Hc 573 Sg/2014/139 British Film Institute Group and Lottery

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BRITISH FILM INSTITUTE

GROUP AND LOTTERY

ANNUAL REPORT AND FINANCIAL STATEMENTS

2013‐14

HC 573

SG/2014/139

BRITISH FILM INSTITUTE Group and Lottery Annual Report and Financial Statements 2013‐14

Presented to Parliament pursuant to Section 34(3) and 35(5) of the National Lottery etc. Act 1993 (as amended by the National Lottery Act 1998 and the National Lottery Act 2006).

ORDERED BY THE HOUSE OF COMMONS TO BEINTED PR 21 JULY 2014

Presented to the Scottish Parliament pursuant to the Scotland Act 1998 Section 88

Charity Registration no: 287780

HC 573

SG/2014/139

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CONTENTS

BFI ANNUAL REPORT BFI Mission and Values Page 5 Chairman and Chief Executive’s Report Page 6 What we delivered this year Page 9 Public Policy, Leadership and Advocacy Page 28 Fundraising and Philanthropy Page 30 Key Performance Measures Page 36 Financial Review Page 41 Public Benefit Page 45 Environmental Sustainability Page 46 How the BFI is Governed Page 48 Remuneration Report Page 55 Corporate Information Page 61

GOVERNANCE STATEMENT Page 62

BFI GROUP AND CHARITY FINANCIAL STATEMENTS Statement of Governors and Accounting Officer’s Responsibilities Page 69 Independent Auditors Report Page 70 BFI Group and Charity Financial Statements Page 72

LOTTERY FINANCIAL STATEMENTS Statement of Governors and Accounting Officer’s Responsibilities Page 96 Certificate and Report of the Comptroller and Auditor General Page 97 Lottery Financial Statements Page 99 Schedule 1: Film Rights Detail as at 31 March 2014 Page 118 Schedule 2: New Soft Commitments Page 126 Schedule 3: Lottery commitments (soft) made by delegate bodies Page 133

STATUTORY BACKGROUND Page 135

MISSION AND VALUES

The BFI’s mission is to ensure that film is central to our cultural life, in particular by supporting and nurturing the next generation of filmmakers and audiences. The BFI serves a public role which covers the cultural, creative and economic aspects of film in the UK.

Founded in 1933, the BFI is a registered charity governed by Royal Charter. Under the Royal Charter, the BFI has five objectives:

 To encourage the development of the arts of film, television and the moving image throughout the UK;  To promote their use as a record of contemporary life and manners;  To promote education about film, television and the moving image generally, and their impact on society;  To promote access to and appreciation of the widest possible range of British and world cinema;  To establish, care for and develop collections reflecting the moving image history and heritage of the UK.

Film Forever is the BFI’s strategic plan for 2012‐2017, which covers all BFI activity, and focuses on three priority areas:

 Expanding education and learning and boosting audience choice;  Supporting the future success of British film;  Unlocking our film and television heritage.

In carrying out its duties, the BFI undertakes to:

 Consider the views of the industry, our audiences and our partners  Be efficient, effective and accessible  Be honest, open and accountable for our actions  Provide clear and appropriate information, guidance and feedback  Share and learn best practice in order to continually improve the services on offer

CHAIRMAN AND CHIEF EXECUTIVE’S REPORT

In 2012 we published our ambitious five year plan for film, Film Forever, and the main focus of this year has been setting up and starting to activate the new strategies and lottery schemes that will underpin our three main priorities of education and audiences, filmmaking and heritage.

After what feels like a long period of consultation and review, there is now a great sense of momentum, as we start to deliver what we believe our audiences and industry colleagues have asked for. Film, overall, was helped this year by new announcements from the Chancellor, strengthening the film tax relief and introducing new reliefs for animation and high end TV (with video games tax relief finally being approved by the European Commission in April 2014). With so many British films, and British talent involved in Oscar and BAFTA nominated films and winning awards, there is a esens of confidence and purpose.

The launch of the BFI Player in October 2013 represented one of those great defining moments for the BFI, perhaps the most important since the opening of the National Film Theatre in 1957. Whilst we always seek to place our content on as many digital platforms as possible, the BFI Player allows us for the very first time to meaningfully involve audiences right across the UK in the whole of our programmes, activities and archives. In parallel with the Unlocking Film Heritage programme that will digitise ten thousand archive titles from the BFI and other significant UK archives, the BFI Player will allow generations of people to experience and enjoy a greater choice of cultural riches from our library, festivals, BFI Southbank, and eventually our partners in the Film Audience Network. Furthermore, the BFI Player is already providing a platform to showcase British films, including those backed by the BFI Film Fund. It also starts to bring in a much needed new income stream and contributes a valuable research capability, as we can now experiment in partnership with distributors, new ways of releasing films in the digital era, whilst tracking and sharing the economic impact.

Film Forever recognised that a prosperous film industry requires a vibrant film audience, and this strategy is the first in many, many years that has growing audiences as a strategic priority. We hope these initiatives will benefit audiences and the industry alike. Audiences outside London and the South East are particularly less well served in terms of choice of film. To counter this we have set up the Film Audience Network to re‐energise the regional cinema networks, and the Neighbourhood Cinema Scheme to re‐vitalise cinema activism at a more local level. Complimenting this is an exciting new initiative with the main cinema circuits for a wider, more adventurous film programme all round. Taken together these initiatives will eventually compliment and work in tandem with the BFI Player. This year our very major cultural blockbuster programme ‘Gothic’ was delivered on multi‐platforms, and in an astonishing variety of inventive ways by our audience network partners right across the UK, and is just a taster of what we hope to achieve for, and with, British audiences in the future.

The international success and recognition of British film in 2013‐14 was impossible to ignore. In a time of heightened international competition, UK film has proven itself to be a truly global business and driver for growth. British film’s continued success depends on its ability to maintain a strong global position. The BFI’s International Strategy, launched in 2013, is the result of the main UK players agreeing on a set of priority territories which were identified

through a forensic analysis of the international marketplace. On the back of this focus we have led delegations to Brazil and made considerable progress towards a co‐production treaty with China, the biggest growing market for film and television sales in the world. The latter will be facilitated by a veryr majo cultural exchange between the BFI and China which will run well into the following year. The British Film Commission (BFC) ‐ the UK government's national agency responsible for maximising and supporting the production of international feature film and television in the UK – has had a bumper year. It has helped the UK attract more than £850m of inward investment for film production and a further £150m for high‐end television, utilising the new tax relief programmes established by government.

The UK film production sector generated a total spend of £1.075 billion in 2013, a 14% increase on 2012’s £945 million. Within this figure, £868 million was generated by 37 major international films making the UK their production base, having a positive impact on the UK’s film industry in the round by bringing investment, creating jobs, and helping film professionals develop new skills which in turn benefit independent productions. The highest grossing UK independent release of the year was the BAFTA and Oscar nominated and BFI backed Philomena, which grossed over £11 million followed by Quartet (£8.6 million), I Give It A Year (£6.2 million), Alan Partridge: Alpha Papa (£6.17 million) and Sunshine on Leith (£4.6 million).

The future of British film depends upon our ability as a nation to identify the next generation of talent. We know that people who regularly enjoy film when they are young are three times more likely to be committed consumers of film as adults. We also know that planting the love of film at an early age is a persuasive factor in attracting young people to seek a career in the film industry. As writer of Gone Too Far Bola Agbaje said, “if you ignite that spark in the young, you create a fire that will burn forever”.

Launched this year and funded by BFI lottery monies Into Film is the boldest initiative ever to make sure that film plays a central role in the lives of young people. Led by some of the most influential leaders in the UK Film Industry, it is drawing on the experience and the strengths of previous projects, to present a compelling new film offering to every school child in the UK.

London remains one of the great film centres of the world, and we were concerned that talent and creativity outside the capital should not be overlooked, or lost, due to lack of opportunity. A number of initiatives have been set up to address this danger – The BFI Film Academy, (which this year expanded into Scotland, Wales and Northern Ireland); the New Emerging Talent Network set up in collaboration with Creative England, Creative Scotland, Film Wales and Northern Ireland Screen to support upcoming talent and develop projects, and a number of specific funds for short films around the UK. Our partners Creative Skillset also successfully secured £16 million from Government to invest in skills development across film, high‐end TV, animation, games and VFX, addressing current and future skills gaps in the sectors and in key city regions. We have re‐energised the 'Vision Awards' which together with similar initiatives delivered by Creative England seek to provide seed funding to promising SME's.

Two years after the publication of Film Forever, Lord Chris Smith and his independent panel have delivered their follow‐up report It’s still about the audience reviewing progress to date, with the BFI being asked to take on some additional issues such as seeking clarity around the Virtual Print Fee. We also, as we pledged we would in Film Forever, held our second round of UK‐wide road 7

shows visiting 11 cities, and running over 100 workshops over the course of a month. The road shows are proving a valuable initiative in gauging responses to our work, particularly from those out of London, and telling us where change is needed.

We also provide leadership and practical support for the UK film sector where we can add real value to the work of others. One such serious issue was a proposed change in the European Commission’s rules governing the use of State Aid for film which, if enacted, would have hugely damaged UK Film, both culturally and economically. We led negotiations with the European Commission on behalf of the industry in the UK and with counterparts in all the other member states. The resulting changes, published in the final text of the Cinema Communication in 2013, ensured that the film tax reliefs and Lottery money for film production in the UK can continue to operate effectively and efficiently, between them underpinning the £4.6 billion economic impact of the UK Film Industry.

Staying with Europe, we were delighted to partner with the British Council and launch the Creative Europe Desk UK. The Desk will be the UK’s gateway to the €1.46 billion the Creative Europe programme has to support film professionals – producers, distributors and cinema exhibitors ‐ over the next seven years.

We are expanding the size of Certification Unit to manage the increased applications being received as a result of the new tax reliefs for high end television, animation and games. To accelerate understanding and take‐up of the games reliefs, and to make it as easy as possible for the games industry to benefit from the BFI’s expertise, we are running workshops and surgeries UK wide. In addition, working with the British film commission, UKTI and the games Industry trade bodies dUKIE an TIGA, we are undertaking research to start to determine what activities and support might be needed for this sector to maximise the economic potential of the tax reliefs.

There is new buoyancy to the film and television sector, and with it come new expectations. Our greatest challenge and concern going forward is meeting these expectations in the context of a funding environment that, like all other publicly funded organisations, is set to decrease over the coming years, a trend we do not see being reversed in the medium term. Our recent record of developing new and inventive revenue streams in parallel with driving down costs is very strong, and we recognise that our biggest task in the next twelve months is to give serious consideration to the years ahead, and work out how to manage with less public funding to ensure that all our activities ‐ our cultural programmes, our support for the industry, our international activities and our very precious national archive ‐ remain relevant, ambitious and top quality.

Greg Dyke Amanda Nevill Chair, Board of Governors Chief Executive

WHAT WE DELIVERED THIS YEAR

STRATEGIC PRIORITY ONE

EXPANDING EDUCATIONAL OPPORTUNITIES AND BOOSTING AUDIENCE CHOICE ACROSS THE UK

 THE BFI 5‐19 EDUCATION OFFER

Film Nation UK, the organisation awarded lottery funding to deliver a unified 5‐19 film education programme, began the roll out of its activities in autumn 2013. This included the introduction of filmmaking into film clubs and the successful expansion of the club network to Scotland, the introduction of a range of curriculum linked resources (some tailored to the specific curricula in the four nations) for learning through and about film, the implementation of exciting projects in schools and clubs that embody the approach of integrating watching, making and understanding film, and a number of pilot teacher training and CPD sessions covering filmmaking, animation and learning through film.

Film Nation UK established Education Advisory Groups in England, Northern Ireland, Scotland, Wales and London, comprising experts from the film industry, education sector and key stakeholder groups. Consultation with these groups, and with teachers and young people, played a central role in shaping the organisation’s programme plans.

A new Chief Executive, Paul Reeve, was appointed in October 2013 with the executive team and organisation structure confirmed in December. On 5 February 2014 the organisation launched its new enam – Into Film – and announced details of its UK‐wide programme with its mission to put film at the heart of children and young people’s learning and cultural experiences. By March 2014 more than 8,000 schools will have participated in Into Film’s programme.

 BFI FILM ACADEMY

The BFI Film Academy is a UK‐wide initiative providing opportunities and training for talented and committed young people aged 16‐19 from all backgrounds to develop new skills and build a career within the film industry. Led by industry experts, BFI Film Academy courses cover every area of the film industry, enabling young people to develop the commercial and cultural knowledge and skills to help them make a career in film a reality.

Building on the success of the pilot year, this year we increased our number of partners to 39 and expanded the scheme into Northern Ireland, Scotland and Wales, reaching around 900 young people UK‐wide. An additional residential strand was also instigated – week‐long courses focusing on the complete craft and workflow of one of the different specialisms – animation, documentary, screenwriting or VFX – with leading industry professionals delivering masterclasses and practical skills training. A launch event for the second year was held at the Houses of Parliament and included alumni from the first year’s programmes alongside director Tom Hooper (Les Misérables, The King’s Speech), actor Andy Serkis (Lord of the Rings), Lorraine Ashbourne (The Selfish Giant), Debs Paterson (Africa United), Reece 9

Shearsmith (A Field in England) and Managing Director of Classic FM (UK), Darren Henley who led the Henley Review of Cultural Education in England.

The National Film and Television School once again delivered the Craft Skills residential programme to 66 young people offering them the unique opportunity to work with top industry professionals to make their short films. This year a screenwriting element was added and six budding writers were taken to a retreat in early December to prepare the scripts for production. During the main programme, young people had the opportunity to attend with filmmakers such as Destiny Ekaragha, Edgar Wright and playwright and screenwriter Abi Morgan, and each participant received tailored industry support to help them in their next steps in the industry.

 EDUCATION STRATEGY AND ADVOCACY

In September the newly appointed Director of Education, Dr Paul Gerhardt, began work on a comprehensive film education strategy. The terms of reference take into account the establishment and launch of Into Film, the needs of the wider audience for film education, its specific value for culture, learning and the economy, and the future role of the BFI.

Following external consultation in March, the new strategy is scheduled for approval in summer 2014.

In terms of advocacy, the BFI has worked with its education partners to submit evidence throughout the process of the National Curriculum review in England. We have continuously affirmed the value of film and moving image in teaching English and literacy and noted the wide variations in policy and practice across the four nations and have worked with other institutions to share evidence and best practice.

 BFI AUDIENCE FUND

The BFI Audience Fund was established in 2013 to help deliver the wider BFI objective of increasing the size, diversity and geographic spread of audiences for British Independent and specialised film. It consists of four elements:

 BFI Film Audience Network The BFI Film Audience Network (FAN) is a major initiative developed to enable a wide‐ range of film organisations and experts to work in partnership across the UK in order to boost access to the widest range of films. The network consists of 9 Hub regions each led by a Film Hub Lead Organisation (FHLO). The Network functions as both a capacity building model – sharing expertise, knowledge and resources – as well as promoting and delivering programmes of British independent and specialised films in a wide variety of contexts and settings. Each FHLO has responsibility for co‐ordinating activities at a regional level as well as contributing to the success of the Network at a UK national level.

All of the FHLOs have been contracted and by early 2014 all had recruited staff and launched activities.

 BFI Neighbourhood Cinema There are many people in the UK who would like have access to both the cinema experience and a broader range of films but are denied this because of lack of provision, limited availability of films, wider social and economic circumstances or a combination of these factors. In December 2013 BFI Neighbourhood Cinema was launched to address this challenge. It will provide communities across the UK with the opportunity to establish or further develop community film venues through £2m investment into touring cinema initiatives and small‐scale equipment. An online platform will launch in spring 2014, supporting existing community cinemas and encouraging new ones to get up and running.

 Film Festival Fund Film Festivals are an important way to bring audiences a broader range of films and film experiences. During the year the BFI supported more than 30 film festivals across the UK ranging in scope, scale and character from genre‐based initiatives such as Abertoir, the festival of horror films in Aberystwyth, to major international gatherings such as Sheffield Doc/Fest and the Edinburgh International Film Festival.

The BFI’s investment of £1m helped supported organisations lever £4 for every £1 invested by the BFI and collectively the supported film festivals attracted more than 400,000 admissions.

 Programme Development Fund The BFI launched the Programme Development Fund in 2013 in order to promote curatorial ambition, support UK‐wide tours and maximise the potential reach of large‐scale projects.

 BFI DIGITAL

This year saw the launch of BFI Player, a video‐on‐demand service that will be a central tenet of the BFI audience development strategy in the years ahead. The service is available online via computers and tablets, and includes a mix of free and paid‐for films across a range of fiction and non‐fiction genres. BFI Player has already attracted plaudits from diverse sources, including inclusion in GQ’s ‘100 Best Things in the World’, ‘Discovery of the Year’ from The Independent’s film section and runner‐up in the ‘Cloud App of the Year’ category in the Stuff Gadget Awards.

The BFI Player launched with a programme of films that reflected some of the BFI's core values, including a collection of contemporary features, documentaries and short films funded by the BFI. All 450 Mitchell & Kenyon titles, all filmed pre First World War, (totaling 28 hours) were made freely available for the first time, plus a selection representing the blockbuster programme GOTHIC: The Dark Heart of Film. The BFI Player also carried the Archive's restoration of The Epic of Everest day‐and‐date with its gala screening at the BFI London Film Festival in partnership with American Express® and UK‐wide release.

The BFI Player also offers a valuable new platform for distinctive British and independent filmmaking to shine without being over shadowed by the large budget studio productions.

The latest iteration of bfi.org.uk was also launched in 2013. For the first time it includes a responsive design, which optimises the presentation of the site to the user’s device – a critical factor given the huge growth in mobile and tablet browsing. During the year the site attracted 9.3m visits. Meanwhile, the BFI YouTube channels continue to deliver growing audiences with 3.4m views during the year.

The scale and influence of the BFI’s social media audience continues to grow, with combined followers of 372,000 across Twitter, Facebook, Tumblr, Instagram and Google+ (up from 150,000 in 2012‐13). Twitter is still the dominant platform for generating audience engagement, with 560,000 interactions with the BFI through Twitter in the year.

To support this year’s Gothic season, for the first time a casual online game was created – ‘A Gothic Dream’. This is an experimental approach to engaging new digital audiences in the BFI’s blockbuster seasons.

 THE BFI CULTURAL PROGRAMME

GOTHIC: The Dark Heart of Film

A key element of our audience development strategy is our ongoing annual blockbuster. Working in partnership with the FAN, commercial chains and non‐cinema venues, we delivered a celebration of the Gothic tradition in film right across the UK. This thematic celebration of film and television from the earliest ghostly silent films to popular present day vampire series turned the spotlight on a very British tradition, where Hammer Films have been our biggest cultural export.

Launching with a sell‐out Monster Weekend of screenings of Night of the Demon (1957) (supported by Simon W. Hessel), Dracula (1958) and The Mummy (1959) at the British Museum, Gothic became the launch programme for the new FAN, which drew on the new Programme Development Fund, enabling Gothic film seasons across the UK in cultural and community centres, and support events andp po ‐up screenings in extraordinary and inspiring locations, from the castles of Wales and the grand houses of Northern Ireland to the stunning ruined Kirkstall Abbey in Yorkshire. Broadcast partnerships with the BBC’s ‘Sounds of Cinema’ season, and Film4’s ‘Dark Arts’ season extended the national reach of the project, as did partnerships with cinema chains Picturehouse, Odeon, Vue and Cineworld.

Working with partner rights holders, our first project from our Unlocking Film Heritage (UFH) project was to invest in new digital cinema prints (DCPs) of ten British Gothic feature films, bringing these back to the big screen in cinemas across the UK. After our success with ‘The Genius of Hitchcock’, which has toured to more than 30 countries worldwide, we are now working with the British Council on offering the package of ‘GOTHIC: The Dark Heart of Film’ to a global audience.

Chiming with key texts in the English curricula (where Edgar Allan Poe is well represented) Into Film offered a National Youth Film Festival, presenting ’13 x 13’: thirteen key gothic films to watch by the time you are thirteen. The education programme around Gothic at BFI Southbank began in term time ahead of the main season, working with students from 12

Lambeth schools on a multi‐media presentation of a re‐imagined Hansel and Gretel. The annual Teach First summer institute brought together early career teachers to create materials for teaching Gothic, there was a two‐week Gothic Film School for teenagers and younger children, Magic Lantern shows, school study days and a major conference for 100 English teachers, all turning themselves towards the dark side, speakers included: Charlie Higson, Professor Roger Luckhurst, and Marina Warner. Nine BFI Gothic DVDs were released, totalling 25,000 units sold, the best of which, Dead of Night (1945), sold 4,000 units. Following a set of Gothic film firsts at the BFI London Film Festival, including the BFI National Archive’s newly restored Gaslight (1940), the biggest ever four‐month BFI Southbank season (Oct 2013 – Jan 2014) featured on‐stage appearances from great international directors Roger Corman, Dario Argento and George A Romero, and a host of talks and discussions including a series of thirteen Gothic talks in the BFI Reuben Library. The programme was complemented by the second lavishly illustrated BFI Compendium publication, and a raft of online activities and a campaign which produced the most sustained and wide‐ranging social media conversation yet for a BFI programme.

Electric Shadows: China and UK Film Celebration 2014

At the end of January 2014 we announced a year of business, trade, creative and cultural collaborations between the UK and China. The BFI programme, entitled ‘Electric Shadows’ (the Chinese term for movies or "dian ying"), encompasses the BFI’s full range of exhibition, archive, digital, education, theatrical and DVD distribution and publishing initiatives, opening up previously hard‐to‐see Chinese cinema to UK audiences and making UK film accessible in China, which will soon be home to the world’s biggest box office. We are working alongside a range of key strategic partners 2014 including the British Council, DCMS, UKTI and the GREAT Britain Campaign.

Designed to grow mutual economic and cultural benefits for UK and Chinese film, ‘Electric Shadows’, (which is sponsored by Lycamobile (Main Sponsor), Shangri‐La Hotels and Resorts, with special thanks to Cathay Pacific Airways), started with a visit to BFI Southbank by film director, Feng Xiaogang China’s most successful and renowned film director who is largely unknown in the UK except amongst Chinese audiences. To complement 'Spectacular China’, a season of his films throughout the month of February 2014, there was a special gala screening of 2Back to 194 (2012), China’s official entry for this year’s Academy Awards, and an on‐stage career interview with Feng.

Alongside a UK presence at FILMART, Hong Kong’s International Film & TV Market in March, the BFI and the British Council worked closely with the Beijing International Film Festival in April to lead a high level film industry delegation and present British film at the festival and to finalise the signing of the UK – China Film Co‐production Agreement at the UK China High Level People to People Dialogue, hosted by China’s Deputy Premier. The ‘Electric Shadows’ programme will continue in 2014, staging an unprecedented exploration of Chinese cinema in the UK: ‘A Century of Chinese Cinema’.

 BFI SOUTHBANK PROGRAMME

BFI Southbank offers one of the most varied and rich programmes of film and television screenings, events, talks and exhibitions in the world, and this year attracted 277,300 attendances to our screenings and events. The Gothic blockbuster was the highest grossing 13

season of the year, contributing 14% of overall revenue, followed by the retrospective of the hugely popular British actress Vivian Leigh, which also achieved the highest average occupancy of 77%. Overall average occupancy was 48%. Other seasons explored the films of Satyajit Ray, Werner Herzog, Rita Hayworth, Jean Gremillon, the Boulting Brothers, Buster Keaton, Terrance Stamp and John Boorman.

Throughout February and March 2014 BFI Southbank celebrated the career of one of the world’s most popular living stage and screen actors, Al Pacino. From a career that has produced more than 40 film roles, the season screened 20 of his greatest films, with the centrepiece of the season an Extended Run of a 4K restoration of Francis Ford Coppola’s masterly The Godfather Part II (1974), which returned to UK cinemas in a nationwide release in February.

The BFI was, as ever, grateful to filmmakers from both in front and behind the camera who shared their knowledge and expertise in 2013‐14. Edgar Wright, James Franco, Yoko Ono, Tim Rice, Cillian Murphy, Anna Chancellor, David Baddiel and David Arnold were all drawn to present their BFI Screen Epiphany in partnership with American Express® and selected and talked about a film that inspired them. Meanwhile the annual ‘Made in Britain’ focus this year was on the innovative independent production company Warp; and the film and TV previews featured guests such as Michael Winterbottom, Olivier Assayas, Armando Iannucci, Pat Collins, Stephen Frears, Chloe Pirrie, Oscar Isaac, T‐Bone Burnett, Joss Whedon, John Travolta, David Tennant and Tom Baker for Dr Who at 50, Benedict Cumberbatch for the Sherlock preview and Beryl Vertue, Dame Diana Rigg, Jimmy McGovern and Sir David Hare.

In 2013‐14 the most popular TV seasons were ‘Jacobean Tragedy’ and a major retrospective of the work of Producer Tony Garnett. The range and diversity of the BFI Southbank TV seasons was further demonstrated across some 125 individual TV screenings from the TV career of the great actor Patrick McGoohan, to the art of the TV monologue, heroes of TV comedy from Tommy Trinder to Peter Kay as well as a major contribution to our exploration of all things Gothic from Ghostwatch to Deadset and Schalcken the Painter. Across 24 TV Previews we showcased new TV Drama with highlights from David Hare (Page Eight), Christopher Hampton (The Thirteenth Tale), Jimmy McGovern (Common) and Mark Gatiss (An Adventure in Space & Time). TV Events ranged from our celebration of the 30th anniversary of the great satirical show Spitting Image to a discussion on “Cool Gothic & the New Vampire” on our TV screens, and of course our monthly events to mark the 50th anniversary of Dr Who. As well as forming a core element of our big screen programme, a key strand in both our book publishing and DVD label, television programmes held in the BFI National Archive represents more than 40% of titles available for free public viewing in the Mediatheque at BFI Southbank and BFI partner Mediatheques around the UK, equating to over 1,100 titles and almost 900 hours of programming. TV will be the focus of Mediatheque programming for Sci‐Fi, with an extensive new collection launching in late October 2014.

Strand programming included ‘Essential Experiments’ for Artists’ Moving Image; ‘Projecting the Archive’ and ‘Out at the Pictures’ which changed its name to ‘BFI Flare’ in line with the London Lesbian and Gay Film Festival’s new brand from April 2014. The Sonic Cinema events were extremely popular, with highlights including Ryoichi Kurokawa’s live AV performance and Demdike Stare’s new score for Haxan: Witchcraft Through the Ages (1922) for Gothic. 14

Guest directors for the music video event, BUG, included Nabil, Josh Cole, Ben Bailey Smith, Ninian Doff, Patrick Daughters and Ian Pons Jewell.

‘Discover Arab Cinema’ was launched at the London Film Festival 2013; this year‐long monthly strand introduced audiences to classic and contemporary work from the region and its , diaspora including features, documentaries, shorts and experimental work. The Derek Jarman season, ‘Queer Pagan Punk’, commemorated the twentieth anniversary of the death of an inspirational and maverick filmmaker and included many films originally produced by the BFI Production board and now restored by the BFI.

It was another strong year for partner projects at BFI Southbank, with highlights including the BFI and BAFTA Screenwriter Lecture Series in association with the JJ Charitable Trust; the Sheffield Docfest, showing programmes simultaneously with the festival in Sheffield; another vibrant edition of science fiction festival Sci‐Fi London; the Birds Eye View festival, which celebratese th work of women filmmakers; Kendal Mountain Festival; a popular celebration of comedy in cinema with Loco London Comedy Film Festival; and two important ongoing partnerships with Asian film festivals: Tongues On Fire and the London Indian Film Festival.

The BFI Southbank Adult Community programmes provide access to high quality film education opportunities for many different communities across London. Highlights in 2013‐14 included a mini season of Chinese New Year films, 15 events and screenings for African Caribbean audiences (including The Stuart Hall Project (2013), Nothing But a Man (1964), and Film Africa), and a full range of support for the Satyajit Ray season, with study days, introduced screenings, and a four week evening course. The third Legacy Media Institute provided a training programme for emerging filmmakers from BAME backgrounds. Altogether the 30 events for diverse audiences reached nearly 5,000 people.

‘Future Film’, the BFI youth programme supported by the Chapman Charitable Trust, attracted increasing audience numbers and national and international reach. The 7th Future Film Festival in February brought 4,000 young people to a weekend of events at BFI Southbank, with masterclasses, screenings, workshops, Q&As for young people, and a short film competition that attracted 400 entries from all over the UK. Beyond ‘Future Film’, 8,000 pupils of all ages visited the BFI as part of the schools’ programme to engage with film in Modern Languages, English, and primary topics, as well as for Film and Media Studies.

The BFI is a leader in research development, and innovation in learning. In 2013‐14 the BFI led a consortium of UK and wider European partners in the publication of Screening Literacy, the first Europe‐wide survey of film education, funded by the European Commission.

The BFI was once again grateful to Sir John Cass’s Foundation for supporting the innovative Cultural Campus programme, in which local primary schools spend half a term ‘in residence’ at BFI Southbank, using the spaces as their ‘classroom by the river’. In all, over 500 separate learning events were hosted, for over 45,000 learners of all ages. The BFI also received the generous support of the Mayor's office in the form of a £200,000 award to work with London schools in their language teaching.

 THE BFI LONDON FILM FESTIVAL IN PARTNERSHIP WITH AMERICAN EXPRESS®

The BFI London Film Festival in partnership with American Express® consolidated last year’s substantial growth, achieving an audience of 151,000 over 12 days. The strength of the programme was widely reported and critically acclaimed, and included 235 features (fiction & documentary), 20 archive and 134 shorts, presented at 548 screenings and events across London and featuring 22 World Premieres, 13 International Premieres and 29 European Premieres. We opened the festival with the European Premiere of Paul Greengrass’s Captain Phillips and closed with the World Premiere of Saving Mr. Banks, which were beamed to 50 cinemas reaching a UK‐wide audience of 11,200 with live cinecasts to Paul Greengrass and Tom Hanks for the former, and John Lee Hancock, Emma Thompson, Tom Hanks, Colin Farrell and Ruth Wilson for the latter. The diversity of the Festival programme reached a new high with 74 countries represented.

At the Awards Dinner, Sir Christopher Lee was presented with his BFI Fellowship by Johnny Depp, and the awards were presented to: Best Film: Ida (Pawel Pawlikowski); Sutherland Award: Ilo Ilo (Anthony Chen), Grierson Award: My Fathers My Mother and Me (Paul‐Julien Roberts); and Best British Newcomer: Jonathan Asser for screenplay, Starred Up.

The Epic of Everest Captain John Noel was the official photographer on the 1924 British Expedition to Mount Everest, famed for the tragic loss of mountaineers George Mallory and Andrew Irvine. In 2013 his extraordinary film The Epic of Everest was the subject of a major BFI National Archive restoration, which was generously supported by The Eric Anker‐Petersen Charity. The work was undertaken in collaboration with Sandra Noel, the director’s daughter, and has transformed the quality of the surviving elements of the film, reintroducing the original coloured tints and tones to do full justice to this heroic feat of exploration cinematography. The Epic of Everest is now fully preserved for future generations on film as well as in digital versions and the original nitrate films have gone back to the new sub zero vaults at the Master Film Store in Gaydon, Warwickshire.

The premiere of the restoration of The Epic of Everest at the LFF was planned to launch with the UK‐wide day and date theatrical release as well as on BFI Player and Curzon Home Cinema. This approach helped us to build a more concentrated and impactful publicity campaign, with national press coverage of the release being timed with the Archive Gala. The results in the year have seen the film booked by 55 venues UK‐wide, with an initial box‐office gross to date of £60,000, quite remarkable for this kind of film. There was also a screening of the film on a private jet flying over Mount Everest while Wade Davis, Explorer in Residence at the National Geographic Society, gave a lecture on the saga of 1921–24 as part of the Society’s 125th anniversary celebrations. It also screened at the Kathmandu International Mountain Film Festival, becoming the BFI’s first‐ever booking in Nepal.

