(1) 51.4 12.4 49.2 5.4

(1) Cash at bank includes an amount of $41.4 million (2003: Nil) which relates to sale proceeds received for properties used as security for the CMBS programme. These funds are restricted to the extent that they must be used to purchase properties given as security for the CMBS programme.

(b) Reconciliation of Net Profit to Net Cash Provided by Operating Activities CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M

Net profit 194.7 126.3 173.9 113.2 Items classified as investing activities: –Profit on sale of investment properties (2.7) – – – –Profit on part sale of a controlled entity (0.1) – – – Non-cash items: – Movement in deferred leasing and tenancy costs (11.5) (3.6) – – – Capitalised interest costs (22.7) (19.4) – – Net cash provided by operating activities before change in assets and liabilities 157.7 103.3 173.9 113.2 Change in assets and liabilities during the year: – (Increase)/decrease in receivables (4.2) 0.3 (14.5) (41.5) – (Increase)/decrease in other assets (2.3) 4.8 (0.3) (0.5) –Increase/(decrease) in payables 4.6 (4.1) 17.5 2.9 Net cash provided by operating activities 155.8 104.3 176.6 74.1

(c) Non-cash Financing and Investing Activities During the year, 95,805,258 units for a total consideration of $150.2 million were allocated under the DRP, as payment for distributions (2003: 50,984,466 units for a total consideration of $73.5 million). MGI acquired all the units in AIP by issuing 0.811 of an MGI unit, plus $0.05 cash paid by MGM, for each AIP unit. MGI issued 251,259,609 units for a total non-cash consideration of $381.9 million. Further details of this transaction, including scrip for scrip roll-over relief, appear in the Investor Relations section of this Annual Report on pages 87 to 88. On 1 April 2004, MGI entered into a co-ownership arrangement with MGP. Under the co-ownership arrangement, MGI sold 47% of the beneficial interests in its properties (excluding development properties) in New Zealand and its investment in Auckland Business Park Pty Limited to MGP. In return, MGP sold 53% of the beneficial interests in its core properties to MGI. This resulted in each party becoming tenants in common of the combined portfolio. Each party’s assets were independently valued at 31 December 2003 and sold at their market value of $58.5 million. Refer to Note 11(c) for further details regarding this arrangement.

73 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

19. Investments in Associates PRINCIPAL OWNERSHIP CONSOLIDATED ACTIVITY INTEREST CARRYING AMOUNT 2004 2003 2004 2003 NAME OF ENTITY % % $M $M

Carter Street Trust Property – 50.0 – 35.1 MGV Property 50.0 – 1.8 – Auckland Business Park Pty Limited Property 50.0 100.0 4.7 – 6.5 35.1

Movements in Carrying Amount of Investment in Associates Carrying amount at the beginning of the year 35.1 34.0 Purchase of controlling interest in Carter Street Trust (35.1) – Investment made during the year 6.5 – Share of profit from ordinary activities after income tax expense 2.3 4.3 Distributions received/receivable (2.3) (3.2) Carrying amount at the end of the year 6.5 35.1

Summary of the Performance and the Financial Position of Associates The aggregate profit, assets and liabilities of associates are: Profit from ordinary activities after income tax expense 2.3 4.3 Assets 19.1 71.2 Liabilities 9.6 6.9

74 Annual Report 2004

20. Acquisition and Disposal of Controlled Entities CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Acquisition of Controlled Entities The Consolidated Entity acquired the following: On 31 October 2002, all the units in Orion Road Trust – 11.7 – 11.7 On 31 October 2002, all the units in Hill Road Trust – 11.2 – 11.2 On 12 December 2002, all the units in Clayton 1 Trust(1) – 75.2 – 75.2 On 12 December 2002, all the units in Port Melbourne 1 Trust(1) – 31.3 – 31.3 On 16 December 2002, all the units in Smithfield Property Trust(1) – 10.9 – 10.9 On 12 March 2003, all the shares in Auckland Business Park Pty Limited(1) – 17.6 – – On 7 April 2003, all the units in MGA IPT(2) – 463.7 – 463.7 On 7 April 2003, all the units in MGA DPT(2) – 42.9 – 42.9 On 29 August 2003, all the units in AIP (renamed Macquarie Goodman Thomas Trust)(3) 435.0 – 435.0 – On 15 March 2004, the remaining 50% of units in Carter Street Trust(4) 34.0 – 34.0 – Total consideration 469.0 664.5 469.0 646.9 Deferred settlement 3.3 (432.7) 3.3 (432.7) Issue of units (383.1) – (383.1) – Cash outflow 89.2 231.8 89.2 214.2

Fair value of net assets: – Investment properties 643.4 661.2 643.4 643.3 – Receivables 8.8 19.1 8.8 19.1 – Payables (183.2) (15.8) (183.2) (15.5) Net assets acquired 469.0 664.5 469.0 646.9

Disposal of Controlled Entities On 7 April 2003, 25% of the units in MGA IPT – 115.9 – 115.9 On 7 April 2003, 25% of the units in MGA DPT – 10.7 – 10.7 On 1 April 2004, shares in Auckland Business Park Pty Limited 4.6 – – – Total consideration 4.6 126.6 – 126.6 Deferred settlement – (108.1) – (108.1) Payment received for 50% of loan payable 4.1 – – – Non-cash proceeds received(5) (7.5) – – – Cash inflow 1.2 18.5 – 18.5

Fair value of net assets: – Investment properties 9.0 125.7 – 125.7 – Receivables 0.1 4.7 – 4.7 – Payables (4.5) (3.8) – (3.8) Net assets disposed 4.6 126.6 – 126.6

