for personal use only - asx2011/03/31 · the company announced it had made the final payment for...

Annual Report 2010oOh!media Group LimitedACN 091 780 924ASX Code: OOH

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Contents PageChairman’s Report 01Highlights/Key Events of 2010 02CEO’s Report 03Directors’ Report 04 Corporate Governance 15Statement of Comprehensive Income 24Balance Sheet 25Statement of Cash Flows 26Statement of Changes in Equity 27Notes to the Financial Statements 28Directors’ Declaration 62Auditor’s Independence Declaration 63Independent Auditor’s Report 64Shareholder Information 66

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Chairman’s Report

01

It is extremely pleasing to report yet another record result for shareholders.

These figures are the result of outstanding management and outstanding staff:

• NPATup43%to$7.0million• Revenueup28%to$109.7millionversusindustrygrowthof19%• 42%EBITDAgrowthto$21.1million• Debt/EBITDAratioreducedto1.7times• EPSup38%to1.8cents.

EightyearsagooOh!mediaembarkedonastrategyofgrowingthebusinessbothorganicallyandbyacquisition.Sincethenwehavemade14valueaccretiveacquisitionsandhavesubstantiallyincreasedouradvertisingassetinventoryacrossallourmajorproductformats.

ThesharepricemorethandoubledbetweenJanuaryandDecember2010.ButinvestorsarenottheonlypeopletonoticetheoutstandingperformanceofoOh!media.Herearesomeotherendorsements:

• AdNews‘Top3MediaCompany’2008,2009and2010.• BRWFast100Company2009• BRW50BestPlacestoWorkCompany2010• Ernst&YoungEntrepreneuroftheYear2010–EasternRegionWinner:BrendonCook

ThisrecognitionhasbeenbroughtaboutasaresultofmarketleadershipinRegionalandmanyMetropolitanoutdoormarkets,atrackrecordofstronggrowthandtheexperienceofthemanagementteam.

Inanenvironmentwherethereisastrongfocusonliquiditymanagementandagenerallyheldbeliefthatdebtlevelsneedtobecarefullymanaged,yourcompanyhasbeenabletostrengthenitsBalanceSheetinthisregard.

During2010,NetDebtwasreducedfrom$56.1millionto$36.4million(3.8XEBITDAdownto1.7XEBITDA).SincethentheNetDebthasbeenfurtherreducedto$26.0Million(1.2xEBITDA).

Thesereductionswereachievedasaresultofacombinationoffreecashflowandaverysuccessfulcapitalraisingwhichwaspricedatapremiumtothemarket.

Ourbankingfacilitiesaremorethanadequateforthefutureoperationsandwecontinuetooperatewellwithinallbankingcovenants.

NotwithstandingtheimpressiveongoingperformanceofoOh!media,thereisnocomplacencyabouttheneedtoreviewthebuildingblocksoffutureperformanceonacontinualbasis.Theprincipalbuildingblockisourpeopleandweareacutelyawareoftheneedforinvestmentinprogramsunderpinningstaffretentionanddevelopment.Thisleadstostabilityandensuresweneverlosesightofourexistingandpotentialcustomers.

Inaddition,weareconstantlylookingforimprovementsinourproductportfoliowithafocusondevelopingbetterwaystoutiliseproductmixthroughmarketing,salesandtechnologyupgrades.

Thusweplantocontinuetoleadthemarket.

Iwouldliketoexpressourappreciationofthesupportreceivedfrombothofourmajorshareholders,MacquarieandWPP.TheirpresenceattheBoardtablehasbeenasignificantfeatureinthecontinuedsuccessofoOh!media.

AgainIwishtopaytributetoBrendonCookandeverymemberofthestaffatoOh!media.Theirdedicationandprofessionalismisexemplaryandisamodelfor any organisation .

Itispleasingtonotethat2011hasstartedverywellandwelookforwardtoanothergoodyear.

Thankyouverymuchforyourcontinuedsupport.

GrahamJones31March2011

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Highlights / Key Events of 2010

02

Key Events

07.05.10 oOh!media launches all-in-one home and workshop on wheelsChiefExecutiveOfficerBrendonCooksaidacalltostaffforsome‘out-there’solutionstoimprovecustomerservice,productivityandprofitpromptedauniquetakeonthemobilehomeofficeconcept–acustom-fittedsemi-trailercompletewithbedroom,kitchen,officeandworkshop–thatwilltravelAustraliatoservicethecompany’s5,000+retailadvertisingsites.

Acostanalysisofwhatwasrequiredshowedthatbybuildingamobilehome/officeworkshopfortheassetmanagertobasehimselfoutofforthemainpartofayear,thecompanyisexpectedtorealisesavingsofsome$250,000p.a.asaresultofextendedlifeofinventory,reducedfreightcostsandtravelandaccommodationsavings.

“Itallowsustomaintainandupdatesitesinshoppingcentresinacosteffectiveandtimelyway,stayintouchwithourregionalclientsandgeton-the-groundfeedback,”MrCooksaid.

15.06.10 oOh!media’s WA growth is the tonicFollowingitsmajorexpansioninthePerthmarketoverthepastfouryears,oOh!mediaappointedsalesrepresentationcompany,MediaTonic,toenhanceitsdeliverytolocalclientsandagencies.WesternAustraliahasbeenakeyfocusareaforthecompanysince2006asithadidentifiedsignificantdemandformarketerstogaingreaterconnectionwithconsumersthroughout-of-homeadvertising.

Wehaveinvestedheavilyininfrastructureandhavemorethandoubledourlargeformatbillboardinventory,introducedretailadvertisingin58shoppingcentresandwecontinuetoaddregionalbillboardstoouroffering.

25.06.10 oOh!media named one of the top 50 Best Places to Work for 2010BasedontheGreatPlacetoWorkInstituteAustralia’sannualresearchwhichconsideredthecultureoftheorganisationandresultsofatrustindexsurveywithstaff,oOh!wasoneofonlysevenmediacompaniestomakethelist.

30.11.10 oOh!media announces $20 million placementoOh!mediaannouncedithadsuccessfullyraised$20milliontohelpthecompanypursuefurthergrowthplansthroughtheplacementof99,248,120newor-dinarysharestoinstitutionalandsophisticatedinvestors.ThefullysubscribedcapitalraisingfollowedNovember’sannouncementthatthecompanyexpectedrevenuestoincreasebyupto38%tobetween$108millionand$110million-thefourthconsecutiveyearofdoubledigitearningsgrowth.

31.01.11 oOh! makes final payment for Sports and Outdoor MediaTheCompanyannouncedithadmadethefinalpaymentforitsSportsandOutdoorMediaPtyLtdacquisitionearlierthanthecontracteddate,followingitsrecentsuccessfulcapitalraising.Undertheearlysettlementagreement,$18.5millionwaspaidtothevendor,consistingof$4.2millioninordinarysharesat20centspershareand$14.3millionincashforthebalanceofthedeferredconsideration.Therearenofurtherpaymentstobemadeinrespectofthisacquisition.

Highlights

•Salesrevenuewasupby28%overthecorrespondingperiodin2009,againstanindustryincreaseof19%.•EBITDAwasup42%overthecorrespondingperiodin2009.•EBITmarginimprovedfrom13.0%in2009to15.4%in2010.•TheGroupdelivereda$2.1millionnetprofitimprovementover2009.

Underlying Media Revenue ($M)

2003 24.1

2004 29.1

2005 32.8

2006 34.4

2007 55.7

2008 75.5

2009 86.0

2010 109.7

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Strategy Overview

WecontinuetoleadthemarketinRegionalAustralia,inbothlargeformatandretailproducts,throughbringingnewadvertisersontoourinventory.

Wehavethemostshoppingcentresofalltheout-of-homemediacompanies,withfurthergrowthinsignandcentrenumbersplannedfor2011andbeyond.Thisleadershippositionwithatrulynationalretailofferingcontinuestoattractadvertisingspendawayfromothermediums.

Ourlargeformatsignshavebeenboostedin2010bythepost-GFCrecoveryandnewsignsthroughtenderswinsinSydney,andthroughthe continued promotion of this format and increased adoption of MOVEastheindustryaudiencemeasurementcurrency,weexpectsolidgrowthinthisareaalso.

StaffoOh!mediaiscommittedtoitscultureandinvestmentinstaff.Stafftraining,developmentandretentionarecriticaltooOh!mediacontinuingtodeliverincreasingmarketshareandvaluetoourshareholders.Ourinclusioninthe2010BestPlaceToWorkInstitute’s‘Top50employers’lististestamenttotheimportanceweplaceonourstaffandourworkplace.

Future Outlook

TheBoardandmanagementareconfidentthatthecompany’searningsaresustainableandthatourcoreproductshavepotentialforgrowthanddevelopmentthatwillcontinuetoseethecompanyperformstronglywithinthegrowingoutdoormediasector.

Wewillcontinuetoinvestinnewinventoryandwell-pricedacquisitionswheretheymakestrategicsenseandifandwhentheybecomeavailable.Itisnosurprisethatwemakethesamestatementforanotheryear,namelythat“thebusinessisstructuredforsustainableperformancewithinchangingeconomicconditions”.

BrendonCookCEOandManagingDirector31March2011

03

CEO’s Report

Results commentary

In2010,wecontinuedtheearningsgrowthshownoverthelast5years.

Ourplanstoinvestinorganicgrowthandtounlockthevalueinouracquisitionshasonceagainbeensuccessful.Theacquisitionswehavemadecontinuetoperformabovetheirpurchasemultiples,asplanned.

Wecontinuedtodeliveronourmarketsharegrowthplansaroundour3coreproductareas:bigbillboardsinmetropolitanareas,regionalbillboardsandretailmedia.

Revenuesfortheyeargrew28%to$109.7million,cappingoff3yearsofmassivegrowth:97%from2007to2010.OurmarketshareinAustraliahasdoubledduringthisperiod(theoutdoorindustrygrew9%overthissameperiod).

Thisdoublingofmarketsharehasbeensoundlyexecutedandwehavebeencarefulnotto‘buy’revenueorimpactprofitabilitybyincreasingourfixedcostbasefasterthanourrevenue.IndeedourEBITDAmarginhascontinuedtogrow,reaching19.2%for2010.

Inthelast8consecutiveyearsofrevenuegrowth,therehasonlybeen1quarterwhererevenuegrowthhasnotexceededthecorrespondingquarterinthepreviousyear.

Oursuccessfulbusinessmodeltodatehasbeenbuilton: -salessuccessthroughchangingeconomicconditions; -expansioninhighermarginproducts; -lowriskpropertyownershipprofiles;and -scalableoperationsmeaningwecanaddmoreinventory withlittleneedforadditionaloverheads.

Ourdiversepropertyownershipbasemeansthatnoonepropertycontractdeliversmorethan4%ofourrevenue.

Ourbalancesheetwasstrengthenedsignificantlywiththe$20millioncapitalraisingandsubsequentsettlementofthebalanceoftheSportsandOutdoorMediaacquisitioninDecember2010andJanuary2011.

ThecompanyisinastrongfinancialpositionwithrecentdebtreductionandaDebt/EBITDAratioamongstthelowestintheAustralianmediasector.

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Directors’ Report

The consolidated net profit after tax for the year comprises: 2010 2009

$’000 $’000

Revenuefromsales 109,700 86,040

Earningsbeforenetborrowingcosts,tax,depreciationandamortisation 21,117 14,925

Depreciationandamortisation (4,306) (3,779)

Earningsbeforenetborrowingcostsandtax 16,811 11,146

Netborrowingcosts (5,629) (4,661)

Profitfromordinaryactivitiesbeforeincometax 11,182 6,485

Incometax(expense) (4,154) (1,594)

Netprofitaftertax 7,028 4,891

Results and financial position

YourDirectorspresenttheirreportonoOh!mediaGroupLimitedforthe

yearended31December2010.

Directors

ThefollowingpersonswereDirectorsoftheCompanyduringthewhole

year and until the date of this report:

MrBrianBickmore

MrChristopherBregenhoj(ExecutiveDirector)

MrBrendonCook(ManagingDirectorandCEO)

MrGrahamJones(Chairman)

MrDavidStanden

MrGeoffreyWildAM

Netcashflowfromoperatingactivitiesfortheyearamountedto$14,032,000(2009:$9,697,000),animprovementof$4,335,000.

Netcashflowfortheyearamountedto$11,373,000(2009:$591,000)reflectingtheincreasedcashflowfromoperatingactivitiesandproceedsfromshare

issues in the year.

Netassetsfortheyearincreasedby$20,001,000to$87,091,000at31December2010.

04

Principal activities

oOh!mediaGroupLimitedistheonlypureout-of-homemediacompany

listedontheASX.TheGroup’sactivitiesincludeout-of-homemedia,

productionandadvertising.TheGroupcontinuestofocusontheoutdoor

advertisingindustryandaccordinglyithasmadeanumberofacquisitions

inthemediaindustry.Itintendstocontinuetogrowitsbusinessthrough

organicdevelopmentandacquisition.

Therewerenosignificantchangesinthenatureoftheactivitiesduring

thefinancialyear,otherthanasdetailedinthereviewofoperationsand

significantchangesinthestateofaffairsnotedbelow.

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Information on Directors

Particulars of Directors’ interests in

shares and options of the Company

Director Special Responsibilities Independence Shares Options

Non-executive Directors

MrBrianBickmore ChairmanofAuditCommitteeChairmanofRemunerationCommittee

Independent 130,000 750,000

MrGrahamJones,Chairman MemberofAuditCommitteeMemberofRemunerationCommittee

Independent 100,541 750,000

MrDavidStanden MemberofAuditCommittee Notindependent - 750,000

MrGeoffreyWildAM MemberofRemunerationCommittee Notindependent - 750,000

Executive Directors

MrChristopherBregenhoj MemberofAuditCommittee Notindependent 13,650,000 4,500,000

MrBrendonCook CEOandManagingDirector Notindependent 11,559,250 6,000,000

Dividends

Nodividendswerepaidduringtheyearandnodividend

is proposed.

Review of operations

TheGroupoperatedintheout-of-homemediaindustry.Currentlythe

GrouphasoperationsonlyinAustralia.

Significant changes in the state of affairs

On16November2009,theGroupannouncedthatithadfinalisednegotiationstoextendthedateoffinalpaymentforSportsandOutdoorMediaPtyLtdto31December2011,withtherightforearlyrepayment.Underthenewagreement,theGroupextendedthefinalinstalmentto31December2011,fortheissueof$1.2millioninsharesiftheoutstandingamountwasnotpaidby31December2009,andafurtherpaymentof$1.2millionincashifthefinalinstalmentwasnotmetby31March2010.Thecompanyalsoannouncedthataspertheoriginalacquisitionagreement,deferredconsiderationof$2.3millionincashand10millionoOh!mediasharesforachievingtheperformancecriteriawouldbesettledby31March2010.

On31January2011,theCompanyannouncedithadmadethefinalpaymentforitsSportsandOutdoorMediaPtyLtdacquisitionearlierthanthecontracteddate,followingitsrecentsuccessfulcapitalraising.Undertheearlysettlementagreement,$18.5millionwaspaidtothevendor,consistingof$4.2millioninordinarysharesat20centspershareand$14.3millionincashforthebalanceofthedeferredconsideration.Therearenofurtherpaymentstobemadeinrespectofthisacquisition.

Matters subsequent to the end of the financial year

Thereisatthedateofthisreportnomatterorcircumstance,otherthanas

notedinnote29tothefinancialstatements,whichhasarisensince

31December2010thathassignificantlyaffectedormayaffect:

i. theoperationsoftheGroup;

ii. theresultsoftheseoperations;or

iii. thestateofaffairsoftheGroupforthefinancialyearssubsequentto

31December2010.

Likely developments and expected results of operations

Furtheracquisitionandgrowthopportunitiesarebeinginvestigated,

withaviewtobroadeningtheGroup’sbusinessbasetomaximise

shareholdervalue.

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Directors’ Report

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Qualification and experience of Directors Non-executive Directors Mr Brian Bickmore (appointed17May2005)BrianBickmoreisoneofAustralia’sleadingmediaexecutivesandbringstooOh!mediaconsiderablelocalandinternationalsuccessinbuildingandoperatingnationalmedianetworksandenterprises.AsafoundingexecutivememberandlongestservingDirectorofAustereoGroupLimited,MrBickmorehasbeenattheforefrontoftheAustralianradioindustryforover25years.FollowingMrBickmore’sretirementfromAustereoGroupLimitedin2004,heassumedindependentdirectorshipswithlistedmediagroupsRGCapitalRadioLimitedandPhotonGroupLimited.MrBickmoresubsequentlyassumedtheroleofIndependentChairmanofRGCapitalRadioLimited.HeisalsoChairmanofAustralianbakerycafechainPieFace.

Mr Graham JonesFCPA,FAICD(appointed5October2001) ChairmanGrahamJones,whoispresentlyPrincipalofWallaceJones&HoodPtyLtd,abusinessandartconsultancy,hashadalongcareerinbusinessinAustraliaandinternationally.MrJonesconductsasuccessfulconsultancyspecialisinginbusinessstrategy,reconstruction,costreductionandorganisationaleffectiveness.HehasheldthefollowingpositionsasTreasurerofIBMAustralia/NZandCFO/FinanceDirectorofRankIndustriesAustralia,CapitaFinancialGroup,HouseofFraserHoldings(incorporatingHarrodsLtd)andQantasAirwaysLtd.HeisalsoChairmanofMediaAccessAustralia,aNotForProfitorganisationencouragingaccesstoallformsofmediaforpeoplewithdisabilities.

Mr David Standen (appointed3July2006) DavidStandenisanExecutiveDirectorofMacquarieCapitalAdvisersLimited,aMacquarieGroupLimitedcompany,focusingoncorporateadvisoryandprivateequityinvestmentsinthetelecommunications,mediaandtechnologymarkets.PriortojoiningMacquarieBank,MrStandenhasservedinexecutivecapacitiesatNCR,AT&TandasaPartnerinthelegalfirmGilbert&Tobinandbringsmanyyearsoperationalandtransaction experience.

Mr Geoffrey Wild AM(appointed10July2007) GeoffreyWildhasspentoverthirtyyearsintheadvertisingindustry,includingasDeputyChairmanofClemengerBBDO,andaBoardMemberofBBDOWorldwide.HewasChairmanoftheNSWTourismCommission,andaDirectoroftheSydneyOlympicCommitteeBidCompanyandoneoffourVicePresidentsofthatCommittee.CurrentlyMrWildsitsonseveralboardsincludingasChairmanofWPPHoldings(Australia)PtyLtdandComOpsLimited.HeisDeputyChairmanofArabBankAustraliaLimited,andalongservingBoardMemberofPhilRuthven’sIBISWorld,thebusinessandeconomicforecastinggroupanduntilrecently,ofthePGA(ProfessionalGolfAssociation).HeisaformerDirectoroftheNSWTABLimitedandOPSM.HewasawardedtheOrderofAustralia(AM)in2000,forhiscontributiontobusiness,tourismandtheOlympics.

Executive Directors

Mr Brendon CookCEOandManagingDirector(appointed15November2002) BrendonCookfoundedOutdoorNetworkAustralia,nowknownasoOh!media,in1989.MrCookhashad32years’experienceinoutdoormediawithcompaniesincludingAustralianPosters,BritescreensandAlanDavis.MrCookisalsoaboardmemberoftheOMA(OutdoorMediaAssociationofAustralia)andhas,formorethan12years,beenanactivememberoftheExecutiveConnectionGroup,aninternationalorganisa-tiondedicatedtoincreasingtheeffectivenessofCEOs.