 BFI FLARE: THE BFI LONDON LESBIAN AND GAY FILM FESTIVAL

‘BFI Flare: London LGBT Film Festival’ welcomed back Principal Sponsor Accenture and ran from 20th March – 30th March 2014 at the BFI Southbank and welcomed audiences of 21,800. The Festival received 542 submissions and screened 50 features, and 62 short films. 16

Opening Night featured a critically acclaimed British feature, the European Premiere of Hong Khaou’s Lilting starring Ben Whishaw; the Festival closed with Australian filmmaker Sophie Hyde’s 52 Tuesdays (which won the Directing Award: World Cinema Dramatic at the 2014 Sundance Film Festival).

Following audience and internal consultation in 2013, the Festival changed its name in 2014 from London Lesbian and Gay Film Festival to ‘BFI Flare: London LGBT Film Festival’ to reflect the increased diversity of the Festival audience. The ‘BFI Flare’ brand also encompasses a contemporary LGBT collection on the BFI Player and a regular monthly screening at BFI Southbank.

 BFI CULTURAL PROGRAMME UK‐WIDE

The BFI releases classic films in new restorations from archives around the world as well as contemporary British titles into a wide range of cinemas, film festivals, film clubs, pop‐ups and other venues. In 2013‐14 the audiences for BFI distributed films in the UK numbered over 550,000 in the UK, with over a quarter of a million internationally. Key titles released this year include John Akomfrah’s BFI‐backed documentary feature The Stuart Hall Project (2013) and new 4K digital restorations of Journey to Italy (1953), La Belle et la Bête (1946) and Goneh wit the Wind (1939). Released to coincide with the centenary of actress Vivien Leigh, Gone with the Wind played at more than 100 UK venues (including 50 Cineworld sites).

Over 45,000 people watched films from the BFI National Archive and partner archives at BFI Mediatheques across the UK. During the8 year 29 titles equating to 188 hours of material were added. New Mediatheques were opened at three new partner venues, the National Media Museum in Bradford, the new Library of Birmingham and Manchester Central Library. Major new collections were added to mark these launches, exploring Yorkshire, the West Midlands and the North West regions. For the launch of the Mediatheque in Bradford an extra collection was made available across the Mediatheque network: 100 titles from the National Media Museum’s pioneering TV Heaven programme. Four new collections were also added to accompany the Gothic season.

2013‐14 saw the BFI’s Blu‐ray & DVD label continuing in its mission to make newly available a range of British feature film and TV archive titles, and new editions of classic titles from international cinema. We sold 267,000 units, collecting many plaudits from the press and public alike for the quality and range of our releases. Our best‐selling titles released as part of Gothic included BBC Ghost Stories Robin Redbreast, Dead of Night and Supernatural, Thorold Dickinson’s superb adaptation of Patrick Hamilton’s unsettling Gaslight (1940), remastered by the BFI National Archive with the support of The Mohamed S. Farsi Foundation), and Rupert Julian’s The Phantom of the Opera (1929).

Footage sales staff worked with a number of filmmakers on feature‐length documentaries: the Sheffield International Documentary Festival and BBC to create The Big Melt, a reimagining of films about steel, taken from our three year industrial heritage project to bring back to life films about coal, ships and steel. These were set to a new score by Jarvis Cocker and screened on BBC4 in January; How We Used To Live by Paul Kelly and Saint Etienne; and The Spirit of ’45 by Ken Loach. BFI footage also played a starring role in Channel 4’s 17

documentary, Edward VIII – the Lion King in addition to the hundreds of other television programmes in the UK and internationally that used film from the National Archive.

 BFI PUBLISHING

The new design and editorial offer from Sight & Sound is bringing new readers to the magazine with vampire movies, street gangs and television movies vying with the more traditional actors and directors for the magazine’s cover.

In the persistently challenging environment for magazine publishers Sight & Sound outperformed the market in terms of retention of sales and the take‐up of the digital edition. In 2013‐14 the magazine delivered year‐on‐year growth in core subscription revenues while at the same time delivering substantial savings in production and distribution costs by turning 13% of the subscriber base digital.

In addition to the second BFI compendium, ‘Gothic: The Dark Heart of Film’, broadly it was a successful year for book publishing with sales in the U.S. (a major business priority for our publishing partner, Palgrave Macmillan) up 29% from the previous year. The implementation of the new publishing strategy, with clearer distinctions between trade and academic titles and a focus on strengthening BFI ‘sub‐brands’, has been deemed to have had a positive impact on the business. In 2013‐14 all of our on‐going series titles received new editions: Screen Guides, Film Classics, Film Stars, BFI Silver and ISI (International Screen Industries) publications. The publication of eight special edition Film Classics to coincide with the Gothic project was a success and more thematic ‘cluster’ publishing will be done in the future.

STRATEGIC PRIORITY TWO

SUPPORTING THE FUTURE SUCCESS OF BRITISH FILM BY INVESTING IN FILM DEVELOPMENT, PRODUCTION, TALENT AND SKILLS

 DEVELOPMENT AND PRODUCTION

In a year of renewed creative confidence and critical success, the BFI Film Fund made 137 awards in 2013 to a broad range of feature film projects across production, development and distribution, amounting to a Lottery investment of £25.8m. This included a record 34 production awards, of which half were projects from first or second‐time directors. The total number of production applications also rose by 150% on the previous year, as other financing opportunities remain limited, and spiked by a new approach to funding decisions on documentary and first features in “rounds”.

2013 was also a banner year for British film on the international stage, and many of the higher profile premieres at key international festivals were projects supported by the Film Fund. Director’s Fortnight at the 66th Cannes Film Festival played host to Clio Barnard’s critically acclaimed, The Selfish Giant, whilst Scottish filmmaker Paul Wright’s debut feature, For Those in Peril featured in International Critic’s Week. Other titles in the festival included Last Days on Mars, an ambitious science fiction feature from Ruairi Robinson, and Mark Cousins’ essay work A Story of Children and Film. The 70th Venice Film Festival saw Jonathan Glazer’s Under the Skin and Stephen Frears’ Philomena in competition, and the 38th Toronto International Film Festival boasted a selection of twelve films that received backing from the Film Fund and no less than twenty nine British titles in its programme.

In October 2013 the BFI London Film Festival included eight Film Fund features in its line‐up, including the World Premiere of Destiny Ekaragha’s debut feature, Gone Too Far, a comedy which was developed and largely financed by the Film Fund. Lenny Abrahamson’s highly anticipated Frank, John McDonagh’s Calvary and Iain Forsythe and Jane Pollard’s 20,000 Days on Earth all debuted at the 2014 Sundance Film Festival to much acclaim and sold to US distributors during the festival. At the Berlinale 2014, Yann Demange’s debut feature, ’71, played in Competition and received some of the best critical notices of the festival. Calvary also won best film in the Panorama strand at the independent jury awards.

In addition to the festival profile and critical acclaim, a number of Film Fund supported films delivered substantial box office results. Philomena (£11m) became the highest‐grossing independent film of the year, and Sunshine on Leith and Alan Partridge: Alpha Papa were among the top 5 grossing British independent films of the year.

Philomena was nominated for 4 Academy‐Awards including Best Picture, Best Screenplay and Best Actress, and both Philomena and The Selfish Giant were nominated for BAFTAs, as were 3 of the BFI‐backed shorts.

 SUPPORTING FUTURE FILMMAKING

The BFI NET.WORK was launched in September 2013 at Encounters Short Film Festival in Bristol and represents a significant shift towards a truly UK‐wide support for talent development. The NET.WORK connects the UK's film agencies to offer hands‐on and holistic development opportunities for promising UK writers, directors and producers who are yet to make their first feature. With an annual budget of over £3m from the Film Fund (an increase of £1.5m on funds previously available) the BFI is working with national partners Creative England, Creative Scotland, Film Agency for Wales and Northern Ireland Screen to establish a joined‐up network of experienced development teams across the UK. These organisations will work to discover and develop the UK’s most distinctive filmmaking voices and ultimately prepare them for their first feature film, through script development, short film production and other bespoke activity.

The first two ‘Talent Centres’ have been established in Brighton and Sheffield in partnership with Creative England and led by experienced talent development executives. We are also working with Film London to deliver a short film scheme with a specific focus on supporting BAME filmmakers.

The NET.WORK will expand next year with planned activity including UK‐wide programme of events; a “talent campus” style weekend; an animation specific development programme in conjunction with Aardman; and an online portal which will connect NET.WORK activity and provide a discovery platform for filmmakers everywhere.

As part of the BFI’s focus on support for new and emerging talent, and with a particular focus in generating work from a greater diversity of filmmakers, the Film Fund is working with Film London on a number of initiatives targeting filmmakers at an early stage in their career. London Calling and London Calling Plus are short film schemes operating within the BFI NET.WORK, and for the first time the Film Fund is supporting a rebooted version of the low budget feature production scheme Microwave ‐ aiming to produce 6 films over 3 years ‐ with a specific target to long list at %least 50 BAME filmmakers.

 SUPPORT FOR COMPANY GROWTH

In May 2013 work began for the successful companies who were recipients of the Film Fund’s Vision Awards. The awards were designed to provide successful companies with a level of financial and creative autonomy to assist them in developing their slate of film projects, as well as giving them the opportunity to grow their businesses and bolster their company profile both nationally and internationally. The BFI pledged eleven awards of up to £50,000 per year (recipients were Blue‐Zoo Animation, Flickerpix, Fly Film, Forward Films, Inflammable Films, JW Films, Origin Pictures, Rainy Day Roast Beef Productions, Stray Bear Films and Third Films) and eight awards of up to £100,000 per year (42 M&P, Cowboy Films, Independent, Lupus Films, Nexus Productions, Passion Pictures and Red Box Films, Warp Films, Wildgaze Films). Of the companies awarded, six are based outside London, eight are female led companies, and for the first time – and in acknowledgement of new opportunities afforded by the recently introduced UK tax credit for animation – four are animation studios.

In addition, Creative England is currently delivering a 3 year business growth programme for film‐related businesses, supported by £500,000 of BFI Lottery Funding per annum. Launched in December 2013, its strategic aim is to improve the growth and sustainability of viable film‐ related businesses, particularly out of London, by providing both individual entrepreneurs and companies with a bespoke and integrated programme of development support over the medium to longer term. The offer includes support for market research, business planning, skills/professional development, mentoring, networking as well as seed funding and co‐ funding for the delivery of fully‐costed growth proposals and business plans.

 SCRIPT EDITOR TRAINEE

As part of the BFI’s continued commitment to industry talent development, the Film Fund launched a Script Editor Trainee programme in 2013. The programme was borne out of the belief that the British film industry would benefit from an increased number of script editors with real industry experience to help support and nurture both the current and next generation of writers. The trainee script editor shadows BFI Film Fund executives on multiple projects during their 6 month placement in house, followed by 2 months at a production company. The first round of the programme launched in December and attracted 419 applications, from which 2 applicants were selected for the first 12 month period.

 CINEMATIC

Throughout 2013, the Film Fund supported Cinematic, Film Agency for Wales’ emerging talent scheme devised and developed in partnership with the BFI Film Fund, BBC Films, S4C, Soda Pictures and Creative Skillset. The scheme was launched to support emerging filmmaking talent from Wales in making contemporary, dynamic and distinctive feature films with budgets of around £300,000. In February it was announced that the successful projects moving forward in the scheme to production were Just Jim – the directorial debut of Submarine star Craig Roberts, The Lighthouse – Directed by Chris Crow (Panic Button); written by Chris Crow and Michael Jibson and produced by David Lloyd, and Y Llyfrgell (The Library) – Directed by Broadchurch’s Euros Lyn and written by award‐winning novelist Fflur Dafydd.

 DOCUMENTARIES

In 2013‐14 the Film Fund began to consider applications for documentary production funding through pitching sessions run in conjunction with Sheffield Doc/Fest. Teams of filmmakers are now able to pitch their project to a panel made up of experienced industry experts including Ben Roberts and Lizzie Francke from the Film Fund team. Most documentary production applications will now be considered through this process. The first round saw over 50 applications shortlisted down to 8 projects that were then invited to pitch at Sheffield Doc/Fest Film Festival in June 2013. Two standout projects ‐ Dark Horse and Thomas Quick – were selected to receive production funding. The second round of pitches took place at the BFI Southbank in December 2013 and the successful projects were A Syrian Love Story and Who’s Gonna Love Me Now?

 INTERNATIONAL STRATEGY

Following wide ranging consultation and input from key stakeholders the BFI launched its International strategy at the BFI London Film Festival in October 2013 to support continued growth of UK Film on a global level, including increased levels of inward investment, strategic co‐ production partnerships and support for exports growth (including international sales and the promotion of skills and talent). The strategy is underpinned by significant new research that identified the most important economic territories for UK film: Brazil, China and the US. It will bring much greater clarity to the strategic priorities and territorial focus, and greatly strengthens industry and public agency partnerships.

In the year 2013‐14, strategic activity included:

 Launch of an International Fund of £1.2m to support the international strategy  Conducting research that provided an evidence base for the strategy which, in consultation with industry partners, identified a tiered set of territorial priorities.  In the Tier 1 priority territories (Brazil, China and US) to put in place activity that helped support the relevant area of the strategy, such as industry delegations to Rio Film Festival, Beijing and a pilot P&A scheme to encourage sales of UK independent films to the US. Supporting the UK Film presence at major international festivals and markets.  Enhancing the level of support for the Film Export Fund. The guidelines were clarified in consultation with the industry to make the support more effective.  Renewal and enhancement of BFI commitment to funding the British Film Commission to deliver the UK’s inward investment strategy for film, focussing on the US. Key Performance Indicators for the term of Film Forever were set and agreed with Film London.  Using the soft power of culture to open doors for business to follow – e.g. the BFI’s Hitchcock restorations have screened in 24 countries, including priority markets such as China and Brazil.  Leading the way in developing a professional, coherent brand ‘We are UK Film’ for British film internationally and work with the GREAT campaign at several festivals to further promote British film and creativity overseas.  Supporting co‐production through a dedicated commitment to minority co‐production of up to £1m per annum from the BFI Film Fund and the signing and ratification of treaties with new territories (see section below).

 Co‐production Treaty Updates

China Last December the BFI was part of the Prime Minister’s Trade Mission that flew to China for the historic signing of a cultural exchange agreement between Culture Minister Maria Miller and the Chinese Culture Minister Cai Wu. The five‐year agreement will see the continuing development of an active programme of cultural exchanges in each country including the sharing of professional expertise, information and knowledge. After eight years of negotiation a co‐production treaty between the UK and China has been approved and was signed in April 2014 by Ed Vaizey and Tong Gang at the end of a UK film industry delegation to Beijing. The BFI is developing a focussed Export Strategy for China alongside FEUK, UKTI and our other international partners. 22

Brazil Further to the signing of the Brazilian treaty in 2012, we await ratification on the Brazilian side in 2014.

South Africa Further to discussions between BFI and DCMS with the South African government, it was agreed that both parties would like to extend the existing co‐production treaty to include TV. The UK is in advanced discussions with South Africa to bring the required amendments into force.

Morocco A co‐production treaty negotiated by the BFI and Centre Cinématographique Marocain (CCM) was ratified by the UK and Moroccan Governments in 2013. British filmmakers, from David Lean through to Christopher Nolan, have looked to Morocco for its stunning landscapes and substantial production infrastructure. The treaty will be a catalyst to grow opportunities to pool creative and financial resources, and foster deeper collaboration between filmmakers in both countries.

Cultural Exchange

Silent Hitchcock The Genius of Hitchcock – our first ever Blockbuster season – was a phenomenal success in 2013‐ 14 both at home and abroad. Silent Hitchcock screenings have been held in China, Australia, Brazil, Mexico, France, Germany, India, Turkey, Argentina and the USA – with 250 screenings to audiences of over 100,000. An event in early December 2013 was one of the most impressive yet as Hitchcock’s Blackmail (1929) screened at the spectacular open air setting of the Clockenflap Music and Arts Festival 2013 in Hong Kong before an audience of almost 3,000 people.

The season also garnered a top accolade from UNESCO as Hitchcock’s silent films have been formally inscribed on the United Kingdom Register of Important Documentary Heritage. This honour is part of the UNESCO Memory of the World Programme that works to preserve documentary heritage and to support and raise awareness of archives. Other inscriptions for 2012 includede th Doomsday Book, the Churchill Archive and other priceless items spanning nearly 900 years which embody pivotal moments in the history of their communities and the UK as a whole.

 THE BRITISH FILM COMMISSION

In 2013‐14 the BFI renewed and enhanced its commitment to funding the British Film Commission to deliver the UK’s inward investment strategy for film, focussing on the US. Key Performance Indicators for the term of Film Forever were set and agreed with Film London.

The BFI funded partner Creative England works in partnership with the British Film Commission to provide free, bespoke support to productions filming in England, outside London and to promote England internationally, through provision of services to facilitate and source locations, studios, facilities and crew. Creative England’s team liaises with local authorities, film offices, regional and national partners, with regional representatives situated in offices across England who provide specialist local knowledge. 23

 EXPANDED ROLE FOR THE BFI FILM CERTIFICATION UNIT

The BFI Film Certification Unit is responsible for certifying films, high‐end television and animation programmes as British either under the Cultural Tests or as official co‐productions under one of the UK’s ten bi‐lateral treaties or the European convention. During 2013‐14 584 film applications were received with 231 interim certificates/approvals made and 193 final certificates/approvals issued. The Unit has also issued 85 European Certificates of nationality that assist filmmakers distributing films in European territories.

In April 2013, the BFI Certification Unit took on the certification functions for the new Creative Sector tax reliefs for high‐end television and animation programmes. Since April, the Unit has assessed 43 high‐end television applications and issued 19 interim certificates, 19 letters of comfort and 5 final certificates. For animation programmes the Unit has assessed 34 applications issuing 23 interim certificates, 17 letters of comfort and 2 final certificates.

The Certification Unit also participated on several panels and presentations around the UK to advise and promote the new reliefs. The Unit will take on the certification function for the video games tax reliefs once state aid clearance has been received.

STRATEGIC PRIORITY THREE

UNLOCKING FILM HERITAGE FOR EVERYONE IN THE UK TO ENJOY BY INVESTING IN PRESERVATION, DIGITISATION, INTERPRETATION AND ACCESS

 UNLOCKING FILM HERITAGE

Various strands of our third strategic priority come together under the Unlocking Film Heritage Programme (UFH), focussing on the digitisation and making accessible of 10,000 titles – in partnership with Regional and National Archives, as well as commercial rights holders – to unlock rarely seen content for everyone in the UK to access and enjoy.

To assist our partners in achieving their goal of 5,000 newly digitised titles, we launched a Discovery Fund in July 2013 to help identify appropriate titles for digitisation. Amongst the eleven recipients of funding (awards totalling just over £400,000) were the Scottish Screen Archive, National Sound and Screen Archive of Wales, as well as English regional archives. The first Digitisation Fund of £5m was launched in December 2013 and awards will be announced in April 2014.

The BFI has embarked on the mammoth project of researching, identifying and contextualising the other 5,000 titles from the national collection. A curatorial framework and plan for the duration of the project was devised in collaboration with the newly formed UFH Curatorial Advisory Panel. This plan aims to ensure that the total of 10,000 films digitised reach the widest range of target audiences. As referred to above, the BFI Player was launched with the first release of UFH titles ‐ a collection of 450 films made by British pioneer filmmakers Mitchell and Kenyon. The collection currently comprises most of the top 20 most viewed films on the Player with Tramride Through the City of Sheffield (1902) the stand out hit.

In summary, under the UFH programme this year, we have:

 made over 500 newly digitised titles available on BFI Player;  digitised another 800 awaiting release on Player;  selected almost 1,000 other titles currently being researched and contextualised;  digitised over 113,000 transparencies from our stills collection.

 THE NATIONAL CATALOGUE AND THE BFI COLLECTIONS INFORMATION DATABASE

This year we achieved a major milestone in providing access to UK screen heritage to everyone. On 2 April 2013, the BFI Collections Information Database (CID) was made available online via bfi.org.uk, making the largest film and television collections database searchable worldwide for the first time. This unrivalled resource includes detailed descriptions and holding information for the whole National Archive (film and television), Special Collections (scripts, documents and ephemera, stills, posters and designs) and the Reuben Library (books, journals, press cuttings and periodicals index). The launch has received an enthusiastic response from researchers, fellow film archives, and the general public, as the BFI was finally able to reveal the full scope of its collections. 25

The database was initially developed as part of the previous Screen Heritage UK programme and its development will continue under UFH, forming the basis of the National Catalogue project. It will drive management and access to our digital assets and data delivery to the BFI Player, providing a joined‐up approach to BFI collections data management. CID also forms the foundation of the first ever UK Filmography – a fully researched catalogue of all feature‐ length, theatrically distributed films produced in the UK since the start of cinema until now. We have already uniquely identified almost 13,000 titles eligible for inclusion ande ar working on detailed descriptions, including were they are held, how they can be accessed, and how much or how little is known about them.

 CONSERVATION

A major element of UFH is to ensure that the BFI National Archive is equipped for a digital future. As such our transformation from analogue to digital continued apace, with the UFH project presenting exciting opportunities for film and video conservation. Along with the digitisation of hundreds of Victorian and Edwardian films, major development programmes continued to strengthen digital capabilities and preservation infrastructure at the conservation centre, equipping the archive to meet the growth and access challenges that digital production and digitisation presents.

Key restorations and remastered films included:

 The Epic of Everest (Captain John Noel, 1924) – premiered as the BFI London Film Festival’s Archive Gala in October with simultaneous release in cinemas and on the Player.  Night of the Demon (Jacques Tourneur, 1957) – premiered to a huge and enthusiastic crowd outside the British Museum as the launch event of the Gothic season. The film was introduced by its star Peggy Cummins.  Gaslight (Thorold Dickinson, 1940) – premiered at the BFI London Film Festival and was screened in cinemas and released on DVD to considerable acclaim.  The Mistletoe Bough (Percy Stow, 1904) – premiered on the BFI Player with a new score by St Etienne and received extensive online coverage.  Sebastiane (Derek Jarman, 1976) and Caravaggio (Derek Jarman, 1986) – premiered at the Berlinale before screenings as part of the Derek Jarman retrospective at BFI Southbank.

 BFI REUBEN LIBRARY

The transformation of the library into the collections’ access centre for all BFI collections continued apace. Celebrating its first anniversary since relocating to BFI Southbank, the library is evidently cherished by its users with high satisfaction levels often expressed via social media, proving much greater engagement from a younger audience than in its previous incarnation. With a significant increase of first time visitors, there is an average of almost 6,000 visitors each month. Since opening, the library has become fully integrated with the cultural offer and programming activities at BFI Southbank, holding events that tie‐in with festivals and blockbuster seasons, as well as hosting book launches, workshops and over 130 study visits from schools, colleges and universities. 26

The BFI is now working towards the further integration of the library with the BFI Mediatheque, to provide seamless on‐site access to analogue and digital, still and moving image collections, especially for material unsuitable for delivery through BFI Player due to rights restrictions.

 CURATORIAL

Key film acquisitions included films by animators Halas and Batchelor and Bob Godfrey; a collection from the Central Office of Information and a significant number of nitrate prints of key British features. Key paper acquisitions included Roy and John Boulting’s papers and Ronald Searle’s work related to film including original artwork for titles including Those Magnificent Men in Their Flying Machines (1965) and a treatment for The Belles of St Trinian’s (1954).

Exhibitions curated by the special collections team during the year included Derek Jarman and the Boulting Brothers. The highlight was ‘Haunted: The Innocents’ (BFI Southbank Atrium) exploring one of cinema’s greatest Gothic ghost stories,e Th Innocents (1961), from script to screen. Objects on show included handwritten script drafts by Truman Capote, costume designs by Motley, and concept drawings by artist John Piper.

In 2013 the Queen hosted a reception for 300 members of the film industry at Windsor Castle. On display were a number of films from the BFI National Archive including Scenes at Balmoral (1896) ‐ the first film to feature a member of the royal family. The film was exhibited alongside Queen Victoria’s original diary entry for the day.

Films from the archive were also viewed on the following BFI archive channels:

 YouTube: 2.2 million views;  Screenonline: 615k visits,  UK‐wide Mediatheques: 50k sessions.

PUBLIC POLICY, LEADERSHIP AND ADVOCACY

As the Government’s lead agency for film, the BFI helps ensure that public policy supports film and, in particular, British film. One of the ways it does this is to make representations on public policy issues to the UK Government and its Devolved Administrations, the European Commission and various statutory organisations.

The BFI also brings together interested parties to identify ways in which policy for film can be made to work most effectively to the benefit of audiences, the industry, learners and film culture in the UK.

 Film Forever and the Independent Film Review

It’s still about the audience: Two years after the publication of the Film Policy Review, Lord Chris Smith and his independent panel have delivered their follow‐up report reviewing progress to date. The report congratulates the successes, identifies some areas needing more focus and makes a number of recommendations for the industry, the BFI and the Government. To publicise and discuss our work on delivering Film Forever we held a series of UK‐wide roadshows with executives and teams from across the BFI travelling to the events throughout November 2013. In practice this meant visits to 11 cities, running well over 100 workshops, attracting 876 registrations, and travelling 3,392 miles. The roadshows provided great opportunities to discuss our new initiatives alongside our partners Creative Scotland, Northern Ireland Screen, Film Agency for Wales, Creative England, Film London, Into Film and Creative Skillset as well as our new FAN.

 State Aid

The BFI led a UK industry working group which developed a negotiating position for the UK, underpinned by robust evidence, to support representations to the European Commission in relation to its proposals to change the Cinema Communication. The Cinema Communication sets out the basis on which Member States can provide support to film production whether using Lottery money or through Tax Reliefs. It is therefore fundamental to the success (or otherwise) of British Film.

In addition the BFI led the way in working closely with both the European Commission and with counterparts in other member states, particularly in co‐ordination with the European Film Agency Directors (EFADs) group. This finally resulted in significant changes which were published in the final version of the Cinema Communication in late 2013. Changes which ensured that, for example, the Film Tax Reliefs in the UK can continue to operate effectively and efficiently underpinning the £4.6 billion economic impact of the UK Film industry.

 Intellectual Property

The BFI was actively engaged with public policy developments around intellectual property (IP) throughout the year. In particular, we engaged with the Intellectual Property Office and

politicians from various parties concerning changes to the IP regime which were eventually included in the Regulatory Reform Act.

We were represented on the Licences for Europe working groups which were set up by the European Commission to examine ways in which the industry could improve cross‐border licensing in respect, for instance, of catch‐up services, user‐generated content and screen heritage materials. The groups concluded their work in November 2013 with outcomes that included a Memorandum of Understanding around Screen Heritage.

In March 2014, the BFI submitted a response to a major consultation by the Commission on the Review of the EU copyright rules. This consultation sought views on important issues potentially affecting the UK’s film industry and culture such as the role of limitations and exceptions and potential barriers to making education and archive materials available across borders.

 New Creative Europe Programme

The BFI formed a partnership with the British Council that will establish Creative Europe Desks in England, Scotland, Wales and Northern Ireland as contact points for both the Media and Culture strands of the new EU Creative Europe funding programme. Creative Europe replaced the MEDIA Programme in January 2014. It is worth €1.462 billion over the next seven years (a 9% increase on the current funding levels) and will provide support for film, television, video games, visual and performing arts, cultural heritage, architecture, design, music, radio and publishing. From 2016 it will operate the Creative Industries Guarantee Fund, expected to unlock €700 million of investment from the private sector.

 Research and Statistics Fund

The bedrock of cultural and commercial growth is having data that facilitates a better understanding of the sector. In 2013‐14 the Research and Statistics Unit (RSU) produced the 2013 Statistical Yearbook, quarterly and annual statistics releases on film production, certification and UK share of the theatrical and other film markets, and made presentations to events such as the BFI London Film Festival industry programme and the BFI‐Screen International ‘Film Summit’. The RSU also produced a report highlighting the increasing success of female screenwriters of UK films in the years .2010‐12

 Making a Difference: Diversity Strategy

In February 2014 the BFI’s Diversity Strategy was approved by the Board of Governors. It’s aim is to contribute to making a real difference to the film industry workforce, to on‐screen portrayal and audiences, and crucially to the BFI. Our first priority will be to tackle diversity in the workforce and at the BFI using a two‐pronged approach supported by new funds, new research and access to expert guidance. Organisations who receive BFI Lottery Funds will be expected and helped to take on interns, trainees or apprenticeships from underrepresented groups and there will be a new interns and placement fund to support this and other placements including for BFI Film Academy alumni.

FUNDRAISING AND PHILANTHROPHY

Your support helps us keep film alive – forever

Your support helps secure the future of British film

Our three Strategic Priorities have been generously supported by a variety of trusts, foundations, corporations and individuals over the past year, all of whom helped us to raise a combined total of £3.7 million.

One of the key achievements of the year was the first ever BFI Fundraising Gala, LUMINOUS, celebrating British film and British film talent in aid of the BFI National Archive. The complete history of British film can be found and celebrated in our collections and our work to both care for and make available these collections is vital to help inspire and delight generations of filmmakers and audiences, today and tomorrow. The Gala was a huge success this year, raising significant funds for the BFI National Archive and attended by the great and good of the British film world. With a rich programme of film content throughout the night, and an auction of money‐can’t‐buy lots, the evening received a wealth of key press and broadcast coverage.

Support from individuals over the past year has grown considerably, not only thanks to LUMINOUS, but also thanks to the continued growth of the Patrons, as well as the success of other initiatives, including The Magnificent 700 – our scheme launched last year to name a seat in the BFI cinemas. This year we also introduced the new Film Forever Club, which allows supporters to play a vital role in the BFI’s future and deepen their engagement with the organisation by making a three year philanthropic commitment towards specific BFI projects. Our ambition is to grow this group over forthcoming years.

We were delighted to continue to work with our longstanding partners American Express as year round supporters and principal sponsors of the BFI London Film Festival and were thrilled to announce a three year partnership with Accenture as principal sponsors of BFI Flare, London LGBT Festival and main sponsors of the BFI London Film Festival. BFI Flare welcomed back the Interbank LGBT Forum and we were delighted to work for the first time with new special screening sponsor Celebrity Cruises.

Another one of our achievements has been our ability to retain and renew partnerships and support. We receive consistent feedback that Patrons, partners and philanthropists value their relationship with us greatly. Some of them have become our best ambassadors and we are thrilled to hear from them that both the richness and diversity of our programmes as highlighted in the previous pages of this report, as well as the way we involve them in these activities throughout the year is a strong reason for their desire to renew their support.

Our successes over the year, including the launch of LUMINOUS, have shown that there is still enormous potential for attracting fresh support from those that share our passion for film and its future. We are extremely grateful to all those who have helped us this year and we look forward to continuing to work with all our supporters in the year ahead.

