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DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007

The directors present their report
together with the financial report of
Amalgamated Holdings Limited
(“Company” or “Parent Entity”) and
the consolidated entity (“Group”), being
the Company and its controlled entities,
for the year ended 30 June 2007 and
the auditors’ report thereon.

CONTENTS OF
DIRECTORS’ REPORT

Page

Directors
Directors’ meetings
Company Secretary
Principal activities
Significant changes in the

state of affairs
Operating and financial review
Review of operations by division
Strategic plans by division
Dividends
Events subsequent to

reporting date
Likely developments
Directors’ interests
Tax consolidation
Indemnification and insurance

of directors and officers

Officers who were previously
partners of the audit firm
Remuneration report – audited
Corporate governance

statement
Auditor independence
Non-audit services provided

by KPMG
Rounding off

26
26
26
26

27
27
29
29
30

30
30
30
31

31

31
31

40
44

44
44

DIRECTORS

The directors of the Company in office at any time during or since the end of the
year are:

Mr AG Rydge (Chairman);
Mr AJ Clark (lead independent director);
Mr TC Ford;
Mr RM Graham;
Ms M Hellicar;
Mr JA O’Neill (appointed 14 December 2006); and
Mr DC Seargeant (Managing Director).

Particulars of the qualifications, experience and independence status of each director,
as at the date of this report, are set out in pages 10 and 11 of the Annual Report.

DIRECTORS’ MEETINGS

The number of directors’ meetings (including meetings of committees of directors)
and the number of meetings attended by each of the directors of the Company
during the financial year are:

Full Board
of Directors
meetings
Audit
Committee
meetings
Nomination and
Remuneration
Committee
meetings
Number of meetings held: 10 4 5
Number of meetings attended:
AG Rydge 10
AJ Clark 10
TC Ford 10
RM Graham 10
M Hellicar 10
JA O’Neill
(appointed 14 December 2006) 4
DC Seargeant 10
4
4
—(a)
4
—(a)
—(a)
3(b)
5
5
—(a)
5
—(a)
—(a)
4(b)

(a) Reflects non-requirement to attend meetings.
(b) Attended committee meetings by invitation.
COMPANY SECRETARY

Mr GC Dean CA, ACIS was appointed to the position of Company Secretary for
Amalgamated Holdings Limited in December 2002. GC Dean was Accounting
Manager for the Company (2001 – 2002) and was previously employed by an
international mining corporation and a regional accounting practice. GC Dean is
a Chartered Accountant and a member of Chartered Secretaries Australia.

PRINCIPAL ACTIVITIES

The principal activities of the Group during the course of the year were:

• motion picture exhibition in cinemas and drive-in theatres;
• ownership of cinema, drive-in, office and retail properties;
• operation of hotels, resorts and restaurants and ownership of hotel properties;
• ownership and operation of Thredbo Alpine Resort;
• ownership and operation of Featherdale Wildlife Park;
• ownership and operation of the State Theatre, Sydney;
• ownership and operation of Pier 26 Bar and Café, Sydney;
• supply of theatre and film laboratory equipment;
• operation of a film processing laboratory and post-production facility; and
• investment in shares in various listed and unlisted companies.
During the year, the Group completed the sale of the Pier 26 Bar and Café business.
Further details of this transaction are outlined in the significant changes in the state of
affairs section.

There were no other significant changes in the nature of the activities of the Group during the year.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

The significant changes in the state of affairs of the Group during the year are outlined below:

•
as announced on 3 April 2007, the Group sold its investment in Village Roadshow Limited. The consideration received
was $22,190,000 and the profit before tax totalled $14,810,000:
•
as announced on 8 May 2007, the Group disposed of the Pier 26 Bar and Café business. The sale was consistent with
the strategy implemented by the Group to divest those assets that are considered to be non-core; and
•
as announced on 8 May 2007, the Group acquired hotel properties at Cronulla and Bankstown. The total purchase price
of the two hotels totalled $46,000,000.
Subsequent to 30 June 2007, the Company has announced the sale of the Group’s 50% shareholding in Roadshow Distributors
Pty Limited. Prior to the sale, Roadshow Distributors Pty Limited was an associate of the Group. Further details relating to this
transaction are outlined within the events subsequent to reporting date section of this report.

OPERATING AND FINANCIAL REVIEW

Overview of the Group

The Group achieved a normalised result, being profit before individually significant items and income tax, of $81,914,000 (2006:
$73,693,000) being 11.2% above the prior year result. This increase in normalised earnings was the result of increased earnings
from Cinema Exhibition International, Thredbo Alpine Resort and property.

2007 2006
Normalised
result
Individually
significant
items Total
Individually
Normalised significant
result items Total
$’000 $’000 $’000 $’000 $’000 $’000
Entertainment
Cinema Exhibition Domestic 36,667 (2,590) 34,077 35,969 1,154 37,123
Cinema Exhibition International
Hospitality & Leisure
1,526 (3,300) (1,774) (3,808) (4,433) (8,241)
Hotels 25,107 — 25,107 24,586 170 24,756
Thredbo Alpine Resort 13,312 (1,424) 11,888 10,634 — 10,634
Leisure/Attractions
Entertainment Technology
771 — 771 1,654 — 1,654
Atlab Holdings Pty Limited 2,705 — 2,705 2,976 — 2,976
Technology – other
Strategic Investments
313 — 313 846 — 846
Roadshow Distributors Pty Limited
Other
15,112 — 15,112 16,836 — 16,836
Available-for-sale investments 430 20,356 20,786 616 5,759 6,375
Property 8,415 — 8,415 3,126 — 3,126
Unallocated revenues and expenses (10,676) — (10,676) (9,841) — (9,841)
Discontinued operations 1,025 7,476 8,501 (261) — (261)
Finance revenue
Finance costs
94,707
1,312
(14,105)
20,518
—
—
115,225
1,312
(14,105)
83,333 2,650 85,983
1,583 — 1,583
(11,223) — (11,223)
Normalised result 81,914 20,518
Income tax expense
Income tax (expense)/benefit from discontinued operations
102,432
(19,928)
(333)
73,693 2,650 76,343
(17,547)
712
Minority interest
82,171
24
59,508
(67)
Net profit 82,195 59,441