Mr Christopher BregenhojExecutiveDirector(appointed20February2000)ChristopherBregenhojworkedfor13yearsinHongKongwherehestartedhiscareerasapracticingaccountantandbecameapartnerinKPMG.SubsequentlyhejoinedMorganGrenfell(HongKong)LimitedasanAssociateDirector.In1988hereturnedtoAustraliawhereheestablishedFirstEquityCapitalLtd,aprivateinvestmentbankingandcorporateadvisorycompanywhichjoinedwithConsortiumCapitalLimitedandGeminiInvestmentHoldingsLimitedtoformGeminiCapitalLimitedin1996.Hewasappointedasnon-executivechairmanofHumanTherapeuticsGroupinDecember1999andhasbeenadirectorofoOh!mediaGroupLimitedsinceitsincorporationon28thFebruary2000asPi2Ltd.

Company Secretary

Mr Michael Egan (appointed3May2001)MichaelEganisCompanySecretaryoftheCompanyanditscontrolledentities.MrEganhasarangeofexperienceintheCharteredAccountingprofession,inbusinessandinconsulting.MrEganhasheldDirectorshipsinASXlistedcompaniesandinAustraliansubsidiariesofmulti-nationalcompaniesincludingAnglo-AustraliangroupRioTintoandHoechst(Germany).

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Directors’ Report

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Meetings of DirectorsThenumberofmeetingsoftheCompany’sBoardofDirectorsandotherBoardCommitteesheldduringtheyearwhiletherelevantDirectorwasinoffice,and

eligibletoattend,andthenumberofmeetingsattendedbyeachDirectorwere:

Full board meeting Audit Committee Remuneration Committee

Director Eligible to attend

Attended Eligible to attend

Attended Eligible to attend

Attended

MrBrianBickmore 12 12 2 2 2 2

MrChristopherBregenhoj 12 12 2 2 - -

MrBrendonCook 12 12 - - - -

MrGrahamJones 12 12 2 2 2 2

MrDavidStanden 12 7 2 1 - -

MrGeoffreyWildAM 12 12 - - 2 2

Retirement, election and continuation in office of Directors

EachDirectorholdsofficeuntilthefirstAnnualGeneralMeetingafterhis/herappointment,atwhicheachDirectorseekingre-electionasaDirectormustofferhimself/herselfforre-electioninaccordancewiththeCompany’sConstitution.TheManagingDirector,byreasonofholdingofficeasManagingDirectoroftheCompany,isexemptedfromtheprovisionsoftheConstitutionthatrequirehim/hertobere-electedtooffice.

Environmental Regulations

TheCompanyhasdeterminedthatthereisnoparticularorsignificantenvironmentallegislationwhichisrelevanttoitsoperations.

Insurance of Officers

Duringthefinancialyear,apremiumof$43,526waspayabletoinsureallDirectorsandofficersoftheCompanyandrelatedbodiescorporate.

TheliabilitiesinsuredincludecostsandexpensesthatmaybeincurredindefendingcivilorcriminalproceedingsthatmaybeboughtagainstanyDirectorintheircapacityasofficeroftheCompanyorarelatedbodycorporate.

Websites

FurtherinformationinrelationtooOh!mediaGroupLimitedanditscontrolledentitiesisavailableontheGroup’swebsiteatwww.oohmedia.com.au.

Proceedings on behalf of the Company

NopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedingsonbehalfoftheCompany,ortointerveneinanyproceedingstowhichtheCompanyisaparty,forthepurposeoftakingresponsibilityonbehalfoftheCompanyfor all or part of those proceedings.

NoproceedingshavebeenbroughtorintervenedinonbehalfoftheCompanywithleaveoftheCourtundersection237oftheCorporationsAct2001.

Auditor

PKFhavebeenappointedasAuditorinaccordancewithsection327oftheCorporationsAct2001.

Directors’ Report

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Independence declaration

InaccordancewiththeAuditIndependencerequirementsoftheCorporationsAct2001,theDirectorshavereceivedandaresatisfiedwiththe“Auditor’sIndependenceDeclaration”providedbytheGroupexternalauditorPKF.AcopyoftheAuditor’sIndependenceDeclarationasrequiredundersection307CoftheCorporationsAct2001issetout

onpage62.

Non-Audit Services

TheCompanymaydecidetoemploytheauditoronassignmentsadditionaltotheirstatutoryauditdutieswheretheauditor’sexpertiseandexperiencewiththeCompanyand/ortheGroupareimportant.

Detailsoftheamountspaidorpayabletotheauditorforauditandnon-auditservicesprovidedduringtheyeararesetoutbelow.

TheBoardofDirectorshasconsideredtheposition,and,inaccordancewiththeadvicereceivedfromtheAuditCommittee,issatisfiedthattheprovisionofthenon-auditservicesiscompatiblewiththegeneralstandardofindependenceforauditorsimposedbytheCorporationsAct2001.

TheDirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutbelow,didnotcompromisetheauditor’sindependencerequirementsoftheCorporationsAct2001forthefollowingreasons:

• allnon-auditserviceshavebeenreviewedbytheauditcommitteetoensuretheydonotimpacttheimpartialityandobjectivityoftheauditor;and

• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependence,includingreviewingorauditingtheauditor’sownwork,actinginamanagementoradecision-makingcapacityfortheCompany,actingasadvocatefortheCompanyorjointlysharingeconomicriskandrewards.

2010$

2009$

Audit and other assurance services:

-Auditorreviewoffinancialreports 234,242 171,500

-Otherassuranceservices 20,790 2,100

Other Services:

-Advisoryservicesandtaxation - 4,500

DuringtheyearthefollowingfeeswerepaidorpayableforservicesprovidedbytheauditoroftheCompany,itsrelatedpracticesandnon-relatedauditfirms:

Rounding of amounts

TheCompanyisofakindreferredtoinClassOrder98/0100,issuedbytheAustralianSecuritiesandInvestmentsCommission,relatingtothe‘roundingoff’of

amountsintheDirectors’Report.AmountsintheDirectors’ReporthavebeenroundedoffinaccordancewiththeClassOrdertothenearestthousanddollars,

orincertaincases,tothenearestdollar.

Directors’ Report

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Remuneration Report ThisreportsetsoutinformationinrespectoftheCompany’sremunerationpoliciesinrespectofDirectorsandkeymanagementpersonnel,includingtherelationshipbetweenremunerationpoliciesandtheCompany’sperformance;prescribeddetailsofDirectorsandkeymanagementpersonnel;detailsofsecuritiesincludedintheremunerationofDirectorsandkeymanagementpersonnel;anddetailsofthecontractsunderwhichthesepersonsareemployed.

Principles used to determine the nature and amount of remuneration TheobjectiveoftheCompany’sexecutiverewardframeworkistoensurerewardforperformanceiscompetitiveandappropriatefortheresultsdelivered.Theframeworkalignsexecutiverewardwithachievementofstrategicobjectivesandthecreationofvalueforshareholders,andconformswithmarketbestpracticeforthedeliveryofreward.

TheBoardhasstructuredanexecutiveremunerationframeworkthatismarketcompetitiveandcomplementarytotherewardstrategyoftheCompanyandwhichistransparent.

Thealignmentoftheremunerationpolicytoshareholders’interestfocusesonmaintainingsustainablegrowthinshareholderwealththroughgrowthinsharevalueanddeliveringreturnsonassetsemployed.

Thealignmentoftheremunerationpolicytoparticipants’interestisbasedonprovidingaclearunderstandingfortheearningofrewards,reflectscontributiontoshareholderwealthandrewardsexperienceandcontribution.

Theframeworkprovidesforfixedpaywithablendofshortandlongtermincentives.

Non-executive Directors Feesandpaymentstonon-executiveDirectorsreflectthedemandswhicharemadeon,andtheresponsibilitiesof,beingaDirectorofalistedcompany.Remunerationfornon-executiveDirectorsconsistsofannualfeesandsuperannuationcontributions.Thefeespaidtonon-executiveDirectorsarereviewedannually.TheBoardasawholehasresponsibilityforreviewingandrecommendingthelevelofremunerationfornon-executiveDirectors. Directors’feeshavebeendeterminedonthebasisthattheyareappropriateandinlinewiththemarket,andtoensuretheCompany’sBoardiscomprisedofskilledandwell-qualifiedDirectors.

Thenon-executiveDirectorsareentitledtoparticipateintheCompany’sEmployeeShareOptionPlan(‘ESOP’).TheCompany’sconstitutionpermitsretirementbenefitsfornon-executiveDirectors.Non-executiveDirectors’feesaredeterminedwithintheaggregateannualfeespoollimitof$500,000.Thefeespaidtonon-executiveDirectorsareinclusiveof committee fees.

Key management personnel pay Thekeymanagementpersonnelpayandrewardframeworkhasfourcomponents: • basepayandbenefits;• long-termincentivesthroughparticipationintheCompany’sESOP;• bonusesfortheachievementofpresettargetswhereappropriate;

and• otherremunerationsuchassuperannuation.

Thecombinationofthesecomponentsformsthekeymanagementpersonnel’stotalremunerationpackage.

Basepayisstructuredasatotalemploymentcostpackagewhichmaybedeliveredasacombinationofcashandprescribednon-financialbenefitsatthekeymanagementpersonnel’sdiscretion.

Basepayforkeymanagementpersonnelisreviewedannuallytoensureremunerationlevelsarecompetitivewithmarketrates.Therearenoguaranteedbasepayincreasesincludedinkeymanagementpersonnel’scontracts.

Keymanagementpersonnelgenerallyreceivebenefitsincludingcarallowancesandcarparking. Retirementbenefitsareprovidedbycontributiontoanaccumulationsuperannuationfundofeachkeymanagementpersonnel’schoice.

Shorttermincentive(STI)bonusesarepaidtoindividualkey

managementpersonnelupontheachievementofpredetermined

personalobjectives.Thebasisofthebonusistiedtotheroleoccupied

bythekeymanagementpersonnelandthecorporateoutcomesthat

heorshecaninfluence.Theappropriatetargetsandkeyperformance

indicatorsaresetannuallyaspartoftheCompany’sbudgeting

procedures.

TheCompanyprovidesequity-linkedincentivestokeymanagement

personnelthroughtheCompany’sESOP.InformationontheCompany’s

ESOPissetoutbelow.

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Directors’ Report

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ThefinancialperformancemeasuresdrivingSTIpaymentsareearningspershare(EPS)andearningsbeforeinterest,tax,depreciationandamortisation

(EBITDA).DetailsofoOh!mediaGroupLimited’sEPSandEBITDAoverthefiveyearperiodfrom1January2006to31December2010aresetoutbelow:

2006 2007 2008 2009 2010

EPS(cents) 0.04 0.2 0.9 1.3 1.8

EBITDA($M) 1.1 7.5 11.3 14.9 21.1

Directors and key management personnelNames and positions held of parent entity Directors and key management personnel in office at any time during the financial year are:

Parent entity Directors:Name Role Period of tenureMrBrianBickmore Director–non-executive Allyear MrChrisBregenhoj Director–executive AllyearMrBrendonCook ManagingDirector&ChiefExecutiveOfficer–executive AllyearMrGrahamJones Chairman–non-executive AllyearMrDavidStanden Director–non-executive Allyear MrGeoffreyWildAM Director–non-executive Allyear

Key management personnel: Name Role MrNoelCook GeneralManagerRegional Allyear MrMichaelEgan CompanySecretary Allyear MrJohnO’Neill GeneralManagerSales AllyearMrMalcolmPearce GeneralManagerAssetsandOperations Allyear MrSimonYeandle ChiefFinancialOfficer Allyear

Service AgreementsRemunerationandothertermsofemploymentfortheexecutiveDirectorsandkeymanagementpersonnelinthetablebelowareformalisedinservice

agreements.DetailsofcurrentserviceagreementsinplacewithDirectorsorkeymanagementpersonneloftheCompanyaresetoutinthetablebelow.

Name Period of tenureTerm of

agreement Termination notice Termination payment

MrChristopherBregenhoj Allyear Unspecified 12months Noticeperiod

MrBrendonCook Allyear Unspecified 12months Noticeperiod

MrNoelCook Allyear Unspecified 6months Noticeperiod

MrMichaelEgan Allyear From1July2009to30June2011

FixedTerm Feesto30June2011

MrJohnO’Neill Allyear Unspecified 12months Noticeperiod

MrMalcolmPearce Allyear Unspecified 1month 3months

MrSimonYeandle Allyear Unspecified 12months Noticeperiod

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2009

Non-Executive Directors

MrBrianBickmore 75,000 - - - - - 75,000 100% - -

MrGrahamJones,Chairman 75,000 - - - - - 75,000 100% - -

MrEdwardPretty - - - - - - - - - -

MrDavidStanden 65,000 - - - - - 65,000 100% - -

MrGeoffreyWildAM 65,000 - - - - - 65,000 100% - -

Executive Directors

MrChristopherBregenhoj 277,950 35,100 104,528 - - - 417,578 75% 25% -

MrBrendonCook 325,000 20,750 172,018 44,732 - 40,954 603,454 64% 29% 7%

Total Directors 882,950 55,850 276,546 44,732 - 40,954 1,301,032

Other key management personnel

MrNoelCook 297,700 12,300 108,500 - - - 418,500 74% 26% -

MrMichaelEgan 126,000 8,700 20,205 - - - 154,905 87% 13% -

MrJohnO’Neill 402,400 4,800 165,440 - - - 572,640 71% 29% -

MrMalcolmPearce 234,125 4,800 83,490 28,585 - - 351,000 76% 24% -

MrSimonYeandle 205,233 6,300 83,028 25,944 - - 320,505 74% 26% -

Total other key management personnel 1,265,458 36,900 460,663 54,529 - - 1,817,550

2010 Short-term benefits

Post employment

benefitsShare-based

payments % of total

Name

Base fee/pay

$Benefits

$Bonus

$

Super -annuation

$Options

$Shares

$Total

$ Fixed

At risk -

STIShares/options

Non-Executive Directors

MrBrianBickmore 75,000 - - - 52,093 - 127,093 59% - 41%

MrGrahamJones,Chairman 75,000 - - - 52,093 - 127,093 59% - 41%

MrDavidStanden 65,000 - - - 52,093 - 117,093 56% - 44%

MrGeoffreyWildAM 65,000 - - - 52,093 - 117,093 56% - 44%

Executive Directors

MrChristopherBregenhoj 277,950 35,100 180,000 - 48,997 - 542,047 58% 33% 9%

MrBrendonCook 325,000 46,300 286,000 29,250 65,329 - 751,879 53% 38% 9%

Total Directors 882,950 81,400 466,000 29,250 322,698 - 1,782,298


MrNoelCook 297,700 12,300 175,000 - 6,533 - 491,533 63% 36% 1%

MrMichaelEgan 126,000 8,700 40,000 - 5,733 - 180,433 75% 22% 3%

MrJohnO’Neill 377,200 30,000 256,000 - 54,904 - 718,104 56% 36% 8%

MrMalcolmPearce 234,128 4,800 145,000 21,072 6,533 - 411,533 63% 35% 2%

MrSimonYeandle 230,229 6,300 150,000 20,721 11,120 - 418,370 61% 36% 3%

Total other key management personnel 1,265,257 62,100 766,000 41,793 84,823 - 2,219,973

Details of RemunerationDetailsofremunerationprovidedtoDirectorsandkeymanagementpersonnelaresetoutinthetablebelow.Thebonusesandcommissionsaredependent

onthesatisfactionofperformanceconditions.Allotherelementsofremunerationarenotdirectlyrelatedtoperformance.

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Share based compensation

AnEmployeeShareOptionPlan(‘ESOP’)isoperatedbytheCompanytoallowselectedpermanentemployeesandDirectorstoparticipateinthegrowthof

theCompanythroughtheissueofoptionsoverordinarysharesintheCompany.EligibilityforparticipationisatthediscretionoftheBoard.Optionsgranted

undertheCompany’sEmployeeShareOptionsPlan(‘ESOP’)wereapprovedbyshareholdersatameetingofshareholderson21May2010.

TheESOPisdesignedtoencourageretentionofkeyemployees,provideanincentiveforfutureperformanceandalignemployeeinterestswithshareholder

valueinthefuture.Optionsgrantedundertheplanarefornoconsideration.OptionsgrantedundertheCompany’sESOPcarrynodividendorvotingrights.

Theoptionsmustnotbetransferred,encumberedorotherwisedisposedofwithoutthepriorconsentoftheBoard.

Optionsareexercisable:

• atpredeterminedexercisedates;and

• atvariableexercisepriceswhichwerecalculatedhavingconsiderationtothesharepriceoftheCompanyatthetimetheESOPwasapprovedby

shareholders.

ExerciseoftheoptionsiscontingentuponkeymanagementpersonnelremainingemployedbytheCompany,within12monthsofceasingemploymentoron

achievingperformancecriteria.Whenexercised,eachoptionisconvertibletooneordinaryshare.

Shareholdings and Optionholdings of Directors and key management personnelThenumberofordinarysharesintheCompanyheldduringthefinancialyearbyDirectorsandkeymanagementpersonnel,includingtheirpersonallyrelated

entitiesaresetoutbelow.

Name

Balance atstart of

the year

Received duringthe year as

remunerationOther changes

during the yearBalance at end

of the year


MrBrianBickmore 90,000 - 40,000 130,000

MrGrahamJones,Chairman 100,541 - - 100,541

MrDavidStanden - - - -

MrGeoffreyWildAM - - - -

Executive Directors

MrChristopherBregenhoj 13,650,000 - - 13,650,000

MrBrendonCook 11,559,250 - - 11,559,250

Total Directors 25,399,791 - 40,000 25,439,791


MrNoelCook 500,000 - (500,000) -

MrMichaelEgan 400,500 - - 400,500

MrJohnO’Neill 18,500,000 - (13,500,000) 5,000,000

MrMalcolmPearce - - - -

MrSimonYeandle 676,528 - - 676,528

Total other key management personnel 20,077,028 - (14,000,000) 6,077,028

12

Ordinary shares provided as remuneration875,195and1,624,805shareswereissuedtoMrBrendonCookon22May2006and3July2006fornoconsideration.Thesharesweresubjecttoescrowfor

aperiodof3yearsfromthedateofissue,andweresubjecttoforfeitureifMrCook’semploymentwiththeCompanyisterminatedforanycauseorMrCook

resignsasanemployeeatanytimewithin3yearsofthedateofissueoftheshares.

InaccordancewithAASB2ShareBasedPayments,thevalueoftheshareswasexpensedoverthevestingperiod.Thesharebasedpaymentexpense

recognisedfor2010inrespectofMrBrendonCook’sshareswas$nil(2009:$40,954).ThefairvalueofMrBrendonCook’sshareswascalculatedusingmarket

pricesatthetimeofissue.Noamountremainsunpaidonthesharesissued.

Sincetheendoftheperiodtowhichthisreportrelatesanduptothedateofthisreport,noshareshavebeenissuedundertheESOP.

