beyond international annual report 2008 · 4 beyond international annual report beyond...

Beyond International Annual Report 2008

2 Beyond International Annual Report Beyond International Annual Report 3

Chairman’s Report 05

Managing Director’s Report 06

Corporate Governance 10

Director’s Report 14

Auditor’s Independence Declaration 23

2007 Financial Notes and Accounts 24

Notes to the Financial Statements 31

Director’s Declaration 77

Audit Opinion 78

Shareholder Information 80

Corporate Directory 82

Contents


Chairman’s Report

Beyond achieved most of its key financial objectives including the complete repayment of all bank debt, a 15 percent increase in Profit After Tax, a 15 percent increase in Earnings Per Share and a 25 percent increase in Dividends per Share despite the difficult and volatile financial markets of the past year. During this time Beyond was also the target of three unsuccessful public takeover offers and completed the sale and leaseback of its Artamon, NSW, production facility.

In the year ending 30 June, 2009 the Directors expect a combination of a more favourable $A/$US exchange rate, increased sales revenue from existing operations and acquisitions to grow Operating Revenue, EBITDA, Net Profit after Tax and Earnings per Share within our longer term target range of 15-20 percent per annum. We also expect to increase Dividends per share by 20 percent to 6 cents for the 2008/9 financial year.

In 2008/9 we will establish a new Los Angeles based television production capacity and invest further in Beyond Home Entertainment’s operations in Australia. Both of these business units are expected to contribute increased earnings in the 2009/10 financial year and thereafter.

Beyond will also continue its investment in the upgrading of our proprietary Rights Licensing System, content digitising, inter-office data processing systems as well as new computer hardware and software upgrades to improve operational efficiencies

and enhance the ‘scale-up’ capacity of Beyond’s management information systems and Beyond Distribution’s sales and content acquisition operations based in Dublin with offices in London and Sydney.

Corporate acquisition opportunities are usually originated by trade relationships and regularly presented to the Directors. Beyond completed two small acquisitions in 2007/08 and another in August 2008. This deal flow may increase and acquisition terms may improve if the economy and financial markets stay difficult for some time. Beyond is well placed to make further acquisitions provided they satisfy the Directors established strategic, management and financial criteria.

In the six months ending 31 December, 2007, Beyond received three public takeover offers. The highest bid was $A1.25 cash per share which failed to achieve sufficient shareholder acceptance to satisfy its bid conditions and therefore lapsed. This activity has left between 20 and 20 percent of Beyond’s total issued share capital in the hands of unsuccessful bidders.

Directors expect these shares to be acquired by stronger strategic investors or industry participants. This situation may evolve and clarify quickly over the next few weeks.

These various public takeover offers despite their failure to attract shareholder acceptance did highlight the unique position of Beyond as the only ASX listed television production

and distribution business. There are many similiar companies publically listed in the US and the UK. However the lack of comparative listed companies in Australia, our small market capitalisation and the relative lack of share liquidity in Beyond results in a lack of research reports and stockbroker interest. This is unlikely to change in the short term.

The Directors would like to acknowledge our appreciation for the efforts and contributions of all our staff and associates at Beyond’ offices in Dublin, London, Los Angeles, Melbourne, San Francisco, Washington D.C and Sydney. We operate in many different countries and time zones which makes the goodwill, courtesy and professionalism of everyone crucial to maintaining a successful and positive working environment. This teamwork continues to be a key factor in Beyond’s success and is recognised as a major asset of the Company.

For and on behalf of the Board of Directors,

Ian Ingram

Chairman. London. 6 Deptember, 2008.

On behalf of the Board of Directors I present the Beyond International Limited (ASX:BYI) Annual Report for the financial year ending 30 June, 2008.


Managing Director’s Report

Operating revenue declined by $6,232,000 (to $62,194,000) due to the closure of the feature film sales division, the exit from high turnover/low margin drama production, and the substantial decline in the US$ against the A$ during the year.

In June 2007 one Australian dollar bought 82 US cents – and in June 2008 it bought 96 US cents. This is a decline in the value of the US currency of 17%. At its peak of 98 cents the Australian dollar was the strongest it had been for over 20 years.

Revenue from non-Australian sources was $36,183,000 being 53% of total revenue for the year ($43,741,000, 64% of total revenue for the 2007 year). This shift is as a result of the acquisition of the Beyond Home Entertainment business and a delay in the commencement of television productions in the USA.

Operating EBITDA has remained steady at $12,337,000 and operating EBIT has increased by $513,000 to $7,037,000. The operating EBITDA margin has improved from 17.7% to 19.8% and the operating EBIT margin has improved from 9.5% to 11.3% of operating revenue.

Net cash flows from operating activities were $7,897,000 (2007: $7,102,000) excluding takeover costs of $1,200,000.

Total bank debt has reduced from $1,696,000 at 30 June 2007 to zero at 30 June 2008.

Cash on hand has increased to $6,155,000 (2007: $3,055,000) including the proceeds from the sale of the property at Artarmon, which realised a profit of $1.66 million.

During the 2007/08 financial years the Company was the target of three public takeover offers which our shareholders ultimately rejected. This activity took place over a period of 9 months to December 2007 and resulted in pressure on the management and Board resources available to the Group as well as the payment of $1.2 million in break fees and legal fees.

Television Production and Copyright Segment.

Segment revenue declined by $6,911,000 (16%) to $35,915,000 from $42,826,000 in 2007 due to the significant strengthening of the Australian dollar against the US dollar and delays in commencement of production for a number of television series in the USA and Australia. In 2008 foreign sourced income totalled 73% of total segment income compared to 67% in 2007.

Operating earnings before tax of the segment has declined by 7.5% to $9,433,000 compared to $10,203,000 in 2007. However, due to effective cost management the net margin has improved to 26% (2007: 23%) despite increased program development costs.

In the twelve months to 30 June 2008 the Group’s net profit increased by 15% to $4,992,000. This is in line with the guidance issued to the Australian Stock Exchange during the last financial year by the Company and includes the net impact of takeover costs and the sale of the Artarmon premises.

In addition to these programs the company has acquired the rights to a number of television series that are internationally marketable including: Big City Broker, Jetstream, The Paper and Numberjacks.

Revenue from DVD sales increased by $2,184,000 to $9,259,000 (2007: $7,075,000) as a result of the successful release of Lexx, Andromeda, Three Stooges, South Side Story, and Mythbusters and many other titles.

Outlook

The Company is in a robust financial position with a solid balance sheet, no bank debt and strong operating cash flows.

a. Corporate Acquisitions

As part of our overall strategy, we continue to pursue synergistic acquisition opportunities that supplement the Company’s growth prospects. During the 2008 financial year Beyond concluded two separate corporate acquisitions in Australia:

a. Eurocam (acquired September 2007).

A television production company that is primarily focused on the production of sponsor-supported sports programming and commercials. Major clients include Red Bull and Cycling Australia.

This acquisition will lead to a broadening of the Company’s customer base locally and internationally. The market for sponsor-supported programming is growing and the Eurocam business will benefit from the support of a larger media company.

b. Force Entertainment (May 2008)

The remaining 49% of the shares in Force Entertainment Pty Limited were acquired by Beyond in May 2008 and the name has been changed to Beyond Home Entertainment (BHE). Sales grew by 24% during the 2008 year.

Despite the challenging retail environment currently being experienced in Australia, sales are expected to grow materially over the 2009 financial year both organically and through label acquisitions.

b. Television Program Production

In 2009 we expect to increase the revenue and output of the television production businesses. The Company is expanding its production activities in the United States by establishing operations in Los Angeles. This is in addition

to its existing production offices in Bethesda Maryland and San Francisco. The expansion will enable Beyond to develop programming for new customers with the intention of producing additional long running series such as Mythbusters, Taboo and Beyond Tomorrow.

Beyond continues to look for complementary production businesses as potential acquisition opportunities. However, to date the expectations of vendors as to value has been unrealistic. Should these expectations change in the future due to the difficult economic climate, the Company has identified a number of potential target entities.

Late in the 2008 financial year Beyond assumed the operating activities of the 51% owned Pacific/Beyond and DSP/Beyond subsidiaries wholly into the Company. This will result in improved development and production output in children’s, family and general entertainment programs as

well as cost savings through more efficient use of our production management and facilities resources.

The Company’s production units are continuing to work closely with local and international customers to produce content for exploitation through multiple distribution channels worldwide.

c. International Distribution

The international distribution business (Beyond Distribution) has continued to grow by forging ongoing relationships with program producers throughout the world. We have specifically targeted quality producers in Australia, New Zealand, UK and Canada to provide television product.

During the 2008 financial year Beyond Distribution acquired 260 hours of programming from third party producers.

Television series produced by the Company in 2007/2008 include the following:

Mythbusters;Hot Property; Prototype This;South Side Story;Taboo;Best Backyards;Milly Molly;Lab Rats;The Singing Office; and Backyard Science

as well as a number of one-off programs for Discovery Channel, National Geographic Channel, Tru TV and TLC.

Film, Television and DVD Distribution Segment.

Revenue from this segment increased by $826,000 to $25,809,000 (2007: $24,983,000).

Segment profit has increased by $726,000 to $1,322,000 (2007: $596,000). The 2008 result includes a noncash write down of film distribution rights in the discontinued film division of $512,000 (2007 loss $564,000). Film revenues for the year totalled $475,000 (2007:1,700.000), a decline of $1,225,000.

Revenue from television programs distributed by Beyond Distribution increased by $660,000 to $15,945,000 (2007: $15,205,000) due to the international sales of programs produced by the Company, principally Mythbusters, Beyond Tomorrow, What’s Good For You, Milly Molly, and Backyard Science.

Television Program and Film Library

FACTUAL BEYOND 41%

FACTUAL JV 0%

FACTUAL 3RD PARTY 24%

CHILDREN BEYOND 3%

CHILDREN JV 3%

CHILDREN 3RD PARTY 7%

DRAMA BEYOND 4%

DRAMA JV 13%

DRAMA 3RD PARTY 1%

FEATURE BEYOND 0%

FEATURE JV 0%

FEATURE 3RD PARTY 4%

Total Hours by Genre Total Hours by Source

BEYOND 46%

JV 16%

3RD PARTY 38%


factual 73%

feature film 1%

children’s 17%

drama 9%

Sales by Genre

australia & nZ 22%

europe 40%

north america 29%

rest of world 9%

Sales by Territory

BeYond 58%

JV 12%

3rd partY 30%

Distribution Sales by Producer

Finished Program Sales 2008

The Company expects to meet its dividend target one year ahead of the previously announced target date of 2010

The exploitation of the new acquired content – together with content produced in house – has lead to efficiencies in utilising Beyond’s international sales and marketing resources located in Dublin, London, and Sydney.

The acquisition and sale of returnable longer running series is the focus as there continues to be new content distribution channels to which this product can be sold. Beyond Distribution is well placed to capitalise on opportunities for lucrative volume and package deals with new channels around the world seeking high quality, long running series.

Beyond Distribution is focusing on pre-sale opportunities, leveraging our international connections to finance program production, which in turn helps to grow distribution revenue.

d. Beyond Home Entertainment

The BHE business will grow and develop over the medium term as the quality of the program catalogue improves and the size of the catalogue expands leading to increased market share. Management resources have also been applied to improving financial and operational controls in this business.

BHE has identified a number of market niches to increase sales. BHE will continue to seek opportunities to extend its access to titles and retailers by a combination of organic growth and the acquisition of other DVD labels and related businesses. The specialised motoring label “Serious Business” was acquired in July 2008 and negotiations are well advanced to acquire a supplier of comedy content. Once these acquisitions have been completed management will focus on integrating the acquired labels into the existing BHE business.

BHE will also move to exploit new technologies and media as the market changes. Opportunities in Blu-Ray, video downloads and interactive DVD gaming will continue to be pursued to further develop the business.

BHE is well positioned to exploit its catalogue and its access to content rights through Beyond Distribution and other distributors as the market changes and consumers seek other ways to acquire and consume screen content.

Key Financial Performance Measures

In August 2006 the Directors set a target to increase EBIT and EPS in a range of 15% to 20% per annum. In the two years to June 2008 the Company has achieved an increase in EBIT of 43.5% and EPS of 61%.

For the 2009 financial year these measures are expected to increase in the target range assuming the average and year end Australian $ to US $ exchange rate is no higher than A$0.95.

The Company is also committed to achieving the target range in the 2010 financial year.

Dividend

An interim 2008 dividend of 2 cents per share was paid in April 2008 and the Company will pay a final 2008 dividend of 3 cents per share in November 2008. This brings the total dividend for the 2008 year to 5 cents per share – an increase of 25% above the prior year.

The Company expects to meet its dividend target of 6 cents per share in the 2009 financial year – one year ahead of the previously announced target date of 2010.

Conclusion

The strengthening of the Australian dollar has dampened the growth of the US-based production business, copyright earnings, and the international distribution business in the 2008 financial year.

In the 2009 financial year to date, the Australian currency has weakened against the US$ since it peaked at 98 cents mid July 2008. It is not possible to predict if this downward trend will continue, reverse or stabilise over the balance of the financial year.

There is concern that the general negative economic conditions could impact the Company’s businesses in the coming twelve months – but since July 2008 there has been no sign of a slow down in sales of the BHE or the International distribution divisions.

While BHE has limited exposure to fluctuations in the Australian dollar, the international distribution and copyright business is largely conducted in US dollars and is therefore exposed to currency fluctuations.

The Australian production business may be exposed to a slow down in advertising sales by broadcasters – although in the past any impact has been relatively small.

Despite this, the Company is confident that it has established a strong financial and operational base from which to achieve increased shareholder returns over the medium term and meet its performance targets to 2010.

Mikael Borglund


Corporate Governance Statement 2008

A description of the Company’s corporate governance practices is set out below. They follow the ten core principles that the ASX Corporate Governance Council believes underlie good corporate governance. All these practices, unless otherwise stated, were in place for the entire financial year ended 30 June 2008.

1. The Board lays solid foundation for management and oversight

The Directors’ overriding objective is to increase shareholder value within an appropriate framework which protects the rights and interests of shareholders and ensures the Company and its controlled entities are properly managed through the implementation of sound strategies and action plans and the development of an integrated framework of controls over the economic entity’s resources. The function of the Board of Directors has been clearly defined and includes responsibilities for:

• Approvalofcorporatestrategiesandtheannual budget;

• Monitoringfinancialperformanceincluding approval of the annual and half year financial statements and liaison with the Company’s auditors;

• Appointmentof,andassessmentoftheperformance of the Managing Director

• Monitoringmanagerialperformanceofsenior Executives; and

• Ensuringthesignificantrisksfacingthe Company and its controlled entities have been identified and appropriate and adequate control monitoring and reporting mechanisms are in place.

The Directors’ are committed to the principles underpinning best practice in Corporate Governance, applied in a manner that is most suited to the consolidated entity. This is supported by an overriding organisation-wide commitment to the highest standards of legislative compliance and ethical behavior.

2. The Board is structured to add value

The Board of Directors

The Board operates in accordance with the following principles:

• TheBoardiscomprisedofExecutiveand Non-Executive Directors. At the date of signing the Directors’ Report, the Board consisted of three Non-Executive Directors and one Executive Director. Details of the Directors are set out in the Director’s Report.

• TheChairmanisaNon-ExecutiveDirector and is not the Managing Director.

• EachDirectorbringsrelevantcomplementary skills and experience to the Board. Full details of each Director’s skills, experience and expertise are presented in the Directors’ report.

Beyond International Limited (the Company) and the board are committed to achieving and demonstrating the highest standards of corporate governance. A review of the Company’s corporate governance framework was completed in light of the best practice recommendations released by the Australian Stock Exchange Corporate Governance Council in March 2003. The Company’s framework was largely consistent with the recommendations.