(1) These entities were acquired from Linfox Property Group Pty Limited as part of a $206.8 million acquisition of industrial properties. (2) During the year ended 30 June 2003, MGI acquired Colonial First State Industrial Property Trust for $506.6 million. Subsequent to this acquisition, MGI sold down 25% of this Trust to Ascendas for $126.6 million. (3) The units were acquired from unitholders in AIP through an unconditional off-market takeover. The total consideration paid by MGI for the units was valued at $435 million. The number of units issued was determined with reference to the quoted price of MGI units as at the date when the Consolidated Entity gained effective control of the units of AIP. A cash payment of $0.05 per AIP unit was made directly by MGM to the unitholders of AIP. (4) MGI previously owned 50% of Carter Street Trust and was entitled to 100% of its income. MGI acquired the remaining 50% from the Uniting Church Trust Association (refer to Note 11(a) or further details). (5) Details relating to non-cash financing activities are set out in Note 18(c).

75 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

21. Commitments

Management Contract Details of the management contract between the Consolidated Entity and the Responsible Entity are set out in Note 23.

Capital Expenditure CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $M $M $M $M Capital Expenditure on Investment Properties Contracted amounts for improvements, not provided for: Payable not later than one year 58.7 65.8 – –

Operating Lease Commitments not Provided for in the Financial Statements (a) Gordon Corporate Centre, Gordon, NSW is subject to a 99 year ground lease that commenced in August 1991. Rent under this lease is 17.5% of net property income, payable monthly in advance. (b) Chifley Business Park, Mentone, Vic is subject to a sublease to April 2048, with a 49 year option to renew. Under the terms of the sublease, rent is 10% of the freehold value of the land, calculated on each fifth anniversary of the sublease. In between these market reviews, rent is reviewed annually subject to consumer price index changes. Rent is subject to abatements of between 50% and 100% until 30 June 2006.

Funding Commitments A guarantee exists between MGI and the Security Trustee for RePS holders, such that in the event that MGA has either insufficient amounts to pay the distribution or insufficient funds to pay the face value in the event of a winding up of MGA, MGI will, subject to some limitations, be required to pay the RePS holders an amount equal to the shortfall. The Responsible Entity’s obligation to deliver ordinary units on conversion is also guaranteed. The amount that MGI is required to pay under the guarantee in respect of distributions will not be greater than the income that MGI has available to distribute to its Unitholders. The obligations of MGI under the guarantee are subordinate to the claims of MGI’s creditors. MGI has provided bank guarantees to the value of $120.2 million which expire between 1 August 2004 and 8 March 2005.

22. Contingent Liabilities and Contingent Assets The Consolidated Entity had contingent liabilities at 30 June 2004 in respect of:

Contingent Consideration A contingent consideration exists in respect of the Heads of Agreement signed between MGI and Brickworks Limited. Once the precinct plan gains approval from relevant authorities, Austral has a put option which gives Austral the right to require MGV to take a transfer of unsold saleable lots of land. The consideration payable over the duration of the development will be the greater of: (a) the guaranteed land payments of unsold saleable lots; or (b) the revised retail price of the unsold saleable lots less a 2.5% discount if the revised retail price is less than $10 million or a 5% discount if it is greater than $10 million.

76 Annual Report 2004

23. Related Party Disclosures

Directors of the Responsible Entity The names of the persons holding the position of Director of the Responsible Entity during the year ended 30 June 2004 were Mr David Clarke, Mr Gregory Goodman, Mr Patrick Allaway, Ms Anne Keating, Mr James Kennedy, Ms Lynn Wood and Mr James Hodgkinson.

Directors’ Unitholdings in MGI The relevant interests, held directly or indirectly, of each Director of the Responsible Entity in the contributed capital of MGI as at 30 June 2004 are set out below: NUMBER OF UNITS HELD 2004 2003

Mr David Clarke 142,020 142,020 Mr Gregory Goodman 51,705,680 21,816,791 Mr Patrick Allaway 200,000 – Ms Anne Keating – – Mr James Kennedy – – Ms Lynn Wood – – Mr James Hodgkinson 42,601 42,601 52,090,301 22,001,412

Responsible Entity’s Remuneration In accordance with MGI’s Constitution, the Responsible Entity is entitled to receive a Performance Fee, Management Fee, trustee fee and expense reimbursements where expenses have been incurred on behalf of MGI: CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $ $ $ $

Management Fee (refer to Note 4) 16,386,302 9,415,426 5,369,508 2,848,109 Performance Fee (refer to Note 4) 17,151,752 – 17,151,752 – Trustee fee 1,107,569 504,564 244,470 504,564 Reimbursement of trust expenses 235,539 163,474 235,539 163,474 34,881,162 10,083,464 23,001,269 3,516,147

The following amounts are included in payables as owed to the Responsible Entity at balance date 17,327,422 – 17,151,752 –

77 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

23. Related Party Disclosures continued

Other Related Parties All dealings between the Consolidated Entity and other related parties are on normal commercial terms and conditions. All material dealings are, where appropriate, appraised by qualified external parties to ensure they are at commercial market rates. The following transactions have taken place with related entities during the year:

Macquarie Goodman Group CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $ $ $ $

Property services fees (including property management, leasing and due diligence work) 12,850,723 13,401,567 – 15,000 Development management and project fees 14,912,392 9,599,114 – 239,613 Building supervisor costs reimbursed 1,534,323 964,508 – – Other costs reimbursed – 5,210 – – 29,297,438 23,970,399 – 254,613

In addition, an amount of $12,066,772 (2003: $16,618,703) representing a portion of the purchase price (including interest) for Campus Business Park, Homebush, NSW acquired during 2001, has been deferred for up to five years. The amount is repayable with interest at commercial rates as tenanted developments are completed (refer Note 14). An amount of $1,133,444 is owed to the Consolidated Entity by the Macquarie Goodman Group. This amount represents 50% of the holding costs for GreystanesPark, Prospect, NSW.

