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## CORPORATE SOCIAL RESPONSIBILITY, SUSTAINABILITY AND DIVERSITY (continued) 

since 2010 and devised for the Company by the independent consultant Mercer Australia Pty. Ltd. 

In accordance with the requirements of the Workplace Gender Equality Act 2012  the Company lodged its annual compliance report on 28 May 2014 with the Workplace Gender Equality Agency. A copy of the report can be accessed from the Company’s website at www.villageroadshow.com.au . 

## SECURITIES TRADING POLICY 

All Directors have a written contractual obligation to the Company to immediately advise the Company of all changes to their interests in shares, options and debentures, if any, in the Company and its associates for the timely reporting of any changes to ASX by the Company Secretaries. 

In addition to all Directors of the Company, all members of the Executive Committee and other key corporate and divisional executives of the Village Roadshow group who are or may be involved in material transactions concerning the Company are included in the definition of “Designated Officers”. These Designated Officers and their related parties are precluded from dealing in securities of the Company during the periods one month prior to the release date of the half-year profit announcement and one month prior to the release date of the full financial year profit announcement, until commencement of trading on the day after the relevant announcement (a “Closed Window”). 

Outside of those Closed Window periods, no Designated Officers may deal in securities of the Company when in possession of any information which, if made publicly available, could reasonably be expected to materially affect the price of the Company’s securities, whether upwards or downwards. Prior written approval must be obtained from the Company Secretaries by any Designated Officer who wishes to deal in the Company’s securities, and legal advice will be obtained by the Company Secretaries on behalf of the Designated Officer in circumstances where any doubt exists. 

In addition, the Company’s Key Management Personnel (“KMP”), including all Directors, are precluded from dealing in securities in the Company during any Closed Window or other ‘black out’ period where that KMP is in possession of any important unpublished information about a potential transaction which, if made publicly available, could reasonably be expected to materially affect the price of the Company’s securities, whether upwards or downwards. Prior written permission via a Clearance Notice to trade in the Company’s securities must be obtained by such KMP. The Company’s Security Trading Policy was provided to ASX in December 2010 and is available on the Company’s website. 

All Directors of the Company, and of the Village Roadshow group of companies (‘the Group’), are required to provide a standing notice, updated as appropriate, giving details of the nature and extent of their ‘material personal interests’ in the affairs of the Company and the Group upon appointment as a Director. All notices are tabled and recorded in the minutes of the Directors’ meeting and entered into a register which is open for inspection by all Directors, and is available to all future incoming Directors. 

The Company has an incentive remuneration hedging policy which prohibits the hedging by any member of the Company’s KMP and their closely related parties of any incentive remuneration, including any equity award, which limits the exposure of that KMP officer to economic risk relating to their unvested or restricted remuneration. 

## RISK MANAGEMENT 

The Board is responsible for the approval and review of the group’s risk management and internal controls framework and policies in accordance with its Group Risk Management policy. However management of risk and the implementation of appropriate controls to mitigate such risks is the responsibility of management. 

To assist the Board in discharging its responsibilities in relation to risk management, the Board has delegated the recognition and management of risk to the Audit & Risk Committee in accordance with its Charter. 

The Company’s formal Risk Management Methodology incorporates a holistic and structured approach to the identification and mitigation of business risks by key business units. This standardised risk approach covers strategic, operational, reputational, health, safety and environment, compliance and financial risks of each of the Company’s strategic business units. The accountability for managing such key risks rests with the CEO and CFO of each business unit, including Corporate Head Office. In accordance with the Risk Management Methodology, formal risk assessments are conducted at least annually, with reporting to the Audit & Risk Committee on major risks and action plans. 

This internal controls process includes reporting on all material financial and non-financial risks across all business units. Detailed sign-offs by key process owners and internal control management questionnaires are completed by all business units bi-annually, including as part of the 

Company’s half-year and full-year financial reporting procedures. To the extent that the Company has any material exposures to economic, environmental and social sustainability risks, these are outlined annually in the Company’s operating and financial review as part of the Directors’ Report to shareholders. Annual updates on the Company’s sustainability and community and charitable endeavours are provided on the Company’s website. 

The Company’s financial structure includes a number of covenants to various lenders, requiring a structured level of monitoring and management to ensure compliance. The Company’s Treasury Risk Management Policy articulates the recognition, measurement and management of interest rate risk, foreign exchange exposure, hedging, credit risk, liquidity levels and monitoring of economic and financial conditions. The parameters of all policies, including the Treasury Risk Management Policy, are periodically reviewed by the Audit & Risk Committee to ensure they remain appropriate and address current issues. 

The Company’s Group Internal Audit function, which is independent of all operating business units, performs regular internal audits on key areas of risk within the business to verify that the internal control framework is adequate and remains effective. In addition, projects conducted by Internal Audit also monitor the compliance with policies adopted by the Board, including compliance with the relevant Delegation of Authority documents to verify that the policies adopted by the Board are implemented. 

The Internal Audit Plan, agreed with management, is approved by the Audit & Risk Committee. A summary of key internal audit findings, and control weaknesses not adequately addressed by management, are reported directly to the Audit & Risk Committee. In addition independent external projects are conducted on a regular basis by specialist contractors reviewing and making recommendations for improvement on specific areas in key businesses within the Company. 

The Company’s Management, Risk and Compliance Committee monitors the implementation and effectiveness of sound governance policies and procedures across the Group in line with ASX Recommendations. Such policies and procedures include the risk management and internal controls framework including the appropriate insurance policies for the insurable risks associated with the Company’s businesses, the code of conduct and the compliance process adopted by management. This Committee is supported by various divisional Management, Risk and Compliance Committees with divisional management having on-going day-to-day control of business unit risks and the implementation of the necessary action plans. These divisional Management, Risk and Compliance Committees report at least bi-annually on their divisional risk management, compliance programs and governance processes appropriately tailored to their specific industries, to provide effective management of all relevant matters. 

The responsibilities of the Committee include the formulation of annual Compliance Programs and the co-ordination and monitoring of such programs to provide timely implementation and review of action plans. The Committee reports at least bi-annually on all material aspects of such risk and compliance programs to the Audit & Risk Committee, and in writing to the Co-Chief Executive Officers and Chief Financial Officer on the appropriateness and effectiveness of these programs. 

During the financial year the members of this Committee were: 

Shaun L. Driscoll (Chair) Simon T. Phillipson (Deputy Chairman) Clark J. Kirby Peter A. Harris Alistair W. Bennallack Julie E. Raffe (by invitation) 

The Board also receives bi-annually a signed, written statement from the Co-Chief Executive Officers and the Finance Director that the financial statements in their opinion give a true and fair view in all material respects of the Company’s financial condition and that it’s operational results are in accordance with accounting standards, that this statement is based on a sound system of risk management and internal compliance and control which implement the policies adopted by the Board, and that the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects. 

## COMPLIANCE WITH ASX CORPORATE GOVERNANCE COUNCIL RECOMMENDATIONS 

In order to assist readers to follow where the various ASX Recommendations are referenced in this annual report, a convenient reconciliation of the ASX Recommendations against the Company’s corporate governance practices – with specific heading and page references – is available on the Company’s website at www.villageroadshow.com.au  in the Corporate Governance section. 

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