INTERNATIONAL DEVELOPMENT COUNCIL MEMBERS 2013‐14:

Josh Berger CBE, Chair Louis Elson Hani Farsi Eric Fellner CBE Gerry Fox Daniel Friel Kathryn Greig Isabella Macpherson Caroline Michel Beth Mill Sir Alan Parker Joyce Reuben Joana Schliemann Colin Walsh Richard Wolman

LUMINOUS GALA AMBASSADORS

Wes Anderson Gemma Arterton Danny Boyle Barbara Broccoli Naomi Campbell Idris Elba Ralph Fiennes Eric Fellner Julian Fellowes Colin Firth Livia Firth Tom Ford Tom Hiddleston Tom Hollander Tom Hooper John Hurt Asif Kapadia Sir Ben Kingsley Peter Kosminsky Jude Law Damian Lewis Ken Loach John Madden Helen McCrory Michael Parkinson Dev Patel Guy Ritchie 31

Nicolas Roeg Martin Scorsese Dan Stevens Jeremy Thomas Emma Thompson Alan Yentob

The BFI warmly thanks the following individuals and organisations for their generous support in 2013‐2014:

PUBLIC SECTOR SUPPORTERS

Arts Council England Europa Cinemas

TRUSTS AND FOUNDATIONS

The Eric Anker‐Petersen Charity Blavatnik Family Foundation Sir John Cass's Foundation Chapman Charitable Trust The John S Cohen Foundation The Mohamed S. Farsi Foundation The Edwin Fox Foundation The Goethe Institute The Great Britain Sasakawa Foundation The Hartnett Conservation Trust The Headley Trust The Hintze Family Foundation The Japan Foundation The David Lean Foundation The Radcliffe Trust The Reuben Foundation The Rose Foundation The Dr. Mortimer and Theresa Sackler Foundation The Philip and Irene Toll Gage Foundation

MAJOR DONORS, INCLUDING FILM FOREVER CLUB

Barbara Broccoli OBE Greg Dyke Hani Farsi Simon W. Hessel Ella Krasner Ian & Beth Mill Col & Karen Needham Sir Alan Parker Joyce & Simon Reuben Matt Spick Peter & Nancy Thompson

And with additional thanks to our anonymous major donors.

DIRECTORS CUT PATRONS

Eric Abraham Peter Baldwin & Lisbet Rausing Donald & Corrine Brydon Amanda Eliasch Gerry Fox Jacqui Fox David Giampaolo Keith Haviland Simon W Hessel Col & Karen Needham Joyce Reuben Alan Smith

EPIC PATRONS

Simeon Brown James Clayton Eric Fellner Tanis & Sam Kawkabani Lynn M. Lewis N’Gunu Tiny Betsy & Jack Ryan Francesca Tondi Colin Walsh & David Ederick The Stuart and Hilary Williams Foundation

CLASSIC PATRONS

Stefan Allesch‐Taylor Francis Bennett Josh Berger Nick Blackburn Felicia Brocklebank Rob Carrington Alison Cornwell Cley Crouch Carl Dalby Ian Durant Sarah &Louis Elson Gavin Essex Jeff & Emily Fergus Paola Ferretti‐Johnson Joachim Fleury Peter & Judith Foy Larisa Fuksman Paul Gambaccini Lizie Gower Claude Green Louis Greig Michael Hamlyn Derek & Maureen Harte Ashley Highfield Duncan Hopper Rachael Horsley Fady Jameel Alexandra Joffe Nicola Kerr Stephen & Sigrid Kirk Steven Larcombe Laura Lonsdale Jackie Mountain Eamonn Murphy Amanda Nevill John Reiss Sarah & Philip Richards Amy Ricker Sue & Tony Rosner Michael Sandler Lisbeth Savill Joana Schliemann Nick Scudamore Angela Seay Jonathan Sellars 34

Gregory Stone & Annabel Scarfe Mark & Lee Shanker Francyn Stuckey Danielle Summers Sultan Torshkhoev Richard & Astrid Wolman

CORPORATE PARTNERS

Accenture American Airlines American Express Celebrity Cruises Deluxe Interbank LGBT Forum Lycamobile Samsung Shell Shangri‐La Hotels and Resorts TV5MONDE

IN‐KIND PARTNERS

8 Northumberland Heineken Bulgari Hotels and Residences The Hospital Club Capablue Konditor & Cook Cathay Pacific Airways Latham & Watkins Champagne de Bleuchamp M.A.C Christie The May Fair Hotel Digital Cinema Media MNX Disaronno Renault Doremi Soho House Green & Black's Topolski Hardy’s Unique Digital

Thanks also to all our other supporters, including anonymous donors, BFI Champions, BFI Members and the Friends of the BFI.

KEY PERFORMANCE MEASURES

As set out in Film Forever the BFI proposed a focussed number of aims to be delivered by 2017, namely to have:

 Ensured that a new education offer is available to every school and 25% of all young people are actively engaged in making, watching and understanding a wide range of film  Increased the size, diversity and geographic spread of audiences viewing British independent and specialised film (through BFI interventions)  Funded a range of British films and talent which will have won major domestic and international awards  Supported an increase in the diversity of talent, in terms of ethnicity, gender, geography and disability  Helped increase the total level of inward investments and exports, by generating new business from emerging target markets  Increased by 25% the number of visits and reach to BFI content digitally  Digitised and made available 10,000 significant heritage titles and increased the number of views of archive materials  Increased, year‐on‐year, the total amount of charitable income to the BFI  Ensured that 80% of key partners consider the BFI as either very effective or effective

In the year we awarded a number of significant awards, including multi‐year awards, to Creative Skillset (£21m), Into Film (£26m) and Unlocking Film Heritage (£15m), in support of Film Forever strategic objectives. These were complex awards that took longer than expected to contract.

In relation to diversity, 2013‐14 was a year in which the BFI Diversity Strategy was developed. Research was undertaken to both inform the strategy and to develop a baseline from which performance can be measured going‐forward.

A stakeholder survey will be undertaken in 2014‐15 to monitor partner satisfaction levels in relation to the indicator relating to perception of the BFIs role as the leady bod for film.

Expanding Education and Learning opportunities The BFI 5‐19 Education scheme is delivered by Into Film KEY MEASURE 2012‐13 ACTUAL 2013‐14 TARGET 2013‐14 ACTUAL COMMENT OF SUCCESS BY 2017 Ensure that a BFI 5‐19 scheme Full year target – Contract signed Award made in new education launched; lottery to be available to November 2014. March 2013 with offer for 5‐19 award made to 12,000 schools Delivery contract agreed year olds is Into Film; (8,000 Film Clubs performance ‐ 5 and signed in available to contract established) months activity: November 2013 every school signature Available to – Delivery delayed 8,500 schools Performance for (8,056 film clubs 5 months activity established) That 25% of all BFI 5‐19 scheme Full year target ‐ 5% of young Number of young young people launched; lottery 7% of young people actively people across the UK are award made to people actively engaged benefiting actively engaged Into Film; engaged directly relates to in making, contract the delivery of watching and signature the 5‐19 scheme understanding a delayed wide range of film (%)

Boosting Audience choice across the UK Audiences to BFI activity are delivered either directly at BFI venues or at other venues which receive BFI material and/or BFI financial support KEY MEASURE 2012‐13 ACTUAL 2013‐14 TARGET 2013‐14 ACTUAL COMMENT OF SUCCESS BY 2017 Increase the size 3.7m Full year target ‐ 4.1m BFI Cultural audiences to 5.1m Programme fully British delivered during independent and the year. (Target based on specialised films full‐year of BFI Audience through BFI operation of the Fund launched interventions. BFI Cultural notably the BFI Programme and Audience the BFI Audience Network and BFI Fund) Neighbourhood funds

Increase by 25% Base Year (9m +7.5% +9% New BFI website the number of visits) and the launch of visits and reach BFI Player to BFI content delivered a digitally (from strong a 2011‐12 base) performance

Increased the Only the BFI Establish  Baseline Geographic Cultural baseline data on established spread of programme geographic  BFI Cultural audiences delivered at spread; Programme viewing BFI venues across BFI Cultural (delivered material the across the UK Programme across the UK – notably including Gothic and Hitchcock blockbuster; international) blockbuster Launch of the BFI  Film Audience Fund Audience (Film Festivals Network Fund, regions Programming established Development across the Fund. BFI mFil UK; 52 Audience awards made Network and BFI to UK film Neighbourhood) festivals; Programming Development Fund

launched with 13 awards made;  BFI Neighbour‐ hood developed. Launch in July 2014  Support to 7 Regional Archives and 21 regional exhibition venues

Supporting the future success of British film The BFI supports British film directly, notably through the Film Fund, and via strategic partner organisations including the National Screen Agencies, Creative Skillset, British Film Commission and Film London KEY MEASURE 2012‐13 ACTUAL 2013‐14 TARGET 2013‐14 ACTUAL COMMENT OF SUCCESS By 2017 BFI to have 5 7 10 Very good funded a range performance for of British films BFI funded and talent which features at a won domestic number of key and international festivals awards Helped increase Inward Inward Inward Strong inward the total level of Investment Investment Investment investment inward £630.6m (98% £700m (97% £868m (99% performance. investments and from US) from US) from US) of exports, by generating new Exports £1,342m Exports £1,900m Export data not business from (81% to Europe (80% to Europe yet available emerging target and US) and US) markets

Unlocking film heritage for everyone in the UK to enjoy

KEY MEASURE 2012‐13 ACTUAL 2013‐14 TARGET 2013‐14 ACTUAL COMMENT OF SUCCESS By 2017 Digitised and Programme not 1,500 titles from 1,552 titles Delivery of the made available in operation the National digitised with Programme is on to the public Collection 468 titles track 10,000 digitised and available on BFI significant available Player heritage titles and increased the number of views of archive materials

Increased, year‐ £3.5 £4.1m £3.7 New biennial on‐year, the total fundraising gala amount of successfully charitable introduced. income to the BFI

FINANCIAL REVIEW

Funding, Income & Investment in Charitable Activities

The main focus of this year has been activating the new strategies and lottery schemes that will underpin the three main priorities of our five year plan for film – Film Forever.

In the year we awarded a number of significant multi‐year lottery awards in support of Film Forever strategic objectives. These included Creative Skillset (£21m), Into Film (£26m) and Unlocking Film Heritage (£15m). In line with our Lottery Accounts Direction and Charity accounting principles these awards are recorded on a commitment basis. The Statement of Financial Activities therefore shows a net decrease in funds for the organisation of £51.3m with lottery activity in the year recording a deficit of £62.3m. Although included in the consolidated BFI accounts the Lottery monies are only available for the specifically defined Lottery distribution activities and are not available more generally for activities of the BFI. The non lottery activities of the BFI resulted in a positive movement in funds of £11.1m which primarily relates to the unspent element (£13.5m) of the £15m Unlocking Film Heritage multi‐ year lottery award made to the BFI and against which expenditure will be incurred in future years.

Under the terms of the Comprehensive Spending Review settlement BFI Grant in Aid decreased in 2013‐4 with further reductions due in 2014‐15 and 2015‐16. Over recent years the BFI has significantly increased self generated income helping maintain and develop public programmes and the preservation of the BFI National Archive.

The BFI received £47.8m (2013: £55m) of Lottery proceeds and recouped Lottery income in the year. Non‐film right lottery awards in the year were £80.2m (2013: £11.7m), with new multi‐year lottery awards over the life of Film Forever to March 2017 to Creative Skillset (£21m), Into Film (£26m) and, under a Section 27 dispensation, the BFI for Unlocking Film Heritage (£15m). These are accounted for in full in the year, and contribute to a fall in net lottery funds of £62.3m to £3.8m reserves (£11.5m was drawn down in 2013‐14). These multi‐ year awards were made after full consideration of future anticipated revenues, in line with DCMS guidance, and in line with Governors’ stated intention to reduce these reserves.

BFI’s financial strategy continues to be to support the delivery of core objectives, to seek operational efficiencies to further drive down overhead costs and to seek to deliver increased income from charitable activities, including the exploration of new sources of income.

Due to the nature of its funding the BFI does not hold large cash balances, and its financial investment is focused on its property asset base and investing in people and activities to achieve its charitable objectives.

Incoming resources The BFI recorded total income of £93.5m (2013: £110.0m), with the most significant differences being the fall in lottery proceeds of £7.5m to £45.1m (2013: £52.6m) and the decrease of £7.5m in grants and donations received in the year due to one off funds in the prior year from DCMS and the BFI Trust.

Income from Charitable Activities fell by 7% to £16.7m (2013: £18m) due to the outsourcing of IMAX cinema activity to Odeon in 2012‐13 with the resulting change to recording net income rather than gross ticket revenue.

Resources expended Expenditure exceeded that of the prior year with total expenditure of £143.6m (2013: £100m). The prime factor behind this being the multi‐year lottery awards as noted above with underlying expenditure remaining similar. Of this £141.8m (99%) was invested in Charitable Activities (2013: £95.1m (95%)). The BFI invested in the following Charitable Activities;

 Education, Learning and Audiences;  Supporting British Film; and  Film Heritage.

Fundraising 2013‐14 was another successful year in which £3.7m was raised, including Gifts in Kind, for the BFI Southbank, Festivals and a host of BFI activities, in challenging economic condition (2013: £3.5m). Fund‐raising costs of £1.5m (2013: £1.2m) represent the cost of running the BFI Development Division in order to raise funds for the BFI.

Net Incoming / Outgoing Resources Net outgoing resources for the year amounted to £50.1m (2013: net incoming resources £10.0m), with the change largely due to the multi year lottery awards.

Actuarial losses/gains on defined pension schemes On the FRS 17 basis the net pension scheme deficit increased by £2.6m (2013: £0.9m) from £37.4m to £40.0m, including an actuarial loss of £1.5m (2013: £0.1m). The latest triennial actuarial valuation, as at 31 March 2013, upon which future contributions are based, showed a net pension liability of £12.7m (2010: £12.2m). The deficit gis bein funded over 14 years under an agreement with the pension trustees.

Movement in fair value reserves The fair value reserve, relating to Lottery funded films, decreased by £1.9m in the year (2013: decrease of £1.7m). This is primarily due to revenues from the phenomenally successful The King’s Speech which were reflected in the fair value reserve in the year ending 31 March 2011 and subsequently received.

Movement in fixed asset revaluation reserves An increase of £2.2m (2013: decrease of £0.9m) arose on the value of leasehold land and buildings with associated plant and fixtures. These movements arise from the standard indexation applied to the 2012 revaluation of the properties.

Reserves Policy

The Governors are committed to maintaining an adequate level of free reserves to meet any unforeseen expenditure or fall in income. This is incorporated into the budgets going forward and the ongoing management of activities within the available income, a significant element of which is subject to market conditions.

The BFI’s net free reserves (Note 23) were maintained at £1.62m (2013: £1.64m). At 31 42

March 2014 the BFI had total consolidated reserves of £30.7m (2013: £82.0m) after the impact of FRS 17, which reduces reserves by £40.0m (2013: £37.4m).

Restricted funds of £38.7m (2013: £87.2m) comprises £3.8m (2013: £66.1m) in Lottery reserves, £21.5m (2013: £21.1m) in fixed assets and £13.4m of non‐Lottery current assets (2013: £0.04m), the increase in the last of these being the unspent element of the Unlocking Film Heritage award received from Lottery in the year.

Unrestricted reserves amount to £30.4m (2013: £30.7m) before the long term pension reserve of £38.4m (2013: £36.0m) resulting in a deficit of £8m (2013: deficit £5.2m). This pension reserve is a result of the requirements of FRS 17: Retirements Benefits. As at 31 March 2013, the latest triennial actuarial valuation date for which figures are available, the net pension deficit to be funded was £12.7m (2010: £12.2m) and this is being addressed over the next 14 years (subject to future triennial valuations) with additional contributions being made to the LPFA. These contributions are factored into our forward plans and the governors, having considered Charity Commission guidance on FRS17 deficits, are satisfied that this approach is appropriate. If the accounts were to include the triennial valuation deficit rather than the FRS17 deficit then the BFI would have positive net unrestricted reserves of £17.7m.

Lottery Financial Review

The Lottery financial statements are presented on page 99.

Incoming resources During the year the BFI’s share of the incoming resources of the National Lottery Distribution Fund was 2.7% (2013: 2.7%). This equated to £44.9m (2013: £52.3m). This was after a one off deduction across all Lottery distributors at source relating to the promotion of lottery games and the new pricing model introduced in the year. The BFIs’ contribution to this was £1.6m.

BFI’s share of investment income earned on the National Lottery Distribution Fund balance amounted to £0.2m (2013: £0.3m).

In addition the BFI received £5.9m of recoupment from its investments in the year (2013: £8.6m). Of this £2.2m (2013: £2.3m) was surplus recoupment over the original investment (the King’s Speech generated £2.1m of this surplus (2013: £2.0m) and was taken to income.

Resources expended Lottery – non film rights awards of £80.2m (2013: £11.7m), including awards to funded partners, were charged to expenditure in the year. The prime reason for the increase were the multi‐year awards in the year, covering the period of our five year plan, Film Forever, including those to Into Film (£26m), Creative Skillset (£21m) and Unlocking Film Heritage (£15m). In addition £27.2m (2013: £25.9m) of awards were taken to Film Rights in the balance sheet. Impairments of £22.6m (2013: £22.3m) were charged to expenditure against these Film Rights.

Costs apportioned from Grant‐in‐Aid, representing operating overhead costs attributable to lottery, were £5.0m (2013: £4.7m), which includes the management of new Film Forever activity and other finance costs (pension) of £0.4m (2013: £0.3m) but excluding costs of change of £0.3m (2013: £0.8m).

On the IAS 19 basis the net pension scheme deficit apportioned to lottery was £1.7m (2013: £1.4m).

Movement in fair value reserves A decrease of £1.9m (2013: £1.7m) arose from Lottery funded films, resulting in a decrease in the fair value of the associated film rights held on the balance sheet. This is primarily due to revenues from phenomenally successful The King’s Speech which were reflected in the fair value reserve in the year ending 31 March 2011 and subsequently received.

Total comprehensive expenditure/ income Total comprehensive expenditure on lottery activities for the year was £62.1m (2013: total comprehensive income £11.1m), with the movement primarily due to the new multi year awards.

Going Concern

The BFI receives Grant in Aid each year from DCMS. This is in recognition of the cultural impact of film, and the importance of the National Film and Television Archive to the nation’s heritage. This level of funding, in common with other government funded bodies, continues to be reduced over the remaining years of the current government spending review. Given the recent review of BFI activities and structures, together with the government commitment to funding, the Governors and Executive have a reasonable expectation that the BFI has adequate resources to continue operating. There have been no events since the balance sheet date which would affect this view. Accordingly, the accounts have been prepared on a going concern basis.

PUBLIC BENEFIT

The Board of Governors has continued to take heed of the Charity Commission’s guidance on public benefit, the guidance on public benefit and fee charging being particularly borne in mind while shaping our objectives for the year and planning activities. The Board also continues to be conscious of its responsibilities as the custodian of a National Collection which it holds in trust for the nation.

The BFI’s Charter includes a requirement to “promote access to and appreciation of the widest possible range of British and world cinema”. The BFI, as a Lottery Distributor for film, invests Lottery money and Grant in Aid to help ensure that audiences across the UK have access to a wide range of cinema. The BFI also uses Lottery and Grant in Aid to support activities including education and lifelong learning and the preservation of the UK’s screen heritage. All these interventions deliver significant public benefit.

The BFI relies on income from the National Lottery, Grant in Aid from the Government and income from ticket and other sales, fees and charges to deliver public benefit and to cover its operating costs. In setting both the overall strategy for the organisation as the lead body for film and the level of prices, fees and charges, the Governors have given careful consideration to accessibility to the activities funded by the BFI’s for those on low incomes. A key part of our longer‐term development strategy has involved providing free access to a wide range of the services we fund and those we run – for example, through our Mediatheques and our websites, to free public screenings and broadcast partnerships. In addition to meeting our social responsibilities, the BFI also considers its impact on local communities, a diverse range of audiences, provides work experience and employment opportunities and works with schools, local authorities and many other organisations.

The BFI directly supports the distribution and exhibition of film through Lottery funding and is also the UK’s biggest distributor of world cinema – non‐commercial film culture from all parts of the world, both these interventions give the public access to a diversity of film culture which would not otherwise be available: the diversity of Britain’s cultural life would be dramatically reduced without the BFI’s interventions. We also support and directly make available a wide range of titles on all other platforms.

There are many ways in which the public accesses the BFI’s work, and this range ensures we deliver the maximum public benefit for our charitable resources. The BFI activities which deliver public benefit are described in more detail in the pages of this report.

ENVIRONMENTAL SUSTAINABILITY

Film Forever included a statement highlighting the BFI’s commitment to sustainable development or put simply to meet the needs of the present without compromising the ability of future generations to meet their needs. At the heart of this commitment was a determination to encourage film organisations to adopt BS 8909 the official standard for the sustainable management of the UK film industry. The BFI also committed to adopt this standard.

“BS 8909 is a cutting edge sustainability tool that the British film industry should be proud of and embrace to maintain a healthy and competitive film industry. The standard has already provided the framework for the BFI to manage our environmental, social and economic impacts on an ongoing basis and we encourage other organisations to use a system to identify and manage their sustainability issues.” Amanda Nevill, BFI Chief Executive

The BFI has now implemented a Sustainability Management System (SMS) in line with the requirements of British Standard 8909 ‐ ‘Specification for a Sustainability Management System for Film’. This standard is a framework for managing environmental, social and economic impacts of film organisations. By implementing a robust SMS the BFI (as well as any other organisation throughout the film value chain) wille be abl to continually improve sustainability performance and manage associated risks.

In 2013‐14 the BFI developed a list of objectives and targets (short, medium and long‐term) based on BFI’s sustainability priorities. Staff from across the BFI were assigned relevant targets to own with priority areas identified as Energy, Waste, Water, Procurement, Transparency, Diversity and Transport.

The progress of the short‐term, 2013‐14, targets, was regularly monitored through the Sustainability Steering Group (SSG) meetings. The SSG has overarching responsibility for the governance of the SMS and the SSG meetings are chaired by the Director of Finance and Resources. By the end of 2013, 40 of the 46 short‐term targets (87%) were successfully completed. The remaining six targets were not completed due to factors beyond the control of their targets owners.

Although the focus in 2013 was mostly on gathering data and developing benchmarks in each priority area of, the SMS the BFI also made some measurable achievements. These include becoming zero waste to landfill. The BFI is also keen on engaging with its supply chain and encouraging them to adopt more sustainable practices. In 2013, the BFI took the first steps towards achieving this by including payment of London Living Wage to all staff in its key contracted out functions including cleaning, M&E and security.

Moving forward the BFI has set 63 medium‐term targets (to be achieved in 2014/15 financial year) including a target to reduce its energy consumption across all sites by 5%.

To engage with internal stakeholders a number of activities have taken place. Quarterly sustainability bulletins have been sent to all staff with the highlights of BFI’s activities and a waste campaign was also launched across all BFI sites coinciding with the start of the new waste 46

contract. At the beginning of 2014 an energy workshop was organised for energy stakeholders including Facility Managers from different BFI sites, to familiarise them with the cross organisation energy issues and prepare them for conducting independent energy audits.

As well as internally managing sustainability issues, the BFI is also taking significant strides to engage with its external stakeholders and to work to support organisations in the industry to identify and manage their own sustainability issues. The BFI hosted regular meetings of the film industry stakeholder group which includes representatives from all the main trade organisations. The BFI also hosts the ‘Greeningfilm’ ewebsit which contains a wealth of sustainability news, information and case studies to professionals across UK film industry.

During the 2013 BFI London Film Festival, the spotlight was turned on sustainability as the BFI hosted ‘Focus on Sustainability’. Livia Firth, Founder and Creative Director of Eco‐Age and Amanda Nevill, CEO of the BFI, addressed a lively audience at the Focus on Sustainability industry event. Panellists representing film production and production support services spoke about the challenges and potential rewards from embedding sustainability into business practices. Partnership and collaboration were key words of the day, something the creative industries and film, in particular, need to capitalise on to take the next step forward. 98 delegates attended. A message of support was received from Colin Firth.

We also undertook scoping work to test the feasibility of embedding sustainability criteria into BFI funding agreements. Initial findings were very encouraging and a number of pilot studies are underway.

ESTATE POWER CONSUMPTION ESTATE WATER CONSUMPTION CO2 M3 2011‐12 2012‐13 2013‐14 2011‐12 2012‐13 2013‐14

BFI Southbank 1443 1373 1376 10 879 10 707 7 385 Conservation Centre, 1402 1224 1293 4 879 2 452 3 018 Berkhamsted BFI Gaydon 881 786 820 911 800 607 BFI Stephen St 416 420 374 1 727 2703 3010 Odeon BFI 966 1033 991 4 905 4600 4380 IMAX Total 5041 4906 4854 23 301 21 266 18 400

HOW THE BFI IS GOVERNED

The BFI is governed by a Board of up to 15 Governors subject to the BFI’s Royal Charter. The Governors, who are also the trustees of the Charity, now submit their annual report and the audited financial statements for the year ended 31 March 2014. In preparing the annual report and financial statements of the Charity, the Governors have adopted the Statement of Recommended Practice, Accounting and Reporting by Charities issued in February 2005 (SORP 2005).

Governors

Governors who were in post for at least part of the financial year 2013–14 or at the date of signing these accounts:

Greg Dyke (Chair) Josh Berger CBE Pat Butler Charles Cecil MBE Pete Czernin1 Alison Cornwell2 Ashley Highfield Tom Hooper Matthew Justice Oona King Peter Kosminsky J. Timothy Richards3 Jonathan Ross OBE4 Lisbeth Savill (Deputy Chair) Andrea Wong5 Cy Young6

1 Term commenced 26 February 2014. 2 Term commenced 15 May 2013. 3 Term commenced 15 May 2013. 4 Term commenced 26 February 2014. 5 Term commenced 26 February 2014. 6 Term expired 29 September 2013.

Methods of Appointment

The Chair of the BFI is appointed by the Secretary of State for Culture, Media and Sport pursuant to the process agreed between the Governing Body and the Department of Culture, Media and Sport. The Governing Body shall determine the terms of appointment of the Chair. All other appointments toe th Board are made by the Board of Governors.

The Board of Governors reserves one place on the Board for a Member Governor. The Member Governor is nominated and voted for by the BFI membership throughout the United Kingdom. This appointment is also subject to approval by the Board of Governors.

A Governor’s term of office is normally three years. Pursuant to the BFI’s Royal Charter, a Governor may only serve two terms in office. Newly appointed Governors receive a letter of appointment and induction documents which together address, amongst other things, general obligations, the management of conflicts of interest, committee membership, and their responsibilities and duties as Charitable Trustees. Governors have broad experience and expertise in the areas of film, television, the moving image generally, business and strategy and education. All Governors are part‐time, unremunerated non‐executives.

The Board of Governors has corporate responsibility for:

 delivering the mission set out in the Royal Charter; delivering the BFI’s charitable objectives; and developing the overall strategic direction of the BFI;  ensuring that the BFI as a Non‐Departmental Public Body complies with any statutory or administrative requirements for the use of public funds and to maximise value for money;  ensuring that the BFI acts reasonably and prudently in all matters relating to its charitable status;  appointment of the Chief Executive;  ensuring that all BFI properties and assets are protected and effectively utilised in the pursuit of the BFI’s overall mission;  ensuring commercial activities are self financing and aligned to the BFI core purpose and that these activities uphold fair trading standard requirements;  ensuring that any fund‐raising activity carried out on behalf of the BFI is properly undertaken and that all funds collected are properly accounted for;  overseeing the delivery of planned results by monitoring performance against agreed strategic objectives and targets;  ensuring that the BFI’s rules for the recruitment and management of staff provide for appointment and advancement on merit on the basis of equal opportunity for all applicants and staff; and  ensuring the board operates sound environmental policies and practices in accordance with the approach set out in the 1990 White Paper This Common Inheritance, the Government’s green initiatives and other relevant guidance.

Organisational Structure

The Board of Governors delegates specific responsibilities to its Committees. Recommendations made by Committees are presented to the Board as a whole for approval.

A brief description of each Committee and its function is given below:

 Audit, Risk and Governance Committee This committee reviews the effectiveness of the processes, structures, and controls used to direct, manage and account for the financial and business affairs of the BFI. The Audit, Risk and Governance Committee consider all internal and external audit reports and recommendations. In line with best practice there are three non‐Governor members of the committee.

 Finance Committee This Committee is responsible for overseeing the budgetary, assurance and value for money processes within the BFI.

 Nominations and Appointments Committee This Committee makes recommendations to the Board of Governors about appointments to the Board and its’ committees and other bodies.

 Remuneration Committee This Committee determines and keeps under review the levels of pay, and the terms and conditions of service, for the Chief Executive and other senior managers.

 International Development Council (IDC) The IDC works closely with the Chief Executive and the Development Department to ensure the financial success of the BFI fundraising campaigns and strengthen the BFI’s fundraising capability.

Current Committee members are:

Audit, Risk & Governance

Alison Cornwell (Chair) Charles Cecil MBE7 Nick Cowley (Non‐Governor member) Alison Dolan (Non‐Governor member)8 Dr Sree Kamineni (Non‐Governor member)

Finance

Pat Butler (Chair) Matthew Justice9 Peter Kosminsky10 Alison Dolan (Non‐Governor member)11

7 Appointed to the Committee 25 February 2014. 8 Appointed to the Committee 25 February 2014. 9 Appointed to the Committee 25 February 2014. 10 Appointed to the Committee 24 September 2014. 11 Appointed to the Committee 24 September 2014.

Nominations & Appointments

Lisbeth Savill (Chair) Matthew Justice Greg Dyke

Remuneration

Greg Dyke (Chair) Pat Butler12 Ashley Highfield

International Development Council

Josh Berger CBE (Chair) Louis Elson Hani Farsi Eric Fellner CBE Gerry Fox Daniel Friel Kathryn Greig Isabella Macpherson Caroline Michel Beth Mill Sir Alan Parker Joyce Reuben Joana Schliemann Colin Walsh Richard Wolman

The Secretary to the Board of Governors and its committees is Iain Thomson.

Executive

The Board of Governors employs a Chief Executive, Amanda Nevill.

Amanda leads an executive team that during the year consisted of:

Tim Cagney Deputy Chief Executive13 Will Evans Director of Business Affairs Ed Humphrey Director of Digital Trevor Mawby Director of Finance and Resources14

12 Appointed to the Committee 25 February 2014. 13 Resigned 17 April 2014.

David Parkhill Director of Finance and Resources15 Ben Roberts Director of Film Fund Richard Shaw Director of Marketing, Communications and Audiences16 Heather Stewart Creative Director of BFI Chris Travers Director of Marketing, Communications and Audiences17 Francesca Vinti Director of Development

The Executive makes day‐to‐day management decisions on behalf of the Board of Governors under the Financial Procedures approved by the Board.

Employment and training policies and staff participation

The BFI is committed to a policy of equality opportunity in its employment practices and continues to develop a culturally diverse workforce. Its training and development programmes are designed to encourage and support all employees in improving performance. In particular, the organisation aims to ensure that no potential or actual employees receive more or less favourable treatment on the grounds of race, colour, ethnic or national origin, marital status, age, gender, sexual orientation, disability or religious beliefs.

Equality information as at 31 March 2014:

WOMEN MEN Board of Governors 4 9 Executive 3 6 Senior Managers18 21 23 Employees 241 230

TOTAL 269 268

The BFI ensures that there are arrangements to promote effective consultation and communications with all staff. All departments have regular staff meetings at which matters relating to BFI activities are discussed and staff are regularly briefed on the matters discussed at Executive and Board meetings. Meetings of all staff are held regularly and recognition agreements are in place with Unite and BECTU fostering the best possible relationship with staff. The BFI seeks to ensure that the requirements of health and safety legislation are met in the workplace. The BFI has policies and procedures in place to monitor sickness absence, (both long and short term) and this information is regularly reviewed by the Senior Management Team. During 2013‐14, sickness absence (excluding long term absence) averaged 3.03 days (2013:

14 Resigned 20 March 2014. 15 Appointed 3 March 2014. 16 Appointed 15 April 2014. 17 Resigned 21 February 2014. 18 Defined as any employee at Senior Civil Service level or equivalent (excluding members of the Executive).

2.86). 12 individuals had long term sickness absence (2013: 15). Long term sickness absence is deemed to be any period of absence over four weeks.

Better Payment Practice Code

The BFI attempts to abide by the Better Payment Practice Code and in particular to settle bills in accordance with contract. Invoicese ar normally settled within our suppliers’ standard terms, which are typically in line with our standard 30 day terms. The average payment terms taken were 28 days (2013: 28).