Goodman Holdings Group The Consolidated Entity has entered into sublease to April 2048 with Moorabbin Airport Corporation Pty Limited (a Director related entity of Mr Gregory Goodman and Mr Patrick Goodman) for the lease of land at Chifley Business Park, Mentone, Vic. As at 30 June 2004, an amount of $312,846 (2003: $29,441) was paid in connection with the sublease.

Pooles Rock Wines Pty Limited On 15 January 2003, Pooles Rock Wines Pty Ltd (a Director related entity of Mr David Clarke) entered into a six year lease at CityWest Office Park, Pyrmont, NSW with the Consolidated Entity. Rent and outgoings charges commenced from 15 January 2004 and amounted to $42,010 for the year ended 30 June 2004.

Macquarie Bank Group CONSOLIDATED PARENT ENTITY 2004 2003 2004 2003 $ $ $ $

Macquarie Bank Limited(1) 4,695,465 99,682 4,695,465 99,682

(1) Relates to services provided in the development and maintenance of the MGI website $66,833 (2003: $99,682) and services provided regarding the acquisition of AIP ($4,628,632).

Other Related Parties Other related parties include associated entities and entities which are controlled but not wholly-owned as disclosed in Note 11. Aggregate amounts included in the determination of net profit that resulted from transactions with each class of other related parties have been reflected in Note 2. Aggregate amounts receivable from, and payable to, each class of other related parties as at 30 June 2004 have been reflected in Notes 8 and 12 respectively. All transactions were made on normal commercial terms and conditions.

78 Annual Report 2004

23. Related Party Disclosures continued

Transactions with Entities in the Wholly-Owned Group The wholly-owned group consists of MGI and its wholly-owned controlled entities as set out in Note 11. Transactions between MGI and other entities in the wholly-owned group during the years ended 30 June 2004 and 2003 consisted of: (a) payment of distributions to MGI; (b) loans advanced by MGI; and (c) loans repaid to MGI. All of the above transactions were made on normal commercial terms and conditions with the exception of loans for working capital. Aggregate amounts included in the determination of net profit that resulted from transactions with entities in the wholly-owned group are disclosed in Note 2. Aggregate amounts receivable from, and payable to, entities in the wholly-owned group at balance date are disclosed in Notes 8 and 12 respectively.

24. Director and Executive Disclosures

Principles Used to Determine the Nature and Amount of Remuneration Remuneration Policies The broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and level of performance, and that remuneration is competitive in attracting, motivating and retaining people of the highest quality. The Board of Macquarie Goodman does not determine the remuneration of any of the Directors. Non-executive Directors do not receive any performance related remuneration.

Details of Remuneration There are no Directors or executives employed or paid by the Responsible Entity or MGI except for fees paid in relation to the Compliance Committee. All Directors and executives are employed and paid by MGM or its controlled entities, except for Mr David Clarke and Mr James Hodgkinson who are employed and paid by MBL or its controlled entities. Where possible, remuneration has been determined based on appropriate allocation of Directors’ time and across their areas of responsibility. There were no specified executives at any time during the year.

79 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

24. Director and Executive Disclosures continued

Details of Remuneration continued Details of the nature and amount of each element of the remuneration of each Director of Macquarie Goodman are set out in the following table. SALARY INCLUDING BONUS UNPAID SUPERANNUATION OTHER PAID TOTAL BONUS OPTIONS (PRIMARY) (PRIMARY) (PRIMARY) (PRIMARY) (PRIMARY) (EQUITY) TOTAL PAID $$$$$$$BY Non-Executive Directors Ms Lynn Wood – Independent Director 55,591 – – 55,591 – – 55,591 MGM Ms Lynn Wood – Compliance Committee 30,000 – – 30,000 – – 30,000 MGI 85,591 – – 85,591 – – 85,591 Mr David Clarke(1) – – – – – – – MBL Mr Patrick Allaway 55,591 – – 55,591 – – 55,591 MGM Ms Anne Keating (Appointed 6 February 2004) 21,952 – – 21,952 – – 21,952 MGM Mr James Kennedy (Resigned 5 February 2004) 37,444 – – 37,444 – – 37,444 MGM Mr James Hodgkinson(2) 15,070 – 94,328 109,398 – 2,420 111,818 MBL 215,648 – 94,328 309,976 – 2,420 312,396

Executive Director Mr Gregory Goodman(3)(4)(5)(6) 399,998 10,864 130,909 541,771 269,091 542,917 1,353,779 MGM

