content_image/187989.jpg content_image/187990.jpg
## 11 INVESTMENTS IN ASSOCIATES (continued) 

## (b) Investments in associates – detailed information: Village Roadshow Entertainment Group Limited (“VREG”): (continued) 

## (i) Nature of Relationship and ownership percentage: (continued) 

Subject to the film performance of VREG films and available free cash flow, the VRL group is entitled to receive approximately USD 6 million p.a. in cash dividends on the redeemable equity shares, as they earn a 5% p.a. cash dividend (which are accrued if not received in cash) and 9% p.a. payment in kind. In the year to 30 June 2014, no cash dividends were received from VREG, (2013: USD 3.9 million (A$3.8 million) cash dividends received, which were included as equity-accounted profits from VREG in the year ended 30 June 2013). The VRL group results only include cash dividends received from VREG. 

The VREG Board is the ultimate decision-making body of VREG, however the provisions of the VREG Shareholders Agreement provide that most decisions regarding relevant activities of VREG are recommended to the Board by an advisory committee established under the Shareholders Agreement (“Advisory Committee”). The VRL group does not have control of either the VREG Board or Advisory Committee. Based on this, it has been determined that the VRL group does not control VREG in accordance with AASB 10: Consolidated Financial Statements , however the VRL group does have significant influence over VREG in accordance with AASB 128: Investments in Associates . 

Therefore, the investment in VREG is equity-accounted, and as a result of the significant negative net asset position of VREG, the carrying value of the shareholding, including the redeemable equity shares, is fully provided against, so that the VRL group has no carrying value for accounting purposes. It is noted that VREG’s film rights are recorded in its accounts (in non-current assets) at amortised cost, as required under IFRS, which is significantly less than the market value of these film rights. 

## (ii) Principal Place of Business and Country of Incorporation: 

VREG was incorporated in the British Virgin Islands, and its principal place of business is Road Town, Tortola, British Virgin Islands. 

## (iii) Dividends Received: 

In the year ended 30 June 2014, the VRL group did not receive any dividends from VREG (2013: $3.8 million received). 

<img src='content_image/187989.jpg'>

The summarised financial information shown above for 2014 is based on the unaudited management accounts of VREG for the year ended 30 June 2014, as the audited accounts are not yet available. 

The VRL group’s redeemable equity shares are included in VREG’s non-current liabilities shown above, along with balances due on the film finance facility, and VREG’s mezzanine debt. 

The gain on sale shown above represents a gain on sale, in the first half of the 30 June 2014 financial year, of a one-sixth interest in future cash flows relating to 74 films, with proceeds used to reduce VREG’s debt. 

## (c) Investments in associates – aggregated information – Other Associates: 

## (i) Aggregated Financial Information – Other Associates: 

<img src='content_image/187990.jpg'>

## (d) Contingent liabilities of associates: 

Share of contingent liabilities incurred jointly with other investors – refer Note 22 for disclosures. 