Disclosure of information to the auditors

So far as the Accounting Officer and each person who was a Governor at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of fellow Governors, the Chief Executive and the Group’s auditor, each Governor/Accounting Officer has taken all the steps that he/she is obliged to take as a Governor/Accounting Officer in order to make himself/herself aware of any relevant information and to establish that the auditor is aware of that information.

Board of Governors Attendance 2013‐14

The number of BFI Board meetings held in the 2013‐14 financial year was 9 and the Governors’ attendance records were as follows:

Greg Dyke (Chair) 8 of 9

Josh Berger CBE 7 of 9

Pat Butler 8 of 9

Charles Cecil MBE 6 of 9

Alison Cornwell 6 of 7

Pete Czernin 0 of 0

Ashley Highfield 4 of 9

Tom Hooper 8 of 9

Matthew Justice 6 of 9

Oona King 7 of 9

Peter Kosminsky 6 of 9

J. Timothy Richards 4 of 7

Jonathan Ross OBE 0 of 0

Libby Savill (Deputy Chair) 7 of 9

Andrea Wong 0 of 0

Cy Young 4 of 5

All Governors are required to complete a declaration of any potential related party interests – and details of any transactions with these related parties is reported in note 29 of the Charity and Group financial statements .

Audit, Risk and Governance Committee Attendance 2013‐14

The number of Audit Risk and Governance Committee meetings held in the 2013‐14 financial year was 4 and the members’ attendance records were as follows:

Alison Cornwell (Chair) 4 of 4 Charles Cecil MBE 0 of 1 Nick Cowley 3 of 4 Alison Dolan 1 of 1 Dr Sree Kamineni 4 of 4

REMUNERATION REPORT

The Remuneration Committee The Board of the BFI is responsible for determining the remuneration of the Chief Executive and senior staff. In the year ending 31 March 2014, it discharged this responsibility through the cycle of monthly Board meetings – which included involvement in the appointment of new members of the Executive Team, and ensuring appropriate approvals were obtained from the Department of Culture, Media and Sport (DCMS).

In addition the Board is supported by the Remuneration Committee that meets as required, which is authorised within its terms of reference, to obtain independent professional advice if it considers this necessary. The Remuneration Committee comprises a chair, who is also chair of the BFI Governors, and up to 3 other members of the Board or co‐opted members, who are each appointed for a period of up to three years. The members during the year were:

Greg Dyke (Chair) Pat Butler Ashley Highfield

The Remuneration Committee did not meet in the 2013‐14 financial year, with meetings held in March 2013 and April 2014.

Remuneration Framework Governors are not entitled to draw any remuneration for their time spent working as a Trustee of the BFI, although they are entitled to reimbursement of expenses incurred in their duties.

In determining appropriate levels of remuneration for senior staff, the BFI follows the Government’s policy to maximise value for money by paying enough to attract and retain suitably qualified senior staff, and salaries are based on the minimum required to recruit, retain and motivate senior staff of appropriate calibre.

All staff Including the Chief Executive, are entitled to membership of the Local Government Pension Scheme (LGPS) operated by the London Pension Fund Authority (LPFA), which is a defined benefit scheme for those BFI employees who wish to join. Further details of the scheme can be found in note 10 to the BFI Group financial statements. Staff enrolled in the scheme, which is contributory; accrue a pension entitlement in the year at the rate of 1/60 of final pensionable salary, up to a limit of two thirds of their final pensionable salary.

The staff pay bill for each year is subject to review by the Remuneration Committee and the DCMS, under HM Treasury guidelines and limits for public sector pay.

Contracts of Employment The Chair of the BFI is appointed by the Secretary of State for Culture, Media and Sport pursuant to the process agreed between the Governing Body and the Department of Culture, Media and Sport, for a term of 4 years. Governors are appointed by the Board for a period of 3 years, with one Governor being elected by the membership of the BFI. Both the Chairman and any other Governors may stand for two successive terms of office. There is no period of notice

required for resignation from the Board.

No members of senior management were employed under closed contracts as at 31 March 2014 and where contractual terms are open ended, the period of notice required for termination of contract is no greater than six months.

Audited Information

Governors’ remuneration No Governor drew any remuneration in the year – although costs amounting to £769 (2013: £937) were incurred. This primarily represents reimbursed travelling expenses. No payments were made in the year for services (2013: £Nil).

As part of their oversight duties as Trustees, copies of all books and DVD/Blu‐Ray releases published by the BFI during the year are made available to all Governors.

Senior staff remuneration Remuneration (excluding pension arrangements) for the senior staff for the year:

Total salary for Bonuses Benefits Pension benefits Total remuneration the year ended attributable for Attributable for accrued in the for the year ended 31 31 March 2014 the year ended the year ended 31 year ended 31 March 2014 (2013) 31 March 2014 March 2014 March 2014 (2013) (2013) (2013) (2013) £’000 £’000 Nearest £100 £’000s £’000

Amanda Nevill 135‐140 ‐ 100 23 160‐165 Chief Executive Officer and Accounting (135‐140) (7) (100) (27) (170‐175) Officer Tim Cagney19 115‐120 ‐ 100 29 145‐150 Deputy Chief Executive (115‐120) (‐) (100) (30) (145‐150) Will Evans 135‐140 ‐ 100 n/a 135‐140 Director of Business Affairs (135‐140) (‐) (100) (n/a) (135‐140) 110‐115 ‐ 100 28 135‐140 Ed Humphrey20 (20‐25 FTE:105‐ (‐) (100) (5) (25‐30) Director of Digital 110) Trevor Mawby21 135‐140 ‐ 400 36 175‐180 Director of Finance and Resources (125‐130) (‐) (400) (18) (145‐150) David Parkhill22 5‐10 FTE:115‐ ‐ 100 3 10‐15 Director of Finance and Resources 120 (N/A) (N/A) (N/A) (N/A) (N/A)

19 Resigned 17 April 2014. 20 Appointed 14 January 2013. 21 Resigned 31 March 2014. 22 Appointed 3 March 2014.

Ben Roberts23 135‐140 ‐ 100 12 150‐155 (‐) Director of Film Fund (105‐110 (100) (18) (125‐130) FTE: 135‐140)

Heather Stewart 110‐115 ‐ 100 15 125‐130 (‐) Creative Director (110‐115) (100) (25) (135‐140) Chris Travers24 85‐90 FTE: 95‐ ‐ 100 21 110‐115 (‐) Director of Communications, 100 (100) (‐9) (85‐90) Marketing and Audiences (95‐100)

Francesca Vinti 80‐85 FTE: 90‐ ‐ 100 17 95‐100 (10) Director of Development 95 (100) (42) (130‐135) (80‐85 FTE: 90‐ 95)

In the year to 31 March 2014, all senior staff with the exception of Will Evans, were members of the LPFA scheme. Pension contributions during the year were made to private pension schemes for Will Evans of £21,173 (2013: £20,570).

Included in the above is remuneration (excluding pension arrangements) for senior staff in the year which are attributable to lottery for the year ending 31 March 2014. These are recharged as part of our lottery funded operations and thus contained within expenditure in the Lottery Financial Statements for the year ending 31 March 2014.

Remuneration (excluding pension arrangements) for the senior staff attributable to lottery for the year ending 31 March 2014:

Total salary Bonuses Benefits Attributable Pension benefits Total apportioned to attributable apportioned to accrued in the year remuneration lottery for the year apportioned to lottery for the year ended 31 March apportioned to ended 31 March lottery for the year ended 31 March 2014 (2013) lottery for the 2014 ended 31 March 2014 year ended 31 (2013) 2014 (2013) (2013) March 2014 () £’000 £’000 Nearest £100 £’000s £’000

Amanda Nevill 75‐80 ‐ 100 (100) 13 85‐90 Chief Executive Officer and (70‐75) (4) (14) (90‐95) Accounting Officer Tim Cagney25 60‐65 ‐ 100 16 80‐85 Deputy Chief Executive (60‐65) (‐) (100) 16 (75‐80)

23 Appointed 18 June 2012. 24 Resigned 21 February 2014. 25 Resigned 17 April 2014.

Will Evans 135‐140 ‐ 100 n/a 135‐140 Director of Business (135‐140) (‐) (100) (n/a) (135‐140) Affairs Trevor Mawby26 75‐80 ‐ 200 20 95‐100 Director of Finance and (65‐70) (‐) (100) (10) (75‐80) Resources David Parkhill27 5‐10 ‐ 100 2 5‐10 Director of Finance and (N/A) (N/A) (N/A) (N/A) (N/A) Resources Ben Roberts28 135‐140 ‐ 100 12 150‐155 (‐) Director of Film Fund (105‐110) (100) (17) (125‐130)

Benefits in kind All members of BFI staff are entitled to receive: up to £100 contribution towards gym membership per annum; up to 12 free tickets per month at the BFI Southbank cinemas; staff discounts on purchases at the BFI Southbank’s Film Store and Benugo’s cafe and restaurant and the BFI London IMAX, ranging from 10‐70%; and interest free loans for train season tickets, bicycle and computer purchases. Staff whose contracts transferred from UKFC may opt to receive a contractual payment of £250 for cinema tickets per annum in place of the BFI Southbank ticket entitlement. Staff on BFI contracts receive a monthly copy of Sight and Sound.

Senior staff pension arrangements The following senior staff were members of the LPFA scheme at 31 March 2014.

Cash Attributable CETV as at 31 Real increase in Equivalent Real increase in pension accrued March 2014 CETV after Transfer accrued pension at 65 at 31 March (or at date left adjustment for Value (CETV) benefits 2013‐14 2014 (or date left the BFI if inflation etc in as at 31 the BFI if earlier) earlier) 2013‐14 March 2013

£’000 £’000 £’000 £’000 £’000 Amanda Nevill 0‐2.5 37.5‐40 676 740 53 Chief Executive and (lump sum: (0‐2.5)) (lump sum: 72.5‐75) Accounting Officer

26 Resigned 31 March 2014. 27 Appointed 3 March 2014. 28 Appointed 18 June 2012.

Tim Cagney29 0‐2.5 5‐7.5 34 57 14 Deputy Chief Executive (lump sum: 0‐2.5) (lump sum: 0‐2.5)

Ed Humphrey30 0‐2.5 0‐2.5 3 20 9 Director of Digital (lump sum: 0‐2.5) (lump sum: 0‐2.5)

Trevor Mawby31 0‐2.5 2.5‐5 21 57 25 Director of Finance and (lump sum: 0‐2.5) (lump sum: 0‐2.5) Resources

David Parkhill32 0‐2.5 0‐2.5 n/a 3 2 Director of Finance and (lump sum: 0‐2.5) (lump sum: 0‐2.5) Resources Ben Roberts 0‐2.5 0‐2.5 10 7 3 Director of Film Fund (lump sum: 0‐2.5) (lump sum: 0‐2.5)

Heather Stewart 0‐2.5 37.5‐40 784 851 38 Creative Director (lump sum: (0‐2.5)) (lump sum: 82.5‐85) Chris Travers33 0‐2.5 5‐7.5 51 56 (3) Director of (lump sum: 0‐2.5) (lump sum: 0‐2.5) Communications, Marketing and Audiences Francesca Vinti 0‐2.5 10‐12.5 135 156 10 Director of (lump sum: (0‐2.5)) (lump sum: 12.5‐15) Development

These staff cover both Lottery and Grant‐in‐Aid and other funded activities. However it is not possible to break out the element purely attributable to Lottery.

The accrued pensions are the amounts eligible at retirement if the staff member left service at the relevant date. The transfer values do not represent a sum paid or payable to the individual, but rather a potential liability of the pension scheme. They have been calculated using assumptions certified by a qualified actuary.

In the year to 31 March 2014, all senior staff with costs attributed in part or whole to lottery, and with the exception of Will Evans, were members of the LPFA scheme. Pension contributions during the year were made to private pension schemes, and attributable to lottery, for Will Evans of £21,173 (2013: £20,570) respectively.

29 Resigned 17 April 2014. 30 Appointed 14 January 2013. 31 Resigned 31 March 2014. 32 Appointed 3 March 2014. 33 Resigned 21 February 2014.

Termination payments The termination payments payable to employees were:

Exit Package Cost Number of Number of other Total compulsory departures redundancies 2014 2013 2014 2013 2014 2013 <£10,000 ‐ ‐ 1 ‐ 1 ‐ £10,000‐£25,000 1 ‐ 5 1 6 1 £25,000‐£50,000 ‐ ‐ 2 ‐ 2 ‐ £50,000‐£100,000 ‐ ‐ ‐ 1 ‐ 1 £100,000‐£150,000 ‐ ‐ ‐ ‐ ‐ ‐

No of exit packages 1 ‐ 8 2 9 2

Cost £’000 11 ‐ 149 98 160 98

Hutton Review of Fair Pay The BFI is required to disclose the relationship between the remuneration of the highest‐paid member of the Executive team in their organisation and the median remuneration of the organisation’s workforce.

The banded remuneration of the Chief Executive in the financial year was £135,000 ‐ £140,000 (2013: £145,000 ‐ £150,000). This was 5 times (2013: 5) the median remuneration of the workforce, which was £30,048 (2013: £28,602).

Total remuneration includes salary, non‐consolidated performance‐related pay, benefits‐in‐ kind as well as severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions.

CORPORATE INFORMATION

British Film Institute The British Film Institute is incorporated by Royal Charter and is registered in England and Wales as a charity, number 287780.

Registered Office: 21 Stephen Street, London W1T 1LN www.bfi.org.uk

Auditor Comptroller and Auditor General National Audit Office 157‐197 Buckingham Palace Road, London SW1W 9SP

Bankers Lloyds Bank plc 113‐117 Oxford Street, London W1D 2HW

Internal auditors Moore Stephens 150 Aldersgate Street, London, EC1A 4AB

Solicitors Farrer & Co 66 Lincoln’s Inn Fields, London WC2A 3LH

Approval of Annual Report This annual report includes information that the BFI is required to disclose in accordance with the Government Financial Reporting Manual (FReM) and accounts direction in a Strategic Report for the Lottery activities. A separate report has therefore not been prepared.

The Annual Report, including the Remuneration Report, was approved by the Board of Governors for signature on 14 July 2014.

Greg Dyke Amanda Nevill Chair, Board of Governors Chief Executive

GOVERNANCE STATEMENT

Scope of Responsibility

How the BFI is governed is covered on pages 48 to 54. The Board of Governors is aware of the requirements of the UK Corporate Governance Code and work is continuing to ensure compliance.

As Accounting Officer and as Chair of the Board of Governors, we have responsibility for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives set by the Department for Culture, Media and Sport (DCMS), whilst safe‐ guarding the public funds and the British Film Institute’s (BFI) assets for which we are responsible in accordance with the responsibilities assigned to us in Managing Public Money and as Trustees of the Charity. The BFI also follows the UK Corporate Governance Code to the extent relevant to a Charity and Lottery distributing body.

We also have responsibility, as defined in the BFl’s Funding Agreement with the DCMS and the Management Statement and Financial Memorandum, for leading and managing the work of the BFI to fulfil its policies, aims and objectives, and upholding its values. The Accounting Officer reports to the Board of Governors of the BFI and we formally meet regularly with DCMS.

The purpose of the system of internal control

The system of internal control is designed to manage to a reasonable level rather than to eliminate the risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of BFI policies, aims and objectives, to evaluate the likelihood of those risks being realised and should they be realised, to manage them efficiently, effectively and economically. The system of internal control includes adequate arrangements for detecting and responding to inefficiency, conflict of interest and fraud, and prioritises those risks associated with the custody of assets and potential loss of Exchequer and Lottery grants. The system of internal control has been in place for the year ended 31 March 2014 and up to the date of approval of the annual report and financial statements, and accords with Treasury guidance.

Capacity to handle risk

As Accounting Officer and Chair of the Board of Governors we have overall responsibility for the BFI’s risk management framework, and are supported in its implementation by the Senior Management Team and staff who are trained and equipped to assess and manage risk in a way appropriate to their authority and duties. Attendance at Board of Governors meetings in 2013‐ 14 is detailed at page 53.

The Audit, Risk and Governance Committee, chaired by Alison Cornwell, gives independent advice and guidance to us, in our roles as Accounting Officer and Chair, and to the Board of Governors as a whole, on the adequacy of audit arrangements (both internal and external), on

the implications of assurances provided in respect of risk and control at the BFI and oversees the work of the internal auditors, as well as providing guidance as to best practice. Attendance at Audit, Risk and Governance Committee meetings in 2013‐14 is detailed at page 54.

The Remuneration Committee provide oversight and approval of remuneration and performance for senior staff members including the Accounting Officer.

Further advice and guidance as to best practice is received from the internal and external auditors (who attend meetings of the Audit, Risk and Governance Committee), the DCMS, and other comparable organisations.

Terms of reference for the Audit, Risk and Governance Committee and the Remuneration Committee are reviewed by the Board of Governors and are held by the Board Secretary.

The risk and control framework

A risk management policy has been established setting out the BFI’s attitude to the assessment, limitation and mitigation of risk in the achievement of our objectives.

The BFI has incorporated risk management in planning and decision making and maintains an organisation‐wide risk register. Policy and operational risks both in the organisation and from external factors are identified through our business planning cycle and the annual operational planning cycle, and are evaluated by the Executive Team. We also consider the risks associated with holding and safeguarding information for operational or financial reporting purposes.

In 2013‐14 the risk register as noted by the Executive Team and updated in March 2014 included 9 corporate risks. The most significant are:

 Reduction in revenue streams due to cuts in Grant in Aid funding, falling lottery revenues and projections or a reduction in self‐generated income all leading to a limitations in our ability to continue to deliver the full range of activities we currently manage.  The BFI is not perceived as working in Partnership with Government and stakeholders.  BFI partners may face other challenges which impact on their help to deliver the BFI strategy.  BFI loses credibility with the key stakeholders regarding its leadership role in cultural and economic policy due to limited resources.  Resources across the BFI are being stretched too thin, undermining the delivery of Film Forever.

Risk management and internal control are embedded in the processes of the organisation and are considered and reviewed on a regular basis by management. For example, the Lottery Finance Committee (LFC), who ultimately sign off on lottery commitments, consisted of representatives of the relevant fund, finance and business affairs and was independently chaired by the Accounting Officer or the Head of Business Affairs. Any perceived risks arising in making an award were thus discussed at the time the funding decision was made and appropriate mitigating action taken, whilst allowing decision‐making, oversight and control to be maintained of the decisions by the respective funds. The committee was updated on the progress of the funded projects to allow timely action to mitigate risks, protect funds and ensure that the

ultimate purpose of the award is fulfilled.

For the regularly funded organisations, such as Creative England, Skillset and First Light, alongside regular oversight and monitoring, a series of regular formal governance meetings were held with the recipients throughout the year to discuss progress against key performance and risk indicators incorporated in their business plans and funding agreements.

The work of the BFI’s internal audit service, provided by Moore Stephens, operated to standards set out in the Government Internal Audit Standards was developed from an analysis of BFI’s UK exposure.

In 2013‐14 internal audit reports covered:

 Review of BFI risk management framework  Mapping the levels and type of assurance provided by BFI management  Review of BFI finance systems upgrade  Review of the lottery funded Unlocking Film Heritage programme

The analysis of risk and the internal audit plans are endorsed by the BFI’s Executive Team, the Audit, Governance and Risk Committee and are approved by the Accounting Officer.

In line with Cabinet Office guidance in relation to information risk, the Finance Director is the Senior Information Risk Owner. Working with the Internal Auditor, all the systems and databases operated by the BFI are kept under review and periodic updates provided to the Audit, Governance and Risk Committee.

In addition, the BFI has in place a wide range of policies, for instance relating to corporate governance, conflicts of interest, financial management (including fraud), health and safety, training and development and information technology. These are periodically reviewed and updated.

The internal communications process ensures that all staff are informed about key decisions on a timely basis through appropriate means. There is also an external communications strategy that ensures stakeholders, Parliament, press, funded organisations and projects, the industry at large, and members of the general public receive appropriate and reliable information.

Progress in achieving objectives set in the strategic plan is monitored by Board and Senior Management. The Board receive appropriate regular financial reporting, enabling monitoring against financial targets.

Review of effectiveness

The Board is responsible for considering its performance and reviewing its effectiveness, including assessing the quality of the information it receives on an ongoing basis, and judge that it is of a satisfactory standard. This review was most recently performed in March 2014. Papers and reports are concise, relevant and timely. The Governors receive appropriate updates on the BFI’s financial positions, forecasts, risks and performance against strategic goals at their schedule meetings.

As Accounting Officer and Chair of the Board of Governors, we have responsibility for reviewing the effectiveness of the system of internal control. Our review is informed by the work of the internal auditors and the Senior Management within the BFI who have responsibility for the development and maintenance of the internal control framework, and comment made by the external auditors in their management letters and other reports. We have been advised on the implications of the results of our review of the effectiveness of the system of internal control by the Board and the Audit, Risk and Governance Committee, and a plant to address any weaknesses and ensure continuous improvement is in place.

In respect of risk management the responsibilities of the Executive Team are to:

 manage risk in their own areas of responsibility through the implementation of risk mitigation processes and by following the BFI’s risk policy;  translate the risk register into day‐to‐day operational planning within teams; and  report to the Accounting Officer on the status of risks and controls.

The Board receives reports from the Chair of the Audit, Risk and Governance Committee, and from the Accounting Officer and managers, on the steps taken to manage risks, including progress reports on key activities and projects, as well as on new risks that may arise both internally within the organisation and due to external factors such as the political and economic environment of both the industry and the public sector.

Amongst the considerations of the Board, the Audit, Risk and Governance Committee and the Executive Team in the year were the risks associated with the establishing the new funding strategies outlined in Film Forever.

The Internal Auditor provides audit reports on the areas of activity within the BFI. The reports include the Internal Auditor’s independent opinion on the adequacy and effectiveness of the BFI’s system of internal control during the year together with recommendations for improvement.

We take assurance from assessment of the risk register, from the business and budget planning cycle, from the decision approval and operational procedures and from the reviews of, and assurance received from, delegate bodies that appropriate risk management procedures are in place.

Additionality

Lottery applications and assessment processes are designed to ensure that awards made will be in line with the achievement of policies, aims and objectives set by the DCMS and the mission and values of the BFI, as well as the requirements of the National Lottery etc. Act 1993 as amended, requiring that Lottery awards uphold the concept of additionality in funding activities which would not otherwise take place.

Administrative Costs Target

The BFI acknowledges the request of the DCMS that by the year ending March 2015, all lottery distributors have a target on costs associated with Lottery grant processing of 5% of incoming resources, with a maximum gross Lottery administration cost of 8%.

In the year, overheads attributed to lottery (excluding restructuring costs) were £5.0m (2013: £4.7m), with total incoming resources of £51.5m (2013: £59.9m) – a gross administration cost of 9.7% (2013: 7.9%). The prime cause of the percentage increase was the unanticipated fall in proceeds from the National Lottery to £44.9m (2013: £52.3m). This was due to lower than anticipated levels of ticket sales, over which no Lottery Distributor has any control, along with the deductions made at source for lottery promotions. Administration costs of £2.4m (4.7% of incoming resources) are deemed attributable to grant processing (2013: £2.8m, 4.7%) and remain within the targeted 5%. Other overheads include direct Film Fund costs associated with the development of projects and other operational costs.

In light of the activities in the forward plan and the resources necessary for these, coupled with recent falls in revenues and the future year projections provided by DCMS for lottery receipts, the Governors believe there is a risk that the imposition of the 8% overheads target may lead to a reduction in efficiency of the lottery operations, causing frustration to the industry and thus inhibiting growth.

We can confirm that in our opinion:

 the BFI complies with its current Financial Directions, Funding Agreement, Management Statement and Financial Memorandum and the requirements of a Charity;  the BFI complies with DCMS guidelines as issued to it, including obtaining relevant approvals and observing the requirements of spending controls;  adequate audit arrangements, both internal and external, are in place to support us in reviewing the systems of internal control;  adequate arrangements are in place to detect and respond to inefficiency, conflicts of interest and fraud and to minimise losses of Lottery and other funds;  the BFI has drawn up and maintains risk assessment and control procedures and risk registers;

 the BFI has complied with Cabinet Office guidance on information risk and has suffered no protected personal data incidents during 2013‐14 or during previous years, and has made no reports to the Information Commissioners Office; and  the systems of internal control were fully operational during the year and no significant weaknesses have been uncovered.

The BFI will continue to strive to improve the systems of internal control in place in relation to its management, and processes to maximise our operational efficiency as a Lottery Distributor. This includes in 2013‐14 and 2014‐15 plans to replace the existing Finance, HR and Payroll software applications.

The Board of Governors has approved a Code of Conduct which reflects the principles laid down in the Code of Best Practice for board members of Public Bodies and maintains a Register of Interests of board members. This Register is available for inspection at the BFI’s registered offices at 21 Stephen Street, London W1T 1LN, on request to the Board Secretary.

The Governance Statement was approved by the Governors for signature on 14 July 2014.

Greg Dyke Amanda Nevill Chair, Board of Governors Chief Executive

Date: 14 July 2014 Date: 14 July 2014

BFI GROUP AND CHARITY FINANCIAL STATEMENTS

STATEMENT OF GOVERNORS AND ACCOUNTING OFFICER’S RESPONSIBILITIES

The Governors as the trustees of the Charity are responsible for preparing the Trustees' Annual Report and the group and charity financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The Governors delegate power and responsibility to the Chief Executive for the day to day operation of the organisation. As Accounting Officer for government reporting purposes the Chief Executive is also responsible for reporting to DCMS, one of our main funders.

The law applicable to charities in England and Wales requires the Governors and Chief Executive to prepare accounts for each financial year which give a true and fair view of the state of affairs of the group and charity and of the incoming resources and application of resources, changes in funds, and cash flows for the financial year. In preparing these financial statements, the Governors and Chief Executive are required to:

 select suitable accounting policies and apply them consistently;  make judgments and estimates that are reasonable and prudent;  observe the methods and principles in the Charities SORP or HM Treasury’s Financial Reporting Manual as applicable;  state whether applicable accounting standards have been followed; and  prepare the financial statements on the going concern basis unless it is inappropriate to assume that the Charity will continue in operation.

The Governors and Chief Executive are responsible for keeping proper accounting records which are such as to disclose, with reasonable accuracy, the financial position of the Charity at any time, and to enable them as trustees to ensure that the accounts comply with applicable law. The Governors and Chief Executive are also responsible for safeguarding the Charity’s assets and ensuring their proper application in accordance with the Charities Act 2011; National Lottery etc. Act 1993, the Royal Charter and Managing Public Money issued by HM Treasury, and hence for taking reasonable steps for the prevention and detection of error, fraud and other irregularities.

The Governors and Chief Executive are responsible for the maintenance and integrity of the charity and financial information included on the charity's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Governors and Chief Executive confirm that they have met the responsibilities set out above and complied with the requirements for preparing the accounts. The charity and group financial statements set out on pages 72 to 74, have been compiled from and are in accordance with the financial records maintained by the Governors and Chief Executive.

INDEPENDENT AUDITOR’S REPORT TO THE GOVERNORS OF THE BRITISH FILM INSTITUTE

I have audited the financial statements of the British Film Institute for the year ended 31 March 2014 under the Charities Act 2011. The financial statements comprise: the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.

Respective responsibilities of the Governors, Accounting Officer and auditor As explained more fully in the Statement of Governors and Accounting Officer’s Responsibilities, the Chief Executive as Accounting Officer and the Governors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit and express an opinion on the financial statements in accordance with the Charities Act 2011. I conducted my audit in accordance with International Standards on Auditing (UK and Ireland). Those standards require me and my staff to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the British Film Institute’s and the group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the British Film Institute; and the overall presentation of the financial statements. In addition I read all the financial and non‐financial information in the Annual Report and Governance Statement to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my report.

I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Opinion on regularity In my opinion, in all material respects the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Opinion on financial statements In my opinion:

. the financial statements give a true and fair view of the state of the group’s and of the British Film Institute’s affairs as at 31 March 2014 and of its incoming resources and application of resources for the year then ended; and . the financial statements have been properly prepared in accordance with the Charities Act 2011.

Opinion on other matters In my opinion:

. the part of the Remuneration Report to be audited has been properly prepared; and . the information given in What we delivered this year, Key Performance Measures, Financial Review, Environmental Sustainability, and How the BFI is Governed sections of the Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception I have nothing to report in respect of the following matters which I report to you if, in my opinion:

. adequate accounting records have not been kept; or . the financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records; or . I have not received all of the information and explanations I require for my audit; or . the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Sir Amyas C E Morse Date 17 July 2014 Comptroller and Auditor General

National Audit Office 157‐197 Buckingham Palace Road Victoria London SW1W 9SP

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES YEAR ENDED 31 MARCH 2014 2014 Non-Lottery Total Lottery 2014 2013 Unrestricted Restricted Non-Lottery Restricted Total Total Note £'000 £'000 £'000 £'000 £'000 £'000 Incoming resources Incoming resources from charitable activities (earned income) Education, Learning & Audiences 4 15,703 - 15,703 - 15,703 17,458 Film Heritage 4 960 - 960 - 960 520 Incoming resources from generated funds Voluntary income 24 Lottery proceeds 16 - - - 45,101 45,101 52,623 Lottery recoupment income 15 - - - 2,214 2,214 2,342 Revenue Grant in Aid funding 5 22,374 - 22,374 - 22,374 26,962 Capital Grant in Aid funding 5 1,927 - 1,927 - 1,927 1,936 Other grants, legacies and donations 5, 23 1,650 1,603 3,253 498 3,751 7,043 Donated services and facilities 6 - 1,441 1,441 - 1,441 1,063 Investment income 7 13 - 13 - 13 18 Total incoming resources 42,627 3,044 45,671 47,813 93,484 109,965

Resources expended Charitable activities Education, Learning & Audiences 8 (27,085) (2,380) (29,465) (38,353) (67,818) (39,733) Supporting British Film 8 (5,614) (138) (5,752) (53,489) (59,241) (42,113) Film Heritage 8 (10,868) (2,880) (13,748) (972) (14,720) (13,225) Total charitable activities (43,567) (5,398) (48,965) (92,814) (141,779) (95,071)

Costs of generating funds Costs of generating voluntary income 8, 24 (1,483) - (1,483) - (1,483) (1,206) Governance costs 8 (318) - (318) (85) (403) (370) Olympic deduction 16 - - - - - (2,732) Restructuring costs 8 - - - 110 110 (602) Total resources expended 8 (45,368) (5,398) (50,766) (92,789) (143,555) (99,981)

Net (outgoing) / incoming resources (2,741) (2,354) (5,095) (44,976) (50,071) 9,984

Gross transfers between funds 23 543 14,855 15,398 (15,398) - -

Net (outgoing) / incoming resources before other recognised gains and losses (2,198) 12,501 10,303 (60,374) (50,071) 9,984

Other recognised gains / (losses) Actuarial losses on defined benefit pension scheme 10 (1,420) - (1,420) (93) (1,513) (60) Movement in fair value reserves 15 - - - (1,868) (1,868) (1,687) Movement in fixed asset revaluation reserves 11 884 1,298 2,182 - 2,182 (900)

Net movement in funds (2,734) 13,799 11,064 (62,335) (51,270) 7,337

Reconciliation of funds Total funds brought forward (5,240) 21,093 15,853 66,115 81,968 74,631

Total funds carried forward 23 (7,974) 34,892 26,918 3,780 30,698 81,968

All gains and losses recognised in the year are included in this Statement of Financial Activities and all activities are classified as continuing. The accompanying notes form an integral part of this Statement of Financial Activities.