CASH SALARY MBL INCLUDING PROFIT SUPERANNUATION SHARE OPTIONS (PRIMARY) (PRIMARY) (EQUITY) TOTAL $$$$

Mr David Clarke 329,666 5,741,523 168,726 6,239,915

(1) There is no meaningful basis on which to allocate the remuneration of Mr David Clarke to the entities of which he is a director. Mr David Clarke is Executive Chairman of MBL and his total remuneration is disclosed. The basis for calculating MBL’s profit share and option amounts are disclosed in MBL’s Annual Report for the year ended 31 March 2004. (2) Mr James Hodgkinson is employed by MBL. The remuneration shown above is an apportionment of Mr James Hodgkinson’s total remuneration paid by MBL. The basis for calculating the MBL profit share and option amounts are disclosed in MBL’s Annual Report for the year ended 31 March 2004. (3) There is no meaningful basis on which to allocate the remuneration of Mr Gregory Goodman to the entities of which he is a Director. Mr Gregory Goodman is the Chief Executive Officer of MGM and his total remuneration is disclosed. (4) Other includes reportable fringe benefits and car parking. (5) There is a bonus policy for the calculation and payment of bonuses by MGM or its controlled entities. The bonus for Mr Gregory Goodman is calculated on a return on equity of greater than 15%. The allocation to Mr Gregory Goodman is between 15% to 20% of the bonus pool. This policy includes the requirement for any amount above $30,000 to be withheld and paid to employees over a period of three to five years, depending on length of service. The amount above $30,000 is then split 50% to cash and 50% to shares in MGM. Mr Gregory Goodman has received approximately one-third of his bonus and will receive the remaining two-thirds over the next two years if he remains an employee of MGM. (6) The amounts disclosed in relation to options are disclosed in accordance with section 300A of the Corporations Act 2001 and ASIC’s guidelines relating to valuing options for Directors and executives. The fair value of the options is calculated at the date of grant using a Black-Scholes model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed above is the portion of the fair value of the options allocated to this reporting period. The factors considered in determining the fair value of the options include the exercise price, the term of the option, the vesting and performance criteria, the current price and expected volatility of the underlying share, the expected dividend yield and the risk-free interest rate. All options expire on the earlier of their expiry date or termination of the employee’s employment. Options vest as to one third on the second anniversary of grant date, one third on the third anniversary of grant date and one third on the fourth anniversary of grant date. Exercise is also conditional on MGM achieving certain performance hurdles.

During the year, the following options over ordinary shares in MGM were granted or vested and the following shares were issued on the exercise of options previously granted as remuneration: NUMBER OF OPTIONS NUMBER OF OPTIONS NUMBER OF SHARES GRANTED DURING VESTED DURING ISSUED ON THE AMOUNT PAID THE YEAR THE YEAR EXERCISE OF OPTIONS $ PER SHARE Executive Director Mr Gregory Goodman 2,000,000 1,666,667 1,666,667 0.54

80 Annual Report 2004

24. Director and Executive Disclosures continued

Details of Remuneration continued Options were granted on 28 October 2003 and expire on the fifth anniversary of grant date. The exercise price is $2.5906 per share with a fair value of $0.92 per share at grant date. The options were provided at no cost to the recipients. All options expire on the earlier of their expiry date or termination of the individual’s employment. The options are exercisable annually for two years from grant date. In addition to a continuing employment service condition, the ability to exercise options is conditional on MGM achieving increased earnings per share by 10% or more each year. For options granted in the current year, the earliest exercise date is 28 October 2005. The movement during the year in the number of options over ordinary shares in MGM held directly, indirectly or beneficially by, each specified Director and specified executive, including their personally related entities, is as follows: HELD AT GRANTED AS HELD AT VESTED AND EXERCISABLE 1 JULY 2003 REMUNERATION EXERCISED 30 JUNE 2004 AT 30 JUNE 2004 Executive Director Mr Gregory Goodman5,000,000 2,000,000 1,666,667 5,333,333 –

25. Additional Financial Instruments Disclosure (a) Interest Rate Risk The Consolidated Entity has entered into interest rate swap agreements to fix interest rate exposure. Interest rate swaps allow the Consolidated Entity to swap floating rate borrowings into fixed rates. The maturity dates of the interest rate swap agreements are between August 2004 and April 2013. The interest rate swap agreements are for 90 and 180 day intervals and involve quarterly and bi-annual payments or receipts of the net amount of interest. At 30 June 2004, the fixed rates varied from 4.89% per annum to 6.73% per annum and the floating rates were at bank bill rates plus a credit margin. Interest Rate Risk Exposures Exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities are set out below: FLOATING FIXED INTEREST NON - WEIGHTED INTEREST MATURING IN INTEREST AVERAGE RATE 1 TO 5 YEARS BEARING TOTAL INTEREST RATE NOTE $M $M $M $M % PA 2004 Financial assets Cash assets 51.4 – – 51.4 4.27 Receivables 8 4.5 104.4 34.2 143.1 5.53 55.9 104.4 34.2 194.5

Financial liabilities Payables 12 – – 56.7 56.7 Provisions 13 – – 60.1 60.1 Interest bearing liabilities 14 820.6 638.5 – 1,459.1 6.12 Interest rate swap (notional principal amounts) (465.0) 465.0 – – 355.6 1,103.5 116.8 1,575.9 2003 Financial assets Cash assets 12.4 – – 12.4 3.86 Receivables 8 – 106.6 20.6 127.2 5.40 12.4 106.6 20.6 139.6

Financial liabilities Payables 12 – – 38.4 38.4 Provisions 13 – – 39.5 39.5 Interest bearing liabilities 14 368.8 647.7 – 1,016.5 5.75 Interest rate swap (notional principal amounts) (135.0) 135.0 – – 233.8 782.7 77.9 1,094.4

81 Macquarie Goodman Industrial Trust

Notes to the Financial Statements for the year ended 30 June 2004

25. Additional Financial Instruments Disclosure continued (b) Credit Risk Exposures Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The largest receivable of $104.4 million (2003: $106.6 million) is from Ascendas representing 73% (2003: 84%) of total receivables.

Recognised Financial Instruments The credit risk on financial assets of the Consolidated Entity, which have been recognised in the Statements of Financial Position, is the carrying amount, net of any provision for doubtful debts relating to rental debtors. The Consolidated Entity has a policy of assessing the creditworthiness of all potential tenants and is not materially exposed to any one tenant or industry group. The Consolidated Entity evaluates all tenants’ perceived credit risk and may require the lodgement of rental bonds or bank guarantees, as appropriate, to reduce credit risk. In addition, all rents are payable monthly in advance.