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Holder

Grant date Vesting date Expiry dateExercise

price

Fair value of each option

at grant date

Outstand-ing at

1 January 2010

Issued during

the year

Lapsed / exercised

duringthe year

Outstand-ing at 31

December 2010


MrBrianBickmore 21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

MrGrahamJones,Chairman

21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

MrDavidStanden 21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

MrGeoffreyWild 21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

Executive Directors

MrChristopherBregenhoj 21May2010 21May2012 20May2015 $0.12 $0.067 - 1,500,000 - 1,500,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 1,500,000 - 1,500,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 1,500,000 - 1,500,000

MrBrendonCook 21May2010 21May2012 20May2015 $0.12 $0.067 - 2,000,000 - 2,000,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 2,000,000 - 2,000,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 2,000,000 - 2,000,000

Total Directors - 13,500,000 - 13,500,000


MrNoelCook 21May2010 21May2012 20May2015 $0.12 $0.067 - 200,000 - 200,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 200,000 - 200,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 200,000 - 200,000

MrMichaelEgan 21May2010 21May2012 20May2015 $0.12 $0.067 - 200,000 - 200,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 150,000 - 150,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 150,000 - 150,000

MrJohnO’Neill 21May2010 21May2012 20May2015 $0.12 $0.067 - 1,700,000 - 1,700,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 1,700,000 - 1,700,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 1,600,000 - 1,600,000

MrMalcolmPearce 21May2010 21May2012 20May2015 $0.12 $0.067 - 200,000 - 200,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 200,000 - 200,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 200,000 - 200,000

MrSimonYeandle 21May2010 21May2012 20May2015 $0.12 $0.067 - 350,000 - 350,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 350,000 - 350,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 300,000 - 300,000

Total other key management personnel - 7,700,000 - 7,700,000

Options provided as remunerationThenumberofoptionsoverordinarysharesintheCompanyheldby,andprovidedasremunerationto,Directorsandkeymanagementpersonnelincluding

theirpersonallyrelatedentities,duringthefinancialyear,aresetoutbelow.

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Theassessedfairvalueatgrantdateofoptions,calculatedinaccordancewithAASB2ShareBasedPayments,grantedtoDirectorsandkeymanagement

personnelisallocatedequallyovertheperiodfromgrantdatetovestingdate,andtheamountsaredisclosedintheremunerationtables.Fairvaluesare

determinedusingaBlack-Scholesoptionpricingmodelthattakesintoaccounttheexerciseprice,thetermandexpectedlifeoftheoption,thevestingand

performancecriteria,theimpactofdilution,thesharepriceatgrantdateandexpectedpricevolatilityoftheunderlyingshare,theexpecteddividendyield

andtherisk-freeinterestrateforthetermoftheoption.

Inputsintothemodelusedaresetoutbelow:

Dividendyield:0%

Expectedvolatility:60%

Risk-freeinterestrate:5.60%

Expectedlifeofoptions:2.8to5years

Theseinputsarereviewedandupdatedforeachandeverygrantofoptions.

Termsofalloptions,optionexercisepricesandweightedaveragesharepricesatmeasurementdatearesetoutinnote20tothefinancialstatements.

Ordinary shares provided on exercise of remuneration options

NoordinarysharesintheCompanywereprovidedtoDirectorsorkeymanagementpersonnelasaresultoftheexerciseofremunerationoptions.

Loans to Directors and key management personnel

NoloanshavebeenmadetoDirectorsorkeymanagementpersonnel.

Directors’ benefits

Exceptassetoutinthefinancialreport,duringtheyearnoDirectoroftheCompanyhasreceivedorhasbecomeentitledtoreceiveabenefit,otherthana

remunerationbenefit,becauseofacontractthattheDirector,anentityofwhichtheDirectorisamember,oranentityinwhichtheDirectorhasasubstantial

financialinterest,hasmade(duringtheyearended31December2010oratanyothertime)with:

(a) theCompany,or

(b) anentitythattheCompanycontrolled,orabodycorporatethatwasrelatedtotheCompany,whenthecontractwasmadeorwhentheDirectorreceived,

orbecameentitledtoreceive,thebenefit.

ThisreportismadeinaccordancewitharesolutionoftheDirectors.

Mr Christopher Bregenhoj

Director,Sydney

31March2011

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Corporate Governance


TheBoardofoOh!mediaGroupLimitediscommittedtoadopting

thehigheststandardsofcorporategovernanceforoOh!mediaGroup

Limitedanditscontrolledentities(the‘Group’)consideringthesize

oftheGroup.Aspartofthisongoingcommitment,theboardhas

undertakenareviewofitscorporategovernanceframeworkagainst

theCorporateGovernancePrinciplesandRecommendations(Second

EditionCorporateGovernanceGuidelines)releasedbytheAustralian

StockExchange.TheGrouphascontinuedtorefineitscorporate

governancepracticesbasedonotherbestpracticespronouncements

andduringoOh!mediaGroupLimited’stradingontheAIMsegmentof

theLondonStockExchange,whoserulesmandatecertaincorporate

governancepractices.

TheimplementationoftheGroup’scorporatestrategiesandpoliciesis

delegatedtotheManagingDirectorandseniorexecutives.

TheDirectorsareresponsibletotheshareholdersfortheperformance

oftheGroupinboththeshortandthelongertermandseektobalance

thesesometimecompetingobjectivesinthebestinterestsoftheGroup

asawhole.Theirfocusistoenhancetheinterestsofshareholdersand

otherkeystakeholdersandtoensuretheGroupisproperlymanaged.

TheGroup’smaincorporategovernancepracticesaresetoutbelow.All

thesepractices,unlessotherwisestated,wereinplaceforthewholeof

the financial year.

1. The Board of Directors

TheBoardoperatesinaccordancewiththeprinciplessetoutbelow.In

developingandreviewingthesesprinciples,ithasbeenrecognisedthat

theGrouphasatightlyheldshareholderbase,withthetop10ofthe

Company’sapproximately1,000shareholdersholdinginexcessof91%

oftheequityintheCompany.ItisalsorecognisedthattheCompanyhas

amarketcapitalisationofapproximately$120million.

Composition of the Board

Ithasbeendeterminedthat:

• theboardshouldcomprisebothexecutiveandnon-

executiveDirectorswithamajorityofnon-executive

Directors.AllDirectors,butinparticularnon-executiveDirectors,

arechargedwithexercisingindependentjudgementandreviewof

performanceandrelatedriskissuesinrespectofoperatingactivities;

• inrecognitionoftheimportanceofindependentviewsoftheboard

andoftheBoard’sroleinsupervisingtheactivitiesofmanagement,

theChairmanoftheBoardmustbeanindependentnon-executive

Director;

• theChairmanoftheBoardiselectedbythefullBoardandisrequired

tomeetregularlywiththeManagingDirectorandChiefExecutive

Officer;and

• theGroupwillendeavourtomaintainamixofDirectorsfrom

differentbackgroundswithcomplementaryskillsandexperience.

Responsibilities

TheresponsibilitiesoftheBoardinclude:

• oversightoftheGroup,includingitscontrolandaccountability

systems;

• developmentandapprovalofcorporatestrategiesandperformance

objectives;

• reviewandapprovaloftheGroup’sbusinessplans,theannual

budgetsandfinancialplans,includingtheresourcingofoperating

andcapitalrequirements;

• overseeingandmonitoringorganisationalperformanceandthe

achievementoftheGroup’sstrategicgoalsandobjectives,including

acquisitionsanddivestments;

• identificationandappointment,andremovaloftheChiefExecutive

OfficeroftheGroup;

• monitoringfinancialperformanceincludingapprovaloftheannual

andhalf-yearfinancialreportsandliaisonwiththeCompany’s

auditor;

• appointmentandassessmentoftheperformanceofanyoffice

holdersoftheGroup;

• ensuringthereareeffectivemanagementprocessesinplaceand

approvingmajorcorporateinitiatives;

• enhancingandprotectingthereputationoftheorganisation;

• ensuringthesignificantrisksfacingtheGrouphavebeenidentified

andappropriateandadequatecontrol,monitoringandreporting

mechanismsareinplace;and

• reportingtoshareholders.

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Code of conduct

DirectorsarerequiredtocomplywiththeCompany’sDirectors’codeof

conduct.ThecodeofconductrequiresthataDirector:

• mustacthonestly,ingoodfaithandinthebestinterestsofthe

Groupasawhole;

• hasadutytouseduecareanddiligenceinfulfillingthefunctionsof

officeandexercisingpowersattachedtothatoffice;

• mustusepowersofofficeforaproperpurpose,inthebestinterests

oftheGroupasawhole;

• mustrecognisethattheprimaryresponsibilityistotheCompany’s

shareholdersasawholebutshould,whereappropriate,haveregard

fortheinterestsofallstakeholdersoftheGroup;

• mustnotmakeimproperuseofinformationacquiredasaDirector;

• mustnottakeimproperadvantageofthepowersofaDirector;

• mustnotallowpersonalinterest,ortheinterestsofanyassociate

person,toconflictwiththeinterestsoftheGroup;

• hasanobligationtobeindependentinjudgementandactionsand

totakeallreasonablestepstobesatisfiedastothesoundnessofall

decisionstakenbytheboard;

• acknowledgesandacceptsthatconfidentialinformationreceived

inthecourseofhisorherdutiesasaDirectorremainstheproperty

oftheGroupfromwhichitwasobtainedanditisimproperto

discloseit,orallowittobedisclosed,unlessthatdisclosurehasbeen

authorisedbythatcompany,orpersonfromwhomtheinformation

isprovided,orisrequiredbylaw;

• shouldnotengageinconductlikelytobringdiscredituponthe

Group;and

• hasanobligation,atalltimes,tocomplywiththespirit,aswellas

theletter,ofthelawandwiththeprinciplesoftheDirectors’codeof

conduct.

Directors’ independence

Inordertobeconsideredindependent,aDirectormustbeanon-

executiveand:

• notasubstantialshareholderoftheCompanyoranofficerof,or

otherwiseassociateddirectlywith,asubstantialshareholderofthe

Company;

• notanofficeroftheCompanyorarelatedentity,ornotbeena

Directorafterceasingtoholdsuchoffice,withinthelastthreeyears;

• notbeenaprincipalofaprofessionaladvisortotheGroupwithinthe

lastthreeyears;

• notbeenamaterialsupplierorcustomeroftheCompanyora

relatedentity,oranofficeroforotherwiseassociatedwithamaterial

supplierorcustomer;

• musthavenomaterialcontractualrelationshipwiththeCompanyor

arelatedentityotherthanasaDirectoroftheGroup;or

• notbeenontheBoardforaperiodthatmaybeperceivedto

interferemateriallywiththeDirector’sabilitytoactinthebest

interests of the Group.

Materialityforthesepurposesisdeterminedonbothquantitative

andqualitativebases,withanamountover5%consideredmaterialin

respectofthequantitativebasis.

TheChairmanoftheBoard,MrGrahamJones,isconsideredan

independentnon-executiveDirector.

Board members

DetailsofthemembersoftheBoard,theirexperience,

expertise,qualificationsandspecialresponsibilitiesareset

outunder‘InformationonDirectors’intheDirectors’Report.

Term of office

TheCompany’sConstitutionspecifiesthatallDirectorsappointedto

eitherfillacasualvacancyorasanadditionalDirectorwillholdoffice

untilthenextannualgeneralmeeting(AGM)atwhichtheDirector,

ifeligible,mayofferhimselforherselfforre-election.TheCompany’s

ConstitutionalsoprovidesforDirectors(excepttheManagingDirector)to

retirebyrotation,withaDirectorhavingtoretireattheconclusionofthe

thirdAGMafterheorshewaslastelected.Whereeligible,aDirectormay

standforre-election.

Onattainingtheageof70yearsaDirectorwillretire,byagreement,at

thenextAGMandwillnotseekre-election.

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Chairman and Chief Executive Officer

TheChairmanisresponsibleforleadingtheBoard,andensuringthat

theBoardactivitiesareorganisedandefficientlyconducted.TheChief

ExecutiveOfficerisresponsibleforimplementingtheGroup’sstrategies

and policies.

TheGroup’scorporategovernancepracticesrequirethattheserolesare

undertakenbyseparatepeople.

Commitment

ThenumberofBoardandCommitteemeetingsheldduringtheyearand

thenumberofmeetingsattendedbyeachoftheDirectorsissetoutin

theDirectors’Report.

Non-executiveDirectorsareexpectedtospendatleast36daysperyear

preparingforandattendingBoardandCommitteemeetings.

Conflict of interests

Dealingswithrelatedcompaniesaresetoutinthefinancialreport.

Independent professional advice

DirectorsandBoardCommitteeshavetheright,inconnectionwiththeir

dutiesandresponsibilities,toseekindependentprofessionaladviceat

theGroup’sexpense.PriorwrittenapprovaloftheChairmanisrequired,

butthiswillnotbeunreasonablywithheld.

2. Corporate reporting

TheChiefExecutiveOfficerandChiefFinancialOfficeroftheGrouphave

madethefollowingcertificationstotheBoard:

• thattheGroup’sfinancialreportsarecompleteandpresentatrue

andfairview,inallmaterialrespects,ofthefinancialconditionand

operationalresultsofthecompanyandtheGroup;and

• thattheabovestatementisfoundedonsoundsystemsofinternal

controlandriskmanagementwhichimplementsthepolicies

adoptedbytheboardandthattheGroup’sriskmanagementand

internalcontrolsareoperatingeffectivelyinallmaterialrespects.

TheGroupfirstadoptedthisreportingstructuretheyearended31

December2003.

3. Board committees

TheBoardhasestablishedanAuditCommitteewhichhasdefined

responsibilities.TheCommitteestructureandmembershipisreviewed

onanannualbasis.Apolicyofrotationofcommitteemembersapplies.

AllmattersdeterminedbytheCommitteearesubmittedtothefull

boardasrecommendationsforBoarddecision.InadditiontheBoard

seekstoensurethatthemembershipatanypointintimerepresentsan

appropriatebalancebetweenDirectorswithexperienceandknowledge

oftheCompanyandDirectorswithanexternalorfreshperspective.

Atthedateofthisreport,theAuditCommitteeconsistsofthefollowing

Directors:MrBrianBickmore(CommitteeChairman),MrChristopher

Bregenhoj,MrGrahamJones,MrDavidStandenandMrMichaelEgan,as

CompanySecretary.

ThemainresponsibilitiesoftheAuditCommitteeareto:

• reviewandreporttotheBoardontheannualandhalf-yearfinancial

reports;

• assisttheBoardinreviewingtheeffectivenessoftheGroup’sinternal

controlenvironmentcovering:

• effectivenessandefficiencyofoperations

• reliabilityoffinancialreporting

• compliancewithapplicablelawsandregulations;

• overseetheeffectiveoperationofriskmanagement;and

• recommendtotheBoardtheappointment,removalandremuneration

oftheexternalauditor,andreviewthetermsofhisengagement,and

thescopeandqualityoftheaudit.

Infulfillingitsresponsibilities,theAuditCommitteeseeksregularreports

from management and the external auditor.

Italsomeetswiththeexternalauditoratleasttwiceayearandatother

times as appropriate. The external auditor has a clear line of direct

communicationatanytimetoeithertheCommitteeChairmanofthe

AuditCommitteeortheChairmanoftheBoard.

TheAuditCommitteehasauthority,withinthescopeofits

responsibilities,toseekanyinformationitrequiresfromanyemployee

or external party.

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ConsideringthesizeoftheCompany,thefullBoardhasresolvedthat

thefunctionsandresponsibilitiesoftheremunerationandnomination

committeeswill,forthetimebeing,beundertakenbythefullBoard.The

responsibilitiesoftheBoardinrespectofthesefunctionsare:

• assessthenecessaryanddesirablecompetencies

ofBoardmembers;

• reviewtheBoard’ssuccessionplans;

• evaluationoftheBoard’sperformanceandremuneration;

• makerecommendationsfortheappointmentandremovalof

Directors;

• reviewexecutiveremunerationandincentivepolicies;

• reviewremunerationpackagesofseniormanagement;

• reviewrecruitment,retentionandterminationpolicies

andproceduresforseniormanagement;and

• reviewstaffincentiveandsuperannuationschemes.

TheBoardiscurrentlyundertakinganevaluationofitsperformance.

4. Risk assessment and management

TheBoardisresponsibleforensuringthereareadequatepoliciesin

relationtoriskoversightandmanagement,andinternalcontrolsystems.

TheGroup’spoliciesaredesignedtoensurestrategic,operational,legal,

reputationandfinancialrisksareidentified,assessed,addressedand

monitoredtoenableachievementoftheGroup’sbusinessobjectives.

TheGroup’sriskmanagementpolicyandprocessesaimto:

• ensurethatrisksarisingfrombusinessstrategiesandactivitiesare

identifiedandprioritised;

• theboardandmanagementhavedeterminedthelevelofrisks

acceptabletotheGroup,includingacceptablerisksinvolvedinthe

Group’sstrategicplan;

• riskmitigationactivitiesaredesigned,reviewedandimplemented

toreduce,orotherwisemanagerisksatlevelsthatareacceptableto

theBoard;

• ongoingmonitoringactivitiesareconductedperiodicallytoreassess

riskandtheeffectivenessofcontrolstomanagerisk;and

• theBoardreceivesperiodicreportscoveringriskmanagement.

TheBoardhasresolvedtoestablishandmaintaingovernanceprocesses

andobtainassurancesconcerningriskmanagementandcontrol

processes.Managementhavebeenchargedwiththeimplementationof

theriskmanagementandcontrolprocesses.Controlprocessesmustbe

designed to ensure:

• financialandoperationalinformationisreliableandpossesses

integrity;

• operationsareperformedefficientlyandachieve

effectiveresults;

• assetsaresafeguarded;and

• actionsanddecisionsoftheorganisationareincompliancewith

laws,regulationsandcontracts.

TheAuditCommitteeisresponsibleforensuringtheadequacyand

effectivenessofcontrolprocesses.

Detailedcontrolprocedurescovermanagementaccounting,financial

reporting,projectappraisal,environment,occupationalhealthand

safety,complianceandotherriskmanagementissues.Eachdepartment

reportsonamonthlybasistotheBoardonthekeybusinessriskswithin

thatdepartment.Riskreportingincludespastperformancewithinthe

department,andthecurrentandfutureriskstheyface.

TheBoardrequiresthateachmajorproposalsubmittedtotheBoard

fordecisionisaccompaniedbyacomprehensiveriskassessmentand,

whererequired,management’sproposedriskmitigationstrategies.

5. Directors’ share trading

ThepurposeofthispolicyistoassistDirectorsandseniormanagersto

avoidconductthatmightbeconsideredtobeacriminalactof“insider

trading”,andtoestablishappropriaterulesfortradingintheCompany’s

shares.Forthepurposesofthispolicy,tradingintheCompany’sshares

wouldalsoextendtotradinginothersecuritiesissuedbytheCompany

includingoptions.ThispolicyappliestotradingintheCompany’sshares

byDirectors,bothexecutiveandnon-executive,toseniormanagersand

totradingbytheirfamilymembersandassociates.

TheBoardtakesthematterofthepurchaseandsaleofsharesinthe

Companyseriouslyandexpectsfullcompliancewiththispolicy.

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Directorsandseniormanagersmustnotbuyorsellsharesinthe

Companywhentheyareinpossessionofpricesensitiveinformation

whichisnotgenerallyavailabletothemarket.Publiccompaniesare

requiredtocontinuouslydisclosepricesensitiveinformation,sothere

isnoparticularperiodoftimeinwhichitcanbeautomaticallyassumed

thatitissafetotradeintheCompany’sshares.Theonlypermissibletime

foraDirectororseniormanagertobuyorselltheCompany’ssharesis

whenheorsheisnotinpossessionofpricesensitiveinformation.