72 CONSOLIDATED AND CHARITY BALANCE SHEET 31 MARCH 2014

Note Group Group Charity Charity 2014 2013 2014 2013 £'000 £'000 £'000 £'000

Fixed assets: Tangible fixed assets 11 49,124 48,865 49,124 48,865 Intangible fixed assets 13 1,141 1,299 - - Investments 14 - - 2,393 2,393 Total fixed assets 50,265 50,164 51,517 51,258

Current assets: Film Rights 15 15,358 16,375 15,358 16,375 National Lottery Distribution Fund 16 55,817 52,841 55,817 52,841 Stocks & work in progress 17 388 578 388 578 Debtors 18 5,030 7,566 6,149 8,561 Cash at bank and in hand 8,278 9,795 5,285 7,010 Total current assets 84,871 87,155 82,997 85,365

Liabilities: Creditors: amounts falling due within one year 20 (36,165) (17,937) (35,543) (17,402)

Net current assets 48,706 69,218 47,454 67,963

Total assets less current liabilities 98,971 119,382 98,971 119,221

Creditors: amounts falling due after more than one year 22 (28,250) - (28,250) - Defined benefit pension scheme net liability 10 (40,023) (37,414) (40,023) (37,414)

Net assets including defined benefit pension scheme net liability 30,698 81,968 30,698 81,807

Funds: Restricted income funds Restricted income funds excluding Lottery and pensions liability 26,357 13,468 26,357 13,468 Restricted fixed asset revaluation reserve 8,535 7,625 8,535 7,625 23 34,892 21,093 34,892 21,093 Lottery reserve 1,885 62,115 1,885 62,115 Lottery fair value reserve 3,558 5,426 3,558 5,426 Lottery share of pension reserve (1,663) (1,426) (1,663) (1,426) 23 3,780 66,115 3,780 66,115 Total restricted funds 38,672 87,208 38,672 87,208

Unrestricted income funds Unrestricted income funds excluding pensions asset/liability 24,963 25,619 24,963 25,458 Unrestricted fixed asset revaluation reserve 5,423 5,129 5,423 5,129 30,386 30,748 30,386 30,587 Pension reserve (38,360) (35,988) (38,360) (35,988) Total unrestricted funds 23 (7,974) (5,240) (7,974) (5,401) Total funds 23 30,698 81,968 30,698 81,807

The accompanying notes form an integral part of this consolidated and Charity balance sheet.

The Governors and Chief Executive Officer of the BFI, registered charity number 287780, approved these financial statements and authorised their signature on 14 July 2014.

Greg Dyke Amanda Nevill Chair, Board of Governors Chief Executive

73 CONSOLIDATED CASH FLOW STATEMENT YEAR ENDED 31 MARCH 2014

2014 2013 Notes £'000 £'000

Net cash inflow from operating activities 2 3,401 16,963 Return on investments and servicing of finance 3 (2,963) (13,003) Capital expenditure and financial investment 3 (2,453) (3,347) Acquisitions and disposals 3 498 - (Decrease) / Increase in cash in the year 3 (1,517) 613

The accompanying notes form an integral part of this consolidated cash flow statement.

74 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

1. ACCOUNTING POLICIES

The principal accounting policies are summarised below. The accounting policies have been applied consistently throughout the year and the preceding year.

Basis of preparation The financial statements of the BFI are prepared under the historical cost convention, as modified for revaluation of certain categories of fixed assets and in accordance with the Charities Act, the Statement of Recommended Practice (SORP), "Accounting and Reporting by Charities Statement of Recommended Practice (revised 2005)" and applicable accounting standards. The requirements of the National Lottery etc Act 1993 have been followed for the treatment of hard and soft commitments, which is consistent with the above basis of preparation.

The statement of financial activities (SOFA) and balance sheet consolidate the financial statements of the Charity, including its Lottery distribution activities, and all its subsidiary undertakings (see note 14 for details of subsidiaries and associate or jointly controlled entities). The results of the subsidiaries are consolidated on a line by line basis within the SOFA. A separate Income and Expenditure account has not been presented for the Charity, as permitted by paragraph 397 of the SORP. However, a summary Operating Statement is included at note 23. The balance sheet and related notes show the assets and liabilities of the Group as well asthe Charity. Separate accounts are also prepared for the BFI's Lottery distribution activities as required under the National Lottery etc Act 1993 and these are attached to the consolidated accounts.

Going concern The accounts have been prepared on a going concern basis. After making enquiries, the Board of Governors has a reasonable expectation that the BFI has adequate resources to continue for at least the next 12 months following signature of the accounts provided that it receives ongoing funding and sales based on past experience. In the year to 31 March 2014 the BFI received £22,374,000 of revenue grant-in-aid from the Department of Culture, Media and Sport’s (DCMS) assessment ofits commitment to recognising the cultural impact of film, the BFI National Archive and the Nation’s heritage. This funding continues through to 2015-16 but in common with other government funded bodies we face further reductions in funding during the period 2014-16 on a like-for-like basis.

Since the BFI became the government's lead body for film in 2011, the BFI has actively engaged with the government in developing the strategy for film in the UK which will impact on future funding. The BFI is a Lottery distributor, with a Statutory right to receive a share of the National Lottery Distribution Funds (NLDF), and is considered by government to be a "Non Departmental Public Body", both of which give support to our future financial stability.

Much of the assets of the BFI are restricted and/or long term fixed assets and pressure therefore remains on the underlying Charity, especially with the prospect of further government funding cuts. Excluding the restricted activities, the BFI recorded a deficit (before other recognised gains/losses) in the year of £2.2m, albeit after non-cash transactions including depreciation of £4.3m and FRS17 net costs of £0.9m. The FRS17 pension liability has increased to £40,023,000 (2013: £37,414,000) contributing to negative unrestricted reserves of £7,974,000 (2013: £5,240,000). This is being addressed in the longer term with additional contributions being made to the London Pension Fund Authority, based on the triennial actuarial valuations, and these contributions are factored into our forward plans.

As at 31 March 2013, the latest actuarial valuation date, the deficit to be funded was £12,678,000 and this is being addressed over the next 14 years, subject to future triennial valuations. This is considerably less than the deficit in the accounts of £40,023,000 (2013: £37,414,000) under FRS17 and the governors are satisfied that this approach is appropriate.

At the year end, the BFI held total reserves of £30,698,000 (2013: £81,968,000) which included unrestricted cash balances of £4,978,000 (2013: £3,667,000) and free reserves of £1,621,000 (2013: £1,636,000) (Note 23). Much of the reduction in total reserves is a result of major long term Lottery awards which will be paid out over the next three years.

Charitable activities The BFI engages in a diverse range of activities in order to meet its objects, which are described in more detail in the Governors' Report. In the financial statements, the BFI categorises its activities across its three strategic priorities:

Education, Learning & Audiences - expanding education opportunities and boosting audience choice across the UK; Supporting British Film - investing in film development, production and skills; and Film Heritage - investing in preservation, interpretation and access.

Incoming resources All incoming resources are included in the SOFA when the Charity is legally entitled to the income, entitlement is virtually certain and the amount can be quantified with reasonable accuracy. The following specific policies apply to categories of income:

Income from charitable activities: includes a wide range of chargeable activities including sales of cinema tickets, DVDs, film and footage and sponsorship income.

Lottery proceeds are the BFI's share of Lottery income as notified to the BFI by the National Lottery Distribution Fund (NLDF).

Lottery recoupment income is income from film rights in excess of the original value of the right and is taken to the SOFA as film recoupment income and, if appropriate, through the fair value reserve.

Donated services and facilities: including gifts in kind, are included in income and expenditure at the value to the Charity where this can be quantified (see Note 6).

Grants and deferred income: whilst grants, including Grant-in-Aid, are typically accounted for in full upon receipt, where related to performance and specific deliverables, grants are accounted for as the Charity earns the right to consideration by its performance. Where income is received in advance of its recognition, it is deferred and included in creditors: amounts falling due within one year. Where entitlement occurs before income being received, the income is accrued. Capital grants are accounted for as income as soon as they are receivable. Grant-in-Aid refers to direct grants from the Department of Culture, Media and Sport for the general use of the BFI and also ring-fenced funding for other appropriate bodies delivering activities in accordance with the BFI's charitable objects.

Investment income is bank interest income on the BFI's cash holdings.

75 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

1. ACCOUNTING POLICIES (CONTINUED)

Resources expended All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category concerned. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with use of the resources (see Note 8). Costs of generating funds are fund-raising and publicity costs incurred in seeking voluntary contributions and do not include the cost of disseminating information in support of charitable activities. Governance costs comprise all costs identified as wholly or mainly attributable to ensuring the public accountability of the Charity and its compliance with regulation. These costs include external and internal audit and Governors' costs.

Grant Awards Grant expenditure is charged to the statement of financial activities in the year in which funded activities take place. Any amounts unpaid from grants at the year end are shown in the balance sheet as creditors. Grant commitments made in the year relating to future years’ activity are charged to the statement of financial activities, in accordance with the SORP.

The basis of the reporting of Lottery award commitments is laid out in the Accounts Direction and the National Lottery etc Act 1993, and align with the reporting requirements of the Charities SORP. Under these a distinction is made in respect of Lottery awards between ‘hard commitments’ and ‘soft commitments’. Where the BFI has made a firm offer of a grant, which, together with the relevant conditions, has been accepted by the recipient and the conditions of the grant have been fully met, the award is accounted for as a ‘hard commitment’. Where the BFI has agreed in principle to fund a scheme or project and made an offer, but the offer has not been accepted and the associated conditions precedent met, the award is accounted for as a ‘soft commitment’. Hard commitments are recognised in the financial statements. Soft commitments are not recognised in the financial statements but are disclosed by way of a note (see Note 22).

In 2013-14, in line with our 5 year Business Plan, Film Forever 2012-17, multi year lottery awards were made covering the four years to March 2017, including those awards to Into Film re our education strategy, Creative Skillset re Industry skills and training and Unlocking Film Heritage. In line with the National Lottery Act etc 1993 and BFI Lottery Accounts direction, which are consistent with the BFI's basis of preparation of accounts as outlined above, these have been accounted for on a commitment basis with the fully committed funds being taken to the Statement of Financial Activities in the year in which the award became a hard commitment.

Hard commitments payable within one year of the balance sheet date are recognised in the statement as current liabilities. Those payable more than one year from the balance sheet date are shown as commitments to filmmakers payable over more than one year, however such commitments are extremely unlikely in the usual course of business. Commitments for future years may be entered into, taking into account income forecasts provided by DCMS. These forecasts take a conservative view of future income and any such longer term commitments, which relate to future years, are not recognised in the accounts.

Awards made under the Lotteries Act Section 27 dispensation Using the power granted by the Section 27 of the National Lotteries Act etc 1993, the Secretary of State gave permission in 2012-13 for an award of £15,000,000 to the BFI in relation to Unlocking Film Heritage, the BFI's Archive Strategy as outlined in the Film Forever future plan, for both the national and regional moving image archives. The award was made in March 2013 and became a hard commitment during 2013-14. The award has been shown on the face of the SOFA as a transfer between funds, reflecting the movement from Lottery Restricted to Other Restricted reserves.

Olympic deduction: In February 2008, a Statutory Instrument (SI 2008 No. 255, The Payments into the OLDF etc. Order 2008) was passed which allowed for the transfer of up to £1,085m from the NLDF to the Olympic Lottery Distribution Fund (OLDF) in order to meet some of the costs of holding the 2012 Olympic and Paralympic Games. The amount in the prior year represented the BFI's final share of Lottery proceeds transferred to the OLDF.

Charitable expenditure on collections The BFI has built the National Archive since its establishment in 1933, consisting of film and other related materials dating back to the 19th century. The BFI develops, cares for and interprets a collection that illustrates the art, history and impact of film, to be held in perpetuity for the public, for their use and for use by the BFI in pursuit of its objectives. The collection is one of the largest and most diverse collections in the world. It includes feature films, documentary and factual films, television programmes, artists film, photographic stills, posters, books and other related materials, held primarily for use in the BFI's activities and charitable objectives, as described in more detail in the Annual Report and below. The Collection Policy was most recently updated in November 2011 and can be found at www.bfi.org.uk. It documents our procedures for Acquisition and Disposal, Documentation, Conservation and Access and describes our role in a national network of organisations that collect or provide access to film.

For the most part this collection has been acquired by donation, often with restricted usage rights, and as a result there is little in the way of purchase cost. There is also a lack of comparable market values, compounded by the diverse nature of the objects and the volume of the items held. In the opinion of the Governors, reliable information on cost or value is not available for the BFI's collection.

In the Governors' opinion, conventional valuation approaches lack sufficient reliability and any valuation is likely to incur significant costs that are likely to be onerous. Even if valuations could be obtained this would not be commensurate with any benefits to the BFI's management, curatorial staff, the public, or other users of the financial statements. For this reason the collections, large proportions of which were gifted to the BFI at nil cost and are incomparable in nature, are not recognised in the BFI's balance sheet.

All expenditure on acquiring, preserving and improving the collection is included in charitable expenditure in the year incurred. In the main, this expenditure is of a curatorial or restoration nature and the Governors are of the opinion that any value attributable to heritage assets or fixed assets would not be material. The collections also comprise donated materials that are not subject to formal valuation.

Heritage assets Much of the BFI's collection is used, or expected to be used in the future, in its charitable activities. To the extent that the collection comprises Heritage Assets, there is an absence of reliable cost information, a diverse range of assets held, a lack of comparable market values and a complex mixture of intellectual property rights associated with the assets. As a result the Governors are of the opinion that valuation information cannot be obtained at a cost commensurate with the benefits to users of the financial statements, so a valuation approach is not practicable. Therefore the BFI has adopted a non-recognition approach.

76 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

1. ACCOUNTING POLICIES (CONTINUED)

Tangible fixed assets, depreciation and impairment Expenditure on tangible fixed assets costing £1,000 or more and with a useful economic life of at least 3 years is capitalised and included at cost. Leasehold land and buildings, together with some associated plant and fixtures, are included at a valuation based on either Existing Use Value or Depreciated Replacement Cost as appropriate.

The BFI's leasehold properties BFI Southbank and BFI London IMAX were revalued as at 31 March 2012 by appropriately qualified valuers, Drivers Jonas Deloitte, in accordance with FRS 15: Fixed Assets, using Existing Use and Depreciated Replacement Cost methods respectively. The values as at 31 March 2014 and 2013 have been estimated using appropriate indexation, resulting in a net increase in value in the year of £2.2m (2013: decrease of £0.9m). The same indexation is applied to acquisitions, starting in the year following the acquisition.

Revaluation is not applied to those classes of asset which are made up of low value and/or short useful economic life assets or where the historical cost is considered a reasonable approximation of fair value.

Depreciation is provided on all tangible fixed assets to write off the cost less estimated residual values over their expected useful economic lives. It is calculated on a straight line basis at the following rates from the month of acquisition to the month prior to disposal:

Long leasehold property 1-7% per annum Short leasehold property 10% per annum Plant & fixtures valued with leasehold property 10-20% per annum Computer and other IT equipment 10-33% per annum Furniture, fixtures and fittings 10-33% per annum Plant and machinery 10-33% per annum Assets in the course of construction Depreciation commences upon completion of construction

The carrying value of fixed assets is reviewed at least annually. Where the carrying value is considered to be greater than the value of the asset to the activities of the Charity, an impairment charge will be made in the year to reflect that loss in value.

Intangible fixed assets Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the carrying value/fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill on acquisition of subsidiaries is separately disclosed. Goodwill is recognised as an asset and reviewed for impairment annually or on such other occasions that events or changes in circumstances indicate that it might be impaired. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing. Purchased goodwill arising on consolidation is amortised over the period of its expected useful economic life. This is considered to be a period of ten years from the date of acquisition.

Investments Investments in subsidiaries, associate or jointly controlled entities are stated at cost less provision for impairment.

Financial instruments The principal financial instruments are cash and holdings in the NLDF and film rights, from the adoption of FRS 25 (Financial Instruments: Presentation), FRS 26 (Financial Instruments: Recognition and Measurement) and FRS 29 (Financial Instruments: Disclosures), fall within the definition of Financial Instruments.

Other financial instruments include debtors and creditors that arise directly from Lottery and non-Lottery operations. The main risks arising from the financial instruments are interest rate risk, foreign currency risk and other price risk.

Film rights Film rights represent loans paid and advances paid and payable to filmmakers. All advances to filmmakers are repayable under certain conditions. Where a feature film made with the assistance of the BFI is successfully released, the BFI is entitled to participate in revenues generated by that success. This can lead to repayment of the investment in full, together with a share of the profits generated by the film.

Film rights meet the definition of "Available for sale financial assets" under Financial Reporting Standards (FRS25, FRS26 and FRS29) and are therefore shown in the financial statements at fair value.

When an advance is made (satisfying the definition of hard commitments above) it is taken to the balance sheet initially at the full value of the award. This valuation is impaired to the extent that full repayment of an advance, through actual receipts and the value of future estimated receipts, is considered doubtful. The valuation is reviewed on a rolling basis to ensure that fair value is maintained.

Movements in impairments shown in the SOFA reflect the net effect of increases and decreases in impairments against film rights in the year. Any impairment may be reversed in part or in full if the valuation understates the fair value of the film right. Advances for development and short film awards are fully impaired in the year of award, unless there is a reasonable expectation of repayment.

If the valuation of the film right is in excess of the amount of the award investment from estimated recoupment over the next three financial years, the key earning period for the film, then this is taken to a fair value reserve, and released to income as the recoupment is received. In the context of the life of a film, and its' distribution cycle, three years is felt to be a reasonable period over which a meaningful forecast can be taken.

Film recoupment income Income received from a film right is offset against the value of the right on the balance sheet. Income in excess of the original value of the right is takentotheSOFA as film recoupment income and if appropriate through the fair value reserve.

77 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

1. ACCOUNTING POLICIES (CONTINUED)

National Lottery Distribution Fund Balances held in the National Lottery Distribution Fund (NLDF) remain under the stewardship of the Secretary of State for Culture, Media and Sport. The share of these balances attributable to the BFI is as shown in the financial statements at an estimate of market value and, at the statement of financial position date, has been certified by the Secretary of State for Culture, Media and Sport as being available for distribution by the BFI in respect of current and future commitments.

The share of proceeds and investment returns attributed to the BFI has been treated as income within these financial statements.

Stocks and work in progress Raw materials, stocks and work in progress are valued at the lower of cost and net realisable value. Stocks consist of goods held for resale and work in progress consists of expenditure on DVD and Blu-Ray development carried forward and written off over the expected commercial life of the individual titles.

Pension costs For defined benefit pension schemes the amounts charged in resources expended are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the SOFA if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a net amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised in the Other recognised (losses) / gains.

Defined benefit schemes are funded, with the assets of the scheme held separately from those of the Charity, in separate trustee-administered funds which are part of the London Pension Fund Authority (LPFA). The LPFA is a local government pension scheme and the BFI is an Admitted Body member. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high-quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained every three years and are updated at each balance sheet date. The resulting defined benefit asset or liability, net of the related deferred tax, is presented separately after other net assets on the face of the balance sheet.

For defined contribution schemes, the amount charged to the SOFA in respect of pension costs and other post-retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

Operating and finance lease transactions Payments made under operating leases are charged to the SOFA on a straight line basis over the lease term. There were no finance leases.

Fund accounting Unrestricted funds are funds available for use at the discretion of the Governors in the furtherance of the general objectives of the BFI and which are not subject to externally imposed restrictions.

Restricted funds are funds to be used in accordance with specific restrictions imposed by donors. The aim and use of each restricted fund is set out in the notes to the accounts. Where the conditions have been met, for example to acquire fixed assets without ongoing restrictions, the related reserves are transferred to unrestricted reserves on the face of the Statement of Financial Activities.

Foreign currencies Transactions in foreign currencies are recorded at the rate ruling on the date of the transaction. Monetary assets and liabilities are retranslated at the rate of exchange ruling at the balance sheet date and gains and losses charged/credited to the Statement of Financial Activities.

Taxation The BFI is a registered charity and as such its income and gains falling within s.505 ICTA 88 or s.256 TCGA 92 are exempt from corporation tax to the extent that they are applied to its charitable objectives. Its subsidiaries have not incurred a tax charge as they either gift all profits to the BFI or have utilised available tax losses.

Irrecoverable VAT is charged to the cost category to which it relates.

Estimates and judgements Estimates and judgements have been used in the production of these accounts, notably with regard to the valuation of Film Rights as at the year end, whichareonthe basis of a review of all available information with regard to the balance sheet date, including third party evidence and experienced judgement. Further information on this can be found in note 15: Film Rights

2. CASH FLOW STATEMENT

Reconciliation of changes in resources to net inflow from operating activities: 2014 2013 £'000 £'000

Net (outgoing) / incoming resources before other recognised gains and losses (50,071) 9,984 Less acquisitions and disposals (498) - Less interest receivable (13) (18) Depreciation 4,329 4,156 Loss on fixed asset disposals 46 136 Amortisation of goodwill 158 157 (Increase) / decrease in film rights (851) 3,099 Decrease in stocks 190 153 Decrease / (increase) in debtors 2,536 (1,834) Increase in creditors due within one year 18,229 306 Increase in creditors due after one year 28,250 - Increase in defined benefit pension scheme liability 1,096 824 Net cash inflow from operating activities 3,401 16,963

78 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

3. ANALYSIS OF CASH FLOWS 2014 2013 £'000 £'000 Return on investments and servicing of finance Increase in National Lottery Distribution Fund (2,976) (13,021) Interest receivable 13 18 Net cash inflow from return on investments and servicing of finance (2,963) (13,003)

2014 2013 £'000 £'000 Capital expenditure and financial investment Purchase of tangible fixed assets (2,457) (3,351) Disposal of tangible fixed assets 44 Net cash outflow from capital expenditure and financial investment (2,453) (3,347)

2014 2013 £'000 £'000 Acquisitions and disposals Assets transferred from Creative England 576 - Liabilities transferred from Creative England (78) - Net assets transferred from Creative England (see Note 5 d)) 498 - a) Reconciliation of net cash flow to movement in net funds 2014 2013 £'000 £'000

(Decrease) / increase in cash in the year (1,517) 613 Net funds at 1 April 2013 9,795 9,182 Net funds at 31 March 2014 8,278 9,795 b) Analysis of net funds 1 April 31 March 2013 Cash flow 2014 £'000 £'000 £'000

Cash at bank and in hand 9,795 (1,517) 8,278

All cash at bank is held with UK commercial banks.

4. INCOMING RESOURCES FROM CHARITABLE ACTIVITIES (EARNED INCOME) 2014 2013 £'000 £'000

Education, Learning & Audiences 15,703 17,458 Film Heritage 960 520

16,663 17,978

Revenues relating to Education, Learning & Audiences include those relating to British Film Institute (Big Screen) Ltd operating the BFI London IMAX cinema of £3,258,000 (2013: £4,419,000), with the reduction arising from the outsourcing of operations to Odeon Ltd, following which income has been reported on a net basis. The net profits gift aided to the BFI were up to £2,656,000 (2013: £2,524,000). Most income streams were maintained but there was a reduction in Sponsorship income at £963,000 (2013: 1,339,000) and British Screen Group income at £333,000 (2013: £433,000).

The 2013 comparatives have been reclassified to be on a consistent basis

79 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

5. OTHER SIGNIFICANT TRANSACTIONS a) Grant-in-Aid - DCMS DCMS has been the BFI's largest source of funding. They have therefore been included in this category in order to provide supplementary disclosure; the prior year comparatives have been reclassified to be on a consistent basis

Income from DCMS 2014 2013 £'000 £'000

Revenue Grant in Aid funding 22,374 26,962

Capital Grant in Aid funding 1,927 1,936

Revenue grant funding in the previous year included one-off funding of £7.75m which was matched by charitable expenditure.

Capital grant funding was also boosted by one off funding of £0.9m (2013: £1.0m).

The balances carried forward at the end of the year are £Nil (2013: £Nil) for unrestricted and restricted funds.

Grant-in-Aid is spent in accordance with the funding agreement between the BFI and DCMS. The common objectives are to: extend & improve access to film culture, serving the diverse geographical needs of the UK's nations and regions and recognising the differing needs of rural, suburban and metropolitan locations; improve education about the moving image; support & encourage cultural diversity and social inclusiveness; and promote film activity in the nations and regions, and ensure that national and regional bodies work in concert towards common goals. b) Governors The Governors neither received nor waived any emoluments during the year (2013: £Nil). Governors expenses amounted to £769 in the year (2013: £937). This primarily represents reimbursed travelling expenses for one (2013: five) governor(s). No payments were made in the year for services (2013: £Nil).

There were no material related party transactions involving Governors in their personal or business capacities other than Lottery and Grant-in-Aid awards disclosed in Note 31.

The Charity has purchased insurance to indemnify the Governors against the consequences of any neglect or default on their part. The cost amounted to £12,522 (2013: £15,341), which includes cover for Governors and Officers of the Charity but also covers management liability, crime and employment practices liability for the organisation as a whole. c) BFI Trust BFI Trust is not a related party, it is an independent registered charity with objectives consistent with those of the BFI. It has therefore been included in this category in order to provide supplementary disclosure. During the year, the BFI had the following material transactions with BFI Trust:

2014 2013 £'000 £'000 Incoming resources from generated funds - Other grants, legacies and donations includes: Grants receivable from BFI Trust 950 4,000

Resources expended - Charitable activities includes: Rental of leasehold premises (1,515) (1,515) Grants awarded to BFI Trust - (7,500) d) Transfer of activities from Creative England

On 1 April 2013, the BFI took over responsibility for a range of activities previously undertaken by Creative England relating to Audiences. As a result lottery assets totalling £576,000 were transferred to the BFI along with 5 staff who transferred under Transfer of Undertakings (Protection of Employment) Regulations (TUPE). The lottery assets and liabilities transferred are summarised below:

Creative England Assets and Liabilities transferred 1 April 2013 As at 1 April 2013 £'000

Cash at bank and in hand 576 Creditors amounts falling due within one year (78) Net assets 498

In addition, soft commitments of £498,000 outstanding at 1 April 2013 were also transferred across. £439,000 of these hardened in the year to 31 March 2014, with the balance remaining as soft commitments at that date.

6. DONATED SERVICES AND FACILITIES 2014 2013 £'000 £'000

Publicity and advertising 694 473 Buildings and facilities 206 164 Services and equipment hire 404 277 Food and drink 71 71 Other goods 66 78 1,441 1,063 80 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

7. INVESTMENT INCOME 2014 2013 £'000 £'000

Bank interest receivable 13 18

8. TOTAL RESOURCES EXPENDED Direct Allocated Allocated 2014 2013 Costs Pension charges Support costs Total Total £'000 £'000 £'000 £'000 £'000

Education, Learning & Audiences (63,516) (1,797) (2,505) (67,818) (39,733) Supporting British Film (58,459) (734) (48) (59,241) (42,113) Film Heritage (11,756) (1,530) (1,434) (14,720) (13,225) Costs of generating voluntary income (1,483) - - (1,483) (1,206) Governance costs (403) - - (403) (370) Total resources expended, before Olympic deduction and restructuring costs (135,617) (4,061) (3,987) (143,665) (96,647)

Support services, including staff and other costs, which are allocated across the activities of the Charity, are shown in the allocated support costs column. The basis of allocation is as follows: 2014 2013 Nature of cost Allocation basis £'000 £'000 IT and finance support Combination of head count and departmental spend (1,970) (1,761) Human resources Head count (415) (349) Premises and utilities Combination of floor area and head count (703) (720) Communication and marketing Direct spend and percentage of income generated (533) (363) Other overheads Combination of time and departmental spend (366) (313) Total support (3,987) (3,506)

Pension cost (Note 10) Salary costs (4,061) (3,281)

2014 2013 £'000 £'000 Governance costs: Audit fees: Charity (excluding Lottery) (100) (80) Audit fees: Lottery (40) (40) Audit: subsidiaries (British Screen group of companies) (13) (13) Audit: subsidiary (British Film Institute (Big Screen) Limited) (9) (9) Audit of UK Media Desk grant claim (3) (3) Trustees costs (24) (50) Corporate planning (214) (175) Total governance (403) (370)

Restructuring costs 110 (602)

The restructuring credit of £0.1m (2013: £0.6m) relates primarily to release of bad debt provision in the year. Prior year costs included leasehold improvements on the offices (£0.1m) and a share of those costs otherwise attributable to the changes arising from the new role (£0.5m).

Net resources expended before transfers are stated after charging: 2014 2013 £'000 £'000

Auditors' remuneration (analysed above) (165) (145)

Auditors' remuneration includes additional fees of £20,000 for the National Audit Office relating to the prior year audit (2013: £19,600).

Foreign exchange gains / (losses) - 123 Depreciation (4,329) (4,156) Loss on disposal of fixed assets (46) - Amortisation of goodwill (158) (157)

2014 2013 £'000 £'000 Charges for operating leases: Land and buildings (1,515) (1,515) Plant & machinery (34) (149)

2014 2013 £'000 £'000

Film rights impairments (22,581) (22,277)

The carrying value of the film rights reflects the extent to which full repayment of an advance, through actual receipts and the value of future estimated receipts, is considered doubtful. The valuation is reviewed on a rolling basis to ensure that fair value is maintained.

81 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

9. STAFF COSTS 2014 2013 £'000 £'000 Staff costs consists of: Wages & salaries (18,255) (17,115) Social security costs (1,502) (1,399) Pension costs (see Note 10) (3,121) (2,314) (22,878) (20,828)

Staff costs capitalised and not included above (155) (137)

The average number of full-time equivalent employees of the BFI during the year was: 2014 2013 Number Number

Costs of generating voluntary income 19 17 Education, Learning & Audiences 220 234 Supporting British Film 49 39 Film Heritage 176 152 Governance costs 22 466 444

Higher paid employees Age at 31 March 2014 2014 2013 £'000 £'000 Chief Executive A. Nevill 57 (140) (145)

Including bonuses totalling £Nil (2013: £6,857). Employer's pension contributions for the year amounted to £29,098 (2013: £28,810).

2014 2013 Number Number Other Executive Team Members

£130,000 - £139,999 31 £120,000 - £129,999 -- £110,000 - £119,999 32 £100,000 - £109,999 -1 £90,000 - £99,999 -1 £80,000 - £89,999 21 £70,000 - £79,999 -- £60,000 - £69,999 -1

Cost £930,000 £849,000

The 2013 comparatives above have been restated to exclude pensions

Other senior staff

£80,000 - £89,999 78 £70,000 - £79,999 17 10 £60,000 - £69,999 14 18

Cost £2,748,000 £2,563,000

Total Cost £3,678,000 £3,412,000

Included in the above are 45 (2013: 40) staff who are ordinary members of the LPFA pension scheme. The amount of employer's pension contributions attributable to these staff amounted to £693,000 (2013: £601,000).

Pension payments are to the LPFA scheme of which the BFI is a member. Pension benefits accrue as a result of the period of employment at the BFI and are payable on retirement. The scheme also provides for lump sum payments on retirement of three times final pension. In addition, pension contributions were paid during the year in respect of the defined contribution scheme for BFI (Big Screen) Limited employees and private pension schemes for two members of the Executive team.

A number of Executive staff and other employees have interests in award applications which have been fully disclosed in note 31.

82 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

10. PENSIONS

The BFI is an admitted body to the LPFA, which provides a defined benefit pension scheme for the salaried employees of the Charity. It is a funded scheme and the assets are administered by trustees and are independent of the BFI. The related costs are assessed in accordance with the advice of professionally qualified actuaries. From 1 January 2014 the BFI also operates a defined contribution pension scheme which is available for all employees not already in the defined benefit scheme. A defined contribution pension scheme is available for employees of the subsidiary company, British Film Institute (Big Screen) Limited.

The BFI has accounted in full for pensions' benefits in the year ended 31 March 2014 under the requirements of FRS17. Therefore, as at 31 March 2014, a pension liability of £40,023,000 (2013: £37,414,000) is included in the BFI balance sheet.

In addition to the amounts payable for current members of the pension scheme, within this scheme the BFI has an unfunded liability to pay pensions to 44 (2013: 46) former employees and their spouses. The total actuarial valuation for this liability at 31 March 2014 is included in the pension provision.