Nomination Committee

The Board has established a Nomination

Committee attended by all Directors,

(Chairman: Ian Ingram).

The primary objective of the Nomination

Committee is to review the membership

of the Board having regard to present and

future needs of the Company and to make

recommendations on Board composition

and appointments.

The Nomination Committee is

responsible for:

• annuallyreviewingtheBoard’srole,

the processes of the Board and Board

Committees, the Board’s performance

and each Director’s performance;

• identifying,andrecommendingtothe

Board, nominees for membership of the

Board, including the Managing Director

and re-election of incumbent Directors;

• identifyingandassessingthenecessary

and desirable competencies and

characteristics for Board membership

and regularly assessing the extent

to which those competencies and

characteristics are represented on

the Board;

• ensuringsuccessionplansareinplaceto

maintain an appropriate balance of skills on

the Board and reviewing those plans; and

• ifappropriate,recommendingthe

removal of Directors.

The Nomination Committee oversees

the process for selecting and appointing

new Directors. As part of this process,

the Nomination Committee considers the

potential Director’s suitability against a

range of criteria including whether the

potential Director:

• hasthenecessaryskills,experienceand

knowledge to perform their duties and

responsibilities as a Director;

• isabletodevotethetimenecessaryto

perform their duties and responsibilities;

• issufficientlyindependent;and

• isabletoworkwiththeothermembers

of the Board.

Board Performance Review

A formal review of the Board is scheduled during the forthcoming year. This review will include the following assessments:

• whethertheDirectorshaveworkedtogether effectively;

• whethertheDirectorshavethenecessaryskills, experience and knowledge to perform their duties; and

• whethertheBoardandBoardCommittees could more effectively review key business and strategic issues.

The performance review will be conducted by the Chairman of the Board. The finding will be discussed with individual Directors and the Board as a whole and the recommendations will then formally be adopted by the Board.

3. The Board promotes ethical and responsible decision making

Code of Conduct

The Company has an established code of conduct that guides Directors, the Managing Director and other key Executives to:

• thepracticesnecessarytomaintainconfidence in the Company’s integrity;

• thepracticesnecessarytotakeintoaccount their legal obligations and the reasonable expectations of their shareholders; and

• theresponsibilityandaccountabilityofindividuals for reporting and investigating reports of unethical practices.

Key issues addressed in the Code of Conduct are:

• theresponsibilitytoserveandprotectthelong-term interests of its shareholders and investors;

• ensuringregulatorycomplianceincludingfinancial disclosure to shareholders and other investors;

• theresponsibilitytomeetemploymentlaws and regulations, and respect the privacy of employee information; and

• ensuringtheCompanyactshonestlyandfairly in all of its dealings.

It is expected that Senior Executives and other

employees will report promptly, and in good

faith, any actual or suspected violation of the

standards set out in the Code of Conduct.

Trading in Company Shares

The purchase and sale of Beyond

International securities by Directors, senior

Executives and employees is only permitted

where the individual:

• doesnotpossessmateriallyprice

sensitive information regarding the

Company which has not yet been made

public; and

• hasfirstinformedtheChairmanor

Managing Director, or in the case of

the Chairman, the Chair of the Audit

Committee.

The Company’s Share Trading Policy also sets

out the Company’s position regarding hedging

of vested and unvested Beyond International

securities. The Policy provides that:

• DirectorsandSeniorExecutivesare

prohibited from entering into hedging

transactions in relation to securities that

have not vested, or that are held subject

to a holding lock or restriction on dealing

under an employee share plan operated

by the Company;

• clearancemustbeobtainedfroman

approving officer prior to entering into a

hedging transaction in relation to vested

securities; and

• notificationofanyhedgingtransactionmust

be made in accordance with the Policy.

The Share Trading Policy prohibits the

Company’s Directors from providing

Beyond International shares as security

for borrowings.

In addition to addressing dealings in Beyond

International securities, the Share Trading

Policy provides that Directors and employees

may only purchase or sell securities of

another listed entity if he or she does not

have information that he or she knows,

or ought reasonably to know, is inside

information in relation to those securities.

The Directors are satisfied that the Group

has complied with its policies on ethical

standards, including trading in securities.

• TheBoardisresponsibleforreviewingthe compensation arrangements for the managing Director and other senior Executives. The Directors are also responsible for reviewing management incentive schemes, share option schemes, superannuation, retirement and termination entitlements, fringe benefit policies and professional indemnity and liability insurance policies.

Executive Directors

The individual performance of the Executive Director is reviewed by the Board of Directors on an annual basis.

Non-Executive Directors

The individual performance of Non-Executive Directors is reviewed by the chairman on an annual basis. All non-executive Directors are regarded as independent. The Company defines independent as independent of the executive management and of business or other relationships which could otherwise detract from the Directors’ ability to act impartially in the Company’s best interests.

Independent Professional Advice

Directors have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company’s expense. Prior written approval of the chairman is required, but this is not unreasonably withheld.


Contractual Items

The organisation has taken all necessary

steps to protect its intellectual property. In all

joint ventures the contractual arrangements

clearly allocate intellectual property rights to

the controlled entity participant.

Managing Director/General Manager of Finance Declaration

At the time that the Managing Director

and General Manager of Finance provide

the Board with the Financial Declaration,

they also state that, in respect of the entire

reporting period:

• TheFinancialDeclarationisfoundedon

a sound system of risk management and

internal compliance and control which

implements the policies adopted by the

Board; and

• TheCompany’sriskmanagementand

internal compliance and control system is

operating efficiently and effectively in all

material aspects.

8. The Board encourages enhanced performance

The Directors have open access to all

relevant information and may meet

independently with management at any

time to discuss areas of interest or concern.

9. Remunerate fairly and responsibly

The Board is responsible for evaluating

and monitoring the performance and

compensation arrangements for the

Chairman, Managing Director and other

senior Executives on an annual basis.

The Company remuneration policies are set

out in full in the Human Resources policy and

procedures manual. These are reviewed and

approved periodically by the Board.

10. Recognise the legitimate interests of stakeholders

The Company has formal policies relating

to its obligations to non-shareholder

stakeholders such as employees, customers

and the community as a whole.

4. The Board safeguards integrity in financial reporting

Managing Director and General Manager of Finance Declaration

The Managing Director and General Manager of Finance declare that the Company’s financial reports present a true and fair view, in all material aspects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards (refer to financial declaration).

Audit Committee

The Board has established an Audit Committee that consists of the following non-Executive Directors:

• IanIngram

• AnthonyLee(chairperson)

The chairperson is an independent Director and is not the chairperson of the board. The audit committee consists of two members rather than the recommended three members; this is due to the size of the board.

The main responsibilities of the audit committee, which are included in the format charter, are:

• reviewandreporttotheBoardontheannual and half-year financial reports and all other financial information published by the Company or released to the market.

• assisttheBoardinreviewingtheeffectiveness of the organisation’s internal control environment covering:

– effectiveness and efficiency of operations

– reliability of financial reporting

– compliance with applicable laws and regulations

• reviewingaccountingpoliciestoensure compliance with the current laws, relevant regulations, accounting standards and other mandatory professional reporting requirements.

• recommendtotheBoardtheappointment, removal and remuneration of external auditors, and review the terms of their engagement and the scope and quality of the audit.

In fulfilling its responsibilities, the audit committee receives reports from management and the external auditors. It also meets with the external auditors at least once a year - more frequently if necessary. The external auditors have a clear line of direct communication at any time to the Chairman of the Audit Committee.

Details of audit committee qualifications and number of meetings attended can be found in the Directors’ report.

External Auditor

The Company’s policy is to appoint an external auditor that clearly demonstrates experience, quality and independence.

PKF has been the external auditor since 26 June 2003. The performance of the external auditor is reviewed annually.

The Company complies with auditor rotation requirements. The lead partner of PKF for the Company’s audit will rotate from the audit team after the June 2010 audit.

An analysis of fees paid to the external auditor, including a breakdown of fees for non-audit services, is provided in Note 3 to the financial statements. It is the policy of the external auditor to provide to the Audit Committee an annual declaration of its independence. The external auditor will also attend the Annual General Meeting and will be available to answer shareholder questions about the conduct of the audit and the preparation and content of the Auditor’s Report.

5. The Board makes timely and balanced disclosures

The Company has an established process to ensure that it is in compliance with its ASX Listing Rule disclosure requirements. This includes monthly confirmation by all general managers that their areas have complied with the continuous disclosure policy below.

Continuous Disclosure

The Company secretary has been appointed as the person responsible for communications with the Australian Stock Exchange (ASX). This person is also responsible for ensuring compliance with the continuous disclosure requirements in

the ASX listing rules and overseeing and co-ordinating information disclosure to the ASX. All information disclosed to the ASX is posted on the Company’s web site as soon as it is disclosed to the ASX.

6. The Board respects the rights of shareholders

The Company places all relevant market announcements on its website and registered shareholders receive an email when there is a material announcement.

The external auditor attends the Annual General Meeting and is available to answer shareholder questions on: the conduct of the audit, the preparation and content of the auditor’s report; the accounting policies adopted by the Company in relation to the preparation of the financial statements; and the independence of the auditor in relation to the conduct of the audit.

7. The Board recognises and manages risk

Policies have been developed that include components relating to oversight, risk profile, risk management and assessing effectiveness of risk oversight and management.

The Board regularly monitors the operational and financial performance of the Company and the economic entity against the budget and other key performance measures. The Board receives from management the key business financial risks that could prevent the economic entity from achieving its objectives and ensure the appropriate controls are in place to effectively manage those risks. Below are some of the key business risks identified and managed by the Company and its controlled entities.

Environmental Occupational Health and Safety

The economic entity recognises the importance of environmental occupational health and safety issues and is committed to the highest levels of performance. Internal environment occupational health and safety committees have been set up within the Company and the progress is monitored periodically.

The Directors’ overriding

objective is to increase

shareholder value

within an appropriate framework


Directors’ Report

1. Directors

The names of Directors in office at any time during or since the end of the financial year are;

Ian Ingram - Chairman

Mikael Borglund - Managing Director

Anthony Lee - Non-Executive Director

Ian Robertson - Non-Executive Director

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

2. Company Secretary

The following person held the position of company secretary at the end of the financial year:

Mr Robert Milne, B Comm. joined Beyond in January 1996 and has worked closely with all areas of the Company’s Film, Television, Distribution and Production divisions. Mr Milne is also the General Manager of Finance for the Company, and was appointed Company Secretary on 1 December 2003.

3. Principal activities of the economic entity

The principal activities of the economic entity during the financial year were television program production and international sales of television programs and feature films. There was no significant change in the nature of those activities during the financial year.

4. Operating results

The consolidated profit attributable to members of the Company for the financial year was $4,992,000 (2007: $4,340,000).

5. Dividends

An interim 2008 dividend of 2 cents per share was paid in April 2008 and the Company will pay a final 2008 dividend of 3 cents per share in November 2008. This brings the total dividend for the 2008 year to 5 cents per share – an increase of 25% over the prior year.

6. Review of operations

In the twelve months to 30 June 2008 the Group’s net profit increased by 15% to $4,992,000. This is in line with the guidance issued to the Australian Stock Exchange during the last financial year by the Company and includes the net impact of takeover costs and the sale of the Artarmon premises.

Operating revenue declined by $6,232,000 (to $62,194,000) due to the closure of the feature film sales division, the exit from high turnover/low margin drama production, and the substantial decline in the US$ against the A$ during the year.

In June 2007 one Australian dollar bought 82 US cents – and in June 2008 it bought 96 US cents. This is a decline in the value of the US currency of 17%. At its peak of 98 cents the Australian dollar was the strongest it had been for over 20 years.

Revenue from non-Australian sources was $36,183,000 being 53% of total revenue for the year ($43,741,000, 64% of total revenue for the 2007 year). This shift is as a result of the acquisition of the Beyond Home Entertainment business and a delay in the commencement of television productions in the USA.

Operating EBITDA has remained steady at $12,337,000 and operating EBIT has increased by $513,000 to $7,037,000. The operating EBITDA margin has improved

Your Directors present their report on the Company and its controlled entities for the financial year ended 30 June 2008.

Film, Television and DVD Distribution Segment.

Revenue from this segment increased by $826,000 to $25,809,000 (2007: $24,983,000).

Segment profit has increased by $726,000 to $1,322,000 (2007: $596,000). The 2008 result includes a noncash write down of film distribution rights in the discontinued film division of $512,000 (2007 loss $564,000). Film revenues for the year totalled $475,000 (2007:1,700.000), a decline of $1,225,000.

Revenue from television programs distributed by Beyond Distribution increased by $660,000 to $15,945,000 (2007: $15,205,000) due to the international sales of programs produced by the Company, principally Mythbusters, Beyond Tomorrow, What’s Good For You, Milly Molly, and Backyard Science.

Revenue from DVD sales increased by $2,184,000 to $9,259,000 (2007: $7,075,000) as a result of the successful release of Lexx, Andromeda, Three Stooges, South Side Story, and Mythbusters and many other titles.

7. Significant changes in the state of affairs

There were no significant changes in the state of affairs of the economic entity during the financial year ended 30 June 2008.

8. Matters subsequent to the end of the financial year

On 31 July 2008, the economic entity acquired 100% of the business assets of Bentran Pty Ltd (trading as Serious Business TV). The cost of the acquisition is $450,000 in cash and two earn out payments which are dependent on sales revenue for the financial year-ending 30 June 2009 and 30 June 2010 respectively. The first instalment was paid on 31 July 2008 for $300,000.

The only tangible asset acquired in the transaction was inventory. As at the date of this financial report, no fair values have been calculated for inventory and other intangibles including goodwill. It is expected the acquired business will contribute revenues of $3,121,000 during the financial year-ending 30 June 2009.

On 28 August 2008 the company declared

a final dividend of 3 cents per share to be

paid in November 2008.

9. Likely developments and expected results of operations

In August 2006 the Directors set a target to

increase EBIT and EPS in a range of 15%

to 20% per annum. In the two years to

June 2008 the Company has achieved an

increase in EBIT of 43.5% and EPS of 61%.

For the 2009 financial year these measures

are expected to increase in the target

range assuming the average and year end

Australian $ to US $ exchange rate is no

higher than A$0.95.

The Company is also committed to

achieving the target range in the 2010

financial year.

The Company expects to meet its dividend

target of 6 cents per share in the 2009

financial year – one year ahead of the

previously announced target date of 2010.

from 17.7% to 19.8% and the operating EBIT margin has improved from 9.5% to 11.3% of operating revenue.

Net cash flows from operating activities were $7,897,000 (2007: $7,102,000) excluding takeover costs of $1,200,000.

Total bank debt has reduced from $1,696,000 at 30 June 2007 to zero at 30 June 2008.

Cash on hand has increased to $6,155,000 (2007: $3,055,000) including the proceeds from the sale of the property at Artarmon, which realised a profit of $1.66 million.

During the 2007/08 financial years the Company was the target of three public takeover offers which our shareholders ultimately rejected. This activity took place over a period of 9 months to December 2007 and resulted in pressure on the management and Board resources available to the Group as well as the payment of $1.2 million in break fees and legal fees.

Television Production and Copyright Segment.

Segment revenue declined by $6,911,000 (16%) to $35,915,000 from $42,826,000 in 2007 due to the significant strengthening of the Australian dollar against the US dollar and delays in commencement of production for a number of television series in the USA and Australia. In 2008 foreign sourced income totalled 73% of total segment income compared to 67% in 2007.