Withoutlimitingthisprinciple,thefollowingruleshavebeenestablished

toassistDirectorsandseniormanagersinfulfillingtheirobligations:

• Directorsandseniormanagersmustnotengageinshortterm

trading;

• thereisanabsoluteprohibitiononanytradingofsharesinthetwo

monthperiodbeforetheannouncementofthefullyearresultsor,

ifshorter,theperiodfromtherelevantfinancialyearenduptoand

includingthetimeoftheannouncement;


monthperiodbeforetheannouncementofthehalf-yearresultsor,if

shorter,theperiodfromtherelevantfinancialperiodenduptoand

includingthetimeoftheannouncement;


monthperiodbeforetheAnnualGeneralMeetingorotherGeneral

MeetingoftheCompany;

• thereisanabsoluteprohibitiononanytradingofsharesintheone

monthperiodbeforetheannouncementofanyquarterlyresultsor,

ifshorter,theperiodfromtherelevantfinancialperiodendupto

andincludingthetimeoftheannouncement;

• aDirectororseniormanagermustnotdealinanyshares

oftheCompanyatanytimewhenheorsheisinpossessionof

unpublishedprice-sensitiveinformationinrelationtothoseshares,

orwhenithasbecomereasonablyprobablethatsuchinformation

willberequired:

• tobedisclosedtothemarketundertheListingRules

ofASX(orotherstockexchangeonwhichtheCompanyis

listed);or

• otherwisewhereclearancetotradehasnotbeengivenunder

thispolicy;

• aDirectororseniormanagermustnottradeintheCompany’sshares

withoutadvisingtheChairman(orotherpersondesignatedforthis

purpose)inadvanceandreceivingwrittenclearancebeforeany

dealing(includingmarketdealing)intheCompany’sshares.Inhis

orherowncase,theChairmanmustadvisetheBoardinadvanceat

aBoardmeeting,oradviseanotherdesignatedDirector,andreceive

clearancefromtheBoardordesignatedDirector,asappropriate;

• aDirectororseniormanagerwillnotbegivenclearanceunderthis

policy to deal in any securities during:

•aclosedperiod;

•anyperiodwhenthereexistsanymatterwhichconstitutes

unpublishedprice-sensitiveinformationinrelationtothe

Company’ssecurities(whetherornottheDirectororsenior

managerhasknowledgeofsuchmatter)andtheproposed

dealingwould(ifpermitted)takeplaceafterthetimewhenit

hasbecomereasonablyprobablethatanannouncementwillbe

requiredinrelationtothatmatter;or

•anyperiodwhenthepersonresponsiblefortheclearance

otherwisehasreasontobelievethattheproposeddealingisin

breachofthispolicy;

• aDirectororseniormanagermustseektoprohibitdealingsonhisor

herbehalf(asrequiredbythispolicy)byaninvestmentmanageror

otherpartyconnectedwiththeDirectororseniormanager;and

• aDirectororseniormanagermustadvisetheCompanySecretary

inwritingofthedetailsofanycompletedtransactionswithin3

businessdaysofthetransactionintheformatrequestedbyASX.The

CompanySecretarywillberesponsibleformaintainingarecordof

disclosures.

ThegrantofoptionstoaDirectororseniormanagerunderanemployee

shareoptionplanmaybepermittedifsuchagrantcouldnotbe

reasonablymadeatanothertime.

6. Shareholder communication and Continuous Disclosure

Thispolicyaimstoensureanypricesensitiveinformationisdisclosed

tothemarketpriortoanyotherpersonorgroupsofpersons.The

policyaimstoensureshareholdersandthemarketisprovidedwith

sufficientinformationtomakeinformeddecisionsaboutinvestmentsin

oOh!mediaGroupLimited.

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TheCompanypromoteseffectivecommunicationwithshareholdersand

themarketthrough:

• theAnnualandHalf-yearlyReports;

• disclosuresmadetoASXundertheContinuousDisclosureregime;

• noticesandexplanatorymemorandaoftheAnnualGeneralMeeting

andanyExtraordinaryGeneralMeetings;

• theAGM,wheretheauditorwillbeavailabletoanswerquestions

abouttheaudit;

• lettersfromtheChairmanandCEO;and

• thewebsitesofGroupcompanies.

The disclosure policy and authorisation process are designed to ensure

Companyannouncements:

• aremadeinatimelymanner;

• arefactual;

• donotomitmaterialinformation;and

• areexpressedinaclearandobjectivemanner.

7. The environment, health and safety management system (EHSMS)

oOh!mediaGroupLimitedrecognisestheimportanceofenvironmental

andoccupationalhealthandsafety(OH&S)issuesandiscommitted

tothehighestlevelsofperformance.Tohelpmeetthisobjectivethe

EHSMSwasestablishedtofacilitatethesystematicidentificationof

environmentalandOH&Sissuesandtoensuretheyaremanagedina

structured manner.

ThisoperatesundertheEHSMSto:

• monitoritscompliancewithallrelevantlegislation;

• continuallyassessandimprovetheimpactofitsoperations

ontheenvironment;

• encourageemployeestoactivelyparticipateinthe

managementofenvironmentalandOH&Sissues;

• workwithtradeassociationsrepresentingtheentity’s

businessestoraisestandards;

• useenergyandotherresourcesefficiently;and

• encouragetheadoptionofsimilarstandardsbytheentity’s

principalsuppliers,contractorsanddistributors.

Informationoncompliancewithsignificantenvironmentalregulationsis

setoutintheDirectors’Report.

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8. Compliance with ASX’s Corporate Governance Principles and Recommendations (Second Edition Corporate Governance Guidelines)

AsummaryoftheextenttowhichtheCompanyhasfollowedtheCorporateGovernancePrinciplesandRecommendationsissuedbyASXCorporate

GovernanceCouncilissetoutinthetablebelow.

Corporate Governance recommendations Extent of compliance

1 Lay solid foundations for management and oversight

1.1 Companiesshouldestablishthefunctionsreservedtotheboardandthosedelegatedtoseniorexecutivesanddisclosethose functions

Complies

1.2 Companiesshoulddisclosetheprocessforevaluatingseniorexecutives

Complies

1.3 CompaniesshouldprovidetheinformationindicatedintheGuidetoReportingonPrinciple1

Complies

2 Structure the board to add value

2.1 Amajorityoftheboardshouldbeindependentdirectors TheCompanyhasamajorityofnon-independentDirectors

2.2 Thechairshouldbeanindependentdirector Complies

2.3 Therolesofchairandchiefexecutiveofficershouldnotbeexercisedbythesameindividual

Complies

2.4 Theboardshouldestablishanominationcommittee TheCompanyhasajointnominationandremunerationcommittee

2.5 Companiesshoulddisclosetheprocessforevaluatingtheperformanceoftheboard,itscommitteesandindividualdirectors

Complies


Complies

3 Promote ethical and responsible decision-making

3.1 Companiesshouldestablishacodeofconductanddisclosethe code or a summary of the code as to:

•thepracticesnecessarytomaintainconfidenceinthecompany’sintegrity

•thepracticesnecessarytotakeintoaccounttheirlegalobligationsandthereasonableexpectationsoftheirstakeholders

•theresponsibilityandaccountabilityofindividualsforreportingandinvestigatingreportsofunethicalpractices

Complies

3.2 Companiesshouldestablishapolicyconcerningtradingincompanysecuritiesbydirectors,seniorexecutivesandemployees,anddisclosethepolicyorasummaryofthatpolicy

Complies


Complies

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4 Safeguard integrity in financial reporting

4.1 Theboardshouldestablishanauditcommittee Complies

4.2 Theauditcommitteeshouldbestructuredsothatit:

•consistsonlyofnon-executivedirectors

•consistsofamajorityofindependentdirectors

•ischairedbyanindependentchair,whoisnotchairoftheboard

•hasatleastthreemembers

TheCompany’sAuditCommitteeincludesanexecutiveDirectorandhasanequalrepresentationofindependentandnon-independentDirectors.WiththisexceptiontheCompanyComplies

4.3 Theauditcommitteeshouldhaveaformalcharter Complies


Complies

5 Make timely and balanced disclosure

5.1 CompaniesshouldestablishwrittenpoliciesdesignedtoensurecompliancewithASXListingRuledisclosurerequirementsandtoensureaccountabilityataseniorexecutivelevelforthatcomplianceanddisclosethosepoliciesor a summary of those policies

Complies

5.2 CompaniesshouldprovidetheinformationindicatedinGuidetoReportingonPrinciple5

Complies

6 Respect the rights of shareholders

6.1 Companiesshoulddesignacommunicationspolicyforpromotingeffectivecommunicationwithshareholdersandencouraging their participation at general meetings and disclose their policy or a summary of that policy

Complies


Complies

7 Recognise and manage risk

7.1 Companiesshouldestablishpoliciesfortheoversightandmanagementofmaterialbusinessrisksanddiscloseasummary of those practices

Complies

7.2 Theboardshouldrequiremanagementtodesignandimplementtheriskmanagementandinternalcontrolsystemtomanagethecompany’smaterialbusinessrisksandreporttoitonwhetherthoserisksarebeingmanagedeffectively.Theboardshoulddisclosethatmanagementhasreportedtoitastotheeffectivenessofthecompany’smanagementofitsmaterialbusinessrisks

Complies

7.3 Theboardshoulddisclosewhetherithasreceivedassurancefromthechiefexecutiveofficer(orequivalent)andthechieffinancialofficer(orequivalent)thatthedeclarationprovidedinaccordancewithsection295AoftheCorporationsActisfoundedonasoundsystemofriskmanagementandinternalcontrolandthatthesystemisoperatingeffectivelyinallmaterialrespectsinrelationtofinancialreportingrisks

Complies

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7.4 CompaniesshouldprovidetheinformationindicatedinGuidetoReportingonPrinciple7

Complies

8 Remunerate fairly and responsibly

8.1 Theboardshouldestablisharemunerationcommittee TheCompany’shasajointnominationandremunerationcommittee

8.2 Companiesshouldclearlydistinguishthestructureofnon-executivedirectors’remunerationfromthatofexecutivedirectorsandseniorexecutives

Complies

8.3 CompaniesshouldprovidetheinformationintheGuidetoReportingonPrinciple8

Complies

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Statement of Comprehensive Incomefortheyearended31December2010

Consolidated

Notes2010

$’0002009

$’000

Revenuefromcontinuingoperations 3 109,700 86,040

Otherincome 3 30 8

Costsofmediasitesandproduction (64,129) (49,853)

EmployeesandDirectorscosts (16,253) (12,911)

Insurance (152) (127)

Propertyrelatedcosts (870) (738)

Depreciationandamortisation 4 (4,306) (3,779)

Legalandprofessionalfees (1,117) (1,729)

Sharebasedpaymentsexpense 4 (422) (41)

Lossondisposalofnon-currentassets 4 - (898)

Otherexpensesfromordinaryactivities (5,640) (4,818)

Operating profit for the year 16,841 11,154

Borrowingcosts 4 (5,659) (4,669)

Profit before income tax for the year 4 11,182 6,485

Incometax(expense) 5 (4,154) (1,594)

Profit from continuing operations attributable to the members of oOh!media Group Limited for the year 7,028 4,891

Othercomprehensiveincome - -

Total comprehensive income for the year 7,028 4,891

Earnings per share for profit from continuing operationsattributable to the ordinary equity holders of the Company

Basicearningspershare 31 1.8 cents 1.3cents

Dilutedearningspershare 31 1.8 cents 1.3cents

Earnings per share for profit attributable to the ordinary equity holders of the Company

Basicearningspershare 31 1.8 cents 1.3cents

Dilutedearningspershare 31 1.8 cents 1.3cents

Theabovestatementofcomprehensiveincomeshouldbereadinconjunctionwiththeaccompanyingnotes.

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Balance Sheetasat31December2010

Consolidated

Notes2010

$’0002009

$’000

Current Assets

Cashandcashequivalents 7 6,525 307

Tradeandotherreceivables 8 23,949 19,716

Inventories 9 92 39

Total Current Assets 30,566 20,062

Non-Current Assets

Property,plantandequipment 10 19,788 19,443

Intangibleassets 11 99,016 97,853

Otherfinancialassets 12 413 516

Total Non-Current Assets 119,217 117,812

Total Assets 149,783 137,874

Current Liabilities

Tradeandotherpayables 14 15,318 11,217

DeferredconsiderationfortheacquisitionofSportsandOutdoorMediaPtyLtd 28 16,878 4,868

Borrowings 15 4,812 10,049

Currenttaxliabilities 2,137 1,833

Provisions 16 452 371

Total Current Liabilities 39,597 28,338

Non-Current Liabilities

DeferredconsiderationfortheacquisitionofSportsandOutdoorMediaPtyLtd 28 - 15,909

Borrowings 17 21,247 25,516

Provisions 18 755 575

Deferredtaxliabilities 19 1,093 446

Total Non-Current Liabilities 23,095 42,446

Total Liabilities 62,692 70,784

Net Assets 87,091 67,090

Equity

Equity attributable to equity holders of the parent entity

Contributedequity-sharecapital 20 79,547 66,996

Reserves 20 422 -

Retainedprofits 7,122 94

Total Equity 87,091 67,090

Theabovebalancesheetshouldbereadinconjunctionwiththeaccompanyingnotes.

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Statement of Cash Flowsfortheyearended31December2010

Consolidated

Notes2010

$’0002009

$’000

Cash flows from operating activities

Receiptsfromcustomers 107,123 85,003

Paymentstoemployeesandsuppliers (85,498) (70,057)

Interestreceived 30 8

Interest costs paid (4,518) (4,436)

Income tax paid (3,105) (821)

Net cash inflow from operating activities 23 14,032 9,697

Cash flows from investing activities

PaymentsfortheacquisitionofSportsandOutdoorMediaPtyLtd 28 (3,950) (1,200)

Paymentsfortheacquisitionofcontrolledentitiesandbusinesses,netofcashacquired 28 (1,650) (246)

Paymentsforplantandequipment (3,711) (2,753)

Paymentsforintangibleassets (317) (542)

Proceedsfromsaleofproperty,plantandequipment - 45

Net cash (outflow) from investing activities (9,628) (4,696)

Cash flows from financing activities

Proceedsfromissueofshares,netofissuecosts 11,361 -

Proceedsfromborrowings 375 -

Repaymentofborrowings (2,800) (2,750)

Repaymentoffinanceleases (1,967) (1,660)

Net cash inflow/(outflow) from financing activities 6,969 (4,410)

Net increase in cash and cash equivalents held 11,373 591

Cash and cash equivalents at the beginning of the financial year (4,999) (5,590)

Cash and cash equivalents at the end of the financial year 7 6,374 (4,999)

Theabovestatementofcashflowsshouldbereadinconjunctionwiththeaccompanyingnotes.

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Statement of Changes in Equityfortheyearended31December2010

Consolidated2010

Contributed equity-

Share capital$’000

Reserves-Optionreserve

$’000

Retained Earnings

$’000Total

$’000

Total equity at 1 January 66,996 - 94 67,090

Profitandtotalcomprehensiveincomefortheyear - - 7,028 7,028

Total comprehensive income for the year - - 7,028 7,028

Transactions with equity holders in their capacity as equity holders

Contributionsofequity,netoftransactioncosts 12,551 - - 12,551

Sharebasedpaymentsexpense-options - 422 - 422

Total of transactions with equity holders intheir capacity as equity holders 12,551 422 - 12,973

Total equity at 31 December 79,547 422 7,122 87,091

Theabovestatementofchangesinequityshouldbereadinconjunctionwiththeaccompanyingnotes.

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Consolidated2009

Contributed equity-

Share capital$’000

Reserves-Optionreserve

$’000

(Accumulatedlosses)/

Retained Earnings

$’000Total

$’000

Total equity at 1 January 67,001 1,226 (6,023) 62,204

Profitandtotalcomprehensiveincomefortheyear - - 4,891 4,891

Total comprehensive income for the year - - 4,891 4,891

Transactions with equity holders in their capacity as equity holders

Contributionsofequity,netoftransactioncosts (46) - - (46)

Sharebasedpaymentsexpense-shares 41 - - 41

Optionslapsed - (1,226) 1,226 -

Total of transactions with equity holders intheir capacity as equity holders (5) (1,226) 1,226 (5)

Total equity at 31 December 66,996 - 94 67,090

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Notes to the Financial Statements31December2010

1 Summary of Significant Accounting Policies

ThisgeneralpurposefinancialreporthasbeenpreparedinaccordancewithAustralianequivalentstoInternationalFinancialReportingStandards(AIFRS),otherauthoritativepronouncementsoftheAustralianAccountingStandardsBoard,AustralianAccountingInterpretationsandtheCorporationsAct2001.

Thisreportincorporatestheassetsandliabilitiesofallof theentitiescontrolledbyoOh!mediaGroupLimited(the‘Company’or‘parententity’)asat31December2010andtheresultsofallcontrolledentitiesfortheyearthenended.oOh!mediaGroupLimitedanditscontrolled entities together are referred to in this financial report as the‘consolidatedentity’or‘Group’.oOh!mediaGroupLimitedisalistedpublicCompany,incorporatedanddomiciledinAustralia.

(a) Basis of preparation

(i)CompliancewithAIFRS

AustralianAccountingStandardsincludeAIFRS.CompliancewithAIFRSensuresthattheconsolidatedandparentCompanyfinancialstatementsandaccompanyingnotescomplywithInternationalFinancialReportingStandards(IFRS).

ThefinancialstatementsarepreparedinAustraliandollarsinaccordancewiththehistoricalcostconvention.

TheGrouphasrecordedaprofitof$7,028,000forthefinancialyearending31December2010(2009:$4,891,000),hasgeneratedpositiveoperatingcashflowsof$14,032,000(2009:$9,697,000)andatthatdatehasanetcurrentliabilitypositionof$9,031,000(2009:$8,276,000).TheDirectorsareoftheopinionthattheGroupwillbeabletofundfutureoperations through profits arising from continuing operations and anticipatesufficientoperatingcashflowstobeabletomeetworkingcapitalrequirements.TheGroupalsocontinuestohavethesupportoffundingfacilities(seenote15)andnoassetsarelikelytoberealisedforan amount less than the amount recorded in the financial report as at 31December2010.

(ii)Comparativefigures

WhererequiredbyAccountingStandards,comparativefigureshavebeenadjustedtoconformtochangesinpresentationforthecurrentfinancial year. (b) New Accounting Standards and Interpretations

(i) Changes in accounting policy and disclosures

Theaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyearexceptasfollows:

TheGrouphasadoptedthefollowingnewandamendedAustralianAccountingStandardsandAASBInterpretationsasof1January2010:

AASB 127 Consolidated and Separate Financial Statements (Amended)

AASB127(amended)requiresthatachangeintheownershipinterestofasubsidiary(withoutachangeincontrol)istobeaccountedforas

atransactionwithownersintheircapacityasowners.Thereforesuchtransactionswillnolongergiverisetogoodwill,norwilltheygiverisetoagainorlossinthestatementofcomprehensiveincome.FurthermoretherevisedStandardchangestheaccountingforlossesincurredbyapartiallyownedsubsidiaryaswellasthelossofcontrolofasubsidiary.ThechangeAASB127(amended)willaffectfutureacquisitions,changesin,andlossofcontrolof,subsidiariesandtransactionswithnon-controlling interests.

ThisamendedStandardhadnoimpactonreportedresults.

(ii) Accounting standards and interpretations issued but not yet effective

AnumberofrevisedaccountingstandardsandinterpretationshavebeenissuedbytheAASBwhicharenotyeteffective.TheGroup’sassessmentoftheimpactofthesenewstandardsandinterpretationsissetoutbelow.

AASB 9 Financial Instruments

TherevisedAASB9incorporatestheIASB’scompletedworkonPhase1ofitsprojecttoreplaceIAS39FinancialInstruments:RecognitionandMeasurement(AASB139FinancialInstruments:RecognitionandMeasurement)ontheclassificationandmeasurementoffinancialassetsandfinancialliabilities.Inaddition,theIASBcompleteditsprojectonderecognition of financial instruments.

TheStandardincludesrequirementsfortheclassificationandmeasurementoffinancialinstruments,aswellasrecognitionandderecognitionrequirementsforfinancialinstruments.AASB9(issuedin2009)onlyincludedrequirementsfortheclassificationandmeasurementoffinancialassetsresultingfromthefirstpartofPhase1oftheIASB’sprojecttoreplaceIAS39(AASB139).