Unrecognised Financial Instruments The credit risk in relation to derivative contracts which have not been recognised in the Statements of Financial Position is minimal, as counterparties are generally large banks. Credit risk on swap contracts is limited to the net amount to be received from or paid to counterparties on contracts that are favourable or unfavourable to the Consolidated Entity. The accrued amount payable by the Consolidated Entity at 30 June 2004 was $106,000 (2003: $248,000).

(c) Foreign Exchange Risk The Consolidated Entity is exposed to foreign exchange risk through its investments in New Zealand. Foreign exchange risk represents the loss that would be recognised from fluctuations in foreign currency prices against the Australian dollar. MGI’s New Zealand dollar liabilities are naturally hedged via New Zealand dollar assets held. MGI has entered into forward foreign exchange contracts to hedge a proportion of the rentals received from its New Zealand properties. The contracts settle at quarterly intervals from 16 December 2003 to 22 December 2006. The net fair value loss on forward foreign exchange contracts at 30 June 2004 was $284,000.

(d) Net Fair Values of Financial Assets and Liabilities Recognised Financial Instruments The Consolidated Entity’s financial assets and liabilities are carried at amounts that approximate net fair value.

Unrecognised Financial Instruments The notional gain/(cost) of hedging instruments is included in the fair value of the swap and will be recognised as interest expense over the life of the interest rate swap agreement. The net fair value gain of interest rate swaps is $7,050,000 (2003: $6,400,000).

26. Segment Reporting The Consolidated Entity’s business is investing in industrial and commercial properties in both Australia and New Zealand. New Zealand is not a separately reportable segment.

82 Annual Report 2004

27. Events Subsequent to Balance Date International Financial Reporting Standards For reporting periods beginning on or after 1 January 2005, the Consolidated Entity must comply with International Financial Reporting Standards (“IFRS”) as issued by the Australian Accounting Standards Board. This Financial Report has been prepared in accordance with Australian Accounting Standards and other financial reporting requirements (“Australian GAAP”). The differences between Australian GAAP and IFRS identified to date as potentially having a significant effect on the Consolidated Entity’s financial performance and financial position are summarised below. The summary should not be taken as an exhaustive list of all the differences between Australian GAAP and IFRS. No attempt has been made to identify all disclosure, presentation or classification differences that would affect the manner in which transactions or events are presented. MGI has not quantified the effects of the differences discussed below. Accordingly, there can be no assurances that the performance and financial position as disclosed in this Financial Report would not be significantly different if determined in accordance with IFRS. Regulatory bodies that promulgate Australian GAAP and IFRS have significant ongoing projects that could affect the differences between Australian GAAP and IFRS described below and the impact of these differences relative to the Consolidated Entity’s financial reports in the future. The potential impacts on the Consolidated Entity’s financial performance and financial position of the adoption of IFRS, including system upgrades and other implementation costs which may be incurred, have not been quantified as at the transition date of 1 July 2004 due to the short timeframe between finalisation of IFRS and the date of preparing this Financial Report. The impact on future years will depend on the particular circumstances prevailing in those years. The key potential implications of the conversion to IFRS on the Consolidated Entity are as follows: (a) changes in the fair values of investment properties will be adjusted through the Statements of Financial Performance rather than through reserves; (b) all loans are measured at their fair value; (c) all derivatives are recognised at fair value; (d) changes in accounting policies will be recognised by restating comparatives rather than making current year adjustments with note disclosure of prior year effects; and (e) hybrid debt/equity instruments such as RePS may be classified as debt instruments. The financial effects of the above transactions have not been brought to account in the Financial Report for the year ended 30 June 2004. Other than the matters discussed above, the Directors are not aware of any matters or circumstances not otherwise dealt with in this Financial Report or the Directors’ Report that have significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in financial years subsequent to the year ended 30 June 2004.

83 Macquarie Goodman Industrial Trust

Directors’ Declaration

(1) In the opinion of the Directors of Macquarie Goodman Funds Management Limited, the Responsible Entity for Macquarie Goodman Industrial Trust (“MGI”) and its controlled entities:

(a) the financial statements and accompanying Notes 1 to 27 are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the financial position of MGI and its controlled entities as at 30 June 2004 and of their performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and

(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and

(b) there are reasonable grounds to believe that MGI will be able to pay its debts as and when they become due and payable.

(2) MGI has operated during the year ended 30 June 2004 in accordance with the provisions of MGI’s Constitution dated 13 December 1989, as amended.

(3) The register of Unitholders has, during the year ended 30 June 2004, been properly drawn up and maintained so as to give a true account of the Unitholders of MGI.

Signed in accordance with a resolution of the Directors.

David Clarke, AO Gregory Goodman Chairman Director

Sydney, 5 August 2004

84 Annual Report 2004

Independent Audit Report to the Unitholders of Macquarie Goodman Industrial Trust

Scope The Financial Report and Directors’ Responsibility The Financial Report comprises the statements of financial position, statements of financial performance, statements of cash flows, accompanying notes to the financial statements, and the Directors’ declaration for Macquarie Goodman Industrial Trust (the “Trust”) and its controlled entities (the “Consolidated Entity”), for the year ended 30 June 2004. The Consolidated Entity comprises both the Trust and the entities it controlled during that year.

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

Audit Approach We conducted an independent audit in order to express an opinion to the Unitholders of the Trust. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Australian Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Trust’s and the Consolidated Entity’s financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

(a) examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report; and

(b) assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the Directors of the Responsible Entity.