For FRS17 disclosure, the full valuation at 31 March 2013 has been updated by the actuaries, Barnett Waddingham, to assess the liabilities of the schemeasat31 March 2014.

The most significant actuarial assumptions in this recent valuation are: 2014 2013 %% Per annum Per annum Rate of increase in prices RPI 3.6 3.4 Rate of increase in prices CPI 2.8 2.6 Rate of increase in salaries 4.1 3.9 Rate of increase in pensions in payment 2.8 2.6 Expected return on assets 6.4 5.6 Discount rate 4.5 4.5

Return on scheme investment: Equities 6.9 6.0 LDI/Cash flow matching 3.6 n/a Target return funds 6.3 4.6 Alternative assets n/a 5.0 Infrastructure 6.5 n/a Commodities 6.3 n/a Properties 5.7 n/a Cash 3.4 0.5

The BFI share of the net pension liability as at 31 March 2014 is: 2014 2013 2012 2011 2010 £'000 £'000 £'000 £'000 £'000

Fair value of employer assets 71,081 67,259 58,009 48,584 44,610 Present value of scheme liabilities (108,676) (102,200) (92,279) (68,328) (82,071) Net underfunding in funded plans (37,595) (34,941) (34,270) (19,744) (37,461) Present value of unfunded liabilities (2,428) (2,473) (2,260) (2,315) (2,326) Net pension deficit (40,023) (37,414) (36,530) (22,059) (39,787)

Assets - Split of Investments by Category 2014 Asset 2013 Asset Assets whole fund £'000 Distribution £'000 Distribution %% Equities 37,674 53% 49,099 73% LDI/Cash flow matching 4,265 6% - Target return funds 21,324 30% 6,726 10% Alternative assets - 0% 10,089 15% Infrastructure 2,843 4% - Commodities 711 1% - Properties 2,132 3% - Cash 2,132 3% 1,345 2% Total 71,081 100% 67,259 100%

Analysis of the amount chargeable to resources expended under FRS17 2014 2013 £'000 £'000

Current service cost (3,121) (2,314) Losses on curtailments and settlements (65) (56) Total operating charge (3,186) (2,370)

Amount credited/(debited) to other finance charges under FRS17 2014 2013 £'000 £'000

Expected return on pension scheme assets 3,793 3,456 Interest on pension scheme liabilities (4,668) (4,367) Net costs (875) (911)

Net revenue account cost (4,061) (3,281)

83 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

10. PENSIONS (CONTINUED)

Analysis of amount recognised in the SOFA 2014 2013 £'000 £'000

Actual return less expected return on pension scheme assets (1,470) 4,866 Experience gains arising on the scheme liabilities 4,075 (239) Changes in assumptions underlying the present value of the scheme liabilities (4,118) (4,687) Actuarial loss recognised in SOFA (1,513) (60)

Reconciliation of defined benefit obligation 2014 2013 £'000 £'000

Defined benefit obligation in scheme at beginning of year (104,673) (94,539) Movement in year: Current service cost (3,121) (2,314) Interest cost (4,668) (4,367) Contributions by members (939) (768) Unfunded benefits paid 162 163 Impact of settlements and curtailments (65) (56) Benefits paid 2,801 2,134 Actuarial (losses)/gains (601) (4,926) Deficit in scheme at end of the year (111,104) (104,673)

Reconciliation of fair value of employer assets 2014 2013 £'000 £'000

Fair value of employer assets in scheme at beginning of year 67,259 58,009 Movement in year: Expected return on assets 3,793 3,456 Contributions by members 939 768 Contributions by the employer, including in respect of unfunded benefits 2,965 2,457 Actuarial (losses)/gains (912) 4,866 Benefits paid, including unfunded benefits (2,963) (2,297) Fair value of employer assets in scheme at end of year 71,081 67,259

History of experience gains and losses 2014 2013 2012 2011 2010 £'000 £'000 £'000 £'000 £'000

Fair value of employer assets 71,081 67,259 58,009 48,584 54,902 Present value of defined benefit obligation (111,104) (104,673) (94,539) (70,643) (104,654) Deficit (40,023) (37,414) (36,530) (22,059) (49,752)

Experience gains / (losses) on assets (912) 4,866 (3,272) 143 7,947 Experience (losses) / gains on liabilities 3,518 (239) 130 13,980 618

The sensitivity analysis on the major assumptions in the above is: £'000 £'000 £'000

Adjustment to discount rate +0.1% 0.0% -0.1% Present value of total obligation 109,059 111,104 113,189 Projected service cost 2,980 3,049 3,119

Adjustment to long term salary increase +0.1% 0.0% -0.1% Present value of total obligation 111,378 111,104 110,832 Projected service cost 3,049 3,049 3,049

Adjustment to pension increases and deferred valuation +0.1% 0.0% -0.1% Present value of total obligation 112,948 111,104 109,296 Projected service cost 3,120 3,049 2,979

Adjustment to mortality age rating assumption +0.1% 0.0% -0.1% Present value of total obligation 107,554 111,104 114,654 Projected service cost 2,955 3,049 3,142

84 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

11. TANGIBLE FIXED ASSETS (Group and Charity) Plant & fixtures Short & long valued with Computer Furniture Assets in leasehold leasehold and other IT fixtures and Plant and the course of property property equipment fittings machinery construction Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Cost or valuation At 1 April 2013 31,343 10,063 4,724 4,104 10,384 - 60,618 Additions - - 556 109 471 1,320 2,456 Disposals - - (7) (71) (78) - (156) Revaluation 1,575 700 - - - - 2,275 At 31 March 2014 32,918 10,763 5,273 4,142 10,777 1,320 65,193

Depreciation At 1 April 2013 (992) (1,312) (2,592) (1,539) (5,318) - (11,753) Charge for the year (1,072) (1,371) (850) (571) (465) - (4,329) Disposals - - 4 40 62 - 106 Revaluation (34) (59) - - - - (93) At 31 March 2014 (2,098) (2,742) (3,438) (2,070) (5,721) - (16,069)

Net Book Value At 31 March 2014 30,820 8,021 1,835 2,072 5,056 1,320 49,124

At 1 April 2013 30,351 8,751 2,132 2,565 5,066 - 48,865

The BFI's leasehold properties BFI Southbank and BFI London IMAX, including associated plant & fixtures, were revalued as at 31 March 2012 by appropriately qualified valuers, Drivers Jonas Deloitte, in accordance with FRS 15: Fixed Assets, using Existing Use and Depreciated Replacement Cost methods respectively. The values as at 31 March 2014 and 2013 have been estimated using appropriate indexation, resulting in a net increase in value in the year of £2.2m (2013: decrease of £0.9m). Other classes of assets have not been revalued, as they are made up of low value and/or short useful economic life assets or where the historical cost is considered a reasonable approximation of fair value.

Included within long leasehold property is property with a depreciated net book value of £17.8m (2013: £17.6m) relating to the BFI IMAX cinema building. Arts Council England has a legal charge on the property to the value of £15,000,000 in respect of original funding for the building costs. In the event that the BFI weretodisposeof the building prior to 2018 there may be a requirement to repay some or all of the charge.

12. HERITAGE ASSETS (Group and Charity)

The BFI has built the National Archive since its establishment in 1933, consisting of film and other related materials dating back to the 19th century. The BFI develops, cares for and interprets a collection that illustrates the art, history and impact of film, to be held in perpetuity for the public, for their use and for use by the BFI in pursuit of its objectives. The collection is one of the largest and most diverse collections in the world. It includes feature films, documentary and factual films, television programmes, artists film, photographic stills, posters, books and other related materials, held primarily for use in the BFI's activities and charitable objectives, as described in more detail in the Annual Report and below. The Collection Policy was most recently updated in November 2011 and can be found at www.bfi.org.uk. It documents our procedures for Acquisition and Disposal, Documentation, Conservation and Access and describes our role in a national network of organisations that collect or provide access to film.

In line with the accounting policy, Heritage Assets are not recognised on the balance sheet as there is an absence of reliable cost information and a valuation approach is not practicable. In order to give an indication of the physical size and diversity of the collections, the main elements are summarised below.

Fiction film 60,000 titles. The collection includes the original camera negatives of some of the most important feature films in British film history. The BFI also looks after an extensive international collection of films.

Non fiction film 120,000 titles including documentaries, newsreels, government films, sponsored films, advertisements and home movies. It is the world’s most important collection of documentary films.

Television Around 750,000 television titles including material recorded off-air, as it was seen by the viewer, as well as production and transmission material. The collection includes all BBC output since 1980 including unique live broadcasts and extensive samples of commercial terrestrial television, with emphasis on keyBritish productions. As well as the recorded material, significant collections of transmitted programming donated by broadcasters include the Rediffusion Collection (the earliest ITV contractor) and material preserved on analogue videotape from the 1960s and 1970s donated by the BBC and ITV. The collection also includes recordings of the proceedings of the two houses of Parliament and select committees (approximately 60,000 hours).

Library The library holds some 45,000 books including major film, TV and video directories and yearbooks from around the world, all major film and TV festival catalogues, programmes and brochures and all UK based festival catalogues. It also includes major film catalogues from around the world, annual reports from relevant companies and bodies; official publications including copyright, arts policy, and government reports; biographies and autobiographies of UK film/TV personalities.

One of the greatest strengths of the library is its near comprehensive collections of UK trade and academic journals (5,000 titles; many hundreds of thousands of issues). An extensive collection of newspaper cuttings, publicity and press material are also held as are brochures, leaflets, prospectuses etc. describing the work of organisations that are relevant to film and television.

Special collections 30,000 unpublished scripts, from first drafts to release scripts, relating primarily to British film and TV titles. 30,000 press books, 15,000 film posters and 2,000 items of cinema ephemera such as programmes, tickets, autographed letters, promotional material and personal memorabilia. 600 collections of personal and company papers reflecting the history of British film and television production from the earliest days to the present time. Approximately 1 million still images from or related to film and TV, including publicity material, production shots, and portraits. Other items include: 3,000 production and costume designs; 3,000 animation cells including artwork by leading animators; and extensive audio collections including oral history recordings and interviews with many key industry figures. 85 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

13. INTANGIBLE FIXED ASSETS (Group)

Goodwill Group £'000 Goodwill on Acquisition At 1 April 2013 and 31 March 2014 1,574

Goodwill Amortisation At 1 April 2013 (275) Amortisation in the year (158) At 31 March 2014 (433)

Net Book Value At 31 March 2014 1,141

At 1 April 2013 1,299

Goodwill arises on consolidation of British Screen Finance Limited (BSF) and its subsidiary companies, which were acquired on 29 June 2011, and is being amortised over ten years on a straight line basis.

14. INVESTMENTS (Charity) British Screen BFI Big Connoisseur 2014 2013 Finance Group Screen Video Total Total £'000 £'000 £'000 £'000 £'000 Trading Account Income 333 3,255 - 3,588 4,880 Expenditure 171 (602) - (431) (2,389) Net operating profit 504 2,653 - 3,157 2,491

Interest receivable and similar income - 3 - 3 6 Surplus gift aided to the BFI (504) (2,656) - (3,160) (2,525) Net profit - - - - (28)

Balance Sheet Debtors 72 1,102 93 1,267 1,372 Cash at bank and in hand 1,783 1,210 - 2,993 2,785 Current liabilities (695) (2,312) - (3,007) (3,124) Total (BFI interest) 1,160 - 93 1,253 1,033

The BFI holds/held 100% of the issued share capital of the following undertakings, which are registered in England and Wales:

British Screen Finance Limited (BSF) BFI (Big Screen) Limited (operates the theatrical and commercial activities of the BFI IMAX) Connoisseur Video Limited (DVD publishing overseas - dormant) Project Rosebud Limited (e-commerce development - dormant with nil assets and investment value) BFI Findanyfilm Limited (website connecting audiences with film experiences) - sold to Industry Trust on 20 September 2012.

BSF, in addition, holds the following investments: Ordinary shares Holding of £1 each Subsidiary undertakings National Film Finance Consortium Limited (NFFC) 100 100% European Co-Production Fund Limited (ECF) 2 100% British Screen Rights Limited (BSR) 2 100% The Greenlight Fund Limited (GLF) 2 100%

Associated undertakings British Film-Makers Limited (BFM) 50 50%

NFFC is a dormant company. ECF was a company that made loans to films produced by European co-producers. BSR acquired and sold rights in feature films. GLF managed the investment of some National Lottery proceeds into feature films on behalf of the Arts Council of England and is now dormant. BFM collects and distributes film revenues on behalf of BSF and third parties. Its results are not material to the Group. All group companies are registered in England and Wales.

Trading subsidiaries are involved in activities wholly consistent with the BFI's charitable aims and objectives and remit taxable profits to the BFI under Gift Aid. Their income and expenditure are consolidated into the Group accounts.

The investments held by the Charity are summarised as follows: 2014 £'000 Cost At 1 April 2013 and 31 March 2014 2,450

Impairment At 1 April 2013 and 31 March 2014 (57)

Net Book Value At 1 April 2013 and 31 March 2014 2,393

86 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

15. FILM RIGHTS (Group and Charity) 2014 2013 £'000 £'000

At 1 April 2013 16,375 21,161 Advances 27,208 25,933 Repayments (3,725) (6,233) Decommitments (51) (522) Fair value adjustments in the year (1,868) (1,687) Impairments written back 1,781 3,822 Impairments (24,362) (26,099) At 31 March 2014 15,358 16,375

Income received on titles where the initial investment has been recovered is taken into the statement of financial activities 2,214 2,342

Repayment of outstanding film rights is dependent upon a number of factors, including the performance of the films at the box office and in ancillary markets. For these reasons it is not possible to state when the loans will be repaid.

The fair valuation adjustment relates to future income anticipated on those projects where the original investment has already been fully recouped. Whilst based on best information available at the statement of financial position date there is inevitable uncertainty in estimating these future income flows. The £1.9m (2013: £1.7m) decrease in fair value in the year was in part due to recoupment received relating to The King's Speech previously anticipated in this reserve.

Schedule 1 of the Lottery financial statements gives a project by project breakdown in the movement of the film rights.

Under Financial Reporting Standards relating to Financial Instruments (FRS25, FRS26 and FRS29) film rights fall within the definition of financial instruments. Within that, they meet the definition of ‘Available for sale financial assets’ and are shown in the balance sheet at fair value.

The valuation of film rights is inherently uncertain, being on informed expectation of future receipts and is under constant review over the life of a project, subject to its actual or anticipated success or otherwise. Many of the factors affecting the valuation will only occur over the passage of time. Should a project over-perform against expectations, once the full investment has been recouped, the film right is increased by a fair valuation based on future years anticipated revenues. However should a film be considered to be likely to under-perform against the original estimation, the impairment against it will be subsequently increased.

It is always more likely that a film right will have an increased impairment over time, as more factual evidence comes to light both as to the project itself and its actual commercial performance.

In 2011-12 the largest increase in provisions relates to the writing off of the remaining rights valuation on Sunshine (£1.9m). Notes On A Scandal (£0.6m) and Wuthering Heights (£0.3m) and an additional provision with regard to Attack The Block. The fair value gains reflect the ongoing commercial success of The King's Speech and anticipated future revenues from this.

In 2012-13 the largest increase in provisions related to writing off the remaining rights valuations on Great Expectations (£0.6m), Seven Psychopaths (£0.6m) and Streetdance Encore (£0.5m). Overall the fair value reserve has fallen by £1.7m due to the recoupment of funds in relation to The King's Speech previously anticipated in this reserve.

In 2013-14 the levels of commitment remained broadly consistent with those of the prior year, in line with the Film Forever business plan. New projects with titles taken to film rights include Bill, The Riot Club (aka Posh), Sunset Song and Suffragette (aka The Fury). The largest increase in provisions related to the write off of right valuations re Under the Skin (£0.9m), Bill (£0.8m) and Jimmy's Hall (£0.6m). Overall the fair value reserve has fallen by £1.9m due in part to the recoupment of funds in relation to The King's Speech previously anticipated in this reserve.

16. NATIONAL LOTTERY DISTRIBUTION FUND (Group and Charity)

The movement in balances held at the NLDF is: 2014 2013 £'000 £'000

Balance at 1 April 52,841 39,820 Income received from the Lottery receipts 44,891 52,343 Investment income earned on NLDF balances 210 280 45,101 52,623 Transfer to the Olympic Lottery Distribution Fund (OLDF) - (2,732) Available for distribution 97,942 89,711 Cash drawn down (42,125) (36,870) Balance at 31 March 55,817 52,841

The accounts for 2012-13 were prepared using an interim certificate issued by DCMS. Subsequent information was made available by DCMS, after the date of signature of the accounts, which would have revised this estimate of the balance to £52.06m. The difference between the estimated valuations as at 31 March 2013 is shown as a reduction in the share of operator proceeds in 2013-14. Net operator proceeds would be £45.68m without this adjustment.

The funds are invested on behalf of the NLDF by the National Debt Commissioners. The BFI's distribution is in accordance with Sections 22 and 23 of the National Lottery etc. Act 1993 (as amended by the National Lottery Act 1998). The BFI is required by statute to show on the balance sheet at the lower of the market value or the cost of the investment as at the year end.

Following the changes in the year in the NLDF investments by the National Debt Commissioners, there were no unrealised gains in the year (2013: £Nil).

In February 2008, a Statutory Instrument (SI 2008 No. 255, The Payments into the OLDF etc. Order 2008) was passed which allowed for the transfer of up to £1,085m from the NLDF to the OLDF in order to meet some of the costs of holding the 2012 Olympic and Paralympic Games. This comprises £410m as originally envisaged when the Government decided to support London’s Olympic bid in 2003, and a further £675m arising from the subsequent budget review.

The final transfers of funds under the statutory instrument took place in the year ending 31 March 2013 with a total of £21.8m being paid by UK Film Council / BFI.

87 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

17. STOCKS AND WORK IN PROGRESS (Group and Charity) 2014 2013 2014 2013 £'000 £'000 £'000 £'000

Raw materials 16 17 16 17 Work in progress 29 83 29 83 Finished goods 343 478 343 478 388 578 388 578

18. DEBTORS Group Group Charity Charity 2014 2013 2014 2013 £'000 £'000 £'000 £'000

Trade debtors 1,496 4,165 1,150 3,823 Amount owed by subsidiary undertakings - - 2,292 2,252 Other debtors 1,499 1,053 1,499 1,092 Prepayments and accrued income 2,035 2,348 1,208 1,394 5,030 7,566 6,149 8,561

Group Group Charity Charity 2014 2013 2014 2013 £'000 £'000 £'000 £'000 Additional analysis of debtors Central Government bodies 1,292 499 1,293 942 Local authorities 34 - 34 - Public corporations and trading funds 12 20 615 20 Bodies external to Government 3,692 7,047 4,207 7,599 5,030 7,566 6,149 8,561

19. FINANCIAL RISKS (Group and Charity)

Financial Reporting Standards require disclosure of the role which financial instruments have had during the period, in creating or changing the risks the BFI faces in undertaking its role.

Liquidity risks In 2014 £22.4m (24%) of the incoming resources were derived from DCMS Grant-in-Aid (2013: £27.0m, 25%); £1.9m (2%) (2013: £1.9m, 2%) related to the DCMS capital provision for the year; £3.8m (4%) was generated from Other legacies, grants and donations (2013: £7.0m, 6%) and £16.7m (18%) (2013: £18.0m, 16%) were Resources generated from charitable activities. £1.4m (2%) (2013: £1.1m, 1%) came from Donated services and facilities. As a Lottery Distributor, £47.9m (50%) of incoming resources was from Lottery proceeds and receipts and the transfer from Creative England (2013: £55.0m, 50%).

The Governors consider that, as the NLDF balance notified by the Secretary of State for Culture, Media and Sport and the BFI's own Lottery cash holding amount to £58.4 m at the statement of financial position date (2013: £57.5m), sufficient liquid resources are available to cover all current hard and soft commitments totalling £61.2 m (2013: £53.5m) and any other payables, with the increase being due to the multi-year awards. The non-Lottery cash holdings are considered sufficient to cover the non-Lottery other payables.

Interest rate risks The BFI’s largest financial asset is retained in the NLDF, which invests in a narrow band of low risk assets such as Government bonds and cash. Neither the BFI nor its Governors has any control over these investments. The interest rate risks in respect of these financial assets are disclosed in the financial statements of the NLDF. The market value at year end of the BFI’s investment in the NLDF was £55.8m (2013: £52.8m) and the average investment return for the year was 0.5% (2013: 0.78%).

Cash drawn from the NLDF, DCMS or received from other sources, to pay grant commitments and operating costs are held in variable rate bank accounts and the average interest rate return for the year was 0.1% (2013: 0.1%). The group cash balance at the year end was £8.3m (2013: £9.8m).

Other price risks Under Financial Reporting Standards (FRS 25, 26 and 29) film rights fall within the definition of financial instruments and within that meet the definition of ‘Available for sale financial assets’ and are therefore shown in the balance sheet at fair value.

Establishing the fair value of film rights is subjective and therefore contains an element of risk. The fair value is based on a review of external evidence such as the sales agents estimates as to the likely revenues generated by a project, and depending on where it is in the life cycle of the project, upon actual performance of the film to date. This is matched with the knowledge and experience of the staff and management involved in the process of assessing the projects both at application stage and as they come to fruition. Any reduction in fair value is immediately taken to the SOFA in the year.

The valuation of film rights are subject to ongoing review to ensure a fair value is maintained with any impairments being charged as expenditure. Any increase in the fair value beyond the original investment value is taken to reserves and only released as income upon the actual receipt of funds.

Film rights at 31 March 2014 have a valuation of £15.4m (2013: £16.4m). The Governors consider that the BFI is not exposed to significant other price risks.

Foreign currency risks The BFI’s financial assets are not exposed to material foreign exchange risks, as long-term balances are held in sterling.

88 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

20. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Group Charity Charity 2014 2013 2014 2013 £'000 £'000 £'000 £'000

Trade creditors (1,099) (1,894) (1,048) (1,864) Amount owed to subsidiary undertakings - - (93) (72) Other taxes and social security costs (493) (489) (493) (489) Other creditors (580) (571) (441) (564) Hard commitments (see Note 22) 29985 (27,848) (8,429) (27,848) (8,429) Accruals (4,969) (4,331) (4,882) (4,274) Deferred income (see Note 21) (1,176) (2,223) (738) (1,710)

(36,165) (17,937) (35,543) (17,402) Additional analysis of creditors Central Government bodies (864) (753) (864) (753) Bodies external to Government (35,301) (17,184) (34,679) (16,649) (36,165) (17,937) (35,543) (17,402)

21. DEFERRED INCOME Group Group Charity Charity 2014 2013 2014 2013 £'000 £'000 £'000 £'000

At 1 April 2013 (2,223) (1,984) (1,710) (1,796) Amount released to incoming resources 2,223 1,984 1,710 1,796 Amount deferred in year (1,176) (2,223) (738) (1,710) At 31 March 2014 (1,176) (2,223) (738) (1,710)

Mainly relates to performance related grants received in the year, deferred to match future performance, and advance ticket sales.

22. LOTTERY HARD AND SOFT COMMITMENTS (Group and Charity)

Hard Commitments 2014 2013 £'000 £'000

At 1 April 2013 (8,429) (8,654) Commitments transferred from Creative England (78) - Commitments made (92,376) (37,808) Hard decommitments 925 672 Amounts paid 43,860 37,361 At 31 March 2014 (56,098) (8,429)

Hard decommitments arise when any element of the award is not utilised once contracts are signed and drawdown has commenced.

New hard commitments made during the year: 2014 2013 £'000 £'000

Film fund awards taken as film rights 27,208 26,884

Multi year awards for the period to March 2017: Film Education awards 26,000 30 Creative Skillset awards 21,000 3,654 Film Network Fund 9,025 30 Film Festivals awards 600 56,625 3,714 Project funding: Creative England 3,920 2,201 International awards 2,061 - Film Festivals awards 371 - Film Academy awards 700 - Programme Development Fund 508 - Film Culture awards 437 - Focal points awards 350 - BFI Neighbourhood awards 196 - First Light - 1,100 Strategic Audience Development Scheme Awards - 3,909 Total project awards 8,543 7,210

92,376 37,808

In addition a multi year award of £15,000,000 was made to the BFI under s27 exemption for the Unlocking Film Heritage programme. This is shown as a transfer of reserves from Lottery to Other Restricted reserves (see note 23).

89 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

22. LOTTERY HARD AND SOFT COMMITMENTS (Group and Charity) (CONTINUED)

2014 2013 Ageing of hard commitments - estimated dates of payment £'000 £'000

Creditors: amounts falling due within one year Year ended 31 March 2014 - (8,429) Year ended 31 March 2015 (27,848) - (27,848) (8,429) Creditors: amounts falling due after more than one year Year ended 31 March 2016 (14,125) - Year ended 31 March 2017 (14,125) - (28,250) -

(56,098) (8,429)

Hard commitments falling due within one year include £35m of lottery awards relating to the years 2015-17 arising from the new multi year awards made in the year.

Hard commitments payable beyond 31 March 2015, relate to the multi-year awards made to Into Film, Creative Skillset, the Film Hub Lead Organisations and under the Film Festivals Fund covering the period to March 2017.

Soft Commitments 2014 2013 £'000 £'000

At 1 April 2013 (45,079) (8,308) Commitments made (68,297) (75,415) Commitments transferred from Creative England (498) - Soft decommitments 1,348 836 Unlocking Film Heritage award to BFI 15,000 - Transferred to hard commitments 92,376 37,808 At 31 March 2014 (5,150) (45,079)

Soft decommitments arise when the conditions of the terms of the award are not met and prior to signature of contract and completion of any terms precedent.

Hard commitments increased significantly in 2013-14 with the full £26m commitment to Film Nation UK for the education strand of Film Forever, along with the multi- year awards to the Film Hub Lead Organisations all hardening within the year. All the latter years (2014-17) of these awards multi year awards remain hard commitments at 31 March 2014.

90 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

23. STATEMENT OF FUNDS (Group) At 1 April Other recognised At 31 March 2013 Income Expendituregains/(losses) Transfers 2014 £'000 £'000 £'000 £'000 £'000 £'000 Unrestricted funds: Income funds excluding pensions asset/liability 25,619 42,627 (43,826) - 543 24,963 Pension reserve (35,988) (952) (1,420) - (38,360) Fixed asset revaluation reserve 5,129 (590) 884 5,423 Total unrestricted funds (5,240) 42,627 (45,368) (536) 543 (7,974)

Restricted funds: Fixed Assets 13,427 (463) 12,965 Fixed asset revaluation reserve 7,625 - (387) 1,298 - 8,535 21,052 - (850) 1,298 - 21,500

Charitable Activities: Donated Services and Facilities - 1,441 (1,441) - - TV Grants - 1,066 (1,066) - - David Lean Foundation - 65 (65) - - Chaplin Foundation 41 - - - 41 European Cultural Foundation - 10 (10) - - British Council - 11 (11) - - European Commission - 64 (64) - - Nicolas Winding Refn - 30 (30) - - Commission Des Com - 131 (131) - - Chapman Trust - 18 (18) - - Ecorys UK Limited - 12 (12) - - Sir John Cass's Foundation - 39 (39) - - Northern Ireland Screen - 20 (20) - - Unlocking Film Heritage - - (1,504) 14,855 13,351 Film London 60 (60) - American Airlines 20 (20) - Arts Council of England 15 (15) - London Borough of Tower Hamlets 10 (10) - Other up to £10,000 - 32 (32) - - Total restricted funds excluding lottery 21,093 3,044 (5,398) 1,298 14,855 34,893

Lottery funds:

Lottery reserve 62,115 47,813 (92,645) - (15,398) 1,885 Lottery fair value reserve 5,426 (1,868) 3,558 Lottery share of pension reserve (1,426) (144) (93) (1,663) Total Lottery funds 66,115 47,813 (92,789) (1,961) (15,398) 3,780

Total funds 81,968 93,484 (143,555) (1,199) - 30,698

Transfers represent fixed assets funded by restricted grants, which have been transferred to unrestricted assets on completion. In addition, a multi-year Lottery award of £15,000,000 was made to the BFI in relation to Unlocking Film Heritage (see Note 30) and this is shown as a transfer between lottery funds and other restricted funds.

Restricted funds: Description: Fixed assets Assets subject to ongoing restrictions and their associated depreciation. This is primarily the BFI London IMAX, as described in Note 11. TV Grants Archiving services for both Independent Television and the BBC. David Lean Foundation Support for restoration work. Chaplin Foundation Charlie Chaplin archive and research projects. European Cultural Foundation Supporting the Youth and Media Programme. British Council Support for LFF programme events European Commission Supporting the EC Film Literacy project. Nicolas Winding Refn Remastering Andy Milligan's Nightbirds for DVD release. Commission Des Com Support for the provision of Media Desk services. Chapman Trust Support for BFI Future Film programme Ecorys UK Limited Education projects Sir John Cass's Foundation Support for the Cultural Campus for Lambeth at BFI Southbank. Dr Mortimer & Theresa Sackler Found'n Support for the BFI Library. DCMS - Capital Grant-in-Aid Grant-in-Aid annual funding for capital renewals. BFI Trust - Capital Grant Grant funding for capital renewals. Unlocking Film Heritage Development, planning and initial awards for the Unlocking Film Heritage programme of projects. Total funding of £15m was awarded by the Lottery under Section 27 dispensation towards improving public access to the UK's film archives from 2013/14 to 2016/17. Film London Support for LFF programme events American Airlines Support for LFF programme and BFI Southbank events Arts Council of England Support for LFF programme events London Borough of Tower Hamlets Education projects Other under £10,000 Various grant awards towards education, restoration and programming.

91 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

23. STATEMENT OF FUNDS (Group) (CONTINUED)

Fund balances at 31 March 2014 are represented by: Unrestricted Restricted Total £'000 £'000 £'000

Tangible fixed assets 27,624 21,500 49,124 Intangible fixed assets 1,141 - 1,141

Film rights - 15,358 15,358 National Lottery Distribution Fund - 55,817 55,817 Stocks and work in progress 388 - 388 Debtors 3,128 1,902 5,030 Cash at bank and in hand 4,978 3,300 8,278 Current assets 8,494 76,377 84,871 Current liabilities (6,873) (29,292) (36,165) 30,386 68,585 98,971 Creditors due after more than one year - (28,250) (28,250) Long term pension liabilities (38,360) (1,663) (40,023)

Total net assets (7,974) 38,672 30,698

Restricted funds are committed as directed by the donors/grantors. Unrestricted Funds are available to fund revenue initiatives identified during the year and to provide a reserve against unforeseen costs arising.

Net free reserves 2014 2013 Unrestricted Unrestricted £'000 £'000

Current assets 8,494 8,560 Current liabilities (6,873) (6,924) Net free reserves 1,621 1,636

Operating statement - Charity only 2014 2013 Total Total £'000 £'000

Incoming resources 89,892 105,079 Resources expended (142,962) (97,660) Operating surplus/(deficit) (53,070) 7,419

BFI (Big Screen) Limited and British Screen Group surpluses gift aided to the BFI 3,160 2,525 Actuarial losses on defined benefit pension schemes (1,513) (60) Movement in fair value reserves (1,868) (1,687) Movement in fixed asset revaluation reserves 2,182 (900)

Charity only funds at 1 April 81,807 74,510

Charity only funds at 31 March 30,698 81,807

24. VOLUNTARY INCOME (Group) 2014 2013 £'000 £'000

Lottery proceeds 45,101 52,623 Lottery recoupment income 2,214 2,342 Revenue Grant in Aid funding 22,374 26,962 Capital Grant in Aid funding 1,927 1,936 Other grants, legacies and donations 3,751 7,043 Donated services and facilities 1,441 1,063 76,808 91,969

Costs of generating funds Costs of generating voluntary income 1,483 1,206

Costs of generating voluntary income is the staff, direct and indirect costs of the in-house teams who source funding from individuals, trusts, foundations and corporations. The costs include some press and public relations expenditure. In addition to the above voluntary income, income from charitable activities includes sponsorship income of £963,000 (2013: £1,442,000) raised by the Development team. This income primarily relates to the corporate sponsorship of the London Film Festival and the London Lesbian & Gay Film Festival.