TheGroupwillapplytheamendedstandardfom1January2013Howeverthereisnotexpectedtobeanymaterialimpactonanyamounts recognised in the financial statements.

AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project , AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project and AASB 2010-5 Amendments to Australian Accounting Standards (effective from 1 July 2010/1 January 2011)

InJune2010,theAASBmadeanumberofamendmentstoAustralianAccountingStandardsasaresultoftheIASB’sannualimprovementsproject.TheGroupwillapplytheamendmentsfrom1January2011.Itdoesnotexpectthatanyadjustmentswillbenecessaryasaresultofapplyingtherevisedrules.

AASB 2010-5 Amendments to Australian Accounting Standards (effective from January 2011)

InOctober2010,theAASBmadeanumberofamendmentstoAustralianAccountingStandards.TheGroupwillapplytheamendmentsfrom1January2011.Itdoesnotexpectthatanyadjustmentswillbenecessaryasaresultofapplyingtherevisedrules.

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(c) Basis of consolidation

The consolidated financial statements comprise the financial statements ofoOh!mediaGroupLimitedanditscontrolledentitiesasoutlinedinnote28(‘theGroup’)asat31Decembereachyear.

SubsidiariesareallthoseentitiesoverwhichtheGrouphasthepowertogovernthefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities.Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhetheragroupcontrolsanotherentity.

The financial statements of the controlled entities are prepared for thesamereportingperiodastheparentcompany,usingconsistentaccounting policies.

Inpreparingtheconsolidatedfinancialstatements,allintercompanybalancesandtransactions,incomeandexpensesandprofitandlossesresultingfromintra-Grouptransactionshavebeeneliminatedinfull.

ControlledentitiesarefullyconsolidatedfromthedateonwhichcontrolisobtainedbytheGroupandceasetobeconsolidatedfromthedateonwhichcontrolistransferredoutoftheGroup.

InvestmentsincontrolledentitiesheldbyoOh!mediaGroupLimitedareaccounted for at cost in the separate financial statements of the parent entity.

Theacquisitionofsubsidiariesisaccountedforusingthepurchasemethodofaccounting.Thepurchasemethodofaccountinginvolvesallocatingthecostofthebusinesscombinationtothefairvalueoftheassetsacquiredandtheliabilitiesandcontingentliabilitiesassumedatthedateofacquisition(seenote1(z)).

(d) Operating segments - see note 2

Anoperatingsegmentisacomponentofanentitythatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses(includingrevenuesandexpensesrelatingtotransactionswithothercomponentsofthesameentity),whoseoperatingresultsareregularlyreviewedbytheentity’schiefoperatingdecisionmakertomakedecisionsaboutresourcestobeallocatedtothesegmentandassessitsperformanceandforwhichdiscretefinancialinformationisavailable.

Operatingsegmentshavebeenidentifiedbasedontheinformationprovidedtothechiefoperatingdecisionmakers–beingtheChiefExecutiveOfficer.

TheGroupaggregatestwoormoreoperatingsegmentswhentheyhavesimilareconomiccharacteristics,andthesegmentsaresimilarineachofthefollowingrespects:

• Natureoftheproductsandservices;

• Natureoftheproductionprocesses;

• Typeorclassofcustomerfortheproductsandservices;

• Methodsusedtodistributetheproductsorprovidetheservices;and ifapplicable

• Natureoftheregulatoryenvironment.

(e) Foreign currency translation

(i) Functionalandpresentationcurrency

ItemsincludedinthefinancialstatementsofeachoftheGroup’sentities are measured using the currency of the primary economic environmentinwhichtheentityoperates(‘thefunctionalcurrency’).TheconsolidatedfinancialstatementsarepresentedinAustraliandollars,whichisoOh!mediaGroupLimited’sfunctionalandpresentation currency.

(ii) Transactionsandbalances

ForeigncurrencytransactionsareinitiallytranslatedintoAustraliancurrency at the rate of exchange at the date of the transaction. AmountspayableandreceivableinforeigncurrenciesaretranslatedtoAustraliancurrencyattheratesofexchangeatthedateofthebalancesheet.Resultingexchangedifferencesarebroughttoaccount in determining the profit or loss for the period.

(f) Revenue recognition

Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.Amountsdisclosedasrevenuearenetofreturns,allowancesandtaxespaid.Revenueisrecognisedforthemajorbusinessactivitiesasfollows:

(i) Mediabusiness

Revenuefortheplacementofadvertisingisrecognisedforthespecificperiodtheadvertisementisdisplayed.Revenueformediaproductionworkisrecognisedoncompletionoftheassignment.

(ii) Other

Interestrevenuesareaccruedovertheperiodduringwhichtheyareearned.

(g) Income tax

Theincometaxexpenseorcreditfortheperiodisthetaxpayableonthecurrentperiod’staxableincomebasedonthenationalincometaxrateforeachjurisdictionadjustedbychangesindeferredtaxassetsandliabilitiesattributabletotemporarydifferencesbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements,andtounusedtaxlosses.

Deferredtaxassetsandliabilitiesarerecognisedfortemporarydifferencesatthetaxratesexpectedtoapplywhentheassetsarerecoveredorliabilitiesaresettled,basedonthosetaxrateswhichareenactedorsubstantivelyenactedforeachjurisdiction.Therelevanttaxratesareappliedtothecumulativeamountsofdeductibleandtaxabletemporarydifferencestomeasurethedeferredtaxassetorliability.

Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesandunusedtaxlossesonlyifitisprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.

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Deferredtaxassetsanddeferredtaxliabilitiesareoffsetif,andonlyif:

(i)theentityhasalegallyenforceablerighttoset-offcurrenttaxassetsagainstcurrenttaxliabilities;and

(ii)thedeferredtaxassetsandthedeferredtaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentity,ordifferenttaxableentitieswhichintendeithertosettlecurrenttaxliabilitiesandassetsonanetbasis,ortorealisetheassetsandsettletheliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxliabilitiesorassetsareexpectedtobesettledorrecovered.

oOh!mediaGroupLimitedanditswholly-ownedAustraliancontrolledentitieshavedecidedtoimplementthetaxconsolidationlegislationasof1January2003.TheAustralianTaxationOfficehasbeennotifiedofthisdecision.Theentitieshaveenteredintoataxsharingagreement.

Asaconsequence,oOh!mediaGroupLimitedastheheadentityinthe tax consolidated Group and the controlled entities in the tax consolidatedGroupwillcontinuetoaccountfortheirowncurrentanddeferredtaxamounts.Inadditiontoitsowncurrentanddeferredtaxamounts,oOh!mediaGroupLimitedalsorecognisesthecurrenttaxliabilities(orassets)andthedeferredtaxassetsarisingfromunusedtaxlosses and unused tax credits assumed from controlled entities in the tax consolidated Group.

AssetsorliabilitiesarisingundertaxfundingagreementswiththetaxconsolidatedentitiesarerecognisedasamountsreceivablefromorpayabletootherentitiesintheGroup.

(h) Acquisition of assets

Thepurchasemethodofaccountingisusedforallacquisitionsofassetsregardlessofwhetherequityinstrumentsorotherassetsareacquired.Costismeasuredasthefairvalueoftheassetsgivenup,sharesissuedorliabilitiesassumedatthedateofacquisitionplusincidentalcostsdirectlyattributabletotheacquisition.Whereequityinstrumentsareissuedinanacquisition,thevalueoftheinstrumentsistheirmarketpriceasattheacquisitiondate,unlessthenotionalpriceatwhichtheycouldbeplacedinthemarketisabetterindicatoroffairmarketvalue.Transactioncostsarisingontheissueofequityinstrumentsarerecogniseddirectlyinequity.

Wheresettlementofanypartofcashconsiderationisdeferred,theamountspayableinthefuturearediscountedtotheirpresentvalueasatthedateofacquisition.ThediscountrateistheGroup’sincrementalborrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtainedfromanindependentfinancierundercomparabletermsandconditions.

Goodwillisbroughttoaccountonthebasisdescribedinnote1(p).Businesscombinationsareaccountedforonthebasisasdescribedinnote1(z).

i) Impairment of assets

Assetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment.Assetsthataresubjecttoamortisationarereviewedforimpairmentwhenevereventsorchanges in circumstance indicate that the carrying amount may not berecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosell,andvalueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiableandindependentcashflows(cashgeneratingunits).Non-financialassetsotherthangoodwillthatsufferedimpairmentarereviewedforpossiblereversaloftheimpairmentateachreportingdate.Seenote11.

(j) Cash and cash equivalents

Cashandcashequivalentsincludescashonhand,depositsheldatcallwithfinancialinstitutions,bankoverdraftsandotherworkingcapitalfacilities.

(k) Receivables

Alltradedebtorsarerecognisedattheamountsreceivableastheyaredueforsettlementnomorethan90daysfromthedateofrecognition.Collectibilityofdebtorsisreviewedonanongoingbasis.Debtswhichareknowntobeuncollectiblearewrittenoff.

(l) Inventories

Workinprogress

Workinprogressisstatedatthelowerofcostandnet realisablevalue.Costscomprisedirectmaterials,direct labour,directthirdpartycostsandanappropriateproportion ofoverheadsifrelevant.

(m) Financial instruments and other financial assets

(i) Available-for-salefinancialassets

Available-for-salefinancialassetsarereflectedatfairvalue.Unrealisedgainsandlossesarisingfromchangesinfairvaluesaretakendirectlytoequity,unlessthelossesaresignificantorprolonged.

(ii) Otherfinancialassets

Financialassetsatfairvaluethroughprofitorlossaresorecognisedoninitialrecognition.Assetsinthiscategoryareclassifiedascurrentassetsiftheyareeitherheldfortradingorareexpectedtoberealisedwithin12monthsofthebalancesheetdate.

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(n) Property, plant and equipment

Allproperty,plantandequipmentisstatedathistoricalcostlessaccumulateddepreciation.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenance are charged to the income statement during the financial period in whichtheyareincurred.

Depreciationiscalculatedonastraightlinebasissoastowriteoffthenetcostofeachitemofplantandequipmentoveritsexpectedusefullifetotheconsolidatedentity.Estimatesofremainingusefullivesaremadeonaregularbasisforallassets,withannualreassessmentsformajoritems.Theexpectedusefullivesareasfollows:

Plantandequipment3-20years

Leaseholdpropertyandimprovementsareamortisedoverthelifeoftheleaseortheexpectedusefullifewhicheveristheshorter.

Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,ateachbalancesheetdate.Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount.

Compensationfromthirdpartiesforitemsofproperty,plantandequipmentthatareimpaired,lostorgivenuparebeincludedinprofitorlosswhenthecompensationbecomesreceivable.

(o) Leases

Adistinctionismadebetweenfinanceleaseswhicheffectivelytransferfromthelessortothelesseesubstantiallyalloftheriskandbenefitincidentaltoownershipofleasednon-currentassetsandoperatingleasesunderwhichthelessoreffectivelyretainssubstantiallyallsuchrisksandbenefits.

Financeleasesarecapitalised.Aleaseassetandliabilityareestablishedatthepresentvalueofminimumleasepayments.Leasepaymentsareallocatedbetweentheprincipalcomponentoftheleaseliabilityandtheinterest expense.

Operatingleasepaymentsarechargedtotheincomestatementsintheperiodinwhichtheyareincurred,asthisrepresentsthepatternofbenefitsderivedfromtheleasedassets.

(p) Intangible assets

(i) Goodwill

Whereanentityoroperationisacquired,theidentifiablenetassetsacquiredaremeasuredatfairvalue.Theexcessofthecostofacquisition,includingthefairvalueofsharesissuedoverthefairvalueoftheidentifiablenetassetsacquired,includinganyliabilityforrestructuringcosts,isbroughttoaccountasgoodwill.Goodwillonacquisitionofbusinesscombinationsisnotamortised.Insteadgoodwillisevaluatedaccordingtonote1(i)‘ImpairmentofAssets’todeterminewhetheritscarryingamountexceedsitsrecoverableamountandhencewhetheranimpairmentlosshasbeenincurredandshouldberecognised.

GoodwillisallocatedtothecashgeneratingunitsoftheGroup.

(ii) Developmentcosts

Developmentcostsrelatingtothedevelopmentoflicencesor contracts are carried at cost less accumulated amortisation. Developmentexpenditureisonlycapitalisedif: - itisprobablethatfutureeconomicbenefitsthatare attributabletotheassetwillflowtotheGroup; - allcostsareseparatelyidentifiable; - theGroupcontrolstheassetandcanrestricttheaccess ofotherstothebenefit;and - theexpenditurearisesfromdevelopmentorthe developmentphaseofaninternalproject.

(iii)Licences,Patents,TrademarksandOther

Alllicences,patentsandtrademarksareassessedashavingeitherafinite or indefinite useful life.

Allitemsthathavebeenclassifiedasbeingindefinitelivedassetswillbeimpairmenttestedannuallyinaccordancewithnote1(i).Allitemsclassifiedasfinitelivedassetsareamortisedovertheusefullifeoftheasset.

RegardlessoftheusefullifeclassificationtheDirectorsassessattheend of each reporting period the classification and rates used to ensure appropriateness.

(q) Trade and other payables

TheseamountsrepresentliabilitiesforgoodsandservicesprovidedtotheGrouppriortotheendofthefinancialperiodandwhichareunpaid.Theamountsareunsecuredandareusuallypaidwithin30daysofrecognition.

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(r) Other financial liabilities and borrowings

Borrowingsareinitiallyrecognisedatfairvalue,netoftransactioncostsincurred.Borrowingsaresubsequentlymeasuredatamortisedcost.BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthebalancesheetdate.

(s) Employee entitlements

(i) Wagesandsalariesandannualleave

Liabilitiesforwagesandsalaries,includingnon-monetarybenefitsandannualleaveexpectedtobesettledwithin12monthsofthereportingdatearerecognisedincurrentliabilitiesinrespectofemployees’servicesuptothereportingdateandaremeasuredattheamountsexpectedtobepaidwhentheliabilitiesaresettled.

(ii) Longserviceleave

Theliabilityforlongserviceleaveexpectedtobesettledwithin12monthsofthereportingdateisrecognisedintheprovisionforemployeebenefitsandismeasuredinaccordancewith(i)above.Theliabilityforlongserviceleaveexpectedtobesettledmorethan12monthsfromthereportingdateisrecognisedintheprovisionforemployeebenefitsandmeasuredasthepresentvalueofexpectedfuturepaymentstobemadeinrespectofservicestobeprovidedbyemployeesuptothereportingdate.Incalculatingtheliability,considerationisgiventoexpectedfuturewageandsalarylevels,experienceofemployeedepartures,periodsofserviceandhistoricaldata. Expectedfuturepaymentsarediscountedusinginterestratesonnationalgovernmentguaranteedsecuritieswithtermstomaturitythatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.

(iii)Equitybasedcompensationcosts

TheCompanycurrentlyengagesinthepracticeofallocatingtoitsemployees shares and share options as part of their remuneration packages.EquitybasedcompensationbenefitsareprovidedtoemployeesviatheoOh!mediaGroupLimitedEmployeeShareOptionPlan,assetoutinnote20tothefinancialstatements.

These payments and also payments made to other counterparties inreturnforgoodsandservicesaremeasuredatthemorereadilydeterminablefairvalueofthegoods/servicesorthefairvaluesoftheequityinstrument.

Anexpenseisrecognisedforallsharebasedremunerationdeterminedwithreferencetothefairvalueoftheequityinstrumentsissued.Thefairvalueofequityinstrumentsiscalculatedusingmarketpriceswhereavailable,andwheremarketpricesarenotavailableusingavaluationtechniqueconsistentwiththeBlack-Scholesmethodology,toestimatethepriceofthoseequityinstrumentsinanarm’slengthtransactionbetweenknowledgeable,willingparties.ThefairvaluecalculatedinaccordancewithAASB2ischargedagainstprofitovertherelevantvestingperiods,adjustedtoreflectactualandexpectedlevelsofvesting.This amount is expensed.

Wherethegrantdateandthevestingdatearedifferentthetotalexpenditurecalculatedwillbeallocatedbetweenthetwodatestakingintoaccount the terms and conditions attached to the instruments and the counterpartiesaswellasmanagement’sassumptionsaboutprobabilitiesofpaymentsandcompliancewithandattainmentofthesetouttermsandconditions.

Upontheexerciseofoptions,thebalanceofthesharebasedpaymentsreserverelatingtothoseoptionsistransferredtosharecapital.

(t) Directors’ and key management personnel remuneration

TheCompanyhasincludedintheRemunerationreportoftheannualDirectors’reportinformationabouttheremunerationofDirectorsandkeymanagementpersonnelwhichisrequiredbyAASB124“RelatedPartyDisclosures”inadditiontomeetingtherequirementssetoutinclause4oftheRegulations.

AASB124defines“keymanagementpersonnel”asthosepersonshavingauthorityandresponsibilityforplanning,directingandcontrollingtheactivitiesoftheentity,directlyorindirectly,includinganyDirector(whetherexecutiveorotherwise)ofthatentity.

TheDirectorsconsiderthatthekeymanagementpersonnel oftheCompanyandoftheGrouparethesamepeopleasdefinedbys300AofTheCorporationsAct2001asDirectorsandexecutives.

(u) Borrowing costs

Borrowingcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.Borrowingcostsinclude: – interestonbankoverdrafts; – amortisationofancillarycostsincurredwiththearrangementof

borrowings;and– financeleasecharges.

(v) Earnings per share

Basicearningspershare

Basicearningspershareisdeterminedbydividingtheoperatingprofitafterincometaxbytheweightedaveragenumberofordinarysharesoutstanding during the financial period.

Dilutedearningspershare

Dilutedearningspershareadjuststhefiguresusedinthedeterminationofbasicearningspersharebytakingintoaccountanyreductioninearningspersharethatwouldarisefromtheexerciseofoptionsoutstanding during the financial period.

(w) Share issue costs

Shareissuecostsarechargeddirectlyagainstsharecapital.

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(x) Rounding of accounts

TheCompanyisofakindreferredtoinClassOrder98/0100,issuedbytheAustralianSecuritiesandInvestmentsCommission,relatingtothe‘roundingoff’ofaccountsinthefinancialreport.AmountsinthefinancialreporthavebeenroundedoffinaccordancewiththatClassOrdertothenearestthousanddollars,orincertaincases,thenearestdollar.

(y) Critical accounting estimates and assumptions

Estimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.

TheGroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountofassetsandliabilitieswithinthenextfinancialyeararesetoutbelow:

(i)Incometaxes

TheGroupissubjecttoincometaxes.Significantjudgementisrequiredindeterminingthecarryingamountofcurrentanddeferredtaxassetsandliabilities.TheGrouprecognisescurrentanddeferredtaxassetsandliabilitiesbasedonestimatesandpredictionsoffutureevents,includingprofitbudgets,forecastsandthelikelihoodofanyadversechangesinincometaxlegislation.TherecoupmentoftaxlossesissubjecttotheGroupsatisfyinglegislativerequirementsparticularlythecontinuityofownershiptestandthesamebusinesstestandcomplyingwiththeinterpretationofthosetestsbytheAustralianTaxationOfficeviaitsrelevanttaxationrulings.Wherethese estimates and predictions differ from the final outcomes of theseevents,suchdifferenceswillimpactthecurrentanddeferredtaxassetsandliabilitiesandincometaxexpenseintheperiodsinwhichthefinaloutcomesoftheseeventsoccur.Detailsofthenatureandcarryingamountofcurrentanddeferredtaxassetsandliabilitiesaresetoutinnote5,13and19.

