Board of Directors JOHN R KIRBY ROBERT G KIRBY GRAHAM W BURKE PETER E FOO Chairman, Executive Director, Deputy Chairman, Managing Director, Finance Director, Age 59 Executive Director, Age 55 Executive Director, Age 64 Executive Director, Age 51 Member of the Board since First joined the Board on 12 August Member of the Board and Managing Member of the Board since 12 August 1988 1988, reappointed 5 July 2001 Director since 9 September 1988 12 February 1998 Holds a Bachelor of Economics and Holds a Bachelor of Commerce Managing Director Village Roadshow Holds a Bachelor of Economics is a Certified Practising Accountant with over 30 years experience in the Limited, a position he has held since with 28 years experience in the with over 30 years experience in the entertainment and media industry. 1988 with unrivalled experience in the management and finance of all entertainment industry. Chairman Through the launch of Roadshow entertainment and media industries. facets of the group. Joined Village Village Roadshow Limited 1990 to Home Video, Mr. Kirby was the Mr. Burke has been one of the strategic Roadshow in 1978 and has served 1994, 1999 to 2002 and from July driving force behind the Australian and creative forces behind Village as Finance Director since 1998. 2006. Deputy Chairman of Village video revolution of the 1980’s and Roadshow’s development and founded Director Austereo Group Limited Roadshow Limited 1994 to 1998, 1990’s. He is a pioneer of new Roadshow Distributors with Roc Kirby. and all Village Roadshow’s major and from 2002 to June 2006. cinema concepts in both Australia He was also a founding director of subsidiaries. Director Austereo Group Limited and and internationally and has been at radio station 2Day FM, and spent four Member Executive Committee Village Roadshow Corporation Pty Ltd. the forefront of Village Roadshow’s years as the original Commissioner successful diversification into theme of the Australian Film Commission. Other Listed Public Company Member Executive Committee parks, radio and production. Director Austereo Group Limited and Directorships in previous 3 years: Chairman Nomination Committee Chairman of Village Roadshow Limited Village Roadshow Corporation Pty Ltd. Austereo Group Limited, since 1994 to 1998, and from 2002 to Other Listed Public Company Chairman Executive Committee 25 February 2004 June 2006. Deputy Chairman Village Directorships in previous 3 years: Roadshow Limited 1990 to 1994, 1999 Member Remuneration Committee Austereo Group Limited, since to 2002 and from July 2006. Director Other Listed Public Company 19 January 2001 Austereo Group Limited and Chairman Directorships in previous 3 years: of Village Roadshow Corporation Pty Ltd. Currently Deputy Chair of Peter Austereo Group Limited, since MacCallum Cancer Foundation and 19 January 2001 of the Zoological Parks and Gardens Board, Member of Patrons Council, Epilepsy Foundation and Patron of Victorian Arts Centre. Member Executive Committee Other Listed Public Company Directorships in previous 3 years: Austereo Group Limited, since 19 June 2001 14 VILLAGE ROADSHOW LIMITED WILLIAM J CONN PETER D JONSON D BARRY REARDON PETER M HARVIE Independent Non-Executive Independent Non-Executive Independent Non-Executive Executive Director, Age 67 Director, Age 60 Director, Age 60 Director, Age 75 Member of the Board since Member of the Board since Member of the Board since Member of the Board since 20 June 2000 12 March 1992 24 January 2001 24 March 1999 Executive Chairman, Austereo Group Holds a Bachelor of Commerce (Hons) Holds a Bachelor of Commerce, Holds a Bachelor of Arts, Holy Cross Limited with over 45 years experience from the University of Melbourne and Master of Arts and Ph D from the College and MBA, Trinity College. in the advertising, marketing and media a MBA from Columbia University. London School of Economics. Over 40 years in the motion picture industries. First entered radio in 1993 Mr Conn has over 35 years experience Following a 16 year career with the business. Formerly Executive Vice as Managing Director of the Triple M in investment banking with Potter Reserve Bank of Australia including 7 President and Assistant to the network before becoming Managing Warburg Limited and McIntosh years as Head of Research, entered President, Paramount Pictures. Director of the enlarged group following Securities Limited. He is Chairman the private sector with roles at leading Between 1975 and 1978, Mr Reardon its merger with Austereo in 1994. of Grand Hotel Group, Palm Springs Australian financial institutions. held the positions of Executive Vice Founder and Managing Director of the Limited and the Foundation for Positions included Head of Research, President, General Cinema Theatres Clemenger Harvie advertising agency