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

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

Audit Opinion In our opinion, the financial report of the Trust is in accordance with:

(a) the Corporations Act 2001, including:

(i) giving a true and fair view of the Trust’s and Consolidated Entity’s financial position as at 30 June 2004 and of their performance for the financial year ended on that date; and

(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and

(b) other mandatory financial reporting requirements in Australia.

KPMG S Fleming Partner

Sydney, 5 August 2004

85 Macquarie Goodman Industrial Trust

Top 20 Unitholders

Top 20 Unitholders as at 20 August 2004 NUMBER OF % OF TOTAL UNITS HELD ISSUED UNITS

1. Westpac Custodian Nominees Limited 216,510,385 13.04 2. National Nominees Limited 197,733,478 11.91 3. Citicorp Nominees Pty Limited 182,247,648 10.97 4. JPMorgan Nominees Australia Limited 165,288,038 9.95 5. RBC Global Services Australia Nominees Pty Limited 84,186,182 5.07 6. Cogent Nominees Pty Limited 74,223,560 4.47 7. Goodman Holdings Pty Limited 50,089,284 3.02 8. Questor Financial Services Limited 50,088,681 3.02 9. Bond Street Custodians Limited 38,355,117 2.31 10. AMP Life Limited 33,547,225 2.02 11. ANZ Nominees Limited 26,343,150 1.59 12. HSBC Custody Nominees (Australia) Limited 24,079,214 1.45 13. Westpac Financial Services Limited 21,086,074 1.27 14. Queensland Investment Corporation 20,868,777 1.26 15. Invia Custodian Pty Limited 12,809,721 0.77 16. Transport Accident Commission 12,231,496 0.74 17. Permanent Trustee Australia Limited 11,890,508 0.72 18. Victorian WorkCover Authority 9,161,754 0.55 19. UBS Private Clients Australia Nominees Pty Limited 7,366,847 0.44 20. Suncorp Custodian Services Pty Limited 7,208,373 0.43 Units held by top 20 Unitholders 1,245,315,512 75.00 Balance of units held 415,280,451 25.00 Total issued units 1,660,595,963 100.00

Unitholder Distribution as at 20 August 2004 NUMBER OF NUMBER OF RANGE OF UNITS UNITHOLDERS UNITS

1– 1,000 714 319,365 1,001 – 5,000 3,590 11,750,479 5,001 – 10,000 6,032 45,787,900 10,001 – 100,000 12,100 276,854,844 100,001 and above 349 1,325,883,375 Total 22,785 1,660,595,963 Unitholders with less than a marketable parcel 264 26,010

Substantial Unitholders as at 20 August 2004 NUMBER OF UNITS HELD

Colonial First State Investment Managers 147,773,107 AMP Capital Investors 105,316,324

Voting Rights Unitholders are entitled to one vote for each fully paid unit held.

On Market Buy-back There is no current on market buy-back.

86 Annual Report 2004

Investor Relations

The objective of our investor relations team is to provide The initiatives under the programme include design principles thorough and transparent communications and a comprehensive that reduce energy use and maximise building and occupant website to assist in making the management of your investment benefits with smart planning. They also conserve and harvest as efficient as possible. water use for landscaping, improve indoor air quality and comfort for customers and reduce emissions and waste in material Please visit our website at www.macquariegoodman.com.au choice and construction methodology. to find out more about MGI and our services. Unitholder Benefits From the Home Page: During the year, we have delivered the following benefits to Portfolio updates our Unitholders: Latest news undertook a Unitholder Purchase Plan, which offered units Stock prices at $1.64 to all Unitholders; From the Investor Centre: revamped our website to ensure the needs of our Unitholders Distribution payment and reinvestment options were fully covered; Check your holding, change your details or download forms introduced eTree to allow Unitholders to receive communications electronically while creating a positive Where to find MGI’s unit price in major newspapers environmental impact and reducing printing and mailing Historical tax information costs; and Performance statistics and the current unit price invited Unitholders to a national seminar on the opportunities Set up a watch list for MGI and strategies for MGI. Register for eTree and receive communications via email Annual Distribution Statements Help us Save the Environment with eTree The Annual Distribution Statements were dispatched to We have partnered with eTree, in a new initiative that will help Unitholders on 13 August 2004. to restore degraded plant, animal and water resources, by Takeover of AMP Industrial Trust (“AIP”) decreasing the amount of paper we produce each year for our Unitholder communications. Roll-over Relief In relation to the successful takeover of AIP by Macquarie By registering your email address with eTree, you can receive Goodman Funds Management Limited as Responsible Entity for communications electronically, which will create a positive MGI, we confirm that a Class Ruling was issued by the Australian environmental impact and reduce printing and mailing costs Taxation Office in March 2004 confirming that scrip for scrip roll- for MGI. over relief is available to the former unitholders of AIP who MGI will donate $2 to Landcare Australia for each Unitholder that exchanged their units in that trust for units in MGI. registers for eTree, which will help support reforestation projects The Class Ruling is available on our website or by calling the in your State or Territory. Registrar at the number overleaf. To register, simply visit www.eTree.com.au/mgi and ensure It is important to note that the roll-over relief only applies to the you have your Holder Identification Number or Securityholder scrip consideration received by the former unitholders of AIP Reference Number, postcode and email address handy. units and not the cash component, as explained in section 11.2 This environmental initiative is not limited to our investor relations of the Bidder’s Statement dated 18 July 2003 and noted in practices. We have implemented an environmentally sustainable paragraph 15 of the Class Ruling. design programme, which extends to our industrial facilities.