(ii)Impairmentofassets Note1(i)setsouttheGroup’saccountingpolicyregardingtesting certainassetsforimpairment.Thecalculationoftherecoverable amountoftheseassetsrequirestheuseofassumptionsincluding: theprobabilityoflease/licencerenewal,thecontinuityofexpected earning capacity of the assets and the discount rates applied to cash flowprojections.Theseassumptionsarereviewedforeach impairment test carried out and any changes in the assumptions mightchangetherecoverableamountscalculatedfortheseassets.

33

(z) Business combinations

Acquisitionsofcontrolledentitiesandbusinessesareaccountedforusingthepurchasemethod.Thecostofthebusinesscombinationismeasuredastheaggregateofthefairvalues(atthedateofexchange)ofassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissuedbytheGroupinexchangeforcontroloftheacquiree.Theacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesthatmeettheconditionsforrecognitionunderAASB3‘BusinessCombinations’arerecognisedattheirfairvaluesattheacquisitiondate,exceptfornon-currentassets(ordisposalgroups)thatareclassifiedasheldforsaleinaccordancewithAASB5‘Non-currentAssetsHeldforSaleandDiscontinuedOperations’,whicharerecognisedandmeasuredatfairvaluelesscoststosell.

Goodwillarisingonacquisitionisrecognisedasanassetandinitiallymeasuredatcost,beingtheexcessofthecostofthebusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesrecognised.If,afterreassessment,theGroup’sinterestinthenetfairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesexceedsthecostofthebusinesscombination,theexcessisrecognisedimmediatelyinstatementofcomprehensiveincomeasincome.

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2. Segment information

a) Reportable segments

Identification of reportable segments

TheGrouphasidentifieditsoperatingsegmentsinaccordancewithitsaccountingpolicy.

Theoperatingsegmentsareidentifiedbymanagementbasedonthemannerinwhichtheproductissold,andthenatureoftheservicesprovidedandthe

locationofthemarketinwhichtheyareprovided.DiscretefinancialinformationabouteachoftheseoperatingbusinessesisreportedtotheChiefExecutive

Officer.

Managementhasidentifiedtwooperatingsegments,thatofout-of-homemediaandexperientialmarketing.Theseoperatingsegmentshavebeen

aggregatedintoasinglereportablesegmentinaccordancewiththeGroup’saccountingpolicy.

TheGroupisorganisedinonesinglereportablesegment,thatofout-of-homemedia.

TheconsolidatedentityoperatedonlyinAustraliain2009and2010.

b) Major customers

TheGroup’scustomersareprimarilymediabuyingandplanningagencies.Nooneagencyconstitutesmorethan10%oftheGroup’srevenuefromcontinuing

operations.

34

Consolidated

2010$’000

2009$’000

Revenue from continuing operations

Sales revenue

Saleofmediaproductionandservices 109,700 86,040

Other income

Interest income 30 8

Total revenue and other income 109,730 86,048

3. Revenue and other income

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4. Items included in profit before income tax

Consolidated

2010$’000

2009$’000

Profit before income tax includes the following specific expenses:

Depreciationofplantandequipment 3,715 3,331

Amortisationofintangibleassets 591 448

Lossondisposalofnon-currentassets - 898

Directors’andemployees’superannuationcontributions 925 778

Rentalexpenserelatingtooperatingleases:

Minimumleasepayments 749 717

Borrowingcosts:

Interestonbankfacilitiesdrawn 2,983 3,278

PresentvalueadjustmentsandpaymentsinrelationtothedeferredconsiderationontheacquisitionofSports&OutdoorMediaPtyLimited 2,676 1,391

5,659 4,669

Sharebasedpaymentsexpense-shares - 41

Sharebasedpaymentsexpense-options 422 -

422 41

5. Income tax

( ) Income tax (expense)

Currenttax(charge) (3,874) (2,296)

Deferredtax(charge)/credit (744) 602

Overprovisioninpriorperiods 464 100

Net income tax (expense) (4,154) (1,594)

Income tax (expense) is attributable to:

(Profit)fromcontinuingoperations (4,154) (1,594)

Deferredincometax(charge)/creditincludedinincometax(expense)comprises:

Increase in deferred tax assets 151 363

(Increase)/decreaseindeferredtaxliabilities (895) 239

(744) 602

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(b) Reconciliation of income tax attributable to the financial year to the prima facie income tax (expense) due on the operating profit

Consolidated

2010$’000

2009$’000

Profitfromcontinuingoperationsbeforeincometax 11,182 6,485

Incometax(expense)calculatedat30%(2009:30%) (3,355) (1,946)

Tax effect of differences:

Non-deductibleexpenses (228) (80)

Capitalraisingcosts 73 48

Investmentallowances - 233

Overprovisioninpriorperiods 464 100

Temporarydifferencesbroughttoaccountduetochangesintaxlegislation (422) -

Temporarydifferencespreviouslynotbroughttoaccount (720) -

Other 34 51

Incometax(expense) (4,154) (1,594)

oOh!mediaGroupLimitedanditswholly-ownedAustraliancontrolledentitieshaveimplementedthetaxconsolidationlegislationasof1January2003.TheAustralianTaxationOfficehasbeennotifiedofthisdecision.Theentitieshaveenteredintoataxsharingagreement.

Asaconsequence,oOh!mediaGroupLimitedastheheadentityinthetaxconsolidatedGroupandthecontrolledentitiesinthetaxconsolidatedGroupwillcontinuetoaccountfortheirowncurrentanddeferredtaxamounts.Inadditiontoitsowncurrentanddeferredtaxamounts,oOh!mediaGroupLimitedalsorecognisesthecurrenttaxliabilities(orassets)andthedeferredtaxassetsarisingfromunusedtaxlossesandunusedtaxcreditsassumedfromcontrolledentities in the tax consolidated Group.

Assetsorliabilitiesarisingundertaxsharingagreementswiththetaxconsolidatedentitiesarerecognisedasamountsreceivablefromorpayabletootherentities in the Group.

ThetaxconsolidatedGrouphasfrankingcreditsavailableforsubsequentreportingperiods,adjustedforfrankingcreditsthatwillarisefromthepaymentoftheamountoftheprovisionforincometaxat31December2010,of$4,911,157(2009:$1,764,723).

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6. Auditor’s remuneration

Consolidated

2010$

2009$

RemunerationoftheauditoroftheCompanyfor:

Auditorreviewoffinancialreports

Currentyear-PKF 200,000 150,000

Prioryear-PKF 34,242 21,500

234,242 171,500

Otherservices - 4,500

Otherassuranceservices 20,790 2,100

255,032 178,100

7. Current assets - Cash and cash equivalents$’000 $’000

Cashatbankandinhand 6,525 307

Reconciliation of cash

Cashattheendofthefinancialyearisreconciledtotherelateditemsinthebalancesheetsasfollows:

Balancesasabove 6,525 307

Bankfacilitiesdrawn(seenote15) (151) (5,306)

6,374 (4,999)

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8. Current assets - Trade and other receivablesConsolidated

2010$’000

2009$’000

Tradereceivables 22,344 18,895

Provisionforbadanddoubtfuldebts (949) (577)

Nettradereceivables 21,395 18,318

Otherdebtors 1,076 760

Prepayments 1,478 638

23,949 19,716

Trade receivables ageing

Theageingoftradereceivablesat31Decemberissetoutbelow:

Consolidated Consolidated

2010 2010 2009 2009

Gross$’000

Provision$’000

Gross$’000

Provision$’000

Notpastdue 20,321 - 17,559 (285)

Pastdue0-30days 933 - 883 (169)

Pastdue31-60days 203 (73) 259 (45)

Pastdue61-90days 30 (19) 165 (49)

Pastdue90days+ 857 (857) 29 (29)

22,344 (949) 18,895 (577)

38

Movement in provisions for bad and doubtful debts

Consolidated

2010$’000

2009$’000

Carryingvalueat1January 577 39

Additionalprovisionsmadeduringtheyear 405 640

Amountsusedduringtheyear (33) (102)

Carryingvalueat31December 949 577

Allcreditrisksassociatedwithtradereceivableshavebeenprovidedforinthebalancesheet.Provisionsforbadanddoubtfuldebtsaremadeonthefollowing

bases:

- Individualongoingassessmentsofeachinvoiceandcustomeraccount,basedonknowledgeofthecustomerandtheircredithistory;and

- Astatisticalmethodtodeterminethelevelofprovision,basedonpastlevelsofbaddebtswrittenoff.

Detailsofthecompany’screditrisksandriskmanagementpoliciesaresetoutinnote21.

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9. Current assets - InventoriesConsolidated

2010$’000

2009$’000

Workinprogressatcost 92 39

10. Non-current assets - Property, plant and equipment

Leaseholdimprovementsatcost 1,563 1,325

Less:accumulateddepreciation (930) (706)

633 619

Plantandequipmentatcost 21,899 18,510

Less:accumulateddepreciation (8,251) (5,966)

13,648 12,544

Leasedplantandequipmentatcost 9,724 9,350

Less:accumulatedamortisation (4,217) (3,070)

5,507 6,280

Totalcarryingvalueat31December 19,788 19,443

Plantandequipmentincludesadditionsintheyearofassetsunderconstruction,atcost 1,100 529

Assetsunderconstructionhavenotbeendepreciatedduringtheyear.

39

Movements in carrying amounts

2010

Leaseholdimprovements

$’000

Plant andequipment

$’000

Leased plant& equipment

$’000Total

$’000

Consolidated

Carryingvalueat1January2010 619 12,544 6,280 19,443

Additions 238 3,495 374 4,107

Disposals - (47) - (47)

Depreciationandamortisationexpense (224) (2,344) (1,147) (3,715)

Carryingvalueat31December2010 633 13,648 5,507 19,788

2009

Consolidated

Carryingvalueat1January2009 843 12,082 7,096 20,021

Additions - 2,497 256 2,753

Depreciationandamortisationexpense (224) (2,035) (1,072) (3,331)

Carryingvalueat31December2009 619 12,544 6,280 19,443

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11. Non-current assets - Intangible assets

Consolidated

2010$’000

2009$’000

Goodwillatdeemedcost 10,838 10,838

Licenceswithdefiniteusefullives,atcost 6,013 5,840

Licenceswithindefiniteusefullives,atcost 83,391 82,114

Less:accumulatedamortisation (1,350) (925)

Less:impairmentloss (451) (451)

87,603 86,578

Computersoftwareatcost 1,043 842

Less:accumulatedamortisation (468) (405)

575 437

Totalcarryingvalueat31December 99,016 97,853

Licencesincludethoseinadevelopmentstage,atcost 588 592

Licencesindevelopmenthavenotbeenamortisedduringtheyear.


2010Goodwill

$’000Licences

$’000

ComputerSoftware

$’000Total

$’000

Consolidated

Carryingvalueat1January2010 10,838 86,578 437 97,853

Additions - 1,450 201 1,651

Amortisationexpense - (425) (63) (488)

Carryingvalueat31December2010 10,838 87,603 575 99,016


2009Goodwill

$’000Licences

$’000

ComputerSoftware

$’000Total

$’000

Consolidated

Carryingvalueat1January2009 11,002 87,221 440 98,663

Additions - 520 53 573

Disposals (164) (771) - (935)

Amortisationexpense - (392) (56) (448)

Carryingvalueat31December2009 10,838 86,578 437 97,853

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Intangibleassetsotherthangoodwillhavedefiniteorindefinitelives.Intangibleassetshavingindefiniteusefullivescompriseoutdoormediaassetleases,licencesandcontracts.Managementhaveassessedtheusefullivesoftheseleases,licencesandcontractsandhavedeterminedthattheusefullivesareindefinite.Thefactorsthathaveplayedasignificant role in these determinations include:

-Theusefullivesoftheleases,licencesandcontractsarenotdefinite;-Theleases,licencesandcontractsmayberenewedatlittleornocost;-Theleases,licencesandcontractsmayhavebeenrenewedinthepast;-Thepresence(orlackthereof )ofanycompellingchallengetothe lease,licenceandcontractrenewals;-Theintentiontorenewtheleases,licencesandcontractsandthe Group’sabilitytodoso;and-Theprobabilityoftheleases,licencesandcontractscontributingtotheGroup’snetcashinflowsindefinitely.

Impairment tests for cash generating units containing goodwill and intangible assets with indefinite useful lives(i)Cashgeneratingunits(CGUs)

CGUsfallintooneofthefollowingcategories,whicharebaseduponthedegreetowhichthecashflowsfromagroupofassetsareindependentfrom other assets or groups of assets:-groupsofoutdoormediaassetleases,licencesandcontracts,totheextentthattheyarethesmallestidentifiablegroupofoutdoormediaassetsthatgeneratethosecashflows;and

-businesses,totheextentthattheyarethesmallestidentifiablegroupofoutdoormediaassetsthatgeneratethosecashflows.ThiswouldgenerallyhappeninthecaseofabusinesscombinationthatisrunindependentlyfromtherestoftheGroup’soperationsandcashflowscannotbeallocatedtoindividualoutdoormediaassetsorgroupofassets.Inassessingtheindependenceofthecashflowsfromassets,managementconsidersinparticularhowrevenueisgeneratedandrecorded,andhowmanagementmakescommercialdecisionsbaseduponthecashflowsandresults of the impairment tests conducted.

CGUSforimpairmenttestinghavebeenidentifiedas

•mediaassetpropertyleasesandcontracts;

•retailmediaassetlicensesandcontracts;and

•theSportsandOutdoorMediaPtyLtdbusiness.

GoodwillacquiredthroughbusinesscombinationsandintangiblelicenceshavebeenallocatedtotheseCGUs.

(ii)CarryingamountofgoodwillandintangibleassetswithindefiniteusefullivesallocatedtoeachCGU

ThecarryingamountsofgoodwillandintangibleassetswithindefiniteusefullivesallocatedtoeachoftheCGUsaresetoutbelow.

Consolidated 2010

Property leases$’000

Retail media asset licences

$’000

Sports and Outdoor Media

Pty Ltd$’000

Total$’000

Carrying amount of goodwill 8,387 2,451 - 10,838

Carrying amount of leases, licences and contracts with indefinite lives 17,075 24,845 41,471 83,391

Consolidated 2009

Propertyleases$’000

Retailmediaasset licences

$’000

SportsandOutdoorMedia

PtyLtd$’000

Total$’000

Carryingamountofgoodwill 8,387 2,451 - 10,838

Carryingamountofleases,licencesandcontractswithindefinitelives 15,561 25,082 41,471 82,114

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(iii)RecoverableamountofCGUs

TherecoverableamountofaCGUisdeterminedbasedonvalue-in-usecalculations.Thesecalculationsuse1to5yearcashflowprojectionsbasedonfinancialbudgetspreparedandapprovedbymanagement.Cashflowsbeyondthefinancialbudgetsareextrapolatedusingestimatedgrowthrates,assetoutbelow.

(iv)KeyassumptionsusedinvalueinusecalculationsfortheCGUsforgoodwillandintangibleassetswithindefiniteusefullives

Thecalculationforvalueinuseforoutdoormediaassetbusinessesandlicencesandcontractsincludesthefollowingassumptions:

Discount ratesThepre-taxdiscountratesappliedtocashflowprojectionsistherangefrom16.2%p.a.to20.7%p.a.(2009:16.0%p.a.to21.2%p.a.).Thesediscountratesareconsistentwithpastexperienceandexternalsourcesof information.

Expected licence/contract tenureThisistheexpectedtimethateachCGUisexpectedtodelivereconomicbenefittotheentityandisintherangefrom10to60years,whichisnotmateriallydifferentfromusingaterminalvalueinthevalueinusecalculations.TherangeusedfortheSportsandOutdoorMediaPtyLtdbusinessis60years.

ContributionContributionistheeconomicbenefitexpectedtoflowtotheentityfromeachCGU.

Growth rateGrowthrateistheannualpecentageincrementincontribution.Managementdeterminesthiswithregardtoexpectedinflation,industryanddemandgrowthratesovertheexpectedlicence/contracttenuresofeachcashgeneratingunit.ThecontributiongrowthratesappliedtoallCGUsareintherangefrom0.0%p.a.to3.0%p.a.ThegrowthrateusedfortheSportsandOutdoorMediaPtyLtdbusinessis3.0%p.a.

(v)SensitivitytochangesinassumptionsManagementbelievethatanypossiblechangesinanyoftheabovekeyassumptionswouldnotcausethecarryingvalueofeachcashgeneratingunittoexceedmateriallyitsfairvalue.

12. Non-current assets - other financial assetsConsolidated

2010$’000

2009$’000

Available-for-sale financial assets

Unlistedequitysecuritiesatfairvalue 413 516

Total carrying value of other financial assets 413 516

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13. Deferred tax assets

Consolidated

2010$’000

2009$’000

The balance comprises temporary differences attributable to:

Amounts recognised in statement of comprehensive income

Employeebenefits 362 284

Provisionsfordoubtfuldebts 272 173

Legalcostsofacapitalnature 150 201

Accruals&sundryitems 107 69

Totalamountsrecognisedinstatementofcomprehensiveincome 891 727

Amounts recognised directly in equity

Capitalraisingexpenses 141 43

Set-offofdeferredtaxliabilitiespursuanttoset-offprovisions(seenote19) (1,032) (770)

Netdeferredtaxassets - -

Movements

At1January - -

Creditedtothestatementofcomprehensiveincome 151 363

Credited/(debited)toequity 100 (46)

Set-offofdeferredtaxliabilitiespursuanttoset-offprovisions(seenote19) (251) (317)

At31December - -

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14. Current liabilities - Trade and other payables

Consolidated

2010$’000

2009$’000

Tradepayables 4,095 2,708

Otherpayables 11,223 8,509

15,318 11,217

Tradepayablesareunsecuredandnoninterest-bearing.

15. Current liabilities - Borrowings

Bankfacilitiesdrawn 151 5,306

Leaseliabilities(seenote25) 1,861 1,943

Commercialbillline 2,800 2,800

4,812 10,049

Unrestrictedaccesswasavailableat31Decembertothefollowinglinesofcredit:

Workingcapitalfacility/bankoverdraft 15,000 15,000


Equipmentfinancerevolvingfacility 6,000 6,000

Total facilities 43,450 46,250

Usedat31December:

Workingcapitalfacility 151 5,306


Equipmentfinancerevolvingfacility 3,526 5,138

26,127 35,694

Theworkingcapitalandthecommercialbillfacilitiesmaybedrawnatanytimeandarereviewedannuallybythebank.TheyaresecuredbyafixedandfloatingchargeoveralltheassetsoftheGroup.Therearenomaterialtermsorconditionsrelatingtotheassetspledgedascollateral. DetailsoftheGroup’sinterestrateexposurearesetoutinnote21.

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Consolidated

2010$’000

2009$’000

Employeeentitlements(seenote26) 452 371

Movements in provisions


Additionalprovisionrecognised 564 353

Unusedamountsreversedduringtheyear (40) (14)

Amountsusedduringtheyearinrespectofemployeeentitlementspaid (443) (275)


17. Non-current liabilities - Borrowings

Leaseliabilities(seenote25) 1,665 3,195

Commercialbillline(seenote15) 19,650 22,450

Less:Costsoffacilities (68) (129)

21,247 25,516

16. Current liabilities - Provisions

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18. Non-current liabilities - ProvisionsConsolidated

2010$’000

2009$’000

Employeeentitlements(seenote26) 755 575

Movements in provisions


Additionalprovisionrecognised 232 16

Unusedamountsreversedduringtheyear (5) (1)

Amountsusedduringtheyearinrespectofemployeeentitlementspaid (47) (8)


19. Non-current liabilities - Deferred tax liabilities

The balance comprises temporary differences attributable to:

Amounts recognised in statement of comprehensive income

Intangibleassets 1,179 874

Financeleasedassets 594 342

DeferredconsiderationonacquisitionofSports&OutdoorMediaPtyLtd 352 -

Set-offofdeferredtaxassetspursuanttoset-offprovisions(seenote13) (1,032) (770)

Netdeferredtaxliabilities 1,093 446

Movements

At1January 446 1,002

Charged/(credited)tothestatementofcomprehensiveincome 898 (239)

Set-offofdeferredtaxassetspursuanttoset-offprovisions(seenote13) (251) (317)

At31December 1,093 446

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(b) Movements in ordinary share capital and options over ordinary shares

*875,195and1,624,805shareswereissuedtoMrBrendonCookon21May2006and3July2006fornoconsideration.Thesharesweresubjecttoescrowfora

periodof3yearsfromthedateofissue,andweresubjecttoforfeitureifMrCook’semploymentwiththeCompanywasterminatedforanycauseorMrCook

resignedasanemployeeatanytimewithin3yearsofthedateofissueoftheshares.