% Expenditure/Income 1.9% 1.3%

92 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

25. LEASE COMMITMENTS (Group and Charity)

At 31 March 2014, the Charity had annual commitments in respect of non-cancellable operating leases as set out below:

Land and Land and buildings buildings Other Other 2014 2013 2014 2013 £'000 £'000 £'000 £'000 Leases which expire: Less than 1 year --(1)(7) Within 2 to 5 years - - (69) (26) Over 5 years (1,515) (1,515) - (1) (1,515) (1,515) (70) (34)

26. CAPITAL COMMITMENTS (Group and Charity)

As at 31 March 2014, the BFI had capital commitments outstanding of £433,000 (£2013: £Nil) relating to the renovation of the ground floor of the Stephen Street

27. CONTINGENT AND OTHER LIABILITIES (Group and Charity)

Some grant funding in the current and previous years could potentially become repayable in the event of the assets funded being disposed of by the BFI, subject to time and other restrictions set out in the grant agreements (see Note 11).

There were no provisions other than those under FRS17: Retirement Benefits (see Note 10).

28. POST BALANCE SHEET EVENTS (Group and Charity)

At the time of signing the accounts there had been no post balance sheet events which would adjust the figures reported in the financial statements. The accounts were authorised for issue on the date the Comptroller and Auditor General signed the audit report.

29. GRANT-IN-AID AND LOTTERY AWARDS (Group and Charity)

Grant-in-Aid awards With the closure of the UK Film Council, the BFI took responsibility on behalf of DCMS for the administration of Grant-in-Aid awards made to third party and partner organisations in the film sector, and received additional funding for this.

Awards in the year were: 2014 2013 £'000 £'000

Creative England 980 2,584 Film London 858 876 Film Agency for Wales 128 128 Northern Ireland Screen: Irish Language Fund 3,000 3,000 Northern Ireland Screen: Ulster Scots Fund 1,000 1,000 Film Academy awards 702 587 Cultural Venues and Archives Fund 709 - 7,377 8,175

Whilst Creative England received a smaller Grant in Aid allocation in the year, this was matched with an increase of lottery funding of £1.7m

Lottery awards Full details of all Lottery commitments made in the year are shown in the accompanying Lottery financial statements.

30. TAX STATUS (Group and Charity)

The BFI is a registered charity and as such is potentially exempt from taxation of its income and gains to the extent that they are applied to its charitable objectives.

Its subsidiaries' total taxable profits are either gifted to the Charity or tax losses have been utilised and therefore no tax is payable.

93 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

31. RELATED PARTIES (Group and Charity)

The BFI maintains a publicly available register of Governors’ interests. Given their broad experience across the film sector, it is inevitable that Governors had connections with or interests in projects and organisations that may from time to time have come to the BFI for funding. All Governors were therefore required to declare any direct interest in and commercial relationships with award applications made to the BFI and they had no role in the award making process. Similarly, BFI employees were excluded from decision making around any relevant application involving any organisation or company in which they have a declared interest.

During the year the BFI entered into transactions, in the ordinary course of business, with related parties. National Lottery awards are included in film rights at the date of the statement of financial position or written off to expenditure within the year.

All awards outstanding are payable upon the meeting of conditions precedent within individual contracts.

The following related party transactions occurred during the period:

Relationship to New Awards Balances Role with recipient of made outstanding Recipient of funding Name BFI funding 2014 31 March 2014 ££ Grant-in-Aid Funding

Film Agency Wales Heather Stewart Employee Board Member 128,000 -

Amanda Nevill (Chief Executive) is a Director and Trustee of the BFI Trust, with whom there were a number of transactions in the year - see Note 5.

Lottery Awards

Relationship to New Awards Balance Role with recipient of made as at Recipient of funding Name BFI funding Year Ended 31.3.2014 31.3.2014 ££ Blueprint Pictures (Posh) Pete Czernin Governor Director 848,827 40,000 Ltd (appointed 14 Blueprint Pictures Ltd Pete Czernin Director 38,705 27,000 March 2014) British Federation of Film Societies Jim Dempster Employee Trustee 80,000 5,000

Fury Pictures Limited Matthew Justice Governor Managing Director 100,000 - Governor Creative Skillset Tim Richards (appointed 14 Director and Trustee 21,000,000 16,360,920 May 2013) Film Agency Wales Heather Stewart Employee Board Member 500,000 336,332

Pete Czernin was appointed a Governor on 14 March 2014 and is a director of Blueprint Pictures Ltd and its related companies. All awards made in the year ended 31 March 2014 were made prior to Pete Czernin's appointment.

Charles Cecil is a director of Screen Yorkshire. Screen Yorkshire independently co-funded a number of projects across the year with the BFI.

Awards made under the Lotteries Act Section 27 dispensation Using the power granted by the Section 27 of the National Lotteries Act etc 1993, the Secretary of State gave permission in 2012-13 for an award of £15,000,000 to the BFI in relation to Unlocking Film Heritage, the BFI's Archive Strategy as outlined in Film Forever future plan, for both the national and regional moving image archives. The awards was made in March 2013 and became hard during 2013-14. It is shown on the Statement of Financial Activities within Gross transfers between funds. At the 31 March 2014 £13,352,000 had not been spent (note 23).

32. LOSSES AND SPECIAL PAYMENTS (Group and Charity)

Screen East, the regional screen agency under the RIFE programme, went into liquidation in September 2010. The agency had received grant and Lottery awards from the UKFC. A protective claim of £1,046,686 was lodged with the liquidator. This claim was transferred to the BFI on 1 April 2011 and remains unadjusted. In the year ended March 2014 £0.2m (2013: nil) was received from the liquidator in partial settlement of this. However until the conclusion of the liquidation process it is unclear what further funds may be recoverable from the liquidator and recovery of funds has not been anticipated in these financial statements.

Registered charity no: 287780

BRITISH FILM INSTITUTE GROUP AND LOTTERY ANNUAL REPORT AND FINANCIAL STATEMENTS 2013-14 LOTTERY FINANCIAL STATEMENTS

For the year ended 31 March 2014

LOTTERY FINANCIAL STATEMENTS

STATEMENT OF GOVERNORS AND ACCOUNTING OFFICER’S RESPONSIBILITIES

The Governors and Chief Executive are responsible for preparing for financial statements for the Lottery distribution activities of the BFI for each financial year under section 35(2) and (3) of the National Lottery etc. Act 1993 in the form and one th basis directed by the Secretary of State for Culture, Media and Sport with the consent of the Treasury. The accounts are prepared on an accruals basis except in relation to the recognition of commitments and must show a true and fair view of the state of affairs of the BFI Lottery Fund distribution activities and of its income and expenditure and cash flows for the financial year.

In preparing these financial statements, the Governors and Chief Executive are required to:

 Observe the accounts directions issued by the Secretary of State, including the relevant accounting and disclosure requirements; apply suitable accounting policies on a consistent basis;  Make judgements and estimates on a reasonable basis;  State whether applicable accounting standards have been followed, and disclose and explain any material departures in the financial statements; and  Prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the BFI Lottery distribution activities will continue in operation.

The Accounting Officer for the DCMS has designated the Chief Executive of the BFI as the Accounting Officer for the BFI. The relevant responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable and for keeping of proper records and for safeguarding the BFI’s assets are set out in Managing Public Money published by the HM Treasury and in the Financial Directions issued by the Secretary of State for Culture, Media and Sport under section 26(3)e of th National Lottery etc. Act 1993.

Greg Dyke Amanda Nevill Chair, Board of Governors Chief Executive

Date: 14 July 2014 Date: 14 July 2014

THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT

I certify that I have audited the financial statements of the British Film Institute Lottery Distribution Fund for the year ended 31 March 2014 under the National Lottery etc. Act 1993. The financial statements comprise: the Statements of Comprehensive Net Expenditure, Financial Position, Cash Flows, Changes in Equity; and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.

Respective responsibilities of the Governors, Accounting Officer and auditor As explained more fully in the Statement of Governors and Accounting Officer’s Responsibilities, the Chief Executive as Accounting Officer and the Governors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit, certify and report on the financial statements in accordance with the National Lottery etc. Act 1993. I conducted my audit in accordance with International Standards on Auditing (UK and Ireland). Those standards require me and my staff to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the British Film Institute Lottery Distribution Fund’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the British Film Institute; and the overall presentation of the financial statements. In addition I read all the financial and non‐financial information in the Annual Report and Governance Statement to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my certificate.

Opinion on financial statements In my opinion: . the financial statements give a true and fair view of the state of the British Film Institute Lottery Distribution Fund’s affairs as at 31 March 2014 and of the net expenditure for the year then ended; and . the financial statements have been properly prepared in accordance with the National Lottery etc. Act 1993 and Secretary of State directions issued thereunder.

Opinion on other matters In my opinion:

. the part of the Remuneration Report to be audited has been properly prepared in accordance with Secretary of State directions made under the National Lottery etc. Act 1993; and . the information given in What we delivered this year, Key Performance Measures, Financial Review, Environmental Sustainability, and How the BFI is Governed sections of the Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception I have nothing to report in respect of the following matters which I report to you if, in my opinion:

. adequate accounting records have not been kept; or . the financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records and returns; or . I have not received all of the information and explanations I require for my audit; or . the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Report I have no observations to make on these financial statements.

Sir Amyas C E Morse Date 17 July 2014 Comptroller and Auditor General

National Audit Office 157‐197 Buckingham Palace Road Victoria London SW1W 9SP

LOTTERY FINANCIAL STATEMENTS

STATEMENT OF COMPREHENSIVE NET EXPENDITURE YEAR ENDED 31 MARCH 2014

Notes 2013-14 2012-13 £'000 £'000

Income Proceeds from the National Lottery 8 44,891 52,343 National Lottery Distribution Fund investment income 8 210 280 Recoupment income Arts Council England and UK Film Council portfolio 2 2,201 2,342 BFI portfolio 2 13 -

Transfer of activities to BFI 3 498 -

47,813 54,965 Expenditure: Multi-year funding to period ending March 2017 Film Education awards 13 (26,000) (30) Creative Skillset awards 13 (21,000) (3,654) Unlocking Film Heritage 13 (15,000) - Film Network Fund 13 (9,025) (30) Film Fund 13 (600) - Total multi-year funding (71,625) (3,714)

Project funding Creative England 13 (3,920) (2,201) International awards 13 (1,950) (932) Film Academy awards 13 (700) - Programme Development Fund 13 (508) - Film Festivals awards 13 (364) - Focal points awards 13 (350) - Rewarding Success 2 (277) - BFI Neighbourhood awards 13 (196) - First Light scheme 13 - (1,100) Strategic Audience Development Scheme Awards 13 - (3,909) Film Culture awards 3, 13 (439) - Distribution and Exhibition awards 96 138 Film Fund awards (non film rights) 736 - Total project funding (7,872) (8,004)

Activity support International (138) - Research and Statistics (485) - Total activity support (623) -

Lottery – non film rights (80,120) (11,718)

Statutory transfer to the Olympics 8 - (2,732)

Impairments against film rights 7 (24,362) (26,099) Reversal of impairments against film rights 7 1,781 3,822

Costs apportioned from Grant-in-Aid 6 (4,686) (4,424) Other finance costs (361) (269)

Costs of change 6 (282) (790)

Total expenditure (108,030) (42,210)

Operating (deficit) / surplus (60,217) 12,755

Bank interest receivable -6

(Deficit) / Surplus on ordinary activities before taxation (60,217) 12,761

Tax on surplus on ordinary activities for the year - -

(Deficit)/Surplus for the year (60,217) 12,761

Other comprehensive expenditure Actuarial loss (41) (4) Movement in fair valuation reserve (1,868) (1,687)

Total other comprehensive (expenditure)/income (1,909) (1,691)

Total comprehensive (expenditure) / income (62,126) 11,070

All activities were on a continuing basis. The accompanying notes 1 to 22 form an integral part of this Statement of Financia

99 LOTTERY FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION 31 MARCH 2013

Notes At 31.3.2014 At 31.3.2013 £'000 £'000

Non current assets Trade and other receivables falling due after one year 9 1,989 1,648

Total non-current assets 1,989 1,648

Current assets Film rights 7 15,358 16,375 National Lottery Distribution Fund 8 55,817 52,841 Trade and other receivables falling due within one year 9 2,049 2,757 Cash and cash equivalents 10 2,538 4,631

Total assets 75,762 76,604

Current liabilities Trade and other payables 12 (455) (88) Other payables - award commitments 13 (33,700) (8,429)

Total current liabilities (34,155) (8,517)

Net current assets 41,607 68,087

Net non-current liabilities Other payables - award commitments payable after more than one year 13 (35,750) - Pension liability 5 (1,663) (1,426)

Total non-current liabilities (37,413) (1,426)

Assets less liabilities 6,183 68,309

Capital and reserves Lottery reserve 4,289 64,310 Fair valuation reserve 3,557 5,425 Pension reserve (1,663) (1,426)

6,183 68,309

The accompanying notes 1 to 22 form an integral part of this statement of financial position

The financial statements were approved and authorised for signature by the Governors on 14 July 2014

Greg Dyke Amanda Nevill Chair, Board of Governors Chief Executive

100 LOTTERY FINANCIAL STATEMENTS

STATEMENT OF CASH FLOWS YEAR ENDED 31 MARCH 2014 Notes 2013-14 2012-13 £'000 £'000 Cash inflows from operating activities Repayment of investments: new film rights in year 7 791 593 Repayment of investments: historical portfolio 7 2,934 5,640 Surplus on historical investments 2 2,214 2,342 Transfer of funds from Creative England 3 576 - Other cash receipts 2,555 1,551 Payments of Lottery hard commitments 13 (45,508) (37,362) Other payments (7,780) (9,168) Tax paid - -

Net cash from operating activities 18 (44,218) (36,404)

Cash flows from investing activities Cash receipts from National Lottery Distribution Fund 8 42,125 36,869 Interest received - 6

Net cash from investing activities 42,125 36,875

Net (decrease)/increase in cash and cash equivalents 18 (2,093) 471

Net cash and cash equivalents at 1 April 18 4,631 4,160

Net cash and cash equivalents at 31 March 18 2,538 4,631

The accompanying notes 1 to 22 form an integral part of this statement of statement of cashflows

101 LOTTERY FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 MARCH 2014 Lottery Fair Valuation Pension Total Reserve Reserve Reserve Reserve £'000 £'000 £'000 £'000

Balance at 1 April 2012 51,451 7,112 (1,324) 57,239

Surplus for the year 12,859 - (98) 12,761

Re-measurements in the year - - (4) (4)

Movement in fair valuation reserve - (1,687) - (1,687)

Balance at 31 March 2013 64,310 5,425 (1,426) 68,309

Surplus/(deficit) for the year (60,021) - (196) (60,217)

Re-measurements in the year - - (41) (41)

Movement in fair valuation reserve - (1,868) - (1,868)

Balance at 31 March 2014 4,289 3,557 (1,663) 6,183

The Lottery reserve primarily represents the carrying value of film investments made by the UK Film Council (prior to 31 March 2011) and British Film Institute (since 1 April 2011), and uncommitted funds held at the National Lottery Distribution Fund, offset by all outstanding award liabilities.

The fair value movement in the year of £1.87m is made up by additional increases in the fair value of film rights £0.34m netted by a release from the reserve of £2.21m against recoupment received in the year and taken as recoupment to the Statement of Comprehensive Expenditure

The pension reserve represents the liability arising on the valuation of the BFI pension fund at year end, as notified by the actuaries.

The accompanying notes 1 to 22 form an integral part of the statement of changes in equity

102 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

1. ACCOUNTING POLICIES

Transfer of Lottery Distributor Status From 1 April 2011, the status of Lottery Distributor for Film was transferred to the British Film Institute (BFI) from the UK Film Council (UKFC) in accordance with Statutory Instrument SI685/2011. The UKFC’s Lottery assets and liabilities, and share of future revenue streams, transferred to the BFI as at that date. Under the Transfer of Undertakings (Protection of Employment) (TUPE) legislation the related staff employed on Lottery activities also transferred to the BFI. There were costs relating to the transfer of distributor status attributed to Lottery in the year ending 31 March 2014.

These financial statements are prepared on a going concern basis under the historical cost convention, and in accordance with the Accounts Direction issued by the Secretary of State for Culture, Media and Sport with the consent of Treasury. These meet the requirements of section 35(3) of the National Lottery etc Act 1993 (as amended by the National Lottery Act 1998) and applicable Accounting Standards, except certain headings have been amended in order to reflect special circumstances of the charity. The requirements of the Accounts Directions issued to the BFI for its activities as a Lottery distributor under the National Lottery etc Act 1993 have been followed for the treatment of hard and soft commitments.

The financial statements have been prepared in accordance with the Government Financial Reporting Manual (FReM) issued by HM Treasury. The accounting policies contained in the FReM apply International Financial Reporting Standards as adapted or interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the BFI for the purpose of giving a true and fair view has been selected. The particular policies adopted by the BFI are described below and they have been applied consistently in dealing with items that are considered material to the accounts.

There are no standards and interpretations in issue but not yet adopted by the BFI that the directors anticipate will have a material effect on the reported income or net assets.

Certain aspects of these financial statements involve the exercise of judgement in ascertaining the valuations used. In the year these included the valuations of film rights, the basis of the recharge of operating costs and the costs arising from the transfer of functionality to the BFI.

In accordance with the Directions issued by the Secretary of State for Culture, Media and Sport, financial statements have also been prepared for the BFI Group activities as a whole.

A copy of the Accounts Direction is available from the Secretary to the Board of Governors, 21 Stephen Street, London W1T 1LN.

Accruals Convention Income and expenditure is accounted for on a receivable basis. The exception is recoupment income, because of the inherent difficulties in relating the income to the period to which it relates, and it is thus accounted for upon notification of amounts received by the BFI. Commitments are reported as per the National Lottery Act etc. 1993.

As required by the Secretary of State for Culture, Media and Sport, a distinction is made in respect of Lottery awards between ‘hard commitments’ and ‘soft commitments’. Where the BFI has made a firm offer of a grant, which, together with the relevant conditions, has been accepted by the recipient, and the conditions of the grant have been fully met, the award is accounted for as a ‘hard commitment’. Where the BFI has agreed in principle to fund a scheme or project and made an offer, but the offer has not been accepted and the associated conditions precedent met, the award is accounted for as a ‘soft commitment’. Hard commitments are recognised in the financial statements whereas soft commitments are recognised by way of a note to the financial statements.

In 2013-14, in line with our 5 year Business Plan, Film Forever 2012-17, multi year lottery awards were made covering the four years to March 2017, including those awards to Into Film re our education strategy, Creative Skillset re Industry skills and training and Unlocking Film Heritage. In line with the National Lottery Act etc 1993 and BFI Lottery Accounts direction these have been accounted for an a commitment basis with the full committed funds being taken to the Statement of Comprehensive Net Expenditure in the year in which the award became a hard commitment.

Hard commitments payable within one year of the statement of financial position are recognised in the statement as current liabilities. Those payable more than one year from the statement of financial position date are shown as commitments to filmmakers payable over more than one year. Commitments for future years have been entered into, taking into account income forecasts provided by the Department for Culture, Media and Sport (DCMS). These forecasts take a conservative view of future income.

Other Lottery Awards Lottery awards other than those for film rights are taken in full to the statement of comprehensive income in the year in which the hard commitment is recognised.

Apportioned Costs The BFI incurred costs which are shared between Lottery and other activities, relating to both operating costs for the year, and on-going restructuring costs resulting from the transfer of responsibilities to the BFI. The BFI is required to apportion costs in accordance with the principles of full cost recovery as outlined in Managing Public Money. In addition to costs wholly attributable to Lottery activities, an assessment is made of the other costs attributable to Lottery activities incurred by service and other departments. This is based on a combination of head count, office space occupied, activity levels and additional expenditure incurred. These departments include Finance & Resources, Marketing, Monitoring, Partnerships and the Chief Executive and Deputy Chief Executive offices.

The share of proceeds and investment returns attributed to the BFI has been treated as income within these financial statements.

Financial Instruments

The Lottery account’s principal financial instruments are cash and holdings in the NLDF and film rights which, with the adoption of IAS 32 (Financial Instruments: Presentation), 39 (Financial Instruments: Measurement and Recognition) and IFRS 7 (Financial Instruments: Disclosure), fall within the definition of Financial Instruments.

Other Lottery financial instruments include trade receivables and payables that arise directly from Lottery operations. The main risks arising from the Lottery accounts' financial instruments are interest rate risk, foreign currency risk and other price risk.

103 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

1. ACCOUNTING POLICIES (CONTINUED)

Film Rights Film rights represent loans paid and advances paid and payable to filmmakers. All advances to filmmakers are repayable under certain conditions. Where a feature film made with the assistance of the BFI is successfully released, the BFI is entitled to participate in revenues generated by that success. This can lead to repayment of the investment in full, together with a share of the profits generated by the film.

Under International Financial Reporting Standards (IAS 32, 39 and IFRS 7) film rights fall within the definition of Financial Instruments; within that, they meet the definition of Available for sale financial assets and are therefore shown in the statement of financial position at fair value.

When an advance is made (satisfying the definition of hard commitments above) it is taken to the statement of financial position initially at the full value of the award made. This valuation is reduced by impairments made against film rights to the extent that full repayment of an advance, through actual receipts and the value of future estimated receipts, is considered doubtful. The valuation is reviewed on a rolling basis to ensure that fair value is maintained.

Movements in impairments shown in the statement of comprehensive income reflect the net effect of increases and decreases in impairments against film rights in the year. Any impairment may be reversed in part or in full if the valuation understates the fair value of the film right. Advances for development and short film awards are fully impaired in the year of award, unless there is a reasonable expectation of repayment.

If the valuation of the film right is in excess of the amount of the award investment based on estimated recoupment over the next three financial years, then this is taken to a fair value reserve, and released to income as the recoupment is received. In the context of the life of a film, and its distribution cycle, three years isfelttobea reasonable period over which a meaningful forecast can be taken.

Film Recoupment Income Income received from a film right is offset against the value of the film right on the statement of financial position.

Income in excess of the original value of the right is taken to the statement of comprehensive income as film recoupment income through the fair value reserve.

Foreign Currencies Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the date of the statement of financial position. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the statement of comprehensive income.

Lease Costs and Commitments Rentals payable under operating leases are charged in the group statement of comprehensive income on a straight-line basis over the lease term and the proportion of costs related to Lottery activities are charged within these accounts.

Pensions BFI operates a defined benefit pension scheme for employees - with an apportionment of the costs and liability being made to Lottery on an assessment of appropriate relative levels of staffing

A defined pension scheme is a post employment benefit plan. The BFI's net obligation in respect of this is calculated by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine the present value.

The pension liabilities and assets of the scheme are recorded in accordance with IAS 19. IAS 19 was revised in 2011 and is required to be applied for annual periods beginning on or after 1 January 2013. The revised IAS is referred to as IAS19 (2011), It measures the value of pension assets and liabilities at the statement of financial position date, determines the benefits accrued in the year, and the interest on the scheme's assets and liabilities. The valuation is undertaken by a qualified actuary.

The value of the benefits accrued during the year (current service costs), past service costs and gains and losses on curtailments and settlements, the net interest expense on the net defined liability and the scheme's administration costs are all recognised in the statement of comprehensive net expenditure. Re-measurement of the net defined benefit liability which comprises actuarial gains and losses and returns on plan assets (in excess of interest) is recognised immediately in the statement of financial position and as other comprehensive expenditure. The resulting pension liability is recorded on the statement of financial position

IAS19 (2011) has been implemented for BFI Lottery in full for 2013-14. The comparative disclosure of some pension movements reported for 2012-13 in note 5: Pension benefits has been re-classified where appropriate, however the impact of implementing IAS 19 (2011) is not material and there is no restatement of the 2012-13 comparatives disclosed within the primary financial statements.

Estimates and judgements Estimates and judgements have been used in the production of these accounts notably with regard to the valuation of Film Rights as at the year end, which are on the basis of a review of all available information with regard to the balance sheet date, including third party evidence and experienced judgement. Further information on this can be found in note 7: Film Rights

Standards, Amendments and Interpretations to Existing Standards not yet effective The application of any new or amended International Financial Reporting Standards is governed by their adoption into the FReM issued by HM Treasury. Usually such changes are not put into effect by the FReM until the effective date of the related IFRS, although occasionally some changes are adopted early or might be delayed. The following standards have been published but are not effective for the periods presented. The BFI has chosen not to adopt these standards early as they are either not relevant to the circumstances of the BFI Lottery Distribution activities or are not considered to have a significant impact on the financial statements: · IFRS 10 - Consolidated Financial Statements, · IFRS 11 - Joint Arrangements, · IFRS 12 - Disclosure of Interests in Other Entities, · IFRS 13 – Fair Value Measurement · IAS 27 - Separate Financial Statements · IAS 28 - Investments in Associates and Joint Ventures

104 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

2. FILM RIGHTS RECEIPTS AND RECOUPMENT INCOME

Under the transfer agreement with UKFC, the BFI received all future income generated from rights in the portfolio of films transferred from the UKFC and Arts Council England.

Film Receipts treated as income

Income received on titles where the initial investment has been recovered is taken into the statement of comprehensive income (2013: £2.3m):

2013-14 Historic portfolio of films (UK Film Council and Arts Council England) The King’s Speech 2,135 8 titles with income below £100,000 66 2,201

BFI portfolio of films 2 titles with income below £100,000 13

Total film receipts treated as income 2,214

Other Film receipts

In the year ended 31 March 2014, the BFI received cash recoupment from 123 films (2013: 106), which was taken against film rights.

Film titles, listing those recovering over £100,000, in the year ended 31 March 2014 (2013: £6.2m) were: 2013-14 Historic portfolio of films (UK Film Council and Arts Council England) Salmon Fishing in the Yemen 136 The Guard 122 The Iron Lady 336 69 titles with income below £100,000 1,231 1,825

BFI portfolio of films

The Imaginarium of Dr Parnassus 120 The Imposter 130 We Need to Talk About Kevin (Distribution award) 200 Welcome to the Punch 148 36 titles with income below £100,000 1,025 1,623

Producers Equity Scheme In the year ended 31 March 2014, the BFI received cash recoupment from 8 films (2013: nil), which were transferred to the Producer Equity Scheme 8 titles with income below £100,000 277

Total other film receipts 3,725

2013-14 2012-13 £'000 £'000

Total film receipts treated as income 2,214 2,342 Total other film receipts 3,725 6,232 5,939 8,574

A full analysis of the above can be found in Schedule 1 to these accounts

3. Transfer of activities from Creative England

Creative England Assets and Liabilities transferred 1 April 2013 As at 1 April 2013 £'000

Cash at bank and in hand 576

Creditors amounts falling due within one year (78)

Net assets 498

In addition soft commitments of £498,000 outstanding at 1 April 2013 were also transferred across. £439,000 of these hardened in the year to 31 March 2014, with the balance remaining as a soft commitment at that date.

105 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

4. STAFF COSTS

No member of the Board of Governors received remuneration during the year (2013: none).

The costs of staff working wholly on Lottery activities were: 2013-14 2012-13 £'000 £'000

Wages and salaries 1,451 1,404 Social Security costs 150 133 Pension service costs and other pension costs 279 211 1,880 1,748

The average number of staff (full-time equivalents) employed during the year: 2013-14 2012-13 Number Number Management and administration: Permanent staff 27 24

27 24

Staff costs for the year are contained within the costs apportioned from grant-in-aid on the statement of comprehensive income

The remuneration of the Chief Executive Officer and costs attributable to Lottery during the year are: Attributable 2013-14 to Lottery £ % £ Amanda Nevill Salary and benefits 139,896 76,943 Bonus - - Total 139,896 55.0% 76,943

Pension contribution 29,098 16,004

Attributable 2012-13 to Lottery £ % £ Amanda Nevill Salary and benefits 138,510 74,795 Bonus 6,857 3,703

Total 145,367 54.0% 78,498 Pension contribution 28,810 15,557

The percentage of the remuneration of the Chief Executive Officer apportioned to lottery is reviewed on an annual basis.

106 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

5. PENSION BENEFITS

The BFI is an admitted body of the LPFA. The majority of the Charity's staff are members of the scheme. The table below summaries the full membership data of the scheme, as at 31 March 2013 for members receiving funded benefits, and as at 31 March 2014 for any members receiving unfunded benefits

Number Salaries / Average Age Pensions £'000s

Actives 291 11,168 45 Deferred Pensioners 467 1,474 46 Pensioners 328 2,245 69 Unfunded Pensioners 44 162 67

Although membership of the scheme is open to all employees, only those costs relating to staff employed on Lottery activities are disclosed in these accounts. This apportionment is calculated on the basis of the numbers of staff employed on lottery activities and their pensions contributions in year as a percentage of those of the whole organisation

The pension scheme is a defined benefit scheme and is funded by employees and employers at actuarially determined rates. Employer contributions charged for members of the scheme amounted to £169,000 (2013: £156,000)

Following the advice of the consulting actuaries to the scheme, the BFI’s employer contributions for current service (as a percentage of the pensionable salary) were set at 12.8% throughout the year (2013: 12.8%).

In 2013-14 the BFI adopted the revision to pensions reporting as per IAS19 and this has not had a material impact on the financial statements. The prior year comparatives for total pension assets and liabilities and the net pension liability have not changed with the revised valuation methodology. However we have reclassified the disclosure of the actuarial gains and losses (now called re-measurements) and items recognised in the statement of comprehensive net expenditure in the prior year comparative figures below.

A valuation under IAS19 as at March 2014 was carried out by a qualified independent actuary. The assumptions used by the actuary for the BFI’s scheme were:

2013-14 2012-13 %%

Rate of increase in salaries 4.1 3.9 Rate of increase in pension payments 2.8 2.6 Discount rate 4.5 4.5 Inflation assumption (CPI) 2.8 2.6

Average life expectancy at 65: Males Females Current pensioners 22.1 25.1 Future pensioners 24.4 27.4

The overall expected rate of return on scheme assets for accounting years beginning on or after 1 January 2013, the expected return and the interest cost has been replaced with a single net interest cost, which has effectively set the expected return on assets to be equal to the discount rate of 4.5%.