Operating earnings before tax of the segment has declined by 7.5% to $9,433,000 compared to $10,203,000 in 2007. However, due to effective cost management the net margin has improved to 26% (2007: 23%) despite increased program development costs.


11. Directors’ meetings

The numbers of meetings of the Company’s Board of Directors and of each Committee held during the financial year ended 30 June 2008 and the number of meetings attended by each Director were:

10. Information on Directors

Director Qualifications & experience

Special responsibilities Directors’ interests in shares of Beyond International Limited

I Ingram BA, Bsc(Econ), Honours Barrister at Law

Chairman of Sealion Capital PLC as well as Chairman of various private venture capital and investment companies. Non-Executive Director of Keybridge Capital Limited (ASX-KBC). Resides in London.

Chairman, member of the Audit Committee, member of the Remuneration Committee, and member of the Nomination Committee.

10,074,681 direct/indirect

M Borglund B.Bus, CA

Extensive management & finance experience. Former member of the board of the Australian Film Institute.

Managing Director, CEO and member of the Nomination Committee.


A Lee BA, MBA

Director of Aberon Pty Ltd, a private investment company, a substantial shareholder in the company.

Non-Executive Director, Chairman of the Audit Committee, member of the Remuneration Committee, and member of the Nomination Committee.


Ian Robertson LL.B. B Comm

Managing Partner, Holding Redlich Sydney, Chairman Ausfilm International Inc, An Advisory Board member of Network Insight (formerly Media & Telecomms Policy Group at RMIT), Director Solar Sailor Holdings Limited an unlisted Australian public company.

Non-Executive Director, Chairman of the Remuneration Committee and member of the Nomination Committee.

60,000 direct/indirect

The particulars of Directors’ interests in shares are as at the date of this report.

Board of Directors Meetings

Audit Committee Meetings

Remuneration Committee Meetings

Nomination Committee Meetings

Director Number Eligible

to Attend

Number Attended

Number Eligible

to Attend

Number Attended

Number Eligible

to Attend

Number Attended

Number Eligible

to Attend

Number Attended

I Ingram 8 8 2 2 2 2 2 2

M Borglund 8 8 - - - - 2 2

A Lee 8 8 2 2 2 2 2 2

I Robertson 8 8 - - 2 2 2 2

In the twelve months to 30 June 2008 the Group’s net profit increased by 15% to $4,992,000


The contracts referred to are currently on foot and variously part performed as to the duration of them. The contracts are terminable by the Company in the event of serious misconduct or non-rectified breach. Only remuneration which is due but unpaid up to the date of termination and normal statutory benefits will be paid in these circumstances.

D) Key Management Personnel Remuneration

The Board undertakes an annual review of its performance and the performance of the Board Committees against goals set at the start of the year. Any performance related bonuses are available to executives of the Company and thus no bonuses

are payable to Non-Executive Directors. Any performance related bonuses will be based on their divisional result exceeding the annual budget set prior to the commencement of the relevant financial year by a minimum of 10%. The Remuneration Committee determines the allocation of the bonus between senior executives and other employees who

have made significant contribution to the economic entity’s performance during the year. Details of the nature and the remuneration of each director of Beyond International Limited and each of the five executives with the greatest authority for the strategic direction and management of the Company and the economic entity are set out in the following tables.

C) Contractual Arrangements – Key management personnel

12. Indemnification and insurance of directors and officers

The company has entered into agreements to indemnify all Directors of the Company named in section 1 of this report and current and former executive officers of the economic entity against all liabilities to persons (other than the company or a related body corporate) which arise out of the performance of their normal duties as Director or executive officer unless the liability relates to conduct involving a lack of good faith. The economic entity has agreed to indemnify the Directors and executive officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity and any resulting payments.

The economic entity paid insurance premiums totaling $38,098.76 in respect of Directors’ and officers’ liability insurance. The policy does not specify the premium of individual Directors and executive officers.

The directors’ and officers’ liability insurance provides cover against all costs and expenses involved in defending legal actions and any resulting payments arising from a liability to persons (other than the Company or a related body corporate) incurred in their position as Director or executive officer unless the

conduct involves a willful breach of duty or an improper use of inside information or position to gain advantage.

13. Remuneration Report

A) Remuneration policy

The broad approach by the economic entity to remuneration is to ensure that remuneration packages:

• properlyreflectindividual’sdutiesandresponsibilities;

• arecompetitiveinattracting,retainingand motivating staff of the highest quality; and

• upholdtheinterestsofshareholders.

The remuneration policies adopted are considered to have contributed to the growth of the Group’s profits and shareholder benefit by aligning remuneration with the performance of the Group. In particular the policies implemented have assisted in:

• drivingnetprofitfrom$2,541,000inFY05 to $4,992,000 in FY08;

• drivingbasicearningspersharefrom4.28 in FY05 to 8.49 in FY08; and

• providingdividendreturnsof5centspershare (FY 05: nil)

B) Remuneration Approach – Non-Executive Directors

Non-Executive Directors are remunerated

from a maximum aggregate amount of

$350,000 per annum.

Current rates effective 1 July 2007 paid to

Non-Executive Directors are :

Chairman $160,000 p.a.

Non-Executive Director

$35,000 p.a.

Additional Duties

Chairman of a board committee

$10,000 p.a.

Member of a board committee

$5,000 p.a.

The Board’s policy is to remunerate

Non-Executive Directors at market rates

from comparable companies having

regard to the time commitments and

responsibilities assumed.

There are no termination payments to

Non-Executive Directors on retirement from

office other than payments relating to their

accrued superannuation entitlements.

Name Position Duration of Contract Period of Notice to Terminate the Contract

M Borglund Managing Director No fixed term Either party may terminate on twelve months notice

J Luscombe General Manager – Productions & Senior Vice President

3 Years On expiry of the contract either party may terminate

P Tehan Manager – Legal & Business Affairs

No fixed term One month notice given by either party

T McGee General Manager – Business Development


F Crago General Manager – Distribution


R Milne General Manager – Finance & Company Secretary



Beyond International Employee Share Plan

The Board has adopted an employee share plan under which employees and Directors of the economic entity may subscribe for shares in the economic entity using funds loaned to them by the economic entity. The board has also adopted a share plan on substantially the same terms for consultants of the economic entity (Consultant Plan). The purpose of the Employee Plan is to:

• assistintheretentionandmotivationof employees and Directors of the economic entity by providing them with a greater opportunity to participate as shareholders in the success of the economic entity; and

• createacultureofshareownershipamongst the employees of the economic entity. The employee share plan was approved by shareholders at the Company’s extraordinary general meeting on 12th April 2006.

912,500 shares are exercisable under the Employee Plan to eligible employees and Directors in the current year, and the economic entity has lent participants the funds necessary to subscribe for those shares. Shares have been issued in accordance with the Employee Plan rules.

Under the Employee Plan rules the Board of the economic entity has the power to decide which full time or permanent part-time employees and Directors of the economic entity will participate in the Employee Plan and the number of shares offered to each participant. The number of shares offered to be issued under the Employee Plan and Consultants Plan in a five year period must not exceed 5% of the total number of issued shares at the time of the offer, disregarding certain share issues.

The shares granted under the Employee Plan may be subject to any restrictions the Board considers appropriate and the Board may implement any procedure the Board considers appropriate to restrict the disposal of shares acquired under the

Employee Plan. The board also has the power to vary or terminate the Employee Plan at any time, subject to the ASX Listing Rules and the Corporations Act 2001.

14. Total Number of Employees

The total number of fulltime equivalent employees employed by the economic entity at 30 June 2008 was 118 as compared with 92 at 30th June 2007.

15. Shares Under Option

At the date of this report, there are no unissued ordinary shares of Beyond International Limited under option.

16. Shares Issued on the Exercise of Options

25,000 shares have been redeemed from the Beyond International Limited employee share option plan during or since the end of the financial year. No further shares have been approved by the Board of Directors under this plan.

17. Environmental Regulations

The economic entity has assessed whether there are any particular or significant environmental regulations which apply to it and has determined that there are none.

18. Rounding of amounts

The economic entity is of a kind referred to in Class Order 98/100, issued by the Australian Securities Commission, relating to the “rounding off” of amounts in the report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

19. Proceedings on behalf of Company

No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

20. Non Audit Services

During the year PKF, the Company’s auditor, has not performed any additional services to their statutory audit services.

If PKF were to provide additional services the Board would consider the non-audit services provided to ensure it was satisfied that the provision of these non-audit services by the auditor is compatible with, and will not compromise the auditor independence requirements of the Corporations Act 2001. In particular it would be ensured that:

• Allnon-auditservicesarereviewedandapproved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• Non-auditservicesprovideddonotundermine the general principles relating to audit independence, as they would not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company, or jointly sharing risks and rewards.

21. Auditors Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included on page 23 in the Directors report.

This report is made in accordance with a resolution of the Board of Directors.

For and on behalf of the Board

Mikael Borglund

Managing Director 28 August 2008 Sydney

Name Salary & Fees Bonus Non-monetary benefits

Superannuation Share based payments

Total

M Borglund $595,361 $62,864 - $13,129 - $671,354

I Ingram $160,000 - - - - $160,000

A Lee $45,872 - - $ 4,128 - $50,000

I Robertson $45,872 - - $ 4,128 - $50,000

Total $847,105 $62,864 - $21,385 - $931,354



Total

J Luscombe $447,452 $288,644 - $13,129 - $749,225

P Tehan $167,981 $14,216 - $13,129 - $195,326

T McGee $190,727 $21,735 - $13,129 - $225,591

F Crago $260,000 - - $13,129 - $273,129

R Milne $167,981 $18,900 - $13,129 - $230,213

Total $1,264,344 $343,495 - $65,645 - $1,673,484



Total

M Borglund $567,775 - - $12,686 - $580,461

I Ingram $160,537 - - - - $160,537

A Lee $45,872 - - $ 4,128 - $50,000

I Robertson $45,872 - - $ 4,128 - $50,000

Total $820,056 - - $20,942 - $840,998



Total

J Luscombe $437,039 $562,113 - $12,686 - $1,011,838

P Tehan $159,135 - - $12,686 - $171,821

T McGee $202,054 $7,500 - $12,686 - $222,240

F Crago $217,346 $35,269 - $12,686 - $265,301

R Milne $145,000 - - $12,686 - $157,686

Total $1,160,574 $604,882 - $63,430 - $1,828,886

Directors of Beyond International Limited

2008

Executive Officers’ Remuneration

2008

2007

2007

Mr Borglund is the only Executive Director employed by Beyond International Limited.


Beyond achieved a 25 percent increase in Dividends per Share despite the difficult and volatile financial markets of the past year


Financial Statements


INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008 BALANCE SHEET FOR THE YEAR ENDED 30 JUNE 2008

The above Income Statements should be read in conjunction with the accompanying notes.

The above Balance Sheets should be read in conjunction with the accompanying notes.

Economic Entity Parent Entity

Notes 2008 2007 2008 2007

$000's $000's $000's $000's

Revenues 3 (a) 62,194 68,426 5,731 5,590

Other income 3 (a) 1,660 - 1,660 -

Royalty expense 7,648 8,513 - -

Cost of goods sold 4,410 3,228 - -

Production costs 24,182 32,066 - -

Administration 4,658 2,744 1,925 1,025

Employee benefits expense 9,552 8,951 1,156 1,087

Finance costs 292 354 186 302

Depreciation and amortisation expense 5,300 5,616 97 99

Provisions 621 784 - 29

Profit before income tax 3 (b) 7,191 6,170 4,027 3,048

Income tax (expense) / benefit 4 (a) (2,041) (1,697) (363) 420

Profit for the year 5,150 4,473 3,664 3,468

Profit attributable to minority equity interest 158 133 - -

Profit attributable to members of Beyond International Limited

4,992 4,340 3,664 3,468

Earning per share: Cents Cents

Basic earnings per share 5 8.49 7.38

Diluted earnings per share 5 8.36 7.27

Dividends per share (cents) 21 5.00 4.00


Notes 2008 2007 2008 2007

$000's $000's $000's $000's

ASSETS Current AssetsCash and cash equivalents 6 6,155 3,055 3,495 1,704

Trade and other receivables 7 16,747 16,382 6,610 5,006

Financial assets 11(b) 850 474 850 474

Inventories 8 1,794 1,908 - -

Other current assets 9 11,708 9,868 117 70

TOTAL CURRENT ASSETS 37,254 31,687 11,073 7,254

Non-Current AssetsTrade and other receivables 7 1,275 323 - -

Investments 10 - - 8,627 5,815

Financial assets 11(a) 520 - - -

Property plant and equipment 12 1,725 6,377 74 4,774

Intangible assets 13 2,523 1,468 - -

Deferred tax assets 4(c) 2,284 3,433 84 559

Other non-current assets 9 2,168 2,908 - -

TOTAL NON-CURRENT ASSETS 10,495 14,509 8,785 11,148

TOTAL ASSETS 47,749 46,196 19,858 18,402

LIABILITIES Current LiabilitiesTrade and other payables 14 6,687 4,462 1,738 398

Short-term borrowings 15 51 1,500 - 1,500

Current tax liabilities 4(d) 1,356 504 965 -

Other current liabilities 17 5,534 4,810 127 25

TOTAL CURRENT LIABILITIES 13,628 11,276 2,830 1,923

Non-Current LiabilitiesLong-term borrowings 15 50 196 - 196

Deferred tax liabilities 4(c) 4,798 5,163 - -

Long-term provisions 16 786 663 - -

Other non-current liabilities 17 267 193 - -

TOTAL NON-CURRENT LIABILITIES 5,901 6,215 - 196

TOTAL LIABILITIES 19,529 17,491 2,830 2,119

NET ASSETS 28,220 28,705 17,028 16,283

EquityIssued capital 18 33,315 33,300 33,315 33,300

Reserves 19 (1,696) 93 144 93

Accumulated losses (2,710) (4,716) (16,431) (17,110)

Parent interest 28,909 28,677 17,028 16,283

Minority equity interest 20 (689) 28 - -

TOTAL EQUITY 28,220 28,705 17,028 16,283


STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 30 JUNE 2008 CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

The above Statements of Changes in Shareholders’ Equity should be read in conjunction with the accompanying notes. The above Cash Flow Statements should be read in conjunction with the accompanying notes.