InaccordancewithAASB2ShareBasedPayments,thevalueoftheshareswasexpensedoverthevestingperiod.Thesharebasedpaymentexpense

recognisedfor2010was$nil(2009:$40,954).ThefairvalueofMrBrendonCook’sshareswascalculatedusingmarketpricesatthetimeofissue.

(c) Ordinary sharesVoting rightsEveryholderofsharespresentinpersonorbyproxy,attorneyorrepresentativeatameetingofshareholdershasonevoteonavotetakenbyashowofhands,and,onapolleveryholderofshareswhoispresentinpersonorbyproxy,attorneyorrepresentativehasonevoteforeveryfullypaidshareheldbyhimorher,andaproportionatevoteforeverypartlypaidshare,registeredinsuchshareholder’snameontheparententity’sshareregister.

ApollmaybedemandedbytheChairpersonofthemeeting,byany5shareholderspresentinpersonorbyproxy,attorneyorrepresentative,orbyanyoneormoreshareholderswhoaretogetherentitledtonotlessthan5%ofthetotalvotingrightsof,orpaidupvalueof,thesharesofallthoseshareholdershavingtherighttovoteatthatmeeting.

20. Contributed equity(a) Issued and paid up capital

Consolidated and parent entity

2010 2009 2010$’000

2009$’000

Ordinarysharesissuedandfullypaid 438,120,012 370,977,155 79,547 66,996

Optionsoutstandingat31December 23,000,000 -

No.ofsecurities

Date Details Number of Shares $’000 Number of Options $’000

1 January 2009 370,977,155 67,001 22,005,000 1,226

31May2009 OptionsLapsed - - (2,005,000) (141)

30June2009 Optionslapsed - - (20,000,000) (1,085)

30June2009 Sharebasedpaymentsexpense - 41* - -

31December2009 Deferredtaxdebitrecogniseddirectlyinequity - (46) - -

31 December 2009 370,977,155 66,996 - -

31March2010 SharesissuedinconsiderationfortheacquisitionofSportsandOutdoorMediaPtyLtd 10,000,000 1,046 - -

18June2010 Optionsissued - - 13,500,000 322

21June2010 Optionsissued - - 9,500,000 100

6December2010 Sharesissued 57,142,857 11,405 - -

31December2010 Deferredtaxcreditrecogniseddirectlyinequity - 100 - -

31 December 2010 438,120,012 79,547 23,000,000 422

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Dividends rightsDividendsarepayableoutoftheparententity’sprofitsandaredeclaredordeterminedtobepayablebytheDirectors.Dividendsdeclaredwillbepayableonthe shares at a fixed amount per share.

Transfer of SharesAshareholdermaytransfersharesbyamarkettransferinaccordancewithanycomputerisedorelectronicsystemestablishedorrecognisedbytheASXortheCorporationsAct2001forthepurposeoffacilitatingtransfersinsharesorbyaninstrumentinwritinginaformapprovedbytheASXorinanyotherusualformorinanyformapprovedbytheDirectors.TheDirectorsmayrefusetoregisteranytransferofshares,otherthanaProperSCHTransfer,wherepermittedbytheListingRulesoftheASX.TheparententitymustnotrefuseorfailtoregisterorgiveeffecttoordelayorinanywayinterferewithaProperSCHTransferofSharesorothersecurities.

Liquidation RightsTheparententityhasonlyoneclassofsharesonissue,whichallrankequallyintheeventofliquidation.Oncealltheliabilitiesoftheparententityaresatisfied,aliquidatormay,withtheauthorityofaspecialresolutionofshareholders,divideamongtheshareholdersatthetimethewholeoranypartoftheremainingassetsoftheparententity.Theliquidatormaywiththesanctionofaspecialresolutionoftheparententityvestthewholeoranypartoftheassetsintrustforthebenefitofshareholdersastheliquidatorthinksfit,butnoshareholdercanbecompelledtoacceptanysharesorothersecuritiesinrespectofwhichthereisanyliability.

(d) OptionsAnEmployeeShareOptionPlan(‘ESOP’)isoperatedbytheCompanytoallowselectedpermanentemployeesandDirectorstoparticipateinthegrowthoftheCompanythroughtheissueofoptionsoverordinarysharesintheCompany.EligibilityforparticipationisatthediscretionoftheBoard.

Theoptionsaregrantedfornoconsiderationandcarrynodividendorvotingrights.Theoptionsaregenerallyexercisablewithinfiveyearsfromthedateofgrantattheexerciseprice,subjecttothesatisfactionofperformancehurdles.Theoptionsexpirefiveyearsfromthedateofgrant.Eachoptionissuedisconvertibleintooneordinaryshare.TheexercisepriceoftheoptionsistheweightedaveragemarketpriceoftheCompany’ssharessoldontheASXduringtheweekimmediatelypriortoandincludingthegrantdate.Theexercisepriceispayableatthetimeofexerciseoftheoptions.Theoptionsmustnotbetransferred,encumberedorotherwisedisposedofwithoutthepriorconsentoftheBoard.

OptionsnormallylapseiftheoptionholderceasestobeanemployeeoftheCompanyoranyofitssubsidiariesandinthecaseofaDirector,ceasestoholdoffice,otherwisethanbydeath,permanentincapacity,redundancy,retirementorterminationbyconvenience.Intheseevents,optionsnormallyvestnothedate of cessation.

48

Grant dateVesting

dateExpiry

dateExercise

Price

Fair value of each

option at grant date

Outstandingat

1 January2010

Issued during

the year

Lapsedduring

the year

Exercisedduring the

year

Outstandingat

31 December 2010

21May2010 21May2010 20May2015 $0.12 $0.069 - 3,000,000 - - 3,000,000

21May2010 21May2012 20May2015 $0.12 $0.067 - 6,750,000 - - 6,750,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 6,700,000 - - 6,700,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 6,550,000 - - 6,550,000

- 23,000,000 - - 23,000,000

Weighted average exercise price - $0.12 - - $0.12

Nooptionswereexercisedduringtheyear.

Weighted average remaining contractual life (years) 4.4

(e) Options issued under the Employee Share Option Plan (“ESOP”)

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Theassessedfairvalueatgrantdateofoptions,calculatedinaccordancewithAASB2ShareBasedPayments,grantedtoDirectorsandkeymanagement

personnelisallocatedequallyovertheperiodfromgrantdatetovestingdate,andtheamountsaredisclosedintheremunerationtables.Fairvaluesare

determinedusingaBlack-Scholesoptionpricingmodelthattakesintoaccounttheexerciseprice,thetermandexpectedlifeoftheoption,thevestingand

performancecriteria,theimpactofdilution,thesharepriceatgrantdateandexpectedpricevolatilityoftheunderlyingshare,theexpecteddividendyield

andtherisk-freeinterestrateforthetermoftheoption.

Inputsintothemodelusedaresetoutbelow:

Dividendyield:0%

Expectedvolatility:60%

Risk-freeinterestrate:5.60%

Expectedlifeofoptions:2.8to5years

Theseinputsarereviewedandupdatedforeachandeverygrantofoptions.

49

21. Financial instruments and financial risk management

(a) Risks arising from financial instruments

TheGroupconductstransactionsinthefollowingfinancialinstruments:

- Cashandcashequivalents;

- Receivables;

- Deposits;

- Payables;and

- Borrowings,includingbankbillsandbankloans,andconvertiblenotes.

TheGroupisexposedtofinancialrisksasaresultofthesetransactions.Thesecanbeclassifiedintocreditrisk,liquidityriskandmarketrisk(inrespectof

interestraterisk,foreigncurrencyriskandotherpricerisks).

TheGrouphasinplaceariskmanagementframeworkthatmitigatestheserisks,withthepurposeofmitigatingoverallrisktofinancialperformance.Financial

riskmanagementpoliciesareapprovedbytheAuditCommittee.TheGroupdoesnotconductderivativetransactionsnortradespeculativelyinfinancial

instruments,derivativeorotherwise.Interestratesarefixedoncertainbankloans,asapprovedbytheboardofDirectorsonacasebycasebasis.

TheGroupmanagesitsrisksinconsiderationofbothitsfinancialresultsanditsunderlyingfinancialposition.

Financial Risk Factors and mitigation

ThefinancialrisksassociatedwiththeGroup’stransactionsandtheGroup’srelatedriskmanagementpolicies,aresetoutbelow.

Market Risks

(i) Interest Rate Risk

Interestrateriskistheriskthatthefairvalueofafinancialinstrumentoritscashflowswillvary,duetochangesininterestrates.

Interestbearingfinancialassetscomprisecashatbankandinhand.Surpluscashatbankisusedtoreduceworkingcapitalfacilities,thereforethereisminimal

interestrateriskonfinancialassets.

FinancialliabilitiesrelatetodebtandborrowingsfromtheGroup’sprimarybanker,WestpacBankingCorporation.

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Cashflowinterestrateriskarisesmainlyfromborrowingsthatattractvariableinterestrates.Workingcapitalfacilitiesattractavariableinterestrate.TheGroup

managestheinterestrateexposureonthisfacilityinaccordancewithtargetedratiosoffixedinterestdebttovariableinterestratedebt.Thesetargetsare

continuallyreviewed.

Otherfinancialliabilitiescomprisecommercialbilllinesandequipmentfinancefacilities,whichhavefixedinterestrates.Thedeferredconsiderationforthe

acquisitionofSportsandOutdoorMediaPtyLtdhasassociatedfixedborrowingcosts.

TheGroupdoesnothedgeinterestrateriskorusederivativestomanageitsinterestraterisk.AllinterestratesapplicableareAustralianinterestrates.

Detailsofeachclassofassetandliabilityandrespectiveinterestrateexposuresaresetoutbelowandinnote15.

Allotherassetsandliabilitiesarenon-interestbearing.

50

ThetablesbelowanalysetheGroup’sfinancialliabilitiesincludinginteresttomaturityintorelevantmaturitygroupingsbasedontheremainingperiod

atthereportingdatetothecontractualmaturitydate.Theamountsdisclosedinthetablesarethecontractualundiscountedcashflows.

Consolidated

2010

1 yearor less$’000

Over 1 to2 years

$’000

Over 2 to3 years

$’000

Over 3 to 4 years

$’000

Over 4 to5 years

$’000Total

$’000

Financial Assets

Variable interest rates

Cashassets 5,625 - - - - 5,625

5,625 - - - - 5,625

Financial Liabilities


Workingcapitalfacility 151 - - - - 151

Commercialbilllines 3,262 4,892 - - - 8,154

Fixed interest rates

Commercialbilllines 1,482 16,112 - - - 17,594

Financeleaseliabilities(seenote25) 2,076 1,237 368 110 58 3,849

6,971 22,241 368 110 58 29,748

DeferredconsiderationfortheacquisitionofSportsandOutdoorMediaPtyLtd 18,630 - - - - 18,630F

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Consolidated

2009

1 yearor less$’000

Over 1 to2 years

$’000

Over 2 to3 years

$’000

Over 3 to 4 years

$’000

Over 4 to5 years

$’000Total

$’000

Financial Assets


Cashassets 307 - - - - 307

307 - - - - 307

Financial Liabilities


Workingcapitalfacility 5,306 - - - - 5,306

Commercialbilllines 3,168 3,295 4,856 - - 11,319

Fixed interest rates

Commercialbilllines 1,482 1,482 16,112 - - 19,076

Financeleaseliabilities(seenote25) 2,300 2,019 1,166 271 18 5,774

12,256 6,796 22,134 271 18 41,475

DeferredconsiderationfortheacquisitionofSportsandOutdoorMediaPtyLtd 6,575 19,790 435 - - 26,800

Sensitivity Analysis

Thetablebelowsetsouttheeffectonprofitaftertaxandequityifinterestrateshadbeenhigherorlowerduringtheyearbyanamountof100basis

points(or1%p.a.).Thisamounthasbeenusedasitrepresentsfour25basispointrises,whichisreasonablypossibleinthecurrenteconomicenvironment,

andconfirmedbymarketexpectationsthatinterestratesinAustraliaarelikelytoincreaseinthecomingyear.

Ifinterestrateswerehigherby1%p.a.,profitandequitywillbedecreaseddueto:

- increasedinterestexpenseonvariablerateborrowings;and

- increasedinterestexpenseonfixedinterestborrowingstakenoutintheyear,duetoincreasesintheprevailinginterestrateatthetimetheborrowings

weretakenout.

Thesetwofactorsarepartiallyoffsetbyanincreaseininterestincomefromcashbalances.

Acorrespondingdecreasewouldoccurininterestexpense(andthusanincreaseinprofitandequity)ifinterestrateswerelowerby1%p.a.

Consolidated

Net Profit Equity

2010$’000

2009$’000

2010$’000

2009$’000

Ifinterestrateswerehigherby1%p.a.withallothervariablesheldconstant-increase/(decrease) (49) (109) (49) (109)

Ifinterestrateswerelowerby1%p.a.withallothervariablesheldconstant-increase/(decrease) 49 109 49 109

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(ii) Other price risk Otherpriceriskistheriskthatthefairvalueofavailable-for-salefinancialassetswillfluctuateduetochangesinmarketprices,otherthanthosearisingfrominterestrateriskandcurrencyrisk.

Sensitivity Analysis Pricesareexpectedtofluctuatebynomorethan10%.Ifpricesofavailable-for-salefinancialassetswerehigherby10%,profitaftertaxandequitywould

increaseby$36,000(2009:$36,000).Acorrespondingdecreaseinprofitaftertaxandequitywouldoccurifpriceswerelowerby10%. (iii)Foreign currency risk Foreigncurrencyriskistheriskthatthefairvalueofafinancialinstrumentoritscashflowswillvary,duetochangesinforeigncurrencyrates. TheGroupconductstransactionssolelyinAustraliandollarsandisnotsubjecttoanyforeigncurrencyrisk.

52

(iv) Credit RiskCreditRiskistheriskthatthefairvalueofafinancialassetwilldecreaseduetothefailureofanentitywithwhomtheGrouptransactstofulfilitscontractualobligations.Theprimarysourceofcreditriskistradereceivablesrelatingtocustomerswhoaregivencredittermsforpaymentofinvoicesforthesupplyofgoodsandservices.Thepracticesinplacetomanagetheserisksare:

-Creditchecksareconductedonallnewcustomers,andcreditlimitsareset;-Collateralheldassecuritymayberequired;-Ongoingassessmentsareconductedonthefairvalueoftradereceivablesand,whereappropriate,aprovisionforbadanddoubtfuldebtorsismadeagainstthoseassetswhichrequireit.

Themaximumexposuretocreditriskisthecarryingvalueoftradereceivablesnetofanyprovisions.Detailsoftradeandotherreceivablesaresetoutinnote8.

(v) Liquidity RiskLiquidityriskistheinherentriskthattheGroupwillhaveinsufficientfundstomeetitscommitmentstosettlefinancialtransactionsandliabilitiesasandwhentheyfalldue.AllfinancialliabilitieswithacontractualmaturitydatecontributetotheGroup’sliquidityrisks.Thepracticesinplacetomanagetheserisksare:

-ongoingcashflowforecastingisperformed;and-acashpolicyisinplacethatmaintainsaminimumlevelofcashandcashequivalents,andaminimumlevelofundrawnbankfacilities.

Thecontractualmaturitydateforfinancialliabilitiesissetoutabove.

(vi) Capital Risk ManagementTheGroup’sandparententity’sobjectiveswhenmanagingcapitalaretosafeguardtheirabilitytocontinueasagoingconcern,sothattheycancontinuetoprovidereturnsforshareholdersandbenefitsforothershareholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.Inordertomaintainoradjustthecapitalstructure,theGroupmayadjusttheamountofdividendspaidtoshareholders,returncapitaltoshareholders,issuenewshares,fundgrowthwithnewdebtorsellassetstoreducedebt.

(b) Financial positionFinancial assets and financial liabilitiesThefairvalueofallfinancialassetsandliabilitiesapproximatestheircarryingvalues.Consequently,inaccordancewithAASB7paragraph29,fairvaluesandcarryingvaluesforeachclassoffinancialassetsandfinancialliabilitiesarenotdisclosedinthenote,asthecarryingvaluesoftheseassetsandliabilitiesaresetoutelsewhereinthefinancialstatements.

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(c) Derivative financial instruments and hedging activitiesTheGroupdoesnotengageinhedgingactivities,conducthedgingtransactionsin,norhold,financialinstrumentstohedgerisks.ConsequentlytheGroup does not perform hedge accounting.

(d) BreachesDuringtheyeartheGrouphasnotbreachedanyofitsagreementswithitslenders,suppliers,customersoremployees.

53

22. Key management personnel disclosures

Total remuneration for Directors and key management personnelConsolidated

2010$

2009$’000

Short-termemploymentbenefits 3,523,707 2,978,367

Postemploymentbenefits 71,043 99,261

Share-basedpayments 407,521 40,954

4,002,271 3,118,582

DetailedremunerationdisclosuresareprovidedintheRemunerationReport.

Shareholdings and Optionholdings of Directors and key management personnel

ThenumberofordinarysharesintheCompanyheldduringthefinancialyearbyDirectorsandkeymanagementpersonnel,includingtheirpersonallyrelated

entitiesaresetoutbelow.

Name

Balance atstart of

the year

Received duringthe year as

remunerationOther changes

during the yearBalance at end

of the year


MrBrianBickmore 90,000 - 40,000 130,000

MrGrahamJones,Chairman 100,541 - - 100,541

MrDavidStanden - - - -

MrGeoffreyWildAM - - - -

Executive Directors

MrChristopherBregenhoj 13,650,000 - - 13,650,000

MrBrendonCook 11,559,250 - - 11,559,250

Total Directors 25,399,791 - 40,000 25,439,791


MrNoelCook 500,000 - (500,000) -

MrMichaelEgan 400,500 - - 400,500

MrJohnO’Neill 18,500,000 - (13,500,000) 5,000,000

MrMalcolmPearce - - - -

MrSimonYeandle 676,528 - - 676,528

Total other key management personnel 20,077,028 - (14,000,000) 6,077,028

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Holder

Grant date Vesting date Expiry dateExercise

price

Fair value of each option

at grant date

Outstand-ing at

1 January 2010

Issued during

the year

Lapsed / exercised

duringthe year

Outstand-ing at 31

December 2010


MrBrianBickmore 21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

MrGrahamJones,Chairman

21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

MrDavidStanden 21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

MrGeoffreyWild 21May2010 21May2010 20May2015 $0.12 $0.069 - 750,000 - 750,000

Executive Directors

MrChristopherBregenhoj 21May2010 21May2012 20May2015 $0.12 $0.067 - 1,500,000 - 1,500,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 1,500,000 - 1,500,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 1,500,000 - 1,500,000

MrBrendonCook 21May2010 21May2012 20May2015 $0.12 $0.067 - 2,000,000 - 2,000,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 2,000,000 - 2,000,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 2,000,000 - 2,000,000

Total Directors - 13,500,000 - 13,500,000


MrNoelCook 21May2010 21May2012 20May2015 $0.12 $0.067 - 200,000 - 200,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 200,000 - 200,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 200,000 - 200,000

MrMichaelEgan 21May2010 21May2012 20May2015 $0.12 $0.067 - 200,000 - 200,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 150,000 - 150,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 150,000 - 150,000

MrJohnO’Neill 21May2010 21May2012 20May2015 $0.12 $0.067 - 1,700,000 - 1,700,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 1,700,000 - 1,700,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 1,600,000 - 1,600,000

MrMalcolmPearce 21May2010 21May2012 20May2015 $0.12 $0.067 - 200,000 - 200,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 200,000 - 200,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 200,000 - 200,000

MrSimonYeandle 21May2010 21May2012 20May2015 $0.12 $0.067 - 350,000 - 350,000

21May2010 21May2013 20May2015 $0.12 $0.058 - 350,000 - 350,000

21May2010 21May2014 20May2015 $0.12 $0.050 - 300,000 - 300,000

Total other key management personnel - 7,700,000 - 7,700,000

Options provided as remunerationThenumberofoptionsoverordinarysharesintheCompanyheldby,andprovidedasremunerationto,Directorsandkeymanagementpersonnelincluding

theirpersonallyrelatedentities,duringthefinancialyear,aresetoutbelow.