The estimated asset allocation as at 31 March 2014 is as follows:

2013-14 2012-13 Long term Long term Rate of return Rate of return expected expected £'000 £'000

Equities 3,592 4,778 LDI/Cashflow matching 407 - Target return portfolio 2,033 785 Infrastructure 271 - Commodities 68 - Property 203 - Alternative assets - 916 Cash 203 65 -

Total market value of assets 6,777 6,544

The net pension liability was: 31 March 2014 31 March 2013

Present value of funded obligation (8,440) (7,970) Fair value of scheme asset 6,777 6,544 Net liability (1,663) (1,426)

The amounts recognised in the statement of comprehensive net expenditure are as follows: 2013-14 2012-13 Restated £'000 £'000

Current service cost (191) (160) Net interest on the defined liability (165) (85) Administration expenses (10) (9)

107 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

Total (366) (254)

Actual return on plan assets 152 586

108 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

5. PENSION BENEFITS (CONTINUED)

Amount recognised in statement of changes in equity: 2013-14 2012-13 Restated £'000 £'000

Return on plan assets in excess of interest (39) 337 Other actuarial gains/(losses) on assets 34 - Change in financial assumption (225) (324) Change in demographic assumptions (27) - Experience gain / (loss) of defined benefit obligation 216 (17)

Re-measurements recognised in the statement of changes in equity (41) (4)

Cumulative re-measurements in statement of changes in equity (3,093) (3,052)

Changes in the present value of the defined benefit obligation: 2013-14 2012-13 Restated £'000 £'000

Opening defined benefit obligation (7,970) (7,228) Current service cost (191) (160) Interest cost (355) (334) Contributions by members (57) (52) Change in financial assumptions (225) (324) Change in demographic assumptions (27) Experience gain / (loss) on defined benefit 216 (17) Estimated benefits paid 169 145

Closing defined benefit obligation (8,440) (7,970)

Changes in the fair value of the Scheme assets: 2013-14 2012-13 Restated £'000 £'000

Opening fair value of employer assets 6,544 5,904 Contributions by members 57 52 Contributions by employer 169 156 Interest on assets 191 249 Return on assets less interest (39) 337 Other actuarial gains/(losses) 34 - Admin expenses (10) (9) Benefits paid (169) (145)

Closing fair value of employer assets 6,777 6,544

The sensitivity analysis on the major assumptions in the above is:

£000s £000s £000s

Adjustment to discount rate +0.1% 0.0% -0.1% Present value of total obligation 8,285 8,440 8,598 Projected service cost 226 232 237

Adjustment to long term salary increase +0.1% 0.0% -0.1% Present value of total obligation 8,461 8,440 8,419 Projected service cost 232 232 232

Adjustment to pension increases and deferred valuation +0.1% 0.0% -0.1% Present value of total obligation 8,580 8,440 8,303 Projected service cost 237 232 226

Adjustment to mortality age rating assumption +0.1% 0.0% -0.1% Present value of total obligation 8,170 8,440 8,710 Projected service cost 224 232 239

A history of experience gains and losses is shown below:

2013-14 2012-13 Restated £'000 £'000

Fair value of employer assets 6,777 6,544 Present value of defined benefit obligation (8,440) (7,970) Deficit (1,663) (1,426)

Experience (losses)/gains on assets 152 586 Experience gains/(losses) on liabilities 216 (17)

109 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

110 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

6. OTHER EXPENDITURE RECHARGED FROM CORE BFI GRANT-IN-AID

Other expenditure apportioned from core BFI Grant-in-Aid relates to the costs of those centralised functions within the BFI that are apportioned to Lottery. These are CEO and Deputy CEO offices, Partnerships, Finance, Facilities, HR, IT, Monitoring, Marketing, Strategic Development, Research and Statistics and Certification. The apportionment is based on a review of the work of these departments and is set as an appropriate percentage recharge in light of this. Auditors remuneration was £40,500 which includes additional fees of £4,500 for the National Audit Office relating to the prior year audit (2013: £39,600).

In 2013-14 repayment of £0.3m was received with regard to a historical debtor from UK Film Council which had previously been provided against in full

The restructuring costs of £0.3m (2013: £0.8m) are a proportion of the costs incurred relating to the transfer of Lottery Distributor status to the BFI from 1 April 2011, primarily amortisation (£0.2m) on capital works necessitated to the Stephen Street premises; and a share of those costs otherwise attributable to the changes arising from the new role.

7. FILM RIGHTS

Under International Financial Reporting Standards relating to Financial Instruments (IAS32, IAS39 and IFRS7) film rights fall within the definition of financial instruments; within that, they meet the definition of ‘available for sale financial assets’ and are shown in the statement of financial position at fair value.

It is always more likely that a film right will have an increased impairment over time, as more factual evidence comes to light both as to the project itself and its actual commercial performance.

Movements in the valuation of film rights 2013-14 2012-13 2011-12 2010-11 2009-10 £'000 £'000 £'000 £'000 £'000

Film rights valuation at 1 April 16,375 21,161 18,013 20,893 15,056

New commitments: made in year 27,208 25,933 20,882 15,307 21,592

Decommitments: new film rights in year (34) (197) - (390) (137) Decommitments: historical portfolio (17) (325) (84) (26) (1,509)

Repayment of investments: new film rights in year (791) (593) (550) (194) (649) Repayment of investments: historical portfolio (2,934) (5,640) (3,368) (6,160) (3,559)

Impairments: new film rights in year (19,293) (18,850) (13,053) (9,323) (9,416) Impairments: historical portfolio (5,069) (7,249) (5,285) (6,680) (2,827) Impairments written back 1,781 3,822 1,193 1,420 2,397

Fair value movement in year: decrease for income already received (2,205) (2,242) (3,477) (962) (203) Fair value movement in year: increase for additional income expectation 337 555 6,890 4,128 148

Film rights valuation at 31 March 15,358 16,375 21,161 18,013 20,893

Movements in impairments in the year is: 2013-14 2012-13 2011-12 2010-11 2009-10 £'000 £'000 £'000 £'000 £'000

Impairments: new film rights in year (19,293) (18,850) (13,053) (9,323) (9,416) Impairments: historical portfolio (5,069) (7,249) (5,285) (6,680) (2,827) (24,362) (26,099) (18,338) (16,003) (12,243) Impairments written back: historical portfolio 1,781 3,822 1,193 1,420 2,397 Net movement in impairments (22,581) (22,277) (17,145) (14,583) (9,846)

In 2009-10 new film rights in the year were almost double that of the prior year, with titles including The King's Speech, Made in Dagenham and Centurion.

In 2010-11 the main additional impairments related to Brighton Rock (£0.6m), Chalet Girl (£0.5m), Tracker (£0.5m) and Another Year (£0.6m). The fair value gains reflected the immediate success of the King's Speech which recouped its in initial investment within weeks of its critical and commercial success. With the announcement of the closure of the UK Film Council, the levels of new awards made inevitably fell, impacting on new film rights in the year.

In 2011-12 the largest increase in provisions relates to the writing off of the remaining rights valuation on Sunshine (£1.9m), Notes On A Scandal (£0.6m) and Wuthering Heights (£0.3m) and an additional provision with regard to Attack The Block (£0.3m). The fair value gains reflect the on-going commercial success of The King's Speech and anticipated future revenues from this - the project had a year end fair value of £6.3m.

In 2012-13 with the launch of the new Film Forever plan and the announcement of our lottery funding strategy, the levels of commitments began to increase. New projects with titles taken to film rights included Belle, The Invisible Woman and 71. The largest increase in provisions related to writing off the remaining rights valuations on Great Expectations (£0.6m), Seven Psychopaths (£0.6m) and Streetdance Encore (£0.5m). Overall the fair value reserve has fallen by £1.7m due to the recoupment funds in relation to The King's Speech previously anticipated in this reserve.

In 2013-14 the levels of commitment remained broadly consistent with those of the prior year, in line with the Film Forever business plan. New projects with titles taken to film rights include Bill, The Riot Club (aka Posh), Sunset Song and Suffragette (aka The Fury). The largest increase in provisions related to the write off of right valuations re Under the Skin (£0.9m), Bill (£0.8m) and Jimmy's Hall (£0.6m). Overall the fair value reserve has fallen by £1.9m due in part to the recoupment funds in relation to The King's Speech previously anticipated in this reserve.

Schedule 1 gives a project by project breakdown in the movement of the film rights summarised above.

111 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

7. FILM RIGHTS (CONTINUED)

The cumulative movements in film rights valuation are: Fair Value Gross Impairments Repayment Adjustments Net £'000 £'000 £'000 £'000 £'000

At 1 April 2012 261,803 (175,728) (72,026) 7,112 21,161

Hard commitments made in the year 25,933 (18,911) (593) - 6,430 Movements on prior year commitments - (3,367) (5,640) (1,687) (10,694) Decommitments (522) - - - (522) At 31 March 2013 287,214 (198,006) (78,259) 5,425 16,375

Hard commitments made in the year 27,208 (19,293) (791) - 7,124 Movements on prior year commitments - (3,287) (2,934) (1,868) (8,090) Decommitments (51) - - - (51)

At 31 March 2014 314,371 (220,586) (81,984) 3,557 15,358

Fair value adjustments in the year can be summarised as: 2013-14 2012-13 £'000 £'000

Fair value reserve at 1 April 5,425 7,112 Decrease for income already received (2,205) (2,242) Increase for additional income expectation 337 555

Fair value at 31 March 3,557 5,425

8. NATIONAL LOTTERY DISTRIBUTION FUND

The movement in balances held at the NLDF is: 2013-14 2012-13 £'000 £'000

Opening balance held at the NLDF 52,841 39,819 Income received from the Lottery 44,891 52,343 Transfer to the Olympic Lottery Distribution Fund (OLDF) - (2,732) Investment income earned 210 280

Available for distribution 97,942 89,710 Cash drawn down (42,125) (36,869)

Balance as at 31 March 55,817 52,841

The funds are invested on behalf of the NLDF by the National Debt Commissioners. The BFI's distribution is in accordance with Sections 22 and 23 of the National Lottery etc. Act 1993 (as amended by the National Lottery Act 1998). The BFI is required by statute to show on the statement of financial position the lower of the market value or the cost of the investment as at the year end.

Following the changes in the year in the NLDF investments by the National Debt Commissioners, there were no unrealised gains in the year (2013:nil)

Adjustment re opening balances

Income received from the Lottery

In 2013-14 a total of £58.2m was deducted from Lottery receipts by Camelot at source, in relation to promotion of the new games, prizes and price modelling that came into effect in October 2013. The share of this that would be attributable to the BFI is £1.6m. Camelot and DCMS have stated that this sum will be repayable over the next 10 years. However due to the uncertainties around the timings and actuality of these repayments, it has not been felt appropriate to treat this as income receivable as at the balance sheet date and thus lottery income can be seen to have fallen due in part to this on a year by year comparison.

Transfer to the Olympic Lottery Distribution Fund (OLDF)

In February 2008, a Statutory Instrument (SI 2008 No. 255, The Payments into the OLDF etc. Order 2008) was passed which allowed for the transfer of up to £1,085m from the NLDF to the OLDF in order to meet some of the costs of holding the 2012 Olympic and Paralympic Games. This comprises £410m as originally envisagedwhen the Government decided to support London’s Olympic bid in 2003, and a further £675m arising from the subsequent budget review.

The final transfers of funds under the statutory instrument took place in the year ending 31 March 2013 with a total of £21.8m being paid by UK Film Council / BFI

112 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

9. TRADE AND OTHER RECEIVABLES

Prior year trade and other receivables have been restated to reflect those prepayments relating to lottery funded capitalised spend on the BFI offices, being released after more than twelve months from the balance sheet date.

At 31.3.2014 At 31.3.2013 £'000 £'000 Trade and other receivables falling due within one year Restated Prepayments and accrued income 290 187 Trade debtors 487 970 VAT receivable 1,197 332 Other receivables 75 1,268

Total trade and other receivables 2,049 2,757

At 31.3.2014 At 31.3.2013 £'000 £'000 Trade and other receivables falling due after one year Restated Prepayments and accrued income 1,989 1,648

Total trade and other receivables 1,989 1,648

Analysis of trade and other receivables between: At 31.3.2014 At 31.3.2013 £'000 £'000

Payable by central government 3,477 1,014 Payable by local authorities - - Payable by bodies external of Government 561 3,391

4,038 4,405

10. CASH AND CASH EQUIVALENTS

All Lottery cash balances are held in commercial bank accounts.

11. FINANCIAL RISKS

International Financial Reporting Standards require disclosure of the role which financial instruments have had during the period, in creating or changing the risks the BFI faces in undertaking its role.

Liquidity risks In 2014, £44.9m (88%) (2013: £52.3m, 84%) of the BFI’s Lottery cash inflows were derived from the National Lottery. The remaining Lottery income comprises investment returns from the balance held with the NLDF £0.2m (0.5%) (2013: £0.3m, 1%); recoupment income from film rights £3.7m (7%) (2013: £6.2m, 10%); surplus on investments £2.2 m (4%) (2013: £2.3m, 4%) and other grants, legacies and donations of £0.5m (0.5%) (2013: £nil, 0%).

The Governors note that the NLDF balance notified by the Secretary of State for Culture, Media and Sport and the BFI's own Lottery cash holding amount to £58.3 m at the statement of financial position date (2013: £57.5m). At the balance sheet date the current hard and soft commitments total £74.6 m (2013: £53.5m) with the increase due to the granting of multi-year awards payable over the period to 2017. Commitments for future years have been entered into, taking into account income forecasts provided by the Department for Culture, Media and Sport (DCMS). These forecasts take a conservative view of future income.

Interest rate risks The BFI’s largest financial asset is retained in the NLDF, which invests in a narrow band of low risk assets such as Government bonds and cash. Neither theBFInorits Governors has any control over these investments. The interest rate risks in respect of these financial assets are disclosed in the financial statements of the NLDF. The market value at year end of the BFI’s investment in the NLDF was £55.8 m (2013: £52.8m) and the average investment return for the year was 0.5% (2013: 0.78%).

Cash drawn from the NLDF, or received from other sources, to pay grant commitments and operating costs are held in variable rate bank accounts and the average interest rate return for the year was 0.1 % (2013: 0.1%). The cash balance at the year end was £2.5m (2013: £4.6m).

Other price risks Under International Financial Reporting Standards relating to Financial Instruments (IAS32, IAS39 and IFRS7) film rights fall within the definition of financial instruments and within that meet the definition of ‘Available for sale financial assets’ and are therefore shown in the statement of financial position at fair value.

The valuation of film rights are subject to on-going review to ensure a fair value is maintained with any impairments being charged as expenditure. Any increaseinthefair value beyond the original investment value is taken to reserves and only released as income on the actual receipt of funds.

Film rights have a valuation of £15.4 m (2013: £16.4m) and the Governors consider that the BFI is not exposed to significant other price risks.

Foreign currency risks The BFI’s financial assets are not exposed to material foreign exchange risks, as long-term balances are held in sterling.

113 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

12. TRADE AND OTHER PAYABLES At 31.3.2014 At 31.3.2013 £'000 £'000

Other payables -BFI non-lottery 157 - Other payables 298 88

455 88 Analysis of other payables between: Payable to central government 157 - Payable to bodies external of Government 298 88

455 88 It is anticipated that all other payables as at 31 March 2014 fall due within one year.

13. OTHER PAYABLES - AWARDS COMMITMENTS

Hard Commitments At 31.3.2014 At 31.3.2013 £'000 £'000

At 1 April 8,429 8,654 Commitments transferred from Creative England 78 - Commitments made 107,376 37,808 Hard decommitments (925) (671) Amounts paid (45,508) (37,362)

At 31 March 69,450 8,429

Hard decommitments arise when any element of the award is not utilised once contracts are signed and drawdown has commenced.

New hard commitments made during the year: 2013-14 2012-13 £'000 £'000

Film fund awards taken as film rights 27,208 25,933

Multi year awards for the period to March 2017:

Film Education awards 26,000 30 Creative Skillset awards 21,000 3,654 Unlocking Film Heritage 15,000 Film Network Fund 9,025 30 Film Festivals Fund 600 - Total multi year awards 71,625 3,714

Project funding :

Creative England 3,920 2,201 International awards 2,061 951 Film Festivals awards 371 - Film Academy awards 700 - Programme Development Fund 508 - Film Culture awards 437 - Focal points awards 350 - BFI Neighbourhood awards 196 First Light - 1,100 Strategic Audience Development Scheme Awards - 3,909 Total project awards 8,543 8,161

New hard commitments in year 107,376 37,808

The comparative figure of £3.9m with regard to the Strategic Audience Development Scheme in 2012-13 includes awards, where in 2013-14 specific new award strands have now been introduced. Primary amongst these is the £2.6m award to Film Clun, now replaced along with the award to First Light, by the new Film Education award.

Ageing of hard commitments - estimated dates of payment 2013-14 2012-13 £'000 £'000

Year ended 31 March 2014 - 8,429 Year ended 31 March 2015 33,700 - Year ended 31 March 2016 17,875 - Year ended 31 March 2017 17,875 -

69,450 8,429

Hard commitments payable beyond 31 March 2015, relate to the multi-year awards made to Into Film, Creative Skillset, the Film Hub Lead Organisations, Unlocking Film Heritage and under the Film Festivals Fund covering the period to March 2017.

114 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

13. OTHER PAYABLES - AWARDS COMMITMENTS continued

Soft Commitments 2013-14 2012-13 £'000 £'000

At 1 April 45,079 8,308 Commitments transferred from Creative England 498 Commitments made 68,297 75,415 Soft decommitments (1,348) (836) Transferred to hard commitments (107,376) (37,808)

At 31 March 5,150 45,079 Soft decommitments arise when the conditions of the terms of the award are not met and prior to signature of contract and completion of any terms precedent.

Hard commitments increased significantly in 2013-14 with the introduction of multi year partner awards covering the period to March 2017. In accordance with our accounting policies, these are taken as expenditure in the year in which the commitment crystallises as hard, with the balance payable contained in award commitments falling due with in one year on the balance sheet.

In the year such multi year commitments were made to Into Film (£26m ) in relation to the Education Strategy, Creative Skillset (£21m) re industry training strategy, Unlocking Film Heritage (£15m under a section 27 dispensation) re digitising and archives, the Film Hub Lead Organisations (£9m), a leading part of our nationwide audience focussed activities and Film Festivals (£0.6m)

14. LEASES

As at 31 March 2014, the BFI had total minimum payments under a non-cancellable operating lease relating to the BFI offices in London, as set out below.

At 31.3.2014 At 31.3.2013 £'000 £'000

Amounts payable within one year 1,160 1,160 Amounts payable within two to five years 4,640 4,640 Amounts payable beyond five years 2,320 3,480

The proportion of these costs relating to these leases forming part of the costs apportioned to Lottery are: At 31.3.2014 At 31.3.2013 £'000 £'000

Amounts payable within one year 261 261 Amounts payable within two to five years 1,044 1,044 Amounts payable beyond five years 522 783

15. CAPITAL COMMITMENTS

As at 31 March 2014, the BFI had capital commitments outstanding relating to the renovation of the ground floor of the Stephen Street offices. The element deemed attributable to lottery at the balance sheet date was £0.1m (2013: £nil).

16. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES At 31 March 2014, the BFI Lottery activities had no provisions, contingent assets or contingent liabilities (2013: £nil).

17. SEGMENTAL REPORTING

The BFI is required under the Lotteries Act to produce statutory accounts which cover its operations as a Lottery distributor to 31 March 2014. These are reported to the Board of Governors and the Chief Executive Officer as a stand-alone entity. Thus in the context of IFRS8 no additional disclosure of segmental reporting is deemed appropriate.

18. NOTES TO THE STATEMENT OF CASH FLOWS

Reconciliation of operating surplus to net cash flow from operating activities: 2013-14 2012-13 £'000 £'000

Operating surplus/(deficit) (60,217) 12,755 Decrease / (increase) in film rights 1,017 3,099 Increase in trade receivables (2,609) (15,090) (Decrease) / increase in trade payables 59,520 (398) Increase / (decrease) in pension liability 196 98 Cash receipts from NLDF (42,125) (36,868)

Net cash from operating activities (44,218) (36,404)

2013-14 2012-13 £'000 £'000

Opening cash balances at 1 April 4,631 4,160 Movement in year (2,093) 471

Closing cash balances at 31 March 2,538 4,631

19. EVENTS AFTER THE REPORTING PERIOD

115 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

There were no events after the reporting period either adjusting or non-adjusting which are not disclosed elsewhere in the Notes to the financial statements.

These accounts were authorised for issue on the date they were certified by the Comptroller and Auditor General

116 LOTTERY FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2014

20. LOSSES AND SPECIAL PAYMENTS

Screen East, the regional screen agency under the RIFE programme, went into liquidation in September 2010. The agency had received grant and Lottery awards from the UKFC. A protective claim of £1,046,686 was lodged with the liquidator. This claim was transferred to the BFI on 1 April 2011 and remains unadjusted. In the year ended March 2014. £0.2m (2013: nil) was received from the liquidator in partial settlement of this. However until the conclusion of the liquidation process it is unclear what further funds may be recoverable from the liquidator, and recovery of funds has not been anticipated in these financial statements.

21. RELATED PARTIES

All awards outstanding are payable upon the meeting of conditions precedent within individual contracts.

The following related party transactions occurred during the period:

Relationship to New Awards Balance Role with recipient of made as at Recipient of funding Name BFI funding Year Ended 31.3.2014 31.3.2014 ££ Governor Blueprint Pictures (Posh) Ltd Pete Czernin Director (appointed 848,827 40,000 14 March Blueprint Pictures Ltd Pete Czernin Director 2014) 38,705 27,000 British Federation of Film Societies Jim Dempster Employee Trustee 80,000 5,000 Governor (appointed Creative Skillset Tim Richards Director and Trustee 14 May 2013) 21,000,000 16,360,920 Film Agency Wales Heather Stewart Employee Board Member 500,000 336,332 Fury Pictures Limited Matthew Justice Governor Managing Director 100,000 -

Charles Cecil is a director of Screen Yorkshire. Screen Yorkshire independently co-funded a number of projects across the year with the BFI.

The BFI is a non-departmental public body sponsored by the Department for Culture, Media and Sport (DCMS). DCMS is regarded as a related party and during the year the BFI, as a lottery distributor, had material transactions with DCMS.

Awards made under the Lotteries Act Section 27 dispensation

Using the power granted by the Section 27 of the National Lotteries Act etc 1993, the Secretary of State gave permission in 2012-13 for an award of £15,000,000, to the BFI in relation to Unlocking Film Heritage, the BFI's Archive Strategy as outlined in Film Forever future plan, for both the national and regional moving image archives. The award was made in March 2013 and became a hard commitment during 2013-14 and at the 31 March 2014 £13.5m remained payable.

22. Analysis of total expenditure between administrative and programme spend

Under the definitions of the Financial Reporting Manual 2013-14 all activities in these accounts are programme spend.

117 LOTTERY FINANCIAL STATEMENTS

Schedule 1: Film Rights Detail as at 31 March 2014

Applicant Description Film Rights New Recoupment Transfer Surplus De-commitments Provisions Reversal of Fair valuation Changes in Film Rights at 1 April 2013 Commitments Received to Producer over made in year prior years movement re fair valuation as at Equity Scheme investment provisions recoupment 31 March 2014 ££££££ £££££

011 Productions Ltd Couple in a Hole (20,000) 20,000 0 Adventure Pictures (Rage) Ltd Rage (135) 135 0 Africa Utd Ltd Africa Utd (1,733) 1,733 0 Alcove Entertainment Ltd The Double 330,000 330,000 APB Distribution Ltd Ginger and Rosa (aka The Bomb) (26,448) 8,486 (6,052) 24,014 0 APT Films Ltd Solomon and Gaenor (12,100) 12,100 0 Artificial Eye We Need To Talk About Kevin (199,700) 199,700 0 ATB Pictures Ltd Attack The Block 340,050 (663) (300,000) 39,386 Baby Cow Films Ltd Alan Partridge: Alpha Papa 206,350 206,350 Becoming Jane Ltd Becoming Jane (8,489) 8,489 0 Bend It Films Ltd Bend It Like Beckham 40,734 (3,175) 3,175 (3,175) 37,559 BFI Gallivant (28) 28 0 Blue Cloth Ltd The Iron Lady 337,705 (335,868) 1,836 Bluelights Neds Ltd Neds 3,144 (3,144) 0 Blueprint Pictures (Now is Good) Ltd Now is Good (13,798) 13,798 0 Blueprint Pictures (Posh) Ltd The Riot Club (aka Posh ) 35,000 (35,000) 0 Blueprint Pictures Ltd Vision Award (20,000) 20,000 0 Brandnew-U Ltd Brand New-U 108,600 (36,200) 72,400 Bright Star Ltd Bright Star (1,788) 1,788 0 Brighton Rock Productions Ltd Brighton Rock 63,328 (11,179) (52,149) 0 Broken Spectre Ltd Shell 10,000 (10,000) 0 Centurion Films Ltd Centurion (61,038) 61,038 0 Conviction Films Ltd Blood (aka Conviction) 210,000 (210,000) 0 Crab Apple Films Ltd & Warp Films Ltd '71 363,736 363,736 Creep Films Ltd Creep (1,560) 1,560 0 Cuba (Broken) Pictures Ltd Broken 80,250 (671) (26,750) 52,829 Dagenham Girls Ltd and We Want Sex Ltd Made in Dagenham 53,077 (1,091) 51,986 Dan Films Ltd Vision Award 22,500 (35,000) 12,500 0 Deep Blue Sea Productions Ltd The Deep Blue Sea 53,766 (29,762) 24,005 Desperate Optimists Ltd Mister John 90,000 (90,000) 0 Dido Belle Ltd Belle 384,000 (128,000) 256,000 DNA Films Ltd 28 Days Later 111,709 (54,350) 100,000 157,358 DNA Films Ltd Beautiful Creatures (87,532) 87,532 0 DNA Films Ltd Strictly Sinatra (3,429) 3,429 0 DNA Films Ltd The Final Curtain (20,034) 20,034 0 DNA Films Ltd The Parole Officer (48,377) 48,377 0 Element Pictures UK Ltd Frank 327,000 327,000 Element Pictures UK Ltd The Guard 46,655 (121,755) 75,100 0 Fragile St Trinian's & Mayhem Films Ltd St Trinians 217,851 (21,383) 21,383 (21,383) 10,000 206,469 Fury Pictures Ltd Cuban Fury 300,000 (200,000) 100,000 Gruber Films Ltd Shooting Fish 6,935 (5,946) 989 Hallmark Entertainment Film Productions and Hallmark Entertainment Distributors LLC Mike Bassett: England Manager 62,825 62,825 Harry Brown Film Ltd Harry Brown 254,656 (8,033) 246,623 Headline Pictures (Invisible Woman) Ltd The Invisible Woman 471,000 (471,000) 0 Heyday Films Ltd The Thirteenth Tale (62,500) 62,500 0 HILN Ltd How I Live Now 365,320 (365,320) 0 Hopscotch Films Ltd The Story of Film 30,956 (35,061) 4,105 (4,105) 20,000 15,895 Illuminations Films Ltd Berberian Sound Studio (6,103) 6,103 0 Independent Film Productions Ltd Boxing Day (1,112) 1,112 0 International Documentary Festival Sheffield Ltd The Big Melt (aka Steel) (1,855) 1,855 0 JHP 3 Ltd Exhibition (aka Joanna Hogg Project 3) 129,058 (936) (128,122) 0 Just A Film Company Ltd Gone Too Far 107,100 (107,100) 0 Kasander (Andrea Untitled) Ltd Fishtank (343) 343 0 Ladies In Lavender Ltd Ladies in Lavender 11,445 (7,561) 7,561 (7,561) 7,500 11,384 Last Passenger Ltd Last Passenger 214,000 (214,000) 0 Left Bank Pictures (Film) Ltd All in Good Time (aka Rafta Rafta) 28,488 (10,488) (18,000) 0

118 LOTTERY FINANCIAL STATEMENTS

Left Bank Pictures Ltd Vision Award 18,750 18,750 Lennon Films Ltd & Nowhere Boy Productions Nowhere Boy 103,504 (103,504) 0 Lions Gate UK Ltd The Imaginarium of Dr Parnassus (120,000) 120,000 0 Made of Stone Productions Ltd Spike Island 270,000 (270,000) 0 Magic Light Pictures (Commissioning) IOM Ltd Sparkle 354 (117) 237 Minnow Films Ltd Shooting Big Foot (aka Of Monster and Men) (22,500) 22,500 0 Mirrorball Films Ltd Nativity 2 (7,147) 7,147 0 Morvern Callar Productions Ltd Morvern Callar 19,295 (19,295) 0 MP Productions (LH) Ltd The Lawless Heart 17,493 (17,493) 0 New Amsterdam Film Ltd Shame 14,779 (61,487) 46,708 0 Nitrate London Ltd London - The Modern Babylon (10,550) 10,550 0 Northern Film & Media Northern Film & Media Dig Shorts 7,323 (4,696) (2,628) 0 Number 9 Films (Byzantium) Ltd Byzantium 90,000 (50,000) (40,000) 0 Number 9 Films (Slate) Ltd Development slate (30,170) 30,170 0 Optimum & Studio Canal Ltd Optimum Film Remakes (74,850) 74,850 0 Origin Pictures Ltd Vision Award (40,000) 40,000 0 P Guide Productions Ltd The Perverts Guide to Ideology 94,231 (6,978) 87,253 Pathe Pictures Ltd Dear Frankie (aka Natural History ) (1,239) 1,239 0 Pathe Pictures Ltd Development slate (1,174) 1,174 0 Pathe Pictures Ltd Girl with a Pearl Earring (43,652) 43,652 0 Pathe Productions Ltd Enduring Love 11,219 (1,501) (1) (9,716) 0 Pathe Productions Ltd It Was An Accident 2,499 (2,499) 0 Pathe Productions Ltd Magic Roundabout 83,833 (83,833) 0 Pathe Productions Ltd Max 18,799 (18,799) 0 Pathe Productions Ltd Millions (4,096) 4,096 0 Pathe Productions Ltd Mrs Henderson Presents 8,930 (8,930) 0 Pathe Productions Ltd Suzie Gold 24,795 (365) (24,430) 0 Pathe Productions Ltd The Hole (2,488) 2,488 0 Pathe Productions Ltd There's only one Jimmy Grimble (1,932) 1,932 0 Pathe Productions Ltd Thunderpants 3,669 (288) (3,381) 0 PFP Films Ltd The Magdalene Sisters 15,000 (8,160) 6,840 Philomena Lee Ltd Philomena 750,000 (38,002) 711,998 Picture Farm Ltd The Escapist (6,200) 6,200 0 Picturehouse Entertainment Ltd The Imposter 130,100 (130,100) 0 Pont Neuf ltd French Film (968) 968 0 Project Nim Ltd Project Nim 1,565 0 (1,565) 0 Qwerty Films Ltd Georgiana, Duchess of Devonshire (aka The Duchess) (779) 779 0 Qwerty Films Ltd Last Days on Mars 154,923 (154,923) 0 Recorded Picture Co Ltd Young Adam (1,542) 1,542 0 Red Diesel Ltd Welcome to the Punch 500,000 (147,786) (250,000) 102,214 Reprisal Films Ltd Calvary 225,000 225,000 Revolution Films Ltd Vision Award (20,000) 20,000 0 Roast Beef Productions Ltd Smash and Grab: The Story of the Pink Panthers 49,500 (49,500) 0 See-Saw Films Ltd Vision Award 17,500 (45,000) 27,500 0 Selfish Giant Film Ltd The Selfish Giant 179,550 (58,543) 121,007 Seventh Kingdom Productions Ltd Under the Skin 916,372 (916,372) 0 Severance IOM Ltd Severance aka P45 (2,162) 2,162 0 Sightseers Film Ltd Sightseers 111,979 (48,304) (6) 63,669 Sigma Films Ltd Vision Award 7,500 7,500 Sixteen Films Ltd The Wind that Shakes the Barley (7,824) 7,824 0 Sixteen Fly Limited The Spirit of '45 60,000 (25,764) 34,236 Sixteen Scotland Ltd The Angels' Share 114,447 (49,945) 64,502 Snow Cake Films Ltd Snowcake 15,651 15,651 Soho Angel Films Ltd In Real Life 90,000 (90,000) 0 SOL Productions Ltd Sunshine on Leith 156,000 156,000 Speaking Film Ltd The King's Speech 4,838,682 (2,135,518) 2,135,518 (2,135,518) 2,703,165 Spies Productions Ltd The Comedian 65,000 65,000 Squid Productions Ltd The Woman in Black (31,125) 31,125 (31,125) 200,000 168,875 Steel Mills (Yorkshire) Ltd & Steel Mill Cottage (IOM) Ltd The Cottage 5,000 5,000 Straightheads Ltd Straightheads (21,251) 21,251 0

119 LOTTERY FINANCIAL STATEMENTS

Streetdance Distribution Ltd Streetdance 120,127 (35,280) 84,847 Studio Canal Ltd Submarine (57,837) 57,837 0 Suite Distribution Ltd Suite Francaise (42,500) 42,500 0 Sunset Song Ltd Sunset Song 77,250 (57,938) 19,313 Tall Stories Ltd Beautiful People (246) 246 0 The Film Consortium Ltd