Ms Jayne Gerrie – Corporate Communications Manager Ms Loren Baker – Communications Assistant

87 Macquarie Goodman Industrial Trust

Investor Relations continued

Consideration Contact Us The consideration to former unitholders of AIP equated to There are a number of ways to make enquiries about your 0.811 of an MGI unit plus $0.05 cash for every AIP unit they unitholding: held. Former foreign unitholders of AIP should refer to section 13.9 of Bidder’s Statement. Distributions InvestorPhone operates 24 hours a day, seven days a week If a former unitholder of AIP accepted the offer and became a and is a convenient way to check and amend details relating registered holder of MGI units by 30 September 2003, they were to your unitholding – just call 1300 723 040. Navigation for entitled to the distribution for that quarter. InvestorPhone follows: Distribution Timetable for 2005 Check and amend your name, address, DATE EVENT Check your direct credit instructions current balance, 123 and tax file number market prices 24 September 2004 Ex-distribution date for the quarter ending and instructions for trading units Receive payment 30 September 2004 456 details and tax information 30 September 2004 Record date for the distribution for the quarter ending 30 September 2004 789 3 November 2004 Distribution payment date for the quarter Talk to an investor 0 # service representative ending 30 September 2004 * 24 December 2004 Ex-distribution date for the quarter ending 31 December 2004 31 December 2004 Record date for the distribution for the quarter ending 31 December 2004 Our website at www.macquariegoodman.com.au is a great 7 February 2005 Distribution payment date for the quarter source of investor information including distributions, latest news, ending 31 December 2004 registry forms and more. It also allows you to check details of 25 March 2005 Ex-distribution date for the quarter ending your unitholding online. 31 March 2005 31 March 2005 Record date for the distribution for the @ quarter ending 31 March 2005 You can email the Unit Registrar at 3 May 2005 Distribution payment date for the quarter [email protected] or Macquarie Goodman at ending 31 March 2005 [email protected] for a quick and easy reply to 24 June 2005 Ex-distribution date for the quarter ending your enquiries. 30 June 2005 30 June 2005 Record date for the distribution for the quarter ending 30 June 2005 Please mail all correspondence to: 6 August 2005 Distribution payment date for the quarter Macquarie Goodman Industrial Trust ending 30 June 2005 C/- Computershare Investor Services Pty Limited These dates are subject to change without notice. GPO Box 1903 Adelaide SA 5001

88 Annual Report 2004

Property Trusts Managed by Macquarie Goodman and its Associates

Property Trusts Managed by Macquarie Goodman (as at 30 June 2004)

Macquarie Goodman Capital Trust(1) Sector Industrial Number of Properties 35 Total Assets $1.7 billion RePS Price $106.50 RePS Yield 7.0% ASX Code MGAPA Warringah Corporate Centre, (1) MGA is a subtrust of MGI. Frenchs Forest, NSW

Macquarie Goodman Property Trust(1) Sector Industrial Number of Properties 17 Total Assets NZ$252.3 million Unit Price NZ$0.98 Yield(2) 9.5% NZX Code MGP

Ricoh Building, Parnell, Auckland (1) MGP is listed on the New Zealand Exchange. (2) Based on MGP’s forecast gross distribution of NZ$0.093 per unit for the year ending 31 March 2005 stated in the Explanatory Memorandum dated 8 March 2004 and closing price of NZ$0.98 per unit as at 30 June 2004.

Ascendas Real Estate Investment Trust (“A-REIT”)(1) Sector Business/Industrial/Logistics Number of Properties 17 Total Assets S$1.1 billion Unit Price S$1.44 Yield(2) 6.2% SGX Code Ascendasreit

The Gemini, Singapore Science Park II, (1) Listed on the Singapore Exchange. Managed by Ascendas-MGM Funds Management Limited, which is a Singapore 60/40 joint venture between Ascendas Land (Singapore) Pte Ltd and Macquarie Goodman Management Limited. (2) Based on A-REIT’s forecast distribution of S$0.0886 per unit for the year ending 31 March 2005 stated in the circular dated 18 February 2004 and closing price of S$1.44 per unit as at 30 June 2004.

For more information on investing in a Macquarie Goodman product, please visit www.macquariegoodman.com.au, call 1300 723 040 or email us at [email protected]. For A-REIT, please visit www.a-reit.com.

89 Macquarie Goodman Industrial Trust

Property Trusts Managed by Macquarie Goodman and its Associates continued

Property Trusts Managed by Associates of Macquarie Goodman (as at 30 June 2004)

Macquarie CountryWide Trust Macquarie Park Street Trust Sector Retail Sector Commercial Number of Properties 127 Number of Properties 1 Share of total property assets $1.6 billion Total Assets $290.0 million Unit Price $1.72 RePS Price $104.45 Yield 8.3% Yield 7.0% ASX Code MCW ASX Code MORPA

Macquarie DDR Trust Macquarie ProLogis Trust Sector Retail (US Community Shopping Centres) Sector Industrial (North American) Number of Properties 22 Number of Properties 101 Share of total property assets $1.6 billion Share of total property assets $1.4 billion Unit Price $1.03 Unit Price $1.03 Forecast Yield 9.4% Yield 10.4% ASX Code MDT ASX Code MPR

Macquarie Leisure Trust Group Macquarie Direct Property Sector Leisure Macquarie Direct Property currently manages 10 property Number of Properties 6 syndicates, with properties in the commercial, industrial and retail Total Assets $205.7 million sectors. These trusts aim to offer attractive income returns and some tax deferred benefits as well as the opportunity of capital Unit Price $1.06 growth. In addition, Macquarie Direct Property also manages Yield 8.68% Macquarie Property Income Fund, a unit trust that uses gearing ASX Code MLE and debt to invest into property securities.