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23. Cash flow information

(a) Reconciliation of cash flow from operating activities with profit from ordinary activities after income taxConsolidated

2010$’000

2009$’000

Profit on ordinary activities after income tax 7,028 4,891

Depreciationandamortisation 4,306 3,779

Non-cashemployeebenefitsexpense-employeeentitlements 306 15

Sharebasedpaymentsexpense 422 41

Non-cashborrowingcosts 1,193 321

Lossondisposalofnon-currentassets - 898

(Increase)intradedebtors (3,146) (2,149)

(Increase)inotheroperatingassets (1,182) (353)

Decreaseintaxassetsandliabilities 224 436

Increase in trade creditors 1,386 267

Increaseinotheroperatingliabilities 3,495 1,551

Net cash inflow from operating activities 14,032 9,697

(b) Reconciliation of cash

Cashattheendofthefinancialyearisreconciledtotherelateditemsinthebalancesheetasfollows:

Cash(seenote7) 6,525 307

Bankfacilitiesdrawn(seenote15) (151) (5,306)

6,374 (4,999)

(c) Non-cash financing and investing activities

Consolidated

2010$’000

2009$’000

Acquisitionofplantandequipmentbymeansoffinanceleases 375 256

24. ContingenciesAt31December2010,theGrouphasissuedbankguaranteesinrespectofpropertyleasesandcontractstotalling$1,913,773(2009:$2,371,668).Thesearenotexpectedtobedrawnonatanytime,andarereturnableuponleaseandcontracttermination.Otherthantheguaranteesmentionedabove,theGrouphadnocontingentliabilitiesorassetsat31December2009and31December2010.

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25. Capital and lease commitments

(a) Capital commitments

At31December2010theGrouphadnocapitalexpenditurecontractedfor.

(b) Lease commitments

Consolidated

2010$’000

2009$’000

Operating leases

Commitmentsforminimumleasepaymentsinrelationtonon-cancellableoperatingleasesarepayableasfollows:

-withinoneyear 24,979 20,964

-laterthanoneyearbutnotlaterthan5years 48,098 51,493

-laterthan5years 5,151 9,679

Commitmentsnotrecognisedinthefinancialstatements 78,228 82,136

Operatingleasecommitmentsincludeminimumcontractedpaymentsinrelationtonon-cancellableout-of-homemediaassetleases,licencesandcontracts.

Finance leases

Commitmentsinrelationtofinanceleasesarepayableasfollows:

-withinoneyear 2,076 2,300

-laterthanoneyearbutnotlaterthan5years 1,774 3,474

-laterthan5years - -

Minimumleasepayments 3,850 5,774

Less:futurefinancecharges (324) (636)

Recognisedasaliability 3,526 5,138

Representingleaseliabilities:

Current(seenote15) 1,861 1,943

Non-current(seenote17) 1,665 3,195

3,526 5,138

Theweightedaverageinterestrateimplicitintheleasesis8.6%p.a.(2009:8.9%p.a.).Therentalcommitmentsrepresentfixedportionsoflong-termrentalcontracts.TheDirectorsbelievethattheassociatedfuturerevenuestreamswillbesufficienttocoverthesecommitments.

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26. Employee benefitsConsolidated

2010$’000

2009$’000

Employee benefits and related on-costs liabilities

Provisionforemployeebenefits-current(seenote16) 452 371

Provisionforemployeebenefits-non-current(seenote18) 755 575

Aggregateemployeebenefitsandon-costsliabilities 1,207 946

Employee numbers

Numberofemployeesatthereportingdate 129 105

27. Related party transactions

(a) Wholly owned Group

ThewhollyownedGroupconsistsofoOh!mediaGroupLimitedanditswhollyownedcontrolledentities,listedinnote28.

TransactionsbetweenoOh!mediaGroupLimitedandotherentitieswithinthewhollyownedGroupduringtheyearended31December2010consistedof:-managementfeeschargedbyoOh!mediaGroupLimited;-loansadvancedbyandtooOh!mediaGroupLimited;and -investmentsinsubsidiariesofoOh!mediaGroupLimited

(b) Other transactions with Directors and key management personnel

TherewerenoothertransactionswithDirectorsorkeymanagementpersonnel,otherthanthosedisclosedintheRemunerationReport.

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28. Investments in controlled entities and business combinations

Country of incorporation Class of shares 2010 2009

oOh!mediaAssetsPtyLimited Australia Ordinary 100% 100%

oOh!mediaDigitalPtyLimited Australia Ordinary 100% 100%

oOh!mediaFactorPtyLimited Australia Ordinary 100% 100%

oOh!mediaLifestylePtyLimited Australia Ordinary 100% 100%

oOh!mediaProducePtyLimited Australia Ordinary 100% 100%

oOh!mediaPtyLimited Australia Ordinary 100% 100%

oOh!mediaRetailPtyLimited Australia Ordinary 100% 100%

oOh!mediaRoadsidePtyLimited Australia Ordinary 100% 100%

oOh!mediaShopPtyLimited Australia Ordinary 100% 100%

oOh!mediaTransportPtyLimited Australia Ordinary 100% 100%

oOh!mediaTryvertisingPtyLimited Australia Ordinary 100% 100%

SportsandOutdoorMediaPtyLtd Australia Ordinary 100% 100%

Effective equity holding

(a) Acquisition of controlled entities

(1) On23July2008,theCompanyannouncedthatithadenteredintoanagreementtopurchase100percentoftheissuedsharecapitalofSportsandOutdoorMediaPtyLimitedforatotalof$45.8millioncomprising$40millionconsideration,$1.5millionacquisitioncostsandaperformancebasedpaymentofapproximately$4.3millionincashandshares.UndertheacquisitionagreementtheGroupwouldacquirethewholeoftheissuedsharecapitalofSports&OutdoorMediaPtyLimitedintwostages.ThefirststagewouldseeoOh!mediaacquire65percentoftheissuedcapitalofSports&OutdoorMediaPtyLimitedon1September2008followedbytheremaining35percenton31December2009.Theconsiderationof$40millionwaspayablebyinstalmentswith$21.5millioncashpayableonsettlement,withthesecondinstalmentof$18.5millionpayableby31December2009incashand/orsharesinoOh!mediaGroupLimitedatthevendor’sdiscretion.Thesecondinstalmentwasacontractualcommitmentandwasexpectedtobefundedbyamixtureofdebtandequity.Inaddition,theGroupwouldpayaperformancebasedpaymentinrespectofSports&OutdoorMedia’sfinancialperformancefortheperiodbetween1September2008and31December2009.

On16November2009,theCompanyannouncedthatithadfinalisednegotiationstoextendthedateoffinalpaymentforSportsandOutdoorMediaPtyLimitedto31December2011,withtherightforearlyrepayment.Underthenewagreement,theGroupextendedthefinalinstalmentto31December2011,fortheissueof$1.2millioninsharesiftheoutstandingamountwasnotpaidby31December2009,andafurtherpaymentof$1.2millionincashifthefinalinstalmentwasnotmetby31March2010.Thecompanyalsoannouncedthataspertheoriginalacquisitionagreement,deferredconsiderationof$2.3millionincashand10millionoOh!mediasharesforachievingtheperformancecriteriawouldbesettledby31March2010.

On31January2011,theCompanyannouncedithadmadethefinalpaymentforitsSportsandOutdoorMediaPtyLtdacquisitionearlierthanthecontracteddate,followingitsrecentsuccessfulcapitalraising.Undertheearlysettlementagreement,$18.5millionwaspaidtothevendor,consistingof$4.2millioninordinarysharesat20centspershareand$14.3millionincashforthebalanceofthedeferredconsideration.Therearenofurtherpaymentstobemadeinrespectofthisacquisition.

(2) On9December2010,theCompanycompletedtheacquisitionoftheoutdooradvertisingassetsoftheNSW-basedoutdooradvertisingbusinessPrimePositionsforaconsiderationof$1.65million,paidincashoncompletion.Itisnotpracticabletodiscloseseparatelytheacquiree’sprofitorlossincludedinthecompany’sprofitfortheyearsincethedateofacquisition,orasiftheacquisitionoccurredon1January2010,becausealltheacquiredbusinessassetshavebeenintegratedintotheCompany’soperations.

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Detailsoftheacquisitionsareasfollows:

2010Out-of-home advertising businesses

2009Out-of-home advertising businesses

$’000Total

$’000 $’000Total

$’000

Aggregate fair value of assets acquired and liabilities assumed

Plantandequipment 313 313 - -

Intangibleassets 1,337 1,337 - -

Total fair value of assets acquired and liabilities assumed 1,650 1,650 - -

Settled by:

Cashpaidincurrentyear 1,650 1,650 - -

Carrying amount of assets acquired and liabilitiesassumed immediately before the combination

Plantandequipment 313 313 - -

Intangibleassets 1,337 1,337 - -

Total carrying amount of assets acquired and liabilitiesassumed immediately before the combination 1,650 1,650 - -

Consolidated

2010$’000

2009$’000

Outflow of cash to acquire controlled entities or businesses net of cash acquired

Cashconsiderationpaidincurrentyear(seeStatementofCashFlows) (5,600) (1,446)

Total (5,600) (1,446)

29. Events occurring after the reporting date

(a)FollowingthepassingoftworesolutionsatameetingoftheCompany’sshareholderson14January2011:

theissueof57,142,857ordinarysharesintheCompanyon6December2010,at21centspershare,raising$12million,wasratified;andafurtherissueof42,105,263ordinarysharesintheCompanyat19centspershare,raisingafurther$8million,wasapproved.

(b)On31January2011,theCompanyannouncedithadmadethefinalpaymentforitsSportsandOutdoorMediaPtyLtdacquisition.Seenote28fordetails.

Asat31March2011therewerenoothermatterstoreportafterthereportingdate.

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30. Authorisation for issue

ThefinancialreportofoOh!mediaGroupLimitedfortheyearended31December2010wasauthorisedforissueinaccordancewitharesolutionofthe

Directorson31March2011.

31. Earnings per share

Consolidated

2010cents

2009cents

Earnings per share for profit from continuing operations attributable tothe ordinary equity holders of the Company

Basicearningspershare 1.8 1.3

Dilutedearningspershare 1.8 1.3

Theearningsusedtocalculatethebasicearningspersharefromcontinuingoperationsare$7,028,000(2009:$4,891,000)beingtheprofitfromcontinuingoperationsattributabletotheordinaryequityholdersoftheCompany

Theearningsusedtocalculatethedilutedearningspersharefromcontinuingoperationsare$7,077,000(2009:$4,891,000)beingtheprofitfromcontinuingoperationsattributabletotheordinaryequityholdersoftheCompany.

Earnings per share for profit attributable to the ordinary equity holders of the Company

Basicearningspershare 1.8 1.3

Dilutedearningspershare 1.8 1.3

Theearningsusedtocalculatethebasicearningspershareare$7,028,000(2009:$4,891,000)beingtheprofitattributabletoordinaryequityholdersoftheCompany.

Theearningsusedtocalculatethedilutedearningspershareare$7,028,000(2009:$4,891,000)beingtheprofitattributabletotheordinaryequityholdersoftheCompany.

Weightedaveragenumberofordinarysharesoutstandingduringtheyearusedinthecalculationofbasicearningspershare 382,425,296 370,977,155

Weightedaveragenumberofordinarysharesoutstandingduringthe year used in the calculation of diluted earnings per share 383,014,537 370,977,155

Options

Optionsexercisableatlessthantheaveragemarketpriceforordinarysharesareconsidereddilutiveinthecalculationofpotentialordinaryshares.Thenumberofpotentialordinarysharesdeemedtohavebeenissuedandincludedinthedeterminationofdilutedearningspershareis589,241(2009:nil).

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32. Parent entity financial information

(a) Summary financial information

Theindividualfinancialstatementsfortheparententityshowthefollowingamounts:

Parent Entity

2010$’000

2009$’000

Current Assets 3,530 116

Non-Current Assets 95,308 95,056

Total Assets 98,838 95,172

Current Liabilities 5,213 11,437

Non-Current Liabilities 39,612 38,230

Total Liabilities 44,825 49,667

Net Assets 54,013 45,505

Equity

Contributedequity-sharecapital 79,547 66,996

Reserves 422 -

(Accumulatedlosses) (25,956) (21,491)

Total Equity 54,013 45,505

Profit and total comprehensive income for the year (4,465) (1,632)

(b) Guarantees entered into by the parent entity

At31December2010,theparententityhasprovidedfinancialguaranteesonbehalfofcontrolledentitiesinrespectofpropertyleaseandcontractstotalling

$489,355(2009:$489,355).Thesearenotexpectedtobedrawnonatanytimeandarereturnableuponleaseandcontracttermination.

Theparententityhasalsoprovidedfinancialguaranteesinrespectofbankfacilities,securedbyafixedandfloatingchargeoveralltheassetsoftheGroup.

(c) Contingent liabilities of the parent entity

Theparententitydidnothaveanycontingentliabilitiesasat31December2010or31December2009.

(d) Commitments for expenditure

Theparententitydidnothaveanycapitalexpenditureorleasecommitmentscontractedforasat31December2010or31December2009.

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TheDirectorsofoOh!mediaGroupLimiteddeclarethat:

(a)intheDirectors’opinionthefinancialstatementsandnotessetoutonpages24to61andtheRemunerationreportintheDirectors’Report setoutonpages19to14,areinaccordancewiththeCorporationsAct2001,including:(i)givingatrueandfairviewoftheGroup’sfinancialpositionasat31December2010andoftheirperformance,for thefinancialyearendedonthatdate;and(ii)complyingwithAustralianAccountingStandards(includingtheAustralianAccountingInterpretations)andCorporationsRegulations2001.(b)thefinancialreportalsocomplieswithInternationalFinancialReportingStandardsasdisclosedinnote1;and(c)therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.

TheDirectorshavebeengiventhedeclarationsrequiredbySection295AoftheCorporationsAct2001bytheChiefExecutiveOfficerandChiefFinancialOfficerforthefinancialyearended31December2010.

SignedinaccordancewitharesolutionoftheDirectors.

Christopher BregenhojDirector31March2011

Directors’ Declaration

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63

AUDITOR'S INDEPENDENCE DECLARATION

TO: The Directors oOh!media Group Limited

As lead auditor for the audit of oOh!media Group Limited for the year ended 31 December 2009, I declare that to the best of my knowledge and belief there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of oOh!media Group Limited and the entities it controlled during the year.

PKF

Paul Bull 31 March 2010Partner Sydney

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726 Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia DX 10173 | Sydney Stock Exchange | New South Wales

The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

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PKF





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Shareholder Information


Theshareholderinformationsetoutbelowisapplicableasat21March2011.

(a) Distribution of equity securities

Analysisofnumberofequitysecurityholdersbysizeofholding:

Number of security holders

Range of security holdings Ordinary shares Options

1-1,000 69 -

1,001-5,000 491 -

5,001-10,000 146 -

10,001-100,000 200 -

100,001andover 53 14

Total number of security holders 959 14

103shareholdersholdlessthanamarketableparcelofshares.

(b) Equity security holdersThenamesofthetwentylargestholdersofquotedequitysecuritiesarelistedbelow:

Ordinary shares

NameNumber

heldPercentage of

issued shares %

HubXPtyLtd 135,752,944 27.08

CavendishSquareHoldingBV 119,000,000 23.74

PFGInvestmentsPtyLtd 69,574,373 13.88

WilliamShawCapitalPtyLimited 52,105,263 10.40

MrRayBalcomb 21,000,000 4.19

RPProspectsPtyLimited 17,110,000 3.41

SteelPriceSuperannuationFund 13,650,000 2.72

JPMorganNomineesAustraliaLimited 11,445,522 2.28

SmallCoInvestmentManagerLtd 10,055,402 2.01

MrsDebraCook 8,000,000 1.60

SpencerStreetSuperPtyLtd 7,325,000 1.46

MrJohnO’Neill 5,000,000 1.00

NationalNomineesLimited 4,516,641 0.90

MrBrendonCook 2,500,000 0.50

BondStreetCustodiansLtd 2,182,549 0.44

RBCDexiaInvestorServicesAustraliaNomineesPtyLtd 1,523,788 0.30

MrArthurGleeson 1,500,000 0.30

MrMarkAndrewDorney 1,134,096 0.23

147049938PtyLtd 800,000 0.16

YeandleSuperannuationFund 676,528 0.12

Top 20 holders of ordinary shares as at 18 March 2010 484,852,106 96.72

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NameNumberon issue

Number of holders

Unquoted equity securities

Optionsissuedtotakeupordinaryshares 23,000,000 14

(c) Substantial holders of equity securities

SubstantialholdersofequitysecuritiesintheCompanyaresetoutbelow:

Name

Numberof ordinary shares held

Percentage%

HubXPtyLtd 135,752,944 27.08

CavendishSquareHoldingBV 119,000,000 23.74

PFGInvestmentsPtyLtd 69,574,373 13.88

WilliamShawCapitalPtyLimited 52,105,263 10.40

(d) Voting rightsThevotingrightsattachingtoeachclassofequitysecuritiesaresetoutbelow:

OrdinarysharesOnashowofhandseverymemberpresentatameetinginpersonorbyproxyshallhaveonevoteanduponapolleachshareshallhaveonevote.

OptionsNovotingrights.

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Corporate Directory

Registered OfficeLevel6165WalkerStreetNorthSydneyNSW2060t.+61(2)99275555f.+61(2)99275599www.oohmedia.com.au

Company SecretaryMichaelEgan

Share RegistryComputershareInvestorServicesPtyLimited452JohnstonStreetAbbotsfordVIC3000t.+61(3)96115711

Stock Exchange ListingoOh!mediaGroupLimitedsharesandoptionsarelistedontheAustralianStockExchange(code:OOH)

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oOh!media

SydneyLevel 6 165 Walker StreetNorth Sydney NSW 2060t. +61 (2) 9927 5555f. +61 (2) 9927 5599

MelbourneLevel 3165 Fitzroy StreetSt Kilda VIC 3182t. +61 (3) 8598 0700f. +61 (3) 8598 0701

Brisbane3 Prospect StreetFortitude Valley QLD 4006t. +61 (7) 3620 2900f. +61 (7) 3257 1618

AdelaideLevel 177 King William RoadNorth Adelaide SA 5006t. +61 (8) 8361 9611f. +61 (8) 3257 1618

www.oohmedia.com.au

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