Notes 2008 2007 2008 2007

$000's $000's $000's $000's

Issued Share Capital 18

Opening balance 33,300 33,447 33,300 33,447

Share buy-back - (145) - (145)

Transaction costs on share buy-back - (2) - (2)

Issue of shares under share option plan 15 - 15 -

Closing balance 33,315 33,300 33,315 33,300

Accumulated losses

Opening balance (4,716) (6,662) (17,110) (18,183)

Profit for the year 4,992 4,340 3,664 3,468

Dividends paid or provided for (2,986) (2,394) (2,985) (2,395)

Closing balance (2,710) (4,716) (16,431) (17,110)

Reserves 19

Employee Share Plan Benefit Reserve

Opening balance 93 22 93 22

Employee Share Plan 51 71 51 71

Closing balance 144 93 144 93

Investments Revaluation Reserve

Opening balance - - - -

Valuation gain taken to equity 96 - - -

Closing balance 96 - - -

Other Equity Reserve

Opening balance - - - -

Acquisition adjustment 6(d) (1,936) - - -

Closing balance (1,936) - - -

Total Reserves (1,696) 93 144 93

Minority Equity Interests 20

Opening balance 28 (105) - -

Profit attributable to minority shareholders 158 133 - -

Disposed of on acquisition of entity 6(d) (875) - - -

Closing Balance (689) 28 - -

Total 28,220 28,705 17,029 16,283


Notes 2008 2007 2008 2007

$000's $000's $000's $000's

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 61,090 64,465 3,001 7,560

Payments to suppliers and employees (53,720) (57,058) (3,055) (8,831)

Interest received 29 49 15 34

Finance costs paid (298) (354) (186) (302)

Income tax paid (404) - - -

Net cash provided by/(used in) operating activities 6(b) 6,697 7,102 (225) (1,539)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (504) (715) (8) (48)

Distribution guarantees paid (434) (490) - -

Distribution guarantees recouped 488 616 - -

Prepaid royalties (1,494) (849) - -

Payment for shares in listed entity (423) - - -

Proceeds from sale of property, plant and equipment 6,425 2 6,425 -

Payment for subsidiary, net of cash acquired 6(d) (2,734) (1,200) (702) (200)

Investment in development projects (225) (249) - -

Net cash flows used in investing activities 1,099 (2,885) 5,715 (248)

CASH FLOWS FROM FINANCING ACTIVITIESRepayment of borrowings (1,696) (2,408) (1,696) (750)

Finance lease principal repayments (44) - - -

Loans advanced to controlled entities - - - (25,970)

Loans repaid by controlled entities - - 953 28,009

Proceeds from share issue 15 - 15 -

Payment for share buy-back - (147) - (147)

Dividend paid (2,971) (2,285) (2,971) (2,285)

Dividend received - - - 3,900

Net cash flows provided by/(used in) financing activities (4,696) (4,840) (3,699) 2,757

Net increase/(decrease) in cash held 3,100 (623) 1,791 970

Cash at the beginning of the financial year 3,055 3,678 1,704 734

Cash at the end of the financial year 6(a) 6,155 3,055 3,495 1,704


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Summary of Significant Accounting Policies

The financial report of Beyond International Limited for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the Board of Directors on 27 August 2008.

Beyond International Limited is a company limited by shares, incorporated and domiciled in Australia whose shares are publicly traded on the Australian Stock Exchange.

The financial report covers the consolidated entity of Beyond International Limited and controlled entities (“the economic entity” and/or “the group”), and Beyond International Limited as an individual parent entity (“the parent entity” and/or “the company”).

(A) Statement of Compliance

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report has been prepared on an accruals basis and is based on historical costs, except where stated. The economic entity has not adopted a policy of revaluing its non-current assets on a regular basis. Non-current assets are revalued from time to time as considered appropriate by the directors and are not stated at amounts in excess of their recoverable amounts.

(B) Basis of Consolidation

A controlled entity is any entity controlled by Beyond International Limited. Control exists where Beyond International Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Beyond International Limited to achieve the objectives of Beyond International Limited. The effects of all transactions and inter-company balances between entities in the economic entity are eliminated in full. A list of controlled entities is contained in note 25 to the financial statements.

Minority equity interest in the results and equity of the controlled entities are shown separately in the consolidated income statement and balance sheet respectively. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Acquisition of minority interest holdings, once control is obtained is recognised in equity as an equity reserve.

Investments in associates where the entity exercises significant influence, but does not have control, are accounted for in the consolidated financial statements using the equity method.

Investments in subsidiaries are carried at cost.

(C) Income Tax

The income tax expense for the year comprises current income tax expense and deferred tax expense.

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (or recovered from) the relevant tax authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

In the current year, the economic entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for the current annual reporting period. These standards as listed below only impacted on the financial statements with respect to disclosure.

AASB 101 ‘Presentation of Financial Statements’

AASB 7 ‘Financial Instruments: Disclosure’

AASB 2008-4 Amendments to Australian Accounting Standards - ‘Key Management Personnel Disclosures’

The following Australian Accounting Standards have been issued or amended and are applicable to the economic entity but are not yet effective. They have not been adopted in preparation of the financial statement at reporting date. This list is not complete however it represents the key standards applicable to the economic entity.

and liabilities and their carrying amounts in the financial statements. Deferred tax assets also arise where amounts have been fully expensed but future deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Tax consolidation

Beyond International Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits, which are immediately assumed by the head entity, being Beyond International Limited. The current tax liability for each group entity is then subsequently assumed by the parent entity.

The tax consolidated group has entered into a tax funding arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Persuant to the funding arrangement, transfers of tax losses or tax liabilities are assumed by the head entity through intercompany loans.

(D) Goods and Service Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority. In these

circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables in the balance sheet are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.

Cash flows are presented in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(E) Revenue recognition

Revenue from operating activities represents revenue earned from the sale and licensing of the economic entity’s products and services, net of returns and trade allowances. Other revenue from outside the operating activities includes interest income on short term investments, proceeds from sale of plant and equipment, net gains on foreign currency transactions, and in the case of the parent entity, management and advisory fees, dividends and other distributions received from controlled entities.

Revenue is recognised to the extent that it is probable that the economic benefit will flow to the economic entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Revenue from Australian and international television production contracts is recognised using the percentage of completion method.

Revenues from international television and feature film licensing contracts are recognised when the programming is able to be delivered and a licence agreement is signed by both parties.

When the contract outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

AASB Amendment Affected Standard(s) Effect of change in Accounting Policy

Application date of standard

Application date for Group

AASB 2007-8 & AASB 2007-10

AASB 101: Presentation of Financial statements: Disclosure and Presentation

No change to accounting policy required. Therefore no impact.

01 January 2009 30 June 2009

AASB 2008-3 & Revised AASB 3

AASB 3 'Business Combinations' and AASB 27 'Separate and Consolidated Financial Statements'

The potential effect of the intial application of the expected Standard has not yet been determined.

01 January 2009 30 June 2009

AASB 2007-3 AASB 8 'Operating Segments' supercedes AASB 114 'Segment Reporting'

The potential effect of the intial application of the expected Standard has not yet been determined.

01 January 2009 30 June 2009



(O) Property, plant and equipment

Property, plant and equipment are measured at cost.

It is the policy of the economic entity to have an independent valuation for property every three years, with annual appraisals being made by the directors.

Depreciation and Amortisation

Depreciation on property, plant and equipment, other than freehold land, is calculated on a straight line basis to write off the net cost or revalued amount over its expected useful life to the economic entity. Estimates of the remaining useful lives are made on a regular basis for all assets, with annual reassessment for major items.

The expected useful lives are as follows:

Buildings 40 years

Plant equipment & leasehold improvements 2 - 15 years

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the Income Statement.

(P) Intangible assets

Goodwill

Goodwill acquired and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Royalty revenue within the Distribution and Film divisions is recognised when received.

Revenues from the sale of DVD inventory is recognised at the time the goods are dispatched.

Where amounts are invoiced before revenue is earned, deferred revenue liability is brought to account.

(F) Borrowing costs

Borrowing costs are recognised as an expense when incurred. Borrowing costs include:

· Interest on bank overdraft and short-term and long-term borrowings

· Finance lease charges

(G) Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(H) Receivables

Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectible amounts or impairment. The following specific recognition criteria must also be met before receivable is recognised:

Production debtors - receivables are recognised as they are due for settlement, within a term no more than 30 days.

Licensing debtors - receivable is recognised once a licence agreement is signed by both parties. Payment terms are usually based upon signature, delivery and acceptance. In certain contracts installment payments may extend over the term of the licence agreement.

A provision for doubtful debts is raised when there is objective evidence that the economic entity will not be able to collect the debts based on a review of all outstanding amounts at the balance date. Bad debts are written off when they are identified.

Patents and licenses

Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful life, which is 20 years.

Rights Licensing System

The Right licensing system has a finite life of 5 years and is carried at cost less any accumulated amortisation and any impairment losses.

(Q) Impairment of assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Income Statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(R) Trade and other payables

These amounts represent liabilities for goods and services provided to the economic entity prior to the end of the financial year and which are unpaid. These amounts are unsecured and are usually paid within 30 days of recognition.

(S) Producer share payables

These amounts represent the amounts due to producers contracted for payment as royalties upon receipt of licensing sales.

(I) Inventories

Inventories are measured at the lower of cost and net realisable value. Inventories represent stock TV footage and DVD stock at cost. As the footage is used it will be included within the production cost of the programme.

(J) Investments

Investments have been brought to account as follows:

Interests in subsidiary companies and trusts

The Company’s interests in listed and un-listed companies and trusts are brought to account at cost and dividends and other distributions are recognised in the Income Statement account when receivable. Controlled entities and associates are accounted for in the consolidated financial statements as set out in note 1 (B).

Where, in the opinion of the Directors, there has been a diminution in the value of an investment, the carrying amount of the investment is written down to its recoverable amount.

Investment in television programmes

The economic entity’s investment in television programmes represents the cost paid to obtain the rights to distribute television programmes not produced by the economic entity. The investment is amortised against the licensing revenues. Each year, the licensing revenue forecasts are reviewed and the amortisation is adjusted accordingly.

(K) Capitalised production costs

Television production costs are capitalised and amortised against future sales revenue. Forecast sales revenues are reviewed regularly and the amortisation is adjusted to reflect the estimates of future licensing revenue of each production. The non-current component represents amounts that will not be amortised within the next twelve months. Where doubt exists as to the ability to recover the expenditure from future sales, the amounts in doubt are provided for in the year in which the assessment is made.

(T) Employee benefits

Wages and salaries, annual leave and sick leave

Liabilities for wages, salaries, annual leave, sick leave and other current employee entitlements have been brought to account and are measured at the amount expected to be paid when the liabilities are settled.

Long service leave

Liabilities for long service entitlements not expected to be paid or settled within 12 months of balance date, are accrued in respect of all employees at the present value of future amounts expected to be paid. This is based on a 2.5% per annum projected weighted average increase in wage and salary rates.

Superannuation

Contributions to employee superannuation plans are charged as an expense as the contributions are paid or become payable.

(U) Share-based payment transactions

Equity settled transactions

The Group provides benefits to employees of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There is currently one plan in place to provide these benefits: the Employee Share Loan Plan.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using the market value of a share on the date which they are granted.

The cost of equity-settled transactions is recognised in the Income Statement over the vesting period.

Capitalised production costs are disclosed in the accounts net of any cash progress payments received on projects. Where such progress payments exceed these costs the net amounts are disclosed as deferred revenue.

(L) Capitalised development costs

Costs of developing new programme concepts, which the directors believe are probable of being recovered from future revenues, are capitalised. Capitalised costs are costed into the production or are written off in the event that the programme does not proceed. These costs are classified as current assets as the costs of developing new programmes are expected to be realised within one year.

(M) Distribution advances and prepaid royalties

Distribution advances for television and feature film distribution rights, and prepaid royalties for the DVD rights, are capitalised at cost as paid, and recouped from future sales on cash receipt.

Where doubt exists as to the ability to recover the expenditure from future sales, the amounts in doubt are provided for in the year in which the assessment is made.

(N) Leases

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incident to ownership of leased non current assets, and operating leases under which the lessor effectively retains substantially all such risks and benefits.

Where property, plant and equipment is acquired by means of finance leases, the present value of the minimum lease payments is recognised as an asset at the beginning of the lease term and amortised on a straight line basis over the expected useful life of the leased asset. A corresponding liability is also established and each lease payment is allocated between the liability and finance charge.

Operating lease payments are charged to the Income Statement on a straight line basis.



(AC) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(AD) Rounding of Amounts

The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in the financial report and directors’ report have been rounded off to the nearest $1,000.

(AE) Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Sections within this financial report whereby estimates and judgements have a material impact are as follows:

•therecoverabilityofDistributionAdvancesand Prepaid Royalties in Note 9 has been assessed using an estimate of future sales for the respective titltes;

•therecoverabilityofCapitalisedDevelopment Costs in Note 9 is assessed based on a judgment as to whether each program will proceed in the forthcoming year(s);

The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects

(i) the extent to which the vesting period has expired and

(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 5).

(V) Borrowings

Loans and borrowings are recorded at their principal amounts. Subequently they are measured at amortised cost using the effective interest method.

(W) Foreign currency translation

Transactions denominated in a foreign currency are converted to Australian currency at the exchange rate at the date of the transaction. Foreign currency receivables and payables at balance date are translated at exchange rates at balance date. Exchange gains and losses are brought to account in determining the profit or loss for the year.

Exchange gains and losses arising on forward foreign exchange contracts entered into as hedges of specific commitments are deferred and included in the determination of the amounts at which the transactions are brought to account. Specific hedging is undertaken in order to avoid or minimise possible adverse financial effects of movements in foreign exchange rates. If the hedging transaction is terminated prior to its maturity date and the hedged transaction is still expected to occur, deferral of any gains and losses which arose prior to termination continues, and those gains and losses are included in the measurement of the hedged transaction.

In those circumstances where a hedging transaction is terminated prior to maturity because the hedged transaction is no longer expected to occur, any previous deferred gains or losses are recognised in the Income Statement at the date of termination. All exchange gains and losses relating to other hedge transactions are brought to account in the Balance Sheet

•CapitalisedProductionCostsinNote9 are calculated using an estimate of future sales on a specified title. The recoverability of this asset is assessed based on a judgement as to whether the initial estimated sales will be reached;

•Goodwillisassessedannuallybasedonan estimate of the value-in-use of the cash generating units to which goodwill has been allocated. The value-in-use calculation requires the economic entity to estimate the future cashflows expected to arise from the cash-generating unit. The calculation also uses an estimated growth rate, and a discount rate in order to calculate present value. Details of these assumed rates are provided in Note 13.

in the same period as the exchange differences on the items covered by the hedge transactions. Costs on such contracts are expensed as incurred.

Exchange gains and losses on the other hedge transactions entered into as hedges of general commitments are brought to account in the Income Statement in the financial year in which the exchange rate changes.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Assets and liabilities of self-sustaining overseas controlled entities and branches are translated at exchange rates existing at balance date and the exchange gain or loss arising on translation is carried directly to a foreign currency translation reserve.

(X) Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Company’s functional and presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the Income Statement.

(Y) Available-for-sale Financial Assets

Shares held in a listed entity are classified as being available-for-sale. These assets were initially recorded at cost and at each

reporting date are revalued to fair value. Gains and losses arising from changes in fair value are recognised directly in the investments revaluation reserve.

The classification of items within this category depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

(Z) Held to maturity financial instruments

The economic entity enters into forward foreign exchange agreements and foreign currency options on production contracts in order to manage its exposure to foreign exchange rate risks. Exchange contracts are brought to account as explained in note 1(W).

(AA) Issued Capital

Ordinary shares are classified as equity. Incremental cost directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(AB) Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

•costsofservicingequity(other than dividends) and preference share dividends;

•theaftertaxeffectofdividendsandinterest associated with dilutive potential ordinary shares that have been recognised as expenses; and

•othernon-discretionarychangesinrevenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Primary Reporting - Business Segments

Primary Reporting - Business Segments

Secondary Reporting - Geographical Segments


2. SEGMENTS

Business segments

The economic entity is organised on a global basis into the following divisions by operational activity:

TV production and copyright

Production of television programming and ownership of television product copyright.

Film, Television, and DVD distribution

International distribution of television programmes and feature films, distribution in Australia of DVDs.

Other

Includes the main operating entity, centralised administrative support services

Notes to and forming part of the segment information

(a) Accounting policies

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories,

to the group comprising legal and business affairs, finance and human resources, in addition to internet development. None of these activities constitute a separately reportable business segment.

Geographical segments

Although the economic entity’s divisions are managed on a global basis they operate in four main geographical areas:

Australia

The home country of the parent entity which is also the main operating entity. The areas of operation include all core business segments.

North America

A portion of the group’s production, film and television sales are generated from

capitalised production and development costs, investments, distribution advances, inventories, property, plant and equipment and goodwill and other intangible assets, net of any related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade and other creditors, producers share payable, bills of exchange and employee entitlements.