Macquarie Office Trust For further information on any of these listed or unlisted property Sector Commercial trusts, please contact your stockbroker or financial adviser, Ask Number of Properties 25 Macquarie on 1300 365 585 (local call cost), visit the website at Share of total property assets $1.9 billion www.macquarie.com.au/propertytrusts or email Macquarie at Unit Price $1.17 [email protected]. Yield 8.8% ASX Code MOF

90 Annual Report 2004

Glossary of Terms

Term Definition or Explanation

AASB An Accounting Standard issued by the Australian Accounting Standards Board

AIP AMP Industrial Trust

A-REIT Ascendas Real Estate Investment Trust

Ascendas Ascendas Funds Management (Australia) Pty Limited

ASIC Australian Securities & Investments Commission

Asset revaluation reserve Undistributed profits that have arisen on the revaluation of the investment properties held in MGI’s portfolio. These profits will only be realised when the properties are sold

ASX Australian Stock Exchange Limited

Board The Board of Directors of Macquarie Goodman

Capital profits reserve Undistributed profits that have been realised on the sale of the investment properties

CGT Capital Gains Tax

CMBS Commercial Mortgage Backed Securities

Consolidated Entity MGI and its controlled entities

Controlled entities The trustee companies of MGI’s subtrusts

CPU Cents per unit

Director A Director of Macquarie Goodman

DPU Distribution per unit

DRP Distribution Reinvestment Plan

EPU Earnings per unit

Ex-distribution When units are traded after this date, they will not qualify for the forthcoming distribution

Fair value Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction

Financial Position MGI’s assets and liabilities at a particular date

GST Goods and services tax

Macquarie Goodman Macquarie Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL 223621)

Macquarie Goodman Group MGM and its controlled entities

Managed investment scheme A scheme that has the following features:

– people contribute money to acquire units to share in the benefits of the scheme;

– the contributions are pooled to produce financial benefits for unitholders; and

– unitholders do not have the day-to-day control over the operation of the scheme

In the case of MGI, it is a registered managed investment scheme with ASIC

Management expense ratio Total expenses (excluding borrowing costs) divided by the weighted average of total assets under management

MGA Macquarie Goodman Capital Trust (ARSN 100 155 986)

MGA DPT MGA Direct Property Trust

MGA IPT MGA Industrial Portfolio Trust (formerly Colonial First State Industrial Property Trust)

91 Macquarie Goodman Industrial Trust

Glossary of Terms continued

MGI Macquarie Goodman Industrial Trust (ARSN 091 213 839) and its controlled entities, as the context requires

MGI’s Constitution The Constitution establishing MGI dated 13 December 1989, as amended

MGI’s portfolio All properties held by MGI and its subtrusts

MGM Macquarie Goodman Management Limited (ABN 69 000 123 071)

MGP Macquarie Goodman Property Trust

MGV Macquarie Goodman Vineyard Pty Limited

NTA Net tangible assets

NZX New Zealand Exchange

Parent Entity In the case of the Macquarie Goodman group of trusts, means MGI

Record Date The day MGI’s register is closed for the purpose of determining a Unitholder’s entitlement to the forthcoming distribution

RePS Reset Preference Units in MGA

RePS holder A holder of RePS in MGA

Responsible Entity Responsible Entity means a public company that holds an Australian Financial Services licence authorising it to operate a managed investment scheme. In respect of MGI, the Responsible Entity is Macquarie Goodman, a wholly-owned subsidiary of MGM

SGX Singapore Exchange

S&P Standard & Poor’s (an independent rating agency that provides evaluation of securities investments and credit risk)

Unitholder An ordinary Unitholder of MGI

UPP Unit Purchase Plan

92 Annual Report 2004

Corporate Directory

Macquarie Goodman Industrial Trust Unit Registrar ARSN 091 213 839 Computershare Investor Services Pty Limited Level 5 Responsible Entity 115 Grenfell Street Macquarie Goodman Funds Management Limited Adelaide SA 5000 ABN 48 067 796 641 GPO Box 1903 AFSL 223621 Adelaide SA 5001

Registered Office Telephone 1300 723 040 (Toll free within Australia) (61 3) 9415 5000 (Outside Australia) Level 10 Facsimile (61 8) 8236 2305 60 Castlereagh Street Email [email protected] Sydney NSW 2000 Website www.computershare.com GPO Box 4703 Sydney NSW 2001 Custodians Telephone 1300 791 100 (Toll free within Australia) Trust Company of Australia Limited (61 2) 9230 7400 (Outside Australia) 35 Clarence Street Facsimile (61 2) 9230 7444 Sydney NSW 2000 Email [email protected] Perpetual Trustee Company Limited Website www.macquariegoodman.com.au 1 Castlereagh Street Directors Sydney NSW 2000

Mr David Clarke, AO (Chairman) Auditor Mr Gregory Goodman (Chief Executive Officer) KPMG Mr Patrick Allaway (Independent Director) 10 Shelley Street Ms Anne Keating (Independent Director) Sydney NSW 2000 Ms Lynn Wood (Independent Director) Mr James Hodgkinson (Alternate Director for Mr David Clarke) ASX Code Chief Operating Officer MGI Mr David van Aanholt

General Counsel and Joint Company Secretary Ms Carolyn Scobie

Group Chief Financial Officer and Joint Company Secretary Mr Mark Alley

Fund Manager Mr Nick Kurtis

Corporate Communications Manager Ms Jayne Gerrie Designed by Armstrong Miller+McLaren Designed by Armstrong ANNUAL REPORT 2004