Young Australians. He is Director James Capel Australia; Managing and between 1978 and 1999 was from 1974 to 1993. Director Mazda of the National Academy of Music Director, Norwich Union Financial President, Warner Bros. Distribution. Foundation Limited and Art Exhibitions and is a consultant to Merrill Lynch Services; and Chairman, ANZ Funds Serves on the board of various United Australia Limited. International (Australia) Limited. Management. Currently Chair of States companies and organisations Bionomics Ltd, Australian Institute and is a Director of Village Roadshow Member Executive Committee Chairman Audit Committee for Commercialisation Ltd, Australian Pictures International Pty Ltd. Other Listed Public Company Chairman Remuneration Committee Aerospace and Defence Innovations Member Audit Committee Directorships in previous 3 years: Ltd and the Federal Government’s Member Nomination Committee Cooperative Research Centre Member Remuneration Committee Austereo Group Limited, since Other Listed Public Company Committee. Serves on the Boards of 16 January 2001 Member Nomination Committee Directorships in previous 3 years: other companies including Sequoia Other Listed Public Company Grand Hotel Group Limited, since Capital Management Ltd, Metal Storm Directorships in previous 3 years: 17 April 1996 Limited and Pro Medicus Ltd. Loewe Cineplex Inc., since Palm Springs Limited, since Member Audit Committee September 2003 26 March 2001 Other Listed Public Company Tribune Media Inc., since 1999 Becton Property Group Limited, since Directorships in previous 3 years: 1 July 2005 Bionomics Ltd, since Sundance Cinema Corporation Inc, since January 2006 Berren Asset Management Limited 11 November 2004 (as Responsible Entity for the Pro Medicus Limited, since International Wine Investment Fund), October 2000 since 3 November 2004 Metal Storm Limited, since 7 February 2006 ANNUAL REPORT 2006 15 Senior Management EXECUTIVE COMMITTEE PHIL LEGGO JULIE RAFFE TONY PANE Group Company Secretary Chief Financial Offi cer Chief Tax Counsel JOHN R KIRBY* Chairman ROBERT G KIRBY* Deputy Chairman GRAHAM W BURKE* Managing Director PETER FOO* Finance Director PETER HARVIE* Chairman, Austereo Group Limited * Photograph in Board of Directors’ Section SIMON PHILLIPSON TIM CARROLL PETER DAVEY General Counsel Chief Marketing Director Managing Director, Corporate Development COMPANY SECRETARIES CORPORATE MANAGEMENT PHILIP S LEGGO ANITA COX Group Company Secretary, Age 52 Human Resources Manager A Chartered Accountant holding SHAUN DRISCOLL a Bachelor of Business Studies Co Company Secretary from Royal Melbourne Institute of & Group Manager Corporate Technology and is a Fellow of the Services Australian Institute of Company Directors. Mr Leggo has over 20 LEE EWE years experience in the media General Manager Risk Assessment and entertainment industries, is a & Compliance member of the Company’s Executive Committee and a Secretary and PETER HARRIS Director of all of Village Roadshow’s Corporate Financial Controller major subsidiaries. ANDREW HUTCHINSON SHAUN L DRISCOLL General Manager Group Tax Co Company Secretary & Group DAVID KINDLEN Manager Corporate Services, Group Manager IT & T Age 51 Holds a Bachelor of Arts and Bachelor of Laws from University of Natal and is a Fellow of the Institute of Chartered Secretaries. Mr Driscoll has diverse industry experience including over 15 years with Village Roadshow, is a Secretary of all of Village Roadshow’s subsidiaries and associated entities and a Director of Village Roadshow’s wholly owned subsidiaries. 16 VILLAGE ROADSHOW LIMITED Financial Report VILLAGE ROADSHOW LIMITED ABN 43 010 672 054 CONTENTS 18 DIRECTORS’ REPORT 66 15. TRADE AND OTHER PAYABLES 23 AUDITOR’S INDEPENDENCE DECLARATION 66 16. INTEREST BEARING LOANS AND BORROWINGS 24 REMUNERATION REPORT 67 17. PROVISIONS 34 CORPORATE GOVERNANCE 68 18. OTHER LIABILITIES 38 INCOME STATEMENT 68 19. CONTRIBUTED EQUITY 39 BALANCE SHEET 70 20. RESERVES AND RETAINED EARNINGS 40 CASH FLOW STATEMENT 71 21. MINORITY INTERESTS 41 STATEMENT OF CHANGES IN EQUITY 71 22. CONTINGENT LIABILITIES AND ASSETS 42 NOTES TO THE FINANCIAL STATEMENTS 72 23. EXPENDITURE COMMITMENTS 42 1. SUMMARY OF SIGNIFICANT ACCOUNTING 74 24. SUPERANNUATION COMMITMENTS POLICIES 74 25. DIRECTOR AND EXECUTIVE DISCLOSURES 49 2. REVENUE AND EXPENSES 81 26. SHARE BASED PAYMENT PLANS 51 3. EARNINGS PER SHARE 87 27. REMUNERATION OF AUDITORS 52 4. INCOME TAX 87 28. EVENTS SUBSEQUENT TO REPORTING DATE 54 5. DIVIDENDS PAID AND PROPOSED 88 29. INTERESTS IN JOINTLY CONTROLLED 54 6. CASH AND CASH EQUIVALENTS OPERATIONS 55 7. TRADE AND OTHER RECEIVABLES 89 30. SEGMENT REPORTING 55 8. INVENTORIES 91 31. DISCONTINUED OPERATIONS 56 9. INTANGIBLE ASSETS AND GOODWILL 93 32. FINANCIAL INSTRUMENTS (INCLUDING