North America, with production offices in Washington D.C. and San Francisco.

Europe

Substantial film and television distribution proceeds are derived from European markets. The group’s head office for multinational activities is located in Dublin. This office is responsible for the acquisition and international sales of all television programmes and feature films. The Dublin office manages the direct sales and marketing activities of the office located in London, which represents the second overseas sales office base.

Rest of World

The Rest of World comprises all other territories from which film and television distribution income is derived including the Middle East, Asia, and Latin America.

(b) Other segments

Segment revenues, expenses and results include transfers between segments. Such transfers are priced on an “arm’s length” basis and are eliminated on consolidation.

Operating Segment

TV Production & Copyright

Film, Television & DVD Distribution

Other Inter Segment Eliminations

& Unallocated

Consolidation

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

$000's $000's $000's $000's $000's $000's $000's $000's $000's $000's

REVENUE

External revenues 35,915 42,826 25,809 24,983 6,895 617 - - 68,619 68,426

Other segments (b) 5,234 5,155 2,186 1,232 2,701 2,705 (10,121) (9,092) - -

Total revenue 41,149 47,981 27,995 26,215 9,596 3,322 (10,121) (9,092) 68,619 68,426

Result 9,433 10,203 1,322 596 (2,065) (4,282) (158) - 8,532 6,517

Finance costs (292) (354)

Unallocated corporate benefit/(expense)

(1,049) 7

Profit before income tax

7,191 6,170

Income tax expense (2,041) (1,697)

Profit after income tax

5,150 4,473

Minority interest profit

158 133

Profit for the year 4,992 4,340

Operating Segment

TV Production & Copyright

Film, Television & DVD Distribution

Other Inter Segment Eliminations

& Unallocated

Consolidation

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

$000's $000's $000's $000's $000's $000's $000's $000's $000's $000's

ASSETS

Segment assets 69,725 53,666 79,147 75,355 25,242 27,103 (130,815) (116,268) 43,299 39,856

Unallocated assets 4,450 6,340

Total assets 47,749 46,196

LIABILITIES

Segment liabilities 19,379 15,636 89,413 81,406 12,006 10,562 (106,064) (95,275) 14,734 12,329

Unallocated liabilities

4,795 5,162

Total liabilities 19,529 17,491

Other

Depreciation & amortisation

3,334 3,414 1,278 1,513 688 689 - - 5,300 5,616

Capital expenditure 427 553 1 - 75 162 - - 503 715

Other non cash expenses

80 153 1,707 2,017 99 119 158 133 2,044 2,422

Segment revenues from external customers

Carrying amount of segment assets

Acquisition of non current segment assets

2008 2007 2008 2007 2008 2007

$000's $000's $000's $000's $000's $000's

Australia 32,436 24,685 41,826 37,888 493 832

North America 27,106 30,703 (406) (189) 10 47

Europe 7,590 9,714 5,295 7,144 - 1

Rest of World 1,487 3,324 1,034 1,353 - -

68,619 68,426 47,749 46,196 503 880




2008 2007 2008 2007

$000's $000's $000's $000's

(a) Revenue

Operating activities

Sales revenue 59,997 66,178 - -

Dividend - - 4,086 3,900

Management service fees - - 263 181

Royalty revenue 2,009 1,797 - -

Interest - other persons 29 49 15 34

Rental revenue - - 899 888

Realised/Unrealised foreign currency translation gains 159 402 468 587

62,194 68,426 5,731 5,590

Other revenue

Gain on sale of land & building (Note 12) 1,660 - 1,660 -

Total Revenue 63,854 68,426 7,391 5,590

(b) Profit before tax includes the following:

Fair value increase in derivative financial assets 375 528 375 528

Bad and doubtful debts

- Trade receivables 56 32 - -

Provision for non recovery of advances 353 400 - -

Projects in development written off 65 129 - -

Rental expense on operating leases

- Minimum lease payments 537 549 21 -

Finance costs

- External 292 354 186 302

Loss on disposal of asset - 7 - 7

Depreciation and Amortisation

- Tangible assets 832 770 97 99

- Intangible assets 504 504 - -

- Copyright & licensing assets 3,964 4,342 - -

5,300 5,616 97 99


2008 2007 2008 2007

$000's $000's $000's $000's

(c) Significant Revenue and Expenses

The following significant revenue and expense items are relevant in explaining the financial performance

Takeover expenses 1,213 - - -

Costs associated with the response to takeover offers made to the company during 2007/08, and include legal fees, valuation fees and a break-fee paid to one of the prospective bidders.

Gain on sale of land & building as part of sale and leaseback transaction 1,660 - 1,660 -

During the year the economic entity enterted into a sale and leaseback transaction, disposing of the Reserve Road, Artarmon property under a 10 year leaseback arrangement. Further detail has been disclosed in note 12.

Litigation settlement expenses - 350 - -

Payment to MBP-Medienbeteiligungs-Und-Produktions Gesellschaft mbH & CO KG and MBP-Internationale Medienbeteiligungs-Film-Und-TV Produktions Gesellschaft mbH & CO KG in settlement of legal costs in relation to the out of court settlement of proceedings.

(d) Auditors' Remuneration

Remuneration of the auditor of the parent entity for:

- Audit or review of the financial report 264,440 237,500 264,440 237,500

Remuneration of other auditors of subsidiaries for audit or review of the financial report

27,280 92,408 - -

3. REVENUES AND EXPENSES

In 2008/9 we will establish a new Los Angeles based television production capacity and invest further in Beyond Home Entertainment’s operations in Australia.




2008 2007 2008 2007

$000's $000's $000's $000's

(a) The components of tax expense comprise:

Current income tax 1,934 83 (364) (455)

Deferred income tax (410) 2,129 (22) 35

Adjustments in respect of current income tax of previous years 517 (515) 749 -

Income tax expense reported in the Income Statement 2,041 1,697 363 (420)

(b) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax expense/(benefit) as follows:

Profit before income tax 7,191 6,170 4,027 3,048

Prima facie tax payable on profit from ordinary activities before income tax at 30% (2007: 30%)

2,157 1,851 1,207 914

Add:

Tax effect of :

- Other non-allowable items (341) (123) (905) (164)

1,816 1,728 302 750

Less:

Tax effect of :

- Adjustments in respect of current income tax of previous years (481) - (749) -

- Effect of lower tax rate on overseas income 482 709 - -

- Other (226) (678) 688 1,170

Income tax expense/(benefit) 2,041 1,697 363 (420)

The applicable weighted average effective tax rates are as follows: 28% 28% 9% -14%

The weighted average effective tax rates for the economic entity is of a consistent rate compared to the prior year. The average effective tax rates of the parent entity has increased due to adjustments in respect of current income tax of previous years.


2008 2007 2008 2007

$000's $000's $000's $000's

(c) Deferred Tax Assets

Deferred tax assets

Deferred tax assets comprise:

Provisions 1,208 1,070 84 39

Deferred tax assets attributable to tax losses 1,076 2,363 - 474

Other - - - 46

2,284 3,433 84 559

Deferred tax liabilities

Deferred tax liabilities comprises:

Tax allowances relating to property, plant and equipment 158 308 - -

Distribution guarantees and unrecouped program expenses 3,153 3,454 - -

Other 1,487 1,401 - -

4,798 5,163 - -

Deferred tax liabilities for Beyond TV Properties Bermuda and Beyond Film Properties totalling $1,130,689 have not brought to account due to the existence of off balance sheet tax losses.

(d) Liabilities

Current

Income Tax 1,356 504 965 -

The above is a current provision for income tax payable by the parent and subsidiaries of the economic entity.

(e) Tax Consolidation

Beyond International Limited and its wholly owned Australian resident subsidiaries have formed a tax consolidated group. Beyond International Limited is the head entity of the tax consolidated group. Members of the group recognise their own current tax liability of each group entity is also subsequently assumed by the parent entity.

The tax consolidated group has entered into a tax funding arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Persuant to the funding arrangement, transfers of tax losses or tax liabilities are assumed by the head entity through intercompany loans.

4. INCOME TAX EXPENSE/BENEFIT



Economic Entity Economic Entity

2008 2007

Cents per share Cents per share

Basic earnings per share: 8.49 7.38

Diluted earnings per share: 8.36 7.27

The following reflects the income and share data used in the basic and diluted earnings per share computations

2008 2007

$000's $000's

Net profit attributable to ordinary equity holders (used in calculating basic earning per share)

4,992 4,340

Net profit attributable to ordinary equity holders (used in calculating diluted earning per share)

4,992 4,340

Weighted average number of ordinary shares in calculating basic earnings per share

Number Number

58,799,468 58,774,468

Effect of dilution:

Employee Share Plan (note 24) 912,500 937,500

Weighted average number of ordinary shares adjusted for the effect of dilution

59,711,968 59,711,968


2008 2007 2008 2007

$000's $000's $000's $000's

Cash at bank and in hand 6,155 3,055 3,495 1,704

The average effective interest rate on cash at bank was 1.79 % (2007: 2.70 %)

(a) Reconciliation of Cash

For the purposes of the Cash Flow Statement, cash and cash equivalent comprise the following at 30 June:

Cash at bank and in hand 6,155 3,055 3,495 1,704

(b) Reconciliation of cash flows from operations with net profit after income tax

Profit after income tax 5,150 4,473 3,664 3,468

Adjustment for non-cash flow in profit:

Depreciation and amortisation 5,300 5,616 97 99

Net (gain)/loss on sale of non-current assets (1,815) 7 (1,815) 7

Transfer of asset to subsidiary - - - 2

Dividends from subsidiaries not paid in cash - - (4,086) -

Share options expensed 51 71 51 71

Changes in assets and liabilities, net of the effects of purchase & disposal of subsidiaries:

(Increase)/Decrease in trade and other receivables (1,106) (2,576) 717 (3,911)

Decrease/(increase) in inventory 114 (1,529) - -

(Increase)/Decrease in other asset (2,918) (1,200) (49) 98

(Increase)/Decrease in Intangible assets and goodwill (13) (30) - -

Decrease/(increase) in deferred tax asset 1,150 (775) 429 (55)

(Increase)/decrease in derivative financial assets (375) (402) (375) (587)

Increase/(decrease) in trade and other creditors 656 2,506 994 (339)

(Increase)/Decrease in deferred income tax liability (247) 1,885 46 (320)

Increase/(decrease) in other liabilities 627 (1,835) 102 (72)

Increase/(decrease) in provisions 123 891 - -

Cash flow from operations 6,697 7,102 (225) (1,539)

(c) Disclosure of financing facilities

Details of credit standby arrangements and loan facilities are included in note 15.

6. CASH FLOW INFORMATION5. EARNINGS PER SHARE




2008 2007 2008 2007

$000's $000's $000's $000's

(d) Acquisition of entities

The cash outflow in the current year Statement of Cashflows for Payment for Subdidiary, net of cash acquired is as follows:

Acquisition of Eurocam 1,685 - - -

Acquisition of remaining 49% share in Beyond Home Entertainment 702 - - -

Final instalment from 2006 acquisition of 51% of Beyond Home Entertainment 347

2,734 - - -

On 28 August 2007 Beyond Television Group Pty Ltd, a wholly owned subsidiary of Beyond International Limited, acquired the business and assets of Eurocam Australia Pty Ltd.

Details of this transaction are:

Purchase consideration 1,685 - - -

Cash outflow (1,685) - - -

Asset and liabilities held at acquisition date:

Plant & equipment 288 - - -

Lease liability (146) - - -

Employee provisions (4) - - -

138 - - -

Goodwill on Consolidation 1,547 - - -

1,685 - - -

The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the group acquisition. The acquisition will allow Beyond to expand its business into new markets.

The acquired business contributed revenues of $2,782,349 and a pre tax profit of $215,083 to the Beyond group for the period from 28 August 2007 to 30 June 2008. Due to a changed basis of costings and revenues, it is not practical to calculate the impact of the acquisiton had it occurred on 1 July 2007.

The assets and liabilities arising from the acquisition are recognised at fair value which is equal to its carrying value.

During 2007 the company acquired 100% interest of business assets of Beyond Home Entertainment (previously known as Force Entertainment) for the consideration of $1.4m cash component and 49% share of Nomad Entertainment Pty Ltd issued to Roto Electrical Pty Ltd. On 12 May 2008, the company reacquired the 49% share previously issued to Roto Electrical Pty Ltd.


2008 2007 2008 2007

$000's $000's $000's $000's



Amounts payable in future periods 1,297 - - -

Amounts paid in current period:


less: amounts owing by Roto Electrical (1,000) - - -

Cash outflow 702 - - -


Prepaid acquisitions 188 - - -

Minority interest (payable to Roto Electrical) 875 - - -

1,063 - - -

Excess taken to Other Equity Reserve (Note 19) 1,936 - - -

2,999 - - -

The excess of purchase consideration over the fair value of assets and liabilities held at acquisition date has been recorded against the Other Equity Reserve rather than goodwill, as the economic entity was the controlling entity at the time of the acquisiton. The fully acquired business contributed revenues of $1,073,162 and a pre tax profit of $134,366 to the Beyond group for the period from 12 May 2008 to 30 June 2008. The business contributed revenues of $9,259,419 and a pre tax profit of $1,431,709 for the full year ending 30 June 2008.

In 2006, the company acquired 50% ownership of Nomad Entertainment Pty Limited. The remaining purchase consideration was paid during the year ending 30 June 2007.

Purchase consideration - 425 - 425

-

Cash Consideration - 425 - 425

Amount paid as at 30 June 2006 - (225) - (225)

Cash outflow - (200) - (200)

6. CASH FLOW INFORMATION Cont.




2008 2007 2008 2007

$000's $000's $000's $000's

On 4 September 2006, the company through its subsidiary, Nomad Entertainment Pty Limited purchased a 100% interest of business assets of Force Entertainment for the consideration of:

(a) $1.4 million cash component

(b) 49% share of Nomad Entertainment Pty Limited issued to Roto Electrical Pty Limited


Purchase consideration - 1,400 - -

Cash Consideration - 1,400 - -

Amount paid as at 30 June 2007 - (1,000) - -

Cash outflow - (1,000) - -


Prepaid acquisitions - 503 - -

Inventory - 926 - -

Property, plant and equipment - 165 - -

Payables - (224) - -

- 1,370 - -

Goodwill on Consolidation - 30 - -

- 1,400 - -

The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the group acquisition of Force Entertainment. The acquisition will allow Beyond to expand its home entertainment business and provide even more direct access to retail customers for Beyond produced and controlled programming.

Profit of Force Entertainment included in consolidated profit of the group between the acquisition date of 4 September 2006 and 30 June 2007 amounted to $934,000. It is not practical to assess what the impact of Force Entertainment would have been if it had been within the group for the entire year.

The assets and liabilities arising from the acquisition are recognised at fair value which is equal to its carrying value.


2008 2007 2008 2007

$000's $000's $000's $000's

Current

Trade receivables (i) 18,631 18,344 386 2,182

Provision for impairment of receivables (1,884) (1,962) - -

16,747 16,382 386 2,182

Amounts receivable from:

- wholly-owned subsidiaries (ii) - - 6,224 2,824

16,747 16,382 6,610 5,006

Non-current

Trade receivables (i) 1,275 323 - -

1,275 323 - -

(i) Credit terms for the economic entity's receivables vary between individual divisions. Distribution, Films and Productions debtors are generally due based on milestones achieved. Debtors within other divisions have credit terms ranging from 30 to 90 days. An allowance has been made for estimated irrecoverable irrecoverable trade receivable amounts arising from the past sale of goods and rendering of services, based on an assessment of individual debtors and the likelihood of recoverability. For Distribution & Films debtors, the economic entity provides fully for receivables over 360 days, with the exception of specific identifiable receivables which are still considered recoverable. Distribution and Film debtors consist largely of television networks, many of which are are government owned, or are listed entities whose published annual reports indicate they continue to be credit-worthy.

Debtors within other divisions are provided for on a specific basis based on an assessment of recoverability. Beyond Home Entertainment debtors largely consist of multi-national retail chains, many of which are listed and whose published annual reports indicate they continue to be credit-worthy.

Included the economic entity’s trade receivables balance are debtors with a carrying amount of $2.6m which are past due between 0 and 180 days at the reporting date are not considered to be impaired so have not been provided for. These amounts are considered recoverable based on reference to past default experience.

Included in the economic entity’s trade receivables balance are debtors with a carrying amount of $1m which are past due more than 180 days at the reporting date are not considered to be impaired so have not been provided for. 90% of this balance relates to four debtors whereby there has not been a significant change in credit quality and the amounts are still considered recoverable.

Inclduded in the parent entity’s trade receivables balance are debtors with a carrying amount of $199,000 which are past due more than 180 days at the reporting date and are not considered to be impaired so have not been provided for. This balance relates solely to two debtors whereby there has not been a significant change in credit quality and the amounts are still considered recoverable.

Amounts due to the parent entity from wholly owned subsidiaries are not past due.

(ii) Details of related party receivables are included in note 29.

6. CASH FLOW INFORMATION Cont. 7. TRADE AND OTHER RECEIVABLES



7. TRADE AND OTHER RECEIVABLES Cont.

8. INVENTORIES

10. INVESTMENTS

9. OTHER ASSETS


2008 2008 2007 2007 2008 2008 2007 2007

$000's $000's $000's $000's $000's $000's $000's $000's

Ageing of debtors

Gross Provision Gross Provision Gross Provision Gross Provision

Not past due 14,342 - 12,185 - 187 - 1,967 -

Past due 0-90 days

2,310 - 3,331 (1) - - 23 -

Past due 91-180 days

331 - 248 (10) - - - -

Past due 180+ days

2,923 (1,884) 2,903 (1,951) 199 - 192 -

19,906 (1,884) 18,667 (1,962) 386 - 2,182 -


2008 2007 2008 2007

$000's $000's $000's $000's

Reconciliation of Provision for impairment of receivables

Opening balance at 1 July 2007 (1,962) (2,416) - -

Additional provision recognised (56) (32) - -

Utilised 134 486 - -

Balance at 30 June 2008 (1,884) (1,962) - -


2008 2007 2008 2007

$000's $000's $000's $000's

Current - at cost

DVD Stock - raw material 683 765 - -

DVD Stock - finished goods 1,083 1,125 - -

Stock footage 28 18 - -

1,794 1,908 - - Economic Entity Parent Entity

2008 2007 2008 2007

$000's $000's $000's $000's

Non-current

Shares in controlled entities - at cost (i) - - 8,627 5,815

(i) Investments comprise of ordinary issued share capital of various entities (note 25) and are reflected at cost. There are no fixed returns or fixed maturity date attached to these investments.


2008 2007 2008 2007

$000's $000's $000's $000's

Current

Capitalised development costs 1,289 1,278 - -

Less: Deferred revenue (369) (776) - -

920 502 - -

Distribution advances 5,493 5,621 - -

Provision for impairment of distribution advances (i) (3,192) (2,628) - -

2,301 2,993 - -

Prepaid royalties 3,032 1,352 - -

Capitalised production costs 5,035 4,718 - -

Prepayments 420 303 117 70

5,455 5,021 117 70

11,708 9,868 117 70

Non-current

Distribution advances 3,460 3,738 - -

Provision for impairment of distribution advances (i) (1,292) (830) - -

2,168 2,908 - -

(i) Distribution advances are monitored on a title by title basis. An provision detailed above is included within the depreciation and amortisation expense disclosed both in the Income Statement and in Note 3(b).



11. FINANCIAL ASSETS 12. PROPERTY, PLANT AND EQUIPMENT


Notes 2008 2007 2008 2007

$000's $000's $000's $000's

Available-for-sale financial assets 11 (a) 520 - - -

Held to maturity financial assets 11 (b) 850 474 850 474

1,370 474 851 474

(a) Available-for-sale Financial Assets (Non Current)

Listed investments:

Shares - at fair value (i) 520 - - -

(b) Held to maturity Financial Assets (Current)

Foreign currency forward contracts - at fair value 27 850 474 850 474

(i) During the year, the economic entity purchased 10% of the ordinary share capital of Motive Television Plc. The shares have been revalued at year end to the closing share price at 30 June 2008, and gains including the revaluation to Australian dollar, totalling $96,481, have been recognised directly in the Investment Revaluation Reserve (equity).


Freehold land &

buildings

Plant & equipment

Leased MV &

equipment

Total Freehold land &

buildings

Plant & equipment

Total

Year ended 30 June 2008 $000's $000's $000's $000's $000's $000's $000's

At 1 July 2007, net of accumulated depreciation and impairment

4,730 1,647 - 6,377 4,730 44 4,774

Additions 4 500 - 504 4 3 7

Disposal (4,601) (11) - (4,612) (4,601) (10) (4,611)

Additions through acquisition of entity

- 142 146 288 - - -

Depreciation charge for the year (82) (725) (25) (832) (82) (15) (97)

Transfer to Subsidiary - - - - 1 1 2

Transfer between asset classes (51) 51 - - (52) 52 -

At 30 June 2008, net of accumulated depreciation and impairment

- 1,604 121 1,725 - 74 74

As at 1 July 2007

Cost 5,620 8,718 - 14,338 5,591 1,102 6,693

Accumulated depreciation and impairment

(890) (7,071) - (7,961) (861) (1,058) (1,919)

Net carrying amount 4,730 1,647 - 6,377 4,730 44 4,774

As at 30 June 2008

Cost - 8,726 146 8,872 - 939 939


- (7,122) (25) (7,147) - (865) (865)

Net carrying amount - 1,604 121 1,725 - 74 74



13. INTANGIBLE ASSETS12. PROPERTY, PLANT AND EQUIPMENT Cont.


Freehold land &

buildings

Plant & equipment

Leased MV &

equipment

Total Freehold land &

buildings

Plant & equipment

Total

Year ended 30 June 2007 $000's $000's $000's $000's $000's $000's $000's

At 1 July 2006, net of accumulated depreciation and impairment

4,798 1,478 - 6,276 4,798 37 4,835

Additions 28 687 - 715 28 20 48

Disposal (8) (1) - (9) (8) - (8)

Acquisition of Subsidiary - 165 - 165 - - -

Depreciation charge for the year (88) (682) - (770) (88) (11) (99)

Transfer to Subsidiary - - - - - (2) (2)

At 30 June 2007, net of accumulated depreciation and impairment

4,730 1,647 - 6,377 4,730 44 4,774

As at 1 July 2006

Cost 5,600 7,867 - 13,467 5,571 1,084 6,655


(802) (6,389) - (7,191) (773) (1,047) (1,820)


As at 30 June 2007

Cost 5,620 8,718 - 14,338 5,591 1,102 6,693


(890) (7,071) - (7,961) (861) (1,058) (1,919)



2008 2007 2008 2007

$000's $000's $000's $000's

Rights Licensing System

Cost 2,527 2,527 - -

Accumulated amortisation and impairment (2,000) (1,500) - -

Net carrying value 527 1,027 - -

Patent and Licenses

Cost 232 232 - -

Accumulated impairment losses (48) (44) - -

Net carrying value 184 188 - -

Purchased Goodwill

Cost 1,812 253 - -

Total Intangibles 2,523 1,468 - -

Sale and leaseback transaction

During the year, the company disposed of the land & building located at Reserve Road, Artarmon, as part of a sale and leaseback arrangement. Details of this transaction are as follows:

2008 2007 2008 2007

$000's $000's $000's $000's

Sale proceeds 6,425 - 6,425 -

Written down value of land, building and other fixtures (4,610) - (4,610) -

Marketing and commission costs (155) - (155) -

1,660 - 1,660 -

The company has entered into a 10 year operating lease for the land & building at Reserve Road, Artarmon as part of this transaction. This operating lease commitment has been included in the disclosures at note 23.

The Company is confident that it has established a strong financial and operational base from which to achieve increased shareholder returns



13. INTANGIBLE ASSETS Cont.


Rights Licensing

System

Patent & licenses

Goodwill Total Patent & licenses

Total

$000's $000's $000's $000's $000's $000's

Year ended 30 June 2007

At 1 July 2006, net of accumulated amortisation and impairment

1,527 192 223 1,942 - -

Additions - - 30 30 - -

Amortisation (500) (4) - (504) - -

At 30 June 2007, net of accumulated amortisation and impairment

1,027 188 253 1,468 - -

Year ended 30 June 2008

At 1 July 2007, net of accumulated amortisation and impairment

1,027 188 253 1,468 - -

Acquisitions - - 1,547 1,547 - -

Amortisation (500) (4) - (504) - -

Adjustments - - 12 12 - -

At 30 June 2008, net of accumulated amortisation and impairment

527 184 1,812 2,523 - -

Intangible assets, other than goodwill, have finite useful lives. Patents and licenses have been assessed as having a finite life and are amortised using the straight line method over 20 years and the Rights Licensing System (RLS) has also been assessed as having a finite life and is amortised using straight line method over a period of 5 years. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the Income Statement. Goodwill is assessed as having has an infinite life subject to an annual impairment review.

If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount.

Impairment Disclosure

No impairment loss was recognised in the 2008 financial year.

Goodwill of $1,547,471 arose on the acquisition of the business assets of Eurocam. The full amount of goodwill of $1,812,000 at 30 June 2008 is in respect of the Eurocam acquisition in 2008 and the Beyond Home Entertainment acquisition in 2007. These entities are treated as seperate cash-generating units and their recoverable amount is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow projections over a 5-year period. The cash flows are discounted using the yield of 5-year government bonds at the beginning of the budget period.

The following assumptions were used in the value-in-use calculations:

Growth Rate Discount Rate

Beyond Home Entertainment Pty Ltd & Eurocam business 7.5% (2007: 15%) 10.00% (2007: 10%)

Budgets and forecasts show the above growth rate to be reasonable.

14. TRADE AND OTHER PAYABLES


2008 2007 2008 2007

$000's $000's $000's $000's

Current (unsecured)

Trade payables (i) 4,381 2,582 1,410 155

Other creditors and accruals 1,322 970 328 243

Employee benefits 984 910 - -

6,687 4,462 1,738 398

(i) Credit terms on trade payables vary between business units and range from 7 days to 90 days. Included in trade payables are amounts due for the acquisition of the remaining 49% of Beyond Home Entertainment as disclosed in Note 6 (d). These amounts are payable in two instalments within six months of the reporting date. Contractual maturities of trade and other payables have been disclosed in Note 27 (iv).



15. BORROWINGS 16. PROVISIONS

17. OTHER LIABILITIES


2008 2007 2008 2007

$000's $000's $000's $000's

At amortised cost

Current (secured)

Lease liabilities (note 23) 51 - - -

Bills of exchange (a) - 1,500 - 1,500

51 1,500 - 1,500

Non-Current (secured)

Lease liabilities (note 23) 50 - - -

Bills of exchange (a) - 196 - 196

50 196 - 196

Total current and non-current secured liabilities 101 1,696 - 1,696

The interest rate on the facility is the bill rate plus 1.65%.

The overdraft facility are secured by certain covenants on the economic entity that these financial conditions are met -

a) That earnings before interest, tax, depreciation and amortisation less normalised capital expenditure will exceed $10,000,000 annually

b) Receivables must remain over $10,000,000 at all times

c) Minimum capital adequacy rate of 50%

Amount of Assets Pledged as Security

Freehold land and buildings - 4,730 - 4,730

Fixed and floating charge over assets - 41,466 - 13,672

Total assets pledged as security - 46,196 - 18,402

Financing facilities available

At reporting date, the following financing facilities had been negotiated and were available:

Secured bank overdraft facility

Used at balance date - - - -

Unused at balance date 1,400 1,400 1,000 1,000

Total facility 1,400 1,400 1,000 1,000

Secured bill acceptance facility

Used at balance date - 1,696 - 1,696

Unused at balance date - 1,679 - 1,679

Total facility - 3,375 - 3,375

The bank overdraft facility may be drawn at any time and may be terminated by the bank on demand.


Long-term Employee

Benefit

Total Long-term Employee

Benefit

Total

$000's $000's $000's $000's

Opening balance at 1 July 2007 663 663 - -

Arising during the year 124 124 - -

Utilised (1) (1) - -

Balance at 30 June 2008 786 786 - -


2008 2007 2008 2007

$000's $000's $000's $000's

Analysis of Total Provisions

Non-current 786 663 - -

786 663 - -

Provision for Long-term Employee benefits

A provision has been recognised for employee entitlements relating to long service leave. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report. The timing of the outflow of long-term employee benefits is uncertain.

Current

Unsecured liabilities

Deferred revenue 4,429 3,355 - -

GST Payable 295 151 127 25

Producer share payable 810 1,304 - -

5,534 4,810 127 25

Non-current

Unsecured liabilities

Producer share payable 267 193 - -

267 193 - -



18. ISSUED CAPITAL

20. MINORITY INTEREST

19. RESERVES


2008 2007 2008 2007

$000's $000's $000's $000's

(a) Share Capital

59,711,968 ordinary shares - fully paid (2007: 59,711,968) 33,315 33,300 33,315 33,300

The company has authorised capital amounting to 100,000,000 ordinary shares of no par value.

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

$000's $000's $000's $000's

Movement in ordinary shares on issue

At 1 July 2007 59,711 33,300 59,711 33,300

Issue of shares under employee share plan (i) - 15 - 15

At 30 June 2008 59,711 33,315 59,711 33,315

(i) These shares were issued in 2006 as part of the employee share plan (Note 24) and hence do not represent an increase in the number of shares. The transaction during the year represents an employee exercising an option as part of this plan.

(b) Share Options

On 1 May 1998 at an extraordinary general meeting shareholders approved the establishment of the Beyond Employee Share Option Plan.

Under the plan the options are cancellable at the Directors discretion upon an option holder ceasing to be an employee (refer note 24).

(c) Employee Share Plan

In 2006, 962,500 shares were issued under the employee plan to eligible employees and directors, and the company has lent participants the funds necessary to subscribe for those shares. Shares were issued in accordance with the Employee Plan rules (refer note 24).


2008 2007 2008 2007

$000's $000's $000's $000's

Interest in:

Accumulated profits/(loss) (689) 28 - -

Employee Share Plan Benefit Reserve

The employee share plan benefit reserve records items recognised as expenses on valuation of employee share options.

Investment Revalation Reserve

The investment revaluation reserve records unrealised share price and foreign exchange gains and losses on the available-for-sale asset in Note 11(a).

Other Equity Reserve

The other equity reserve recorded the excess between the purchase consideration and net assets fully acquired on the acquisition of the remaining 49% of Beyond Home Entertainment in the current year. This amount was not recorded against goodwill as the economic entity was the controlling entity at the time of the remaining acquisition.

In the twelve months to 30 June 2008 the Group’s net profit increased by

15% to $4,992,000



23. COMMITMENTS


2008 2007 2008 2007

$000's $000's $000's $000's

(i) OPERATING LEASE COMMITMENTS

Total lease expenditure contracted at balance date but not recognised in the financial statements:

Payable no later than one year 914 397 528 -

Payable later than one, not later than five years 2,521 332 2,300 -

3,435 729 2,828 -

Included in the commitments above is $2.8m of lease commitments arising from the operating lease taken out as part of the sale and leaseback transaction during the year. The lease agreement is for a ten year period, with an option for two further terms of five years each. The economic entity has the option to terminate the lease after five years from the commencement date and hence commitments included above represent five years only.

(ii) DISTRIBUTION GUARANTEE COMMITMENTS

In the course of the economic entity's feature film and television business, commitments to pay distribution guarantees and advances of minimum proceeds from sales have been made to producers. The amounts committed to at balance date but not recognised in the financial statements:

Not later than one year

Distribution Guarantee 589 513 - -

DVD Distribution Advances 1,074 918 - -

Later than one year but not later than five years

Distribution Guarantee 262 100 - -

DVD Distribution Advances - 37 - -

Later than five years

Distribution Guarantee 858 1,120 - -

2,783 2,688 - -

The above commitments to pay distribution guarantees have been entered into in the normal course of business.

(iii) FINANCE LEASE COMMITMENTS

Payable - minimum lease payments

- not later than 12 months 72 - - -

- between 12 months and 5 years 50 - - -

Minimum lease payments 122 - - -

less Future finance charges (21) - - -

Present value of minimum lease payments 101 - - -

The hire purchase contracts was for various items of plant and equipment.

21. DIVIDENDS


2008 2007 2008 2007

$000's $000's $000's $000's

Distributions paid

Interim unfranked ordinary dividend of two cents per share (2007: one cent) 1,194 597 1,194 597

On 28 August 2008, the directors declare a final unfranked dividend of three cents per share, totaling $1,791,359 (2007 : three cents per share totalling $1,790,632).

Estimated amounts of reserves and retained profits that could be distributed as dividends and be franked out of existing franking credits.

246 246 218 218

The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:

(a) franking credits that will arise from the payment of the current tax liability

(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date

(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date

(d) franking credits that may be prevented from being distributed in subsequent financial years

22. CONTINGENT ASSETS AND LIABILITIES

Beyond Distribution has provided a distribution guarantee which guarantees the investors in the Beyond Group Media Fund will receive by 30 June 2011 on a cumulative basis from all territories an amount equal to the level of pre-sales or 70% of the cost of acquiring the copyright.

Beyond Distribution has provided a distribution guarantee which guarantees the investors in the Beyond Group Television Fund will receive by 30 June 2010 on a cumulative basis from all territories an amount equal to the level of pre-sales or 70% of the cost of acquiring the copyright.

The distributor has entered into a credit insurance arrangement with an arm’s length financial institution for the purpose of enhancing the credit obligations of the third party broadcasters and of the distributor. The directors believe these arrangements will ensure there is no future financial exposure to the Beyond group.



24. SHARE BASED PAYMENTS

General Employee Share Loan Plan

The Board has adopted an employee share plan under which employees and Directors of the economic entity may subscribe for shares in the Company using funds loaned to them by the economic entity. The board has also adopted a share plan on substantially the same terms for consultants of the economic entity (Consultant Plan). The purpose of the Employee Plan is to:

(a) assist in the retention and motivation of employees and Directors of the economic entity by providing them with a greater opportunity to participate as shareholders in the success of the economic entity; and

(b) create a culture of share ownership amongst the employees of the economic entity.

The loans are made based on the greater of market value of the shares on allotment date and $0.60. The plan is accounted for and valued as an option plan, with contractual life of each option equivalent to the estimated loan life. There are no cash settlement alternatives with the repayment of the loan representing exercise of the options.

Notwithstanding any other provision of the Plan, each Participant has a legal and beneficial interest in the Shares issued to him or her and is at all times absolutely entitled to those Plan Shares, except that any dealings with those Shares by the Participant may be restricted in accordance with the plan rules. Plan Shares rank equally with all existing Shares from the date of issue in respect of all rights issues, bonus issues, dividends and other distributions to, or entitlements of, holders of existing Shares where the record date for such corporate actions is after the relevant Plan Shares are issued.

On 12 April 2006, 962,500 shares were issued under the Employee Plan to eligible employees and directors of Beyond International Limited and its controlled entities. The company lent participants the funds necessary to subscribe for those shares. Share were issued in accordance with the Employee Plan rules.

Share movements in the plan as follows:

Number of options Weighted average exercise price

Grand total fair value $

Outstanding at the beginning of year 937,500 0.60

Issue of shares under the employee share plan (i) (25,000) 0.60

Exercisable at year end 912,500 0.60 144,180

The grant fair value of the shares is amortised across the vesting periods as follows:

Vesting period Amortisation $

12 April 2006 to 30 June 2006 22,486

Financial year ending 30 June 2007 70,630

Financial year ending 30 June 2008 51,065

Included under employee benefits expense in the income statement is $ 51,065 which relates, in full, to equity-settled share-based payments transactions.

The grant fair value was calculated by using the Black Scholes option pricing model applying the following inputs:

Weighted average exercise price $0.60

Weighted average life of the option 2

Underlying share price $0.60

Expected share price volatility (i) 30%

Risk free interest rate 5.50%

Expected dividend rate 3.00%

Weighted average fair value price $0.16

(i) Expected share price volatility has been estimatedbased on the historcial volatility of the Company's share price.



25. CONTROLLED ENTITIES

(a) Controlled entities consolidated

Country of formation

or incorporation

Beyond International Limited direct interest in ordinary shares

Name of entity 2008 % 2007 %

Ultimate parent entity

Beyond International Limited Australia

Controlled entities of Beyond International Ltd:

Beyond Films Limited Australia 100 100

Beyond Television Group Pty Ltd Australia 100 100

Beyond Television Pty Ltd Australia 26 26

Beyond Entertainment Pty Ltd Australia 100 100

Beyond Simpson le Mesurier Pty Ltd Australia 51 51

Liberty & Beyond Pty Ltd Australia 51 51

Beyond Imagination Pty Ltd Australia 51 51

Beyond Miall Kershaw Pty Ltd Australia 51 51

Pacific & Beyond Pty Ltd Australia 51 51

dSp Beyond Pty Ltd Australia 51 51

Beyond Home Entertainment Pty Ltd (refer note 25(b)) Australia 100 51

Beyond Entertainment Holdings Limited Ireland 100 100

Controlled entities of Beyond Entertainment Pty Ltd:

Mullion Creek and Beyond (partnership) Australia 51 51

Equus Film Productions Pty Ltd Australia 51 51

Controlled entities of Liberty & Beyond Pty Ltd:

Liberty & Beyond Productions Pty Ltd Australia 100 100

Controlled entities of Beyond Television Group Pty Ltd:

Beyond Television Pty Ltd Australia 74 74

Controlled entities of Beyond Television Pty Ltd:

Beyond Properties Pty Ltd Australia 100 100

Beyond Productions Pty Ltd Australia 100 100

Beyond Distribution Pty Ltd Australia 100 100

Controlled entities of Beyond Properties Pty Ltd:

Beyond Pty Ltd Australia 100 100

Beyond International Group Inc USA 100 100

The Two Thousand Unit Trust * Australia 100 100

* The corporate trustee of the trust is Beyond Properties Pty Ltd.

Controlled entities of Beyond International Group Inc:

Beyond Productions Inc USA 100 100

Beyond Finance USA Inc USA 100 100

Country of formation

or incorporation

Beyond International Limited direct interest in ordinary shares

Name of entity 2008 % 2007 %

Controlled entities of Beyond Simpson le Mesurier Pty Ltd:

Beyond Simpson le Mesurier Productions Pty Ltd Australia 100 100

BSLM Productions Pty Ltd Australia 100 100

Something in the Air Pty Ltd Australia 100 100

Something in the Air 2 Pty Ltd Australia 100 100

Beagle Productions Pty Ltd Australia 100 100

Stingers 3 Pty Ltd Australia 100 100



Halifax 5 Pty Ltd Australia 100 100

Halifax 6 Pty Ltd Australia 100 100

Controlled entities of Beyond Entertainment Holdings Ltd:

Beyond Entertainment Limited Ireland 100 100

Beyond Films Limited Ireland 100 100

Controlled entities of Beyond Entertainment Ltd:

Beyond Finance (BOC) Inc. USA 100 100

Beyond Finance (MERC) Inc USA 100 100

Controlled entities of Beyond Distribution Pty Ltd:

Beyond TV Properties Bermuda Bermuda 100 100

Controlled entities of Beyond Films Ltd:

Beyond Film Properties Bermuda Bermuda 100 100

Entity controlled jointly by Beyond TV Properties Bermuda and Beyond Films Properties Bermuda

Beyond International Services Limited United Kingdom 100 100

Controlled entities of Beyond International Services Ltd:

Beyond International (U.K.) Limited (refer to note 25 (c)) United Kingdom 0 100

(b) Acquisition of controlled entities

On 28 August 2007, Beyond Television Group Pty Ltd purchased a 100% interest of business assets of Eurocam (note 6(d)). On 12 May 2008 Beyond International Limited acquired the remaining 49% of Force Media Entertainment Pty Ltd (note 6(d)). Force Media Entertainment Pty Limited subsequently changed it’s name to Beyond Home Entertainment Pty Limited.

(c) Deregistration of controlled entities

Beyond International (U.K.) Limited was deregistered in July 2007. There was no financial impact to the economic entity.



26. INVESTMENTS IN ASSOCIATES

27. FINANCIAL INSTRUMENTS

Name of associate Principal activity

Ownership interest

(2007: 50%)

Balance Date Consolidated carrying amount

2008 2007

$000's $000's

Unlisted

Beyond Reilly Pty Ltd TV Production 50% 30 June - -

- -

No trading activity has occurred in Beyond Reilly Pty Ltd during the current year or the prior year. Retained earnings, aggregate profits and liabilities are nil.

(i) Capital Risk Management

The economic entity manages its capital to ensure that entities in the group will be able to continue as a going concern while maximising the return to stakeholders. The economic entity’s strategy remains unchanged from 2007.

The capital structure of the group consists of cash and equity attributable to the equity holders of the parent entity, comprising issued capital, reserves and retained earnings. The economic entity operates globally, primarily through subsidiary companies established in the markets in which the group trades. None of the economic entities are subject to externally imposed capital requirements.

Operating cashflows are used to make the routine outflows of tax and dividends. During the year the economic entity repaid all outstanding borrowings with the sale proceeds from the sale and leaseback transaction disclosed in Note 12.

During the year the company sold the land and building at Reserve Road, Artarmon. Proceeds from the sale, along with cashflows generated from operating activities will be used to fund acquisitions in the forthcoming year.

(ii) Market risk

The economic entity’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (refer note 27 (iii)).

(iii) Foreign currency risk management

The economic entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise.

Derivative financial instruments are used by the economic entity to hedge exposure to exchange rate risk associated with foreign currency trade receivables. Mark-to-market gains on derivative financial instruments used by the economic entity are recognised in the financial statements. Transactions for hedging purposes are undertaken without the use of collateral as only reputable institutions with sound financial positions are dealt with.

Foreign currency sensitivity analysis

The economic entity is mainly exposed to US dollars (USD), Euro (EUR) and Great British Pound (GBP).

The carrying amount of the foreign currency denominated financial assets and liabilities at the reporting date is as follows:

2008 2007

Financial Assets

Financial Liabilities

Financial Assets

Financial Liabilities

$000's $000's $000's $000's

Economic Entity

US Dollars 5,129 23 7,366 217

Euro 1,878 156 2,439 423

Great British Pound 1,113 49 920 57

Other 500 5 670 -

8,620 233 11,395 697

Parent Entity

US Dollars 857 5 2,468 2

Euro - - - -

Great British Pound - - - -

Other - - - -

857 5 2,468 2

The following table details the parent and economic entity’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign currencies. A sensitivity rate of 10% is considered reasonable based on exchange rate fluctuations over the past 12 months. The sensitivity analysis includes only outstanding foreign currency financial assets and liabilities and adjusts their translation at the period end for a 10% change in foreign currency rates.

2008 2007

10% increase

10% decrease

10% increase

10% decrease

$000's $000's $000's $000's

Economic Entity

Profit/(loss) 391 (477) (216) 264

Other equity (47) 58 - -

344 (419) (216) 264

Parent Entity

Profit/(loss) 1,028 (1,257) 533 (651)

Other equity - - - -

1,028 (1,257) 533 (651)



27. FINANCIAL INSTRUMENTS Cont.

Forward foreign exchange contracts

It is the policy of the economic entity to enter into forward foreign exchange contracts to cover specific production foreign currency receipts. The economic entity does not enter into derivative financial instruments for speculative purposes.

The following table details the forward foreign currency contracts outstanding as at report date.

Economic Entity & Parent Entity Average Exchange

Rate

Principal Amount

Average Exchange

Rate

Principal Amount

2008 2008 2007 2007

Outstanding Contracts $000's $000's

Sell USD

Less than 3 months 0.8769 4,609 0.8067 4,298

3 to 6 months 0.9251 1,379 - -

Longer than 6 months 0.9045 222 - -

6,210 4,298

Gains or Losses from forward exchange contracts

Unrealised Gains 850 529

Unrealised Losses - -

850 529

(iv) Interest Rate Risk Management

The company and the group’s exposure to interest rate risk is minimal. The group does not have significant borrowings in the current or prior periods. At 30 June 2008 there are no borrowings attached to variable interest rates.

The company and the group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A sensitivity analysis of 50 basis points is considered reasonable based on interest rate fluctuations over the past 12 months.

At reporting date, if interest rates had been 50 points higher or lower and all other variables were held constant, the parent entity and the economic entity’s net profit would increase or decrease by $1,000 (2007: $2,000).

(v) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the economic entity’s short, medium and long-term funding and liquidity management requirements. This framework is not formally documented. The economic entity manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cashflows. Included in note 15 is a listing of additional undrawn facilities that the economic entity has at its disposal to further reduce liquidity risk.

Liquidity and interest risk tables

The following tables detail the parent and the economic entity’s remaining contractual maturity for it’s financial liabilites.

Notes Average interest

rate

Less than 6 months

6 months to 1 year

1 to 5 years

5+ years Total Outflows

Carrying amount

Economic Entity % $000's $000's $000's $000's $000's $000's

2008Financial liabilities

Trade & other payables

14 - 6,195 492 - - 6,687 6,687

Producer share payable

17 - 405 405 267 - 1,077 1,077

Finance Leases 15 12.79 36 36 50 - 122 101

Total financial liabilities 6,636 933 317 - 7,886 7,865


Commercial bills 15 6.34 750 750 196 - 1,696 1,696

Trade payables 14 - 4,007 455 - - 4,462 4,462

Producer share payable

17 - 652 652 193 - 1,497 1,497

Total financial liabilities 5,409 1,857 389 - 7,655 7,655

Parent Entity


Trade & other payables 14 - 1,738 - - - 1,738 1,738


Trade & other payables 14 - 398 - - - 398 398



27. FINANCIAL INSTRUMENTS Cont.

28. KEY MANAGEMENT PERSONNEL COMPENSATION

(vi) Credit Risk Exposures

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the economic entity. The economic entity has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. This information is supplied by credit rating agencies and, if not available, the economic entity uses publically available financial information to assess the credit-worthiness.

Trade receivables consist of a large number of customers, spread across diverse geographical areas. On going reviews are conducted of accounts receivable balances. The economic entity does not have significant credit risk exposure to any single counterparty. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

The credit risk on financial assets of the economic entity which are recognised on the balance sheet is generally the carrying amount, net of any provisions for doubtful debts.

(vii) Price Risk

The economic entity is exposed to equity price risk arising from the equity investments classified as available-for-sale assets in Note 11(a). Equity investments are held for strategic rather than trading purposes. The Economic Entity does not actively trade in this investment.

Equity price sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to equity price risks at the reporting date and the stipulated change taking place at the reporting date. A sensitivity analysis of 10 percent is considered reasonable based on movements in equity markets over the last twelve months.

At reporting date, if the relevant equity price had been 10 percent higher or lower and all other variables were held constant, the economic entity’s reserves would increase or decrease by $52,000 (2007: nil), as a result of changes in fair value of available-for-sale shares.

(viii) Net Fair Value of Financial Instruments

The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximates their carrying values. A discount rate of 8% (2007: 6.25%) has been applied to all non-current receivables & borrowings to determine fair value.

The net fair value of other monetary financial assets and liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles.

For forward exchange contracts the net fair value is taken to be the unrealised gain or loss as at the date of the report calculated by reference to the current forward rates for similar contracts.

Carrying Amount Net Fair Value

2008 2007 2008 2007

$000’s $000's $000’s $000's

Financial assets

Cash and cash equivalents 6,155 3,055 6,155 3,055

Loans and receivables 18,022 16,705 17,928 16,686

Held to maturity 850 474 850 474

Available-for-sale 520 - 520 -

25,547 20,234 25,453 20,215

Financial liabilities, at amortised cost

Commercial bills - 1,696 - 1,696

Finance leases 101 - 101 -

Trade payables 6,687 4,462 6,687 4,462

Producer share payable 1,077 1,497 1,057 1,486

7,865 7,655 7,845 7,644

Directors

The following persons were directors of Beyond International Limited during the financial year:

Chairman

Ian Ingram

Executive directors

Mikael Borglund - Managing Director

Non-executive directors

Anthony Lee

Ian Robertson

Executives (other than directors) with the greatest authority for strategic direction and management

The following persons were the five executives with the greatest authority for the strategic directions and management of the economic entity (“specified executives”) during the financial year.

Name Position Employer

J Luscombe General Manager - Productions & Senior Vice President Beyond Television Group Pty Limited

T McGee General Manager - Business Development Beyond Television Group Pty Limited

F Crago General Manager - Distribution Beyond Television Group Pty Limited

R Milne General Manager - Finance & Company Secretary Beyond Television Group Pty Limited

P Tehan Manager - Legal & Business Affairs Beyond Television Group Pty Limited

Information on key management personnel compensation is disclosed in the Directors’ Report.



28. KEY MANAGEMENT PERSONNEL COMPENSATION Cont.

Directors of Beyond International Limited

Short-term benefits Post-employment

Benefits

Share-based payment

Name Cash, salary and

commissions

Bonus Non-monetary benefits

Superannuation Equity Total

$ $ $ $ $ $

2008M Borglund 595,361 62,864 - 13,129 - 671,354

I Ingram 160,000 - - - - 160,000

A Lee 45,872 - - 4,128 - 50,000

I Robertson 45,872 - - 4,128 - 50,000

Total 847,105 62,864 - 21,385 - 931,354

2007M Borglund 567,775 - - 12,686 - 580,461

I Ingram 160,537 - - - - 160,537

A Lee 45,872 - - 4,128 - 50,000

I Robertson 45,872 - - 4,128 - 50,000

Total 820,056 - - 20,942 - 840,998

No options have been granted to directors in the current financial year (2007: nil).

Mr Borglund is the only Executive Director employed by Beyond International Limited.

(ii) EXECUTIVES’ REMUNERATION

Specified Executives of the economic entity

2008J Luscombe 447,452 288,644 - 13,129 - 749,225

T McGee 190,727 21,735 - 13,129 - 225,591

F Crago 260,000 - - 13,129 - 273,129

R Milne 198,184 18,900 - 13,129 - 230,213

P Tehan 167,981 14,216 - 13,129 - 195,326

Total 1,264,344 343,495 - 65,645 - 1,673,484

2007J Luscombe 437,039 562,113 - 12,686 - 1,011,838

T McGee 202,054 7,500 - 12,686 - 222,240

F Crago 217,346 35,269 - 12,686 - 265,301

R Milne 145,000 - - 12,686 - 157,686

P Tehan 159,135 - - 12,686 - 171,821

Total 1,160,574 604,882 - 63,430 - 1,828,886

(iii) SHAREHOLDINGS

Number of Shares held by Directors and Specified Executives

Parent Entity Directors

Balance 1.07.07 Received as Remuneration

Options Exercised Net Change Other*

Balance 30.6.08

M Borglund 3,405,701 - - - 3,405,701

I Ingram 4,244,403 - - 5,830,278 10,074,681

A Lee 5,424,997 - - - 5,424,997

I Robertson 60,000 - - - 60,000

Total 13,135,101 - - 5,830,278 18,965,379

Specified Executives

Balance 1.07.07 Received as Remuneration

Options Exercised Net Change Other*

Balance 30.6.08

J Luscombe 100,337 - - - 100,337

T McGee 25,000 - - - 25,000

F Crago 25,000 - - - 25,000

R Milne 75,000 - - - 75,000

P Tehan 25,000 - - - 25,000

Total 250,337 - - - 250,337

*Net Change Other refers to shares purchased or sold during the financial year.

29. RELATED PARTIES

(i) CONTROLLING ENTITIES

Beyond International Limited is the ultimate parent entity in the wholly-owned group comprising the Company and its wholly-owned controlled entities which are disclosed in note 25.

(ii) DIRECTORS AND DIRECTOR-RELATED ENTITIES

The following persons each held office as a director of the Company during the financial year:

I Ingram

M Borglund

A Lee

I Robertson

Information on remuneration benefits of directors is disclosed in note 28 and the Directors Report.

Loans to key management personnel

There were no outstanding loans as at 30 June 2008 or at any point during the year.



29. RELATED PARTIES Cont.

Equity transactions with directors and their director-related entities

The aggregate number of equity instruments acquired or disposed of by directors of the Company and the economic entity and their director-related entities during the year were:

Parent entity and consolidated

2008 2007

Number Number

Acquisitions Ordinary shares 5,830,278 -

Disposals Ordinary shares - -

The aggregate number of equity instruments held by directors of the Company and the economic entity and their director-related entities at balance date were:

Issuing entity Class of equity instruments

Number Number

Beyond International Limited Ordinary shares 18,965,379 12,474,370

Options over ordinary shares

- -

Other transactions with directors of the Company and controlled entities and their director-related entities

The following directors and their director related entities provided executive producer services to entities in the economic entity:


2008 2007 2008 2007

Directors Director related entity $ $ $ $

Ron Saunders Pacific and Beyond Pty Ltd 37,494 49,992 - -

Denis Spencer DSP Television Pty Ltd 252,594 326,156 - -

All transactions are on normal terms and conditions and in the ordinary course of business.

The aggregate amounts recognised in respect of each of the above transactions with directors of entities in the economic entity and their director-related entities:

Transaction type

Executive producer services 290,088 376,148 - -

Aggregate amounts payable to and receivable from director-related (associate) entities at balance date:

Current receivables (trade debtors note 7) 341,000 341,000 341,000 341,000

Amounts provided for (341,000) (341,000) (341,000) (341,000)

Current trade payables (Note 14) 272,309 375,630 - -

(iii) TRANSACTIONS WITH ENTITIES IN THE WHOLLY-OWNED GROUP

Beyond International Limited is the ultimate parent entity in the wholly-owned group comprising the Company and its wholly-owned controlled entities. The Company advanced and repaid loans, received loans, provided management services, received dividends and charged rent to other entities in the wholly-owned group during the current and previous financial years. With the exception of loans advanced free of interest to wholly-owned subsidiaries, these transactions were on commercial terms and conditions. Such loans are repayable on demand.

(iv) TRANSACTIONS WITH OTHER RELATED PARTIES

The aggregate amounts recognised in respect of the following types of transactions and each class of related party involved were:


2008 2007 2008 2007

Transaction type Class of other related party $ $ $ $

Legal services Associates 147 92 61 -

The above transactions were made on commercial terms and conditions, at market rates.

(v) AMOUNTS RECEIVABLE FROM AND PAYABLE TO ENTITIES IN THE WHOLLY-OWNED GROUP AND OTHER RELATED PARTIES

Aggregate amounts receivable at balance date from:

Current

Wholly owned subsidiaries (note 7) - - 6,224 2,824

Less provision for doubtful receivables - - - -

- - 6,224 2,824

Associates 341 341 - -

Provision against associates (341) (341) - -

(vi) TRANSACTIONS WITHIN THE WHOLLY OWNED GROUP

Parent entity

All parent entity income is from sources within the group with the exception of interest $15,373 (2007: $33,987) (refer to note 3(a)).

Balances due from within the group to the parent entity: 2008 2007

$ $

Beyond Television Pty Ltd 6,224,256 2,824,355

Due to the nature of the operations of the economic entity, normal operating transactions take place between subsidiaries within the group. These are all at arms length and are eliminated on consolidation.



30. SUBSEQUENT EVENTS

31. COMPANY DETAILS

(i) Dividend

Final dividend declared as detailed in Note 21.

(ii) Acquisition of Serious Business TV

On 31 July 2008, the economic entity acquired 100% of the business assets of Bentran Pty Ltd (trading as Serious Business TV). The cost of the acquisition is $450,000 in cash and two earn out payments which are dependent on sales revenue for the year-ending 30 June 2009 and 30 June 2010 respectively. A first instalment was paid on 31 July 2008 for $300,000.

The only tangible asset acquired in the transaction was inventory. As at the date of this financial report, no fair values have been calculated for inventory and other intangibles including goodwill. It is expected the acquired business to contribute revenues of $3,121,000 during the year-ending 30 June 2009.

The registered office & principal place of business of the company is :

Beyond International Limited 109 Reserve Rd Artarmon, NSW 2064 Australia

The directors of Beyond International Limited declare that:

(a) in the directors’ opinion the financial statements and notes on pages 24 to 76, and the remuneration disclosures that are contained in the Remuneration report in the Directors report, set out on pages 18 to 21, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and the economic entity’s financial position at 30 June 2008 and of their performance, for the financial year ending on that date;

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1; and

(c) the remuneration disclosures that are contained in the Remuneration report in the Directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures, the Corporations Act 2001 and the Corporations Regulations 2001; and

(d) there are reasonable grounds to believe that the company and the group entities identified in note 25 will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations by the Managing Director and General Manager - Finance for the financial year ended 30 June 2008, required by Section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors

Mikael Borglund

Managing Director 28 August 2008 Sydney

Directors’ Declaration

Total bank debt has reduced from $1,696,000 at 30 June 2007 to zero at 30 June 2008


Shareholder Information

Range Total Holders

1 - 1000 198

1001 - 5000 135

5001 - 10000 62

10001 - 100000 95

100001 - 9999999999 40

Rounding

Total 530

Holder Units % of Issued Capital

FREMANTLEMEDIA OVERSEAS LIMITED 11,936,422 19.99%

SEALION MEDIA LIMITED 5,830,278 9.76%

ANZ NOMINEES LIMITED 5,281,739 8.85%

ABERON PTY LIMITED 4,767,063 7.98%

MR MIKAEL JOHN BORGLUND 3,150,000 5.28%

CLIPPER HOLDINGS LTD 2,957,862 4.95%

CLARIDGE AUSTRALIA PTY LTD 2,701,968 4.53%

D & D NOMINEES PTY LTD 2,531,111 4.24%

WILGRIST NOMINEES LIMITED 2,416,224 4.05%

MS YUN CHUN MARIE CHRISTINE LEE 2,228,044 3.73%

WILVESTOR LIMITED 1,550,000 2.60%

ANZ NOMINEES LIMITED 1,206,660 2.02%

PEARL FINANCE LIMITED 1,012,500 1.70%

MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 949,984 1.59%

EFFIE HOLDINGS PTY LIMITED 620,557 1.04%

MS IRENE YUN LIEN LEE 575,300 0.96%

SOURCE INCORPORATED 559,016 0.94%

DIXSON TRUST PTY LIMITED 546,820 0.92%

LEE HYSAN ESTATE COMPANY LIMITED 503,986 0.84%

WARMAN INVESTMENTS PTY LTD 435,121 0.73%

Total Top Holders Balance 51,760,655 86.68%

B. Distribution of Equity Securities

C. Twenty Largest ShareholdersA. Substantial Shareholders

D. Voting Rights

(i) Schedule of distribution Ordinary Shares of holdings as at September 2007:

(ii) There were 166 holders of less than a marketable parcel of ordinary shares.

The Company’s Substantial Shareholders and the number of equity securities in which they have an interest are:

Freemantle Media Overseas Limited ha a relevant interest in 11,936,422 fully paid ordinary shares. Aberon Pty Limited and Mr Anthony H P Lee have a relevant interest in 5,424,997 fully paid ordinary shares. Mikael Borglund and Axphon Pty Limited and Navis Media Holdings Pty Ltd have a relevant interest in 3,405,701 fully paid ordinary shares. Ian Ingram, Sealion Media Limited, Claridge Australia Pty Ltd, Winchester Investments Group Pty Ltd and Australian Property Holdings Pty Ltd have a relevant interest in 10,074,681 fully paid ordinary shares.

The voting rights, upon a poll, are one vote for each share held.


DIRECTORS

Ian Ingram Chairman of Directors 109 Reserve Rd Artarmon NSW 2064

Mikael Borglund Managing Director 109 Reserve Rd Artarmon NSW 2064

Anthony Lee Non-Executive Director 109 Reserve Rd Artarmon NSW 2064

Ian Robertson Non-Executive Director 109 Reserve Rd Artarmon NSW 2064

OFFICERS

Mikael Borglund Chief Executive Officer

Robert Milne Company Secretary

OFFICES

Sydney 109 Reserve Rd Artarmon NSW 2064 Australia Telephone: 61 2 9437 2000 Facsimile: 61 2 9437 2181 www.beyond.com.au

Dublin 7 Windsor Place, Dublin 2 Ireland Telephone: 353 1 614 6270 Facsimile: 353 1 639 4944

London 41/42 Berners Street London W1T 3NB UK Telephone: 44 20 7323 3444 Facsimile: 44 20 7580 6479

Washington 4733 Bethesda Avenue Suite 700 Bethesda MD 20814 USA Telephone: 1 240 395 2880 Facsimile: 1 240 395 2821

Los Angeles Hollywood Production Center 1149 North Gower St., Suite 102-D Los Angeles, CA 90038 USA Telephone: 1 323 785 2312

Melbourne Beyond Home Entertainment Pty Ltd 287-313 Macaulay Rd North Melbourne Victoria 3051 Australia Telephone: 61 3 9329 8120 Facsimile: 61 3 9329 8116

AUDITOR

PKF Chartered Accountants Level 10, 1 Margaret St Sydney NSW 2000

ACCOUNTANTS/ADVISORS

Greenwoods & Freehills Level 35 MLC Centre 19-29 Martin Place Sydney NSW 2000

BANKERS

St George Bank Level 1, 4 Blight St Sydney NSW 2000

Bank of Ireland Colvill House Talbot St, Dublin 1 Ireland

SOLICITORS

Freehills MLC Centre Martin Place Sydney NSW 2000

Holding Redlich Level 12, The Chifley Tower 2 Chifley Square Sydney NSW 2000

Gaines, Solomon Law Group LLP 1901 Avenue of the Stars Suite 1100 Los Angeles, California 90067 USA

SHARE REGISTRY

Computer Investor Services Pty Ltd Level 3, 60 Carrington Street Sydney NSW 2000 Ph 1300 855 080 Fax 61 2 8234 5050

Corporate Directory

The Company is in a robust financial position with a solid balance sheet, no bank debt and strong operating cash flows

beyond international annual report 2008 · 4 beyond international annual report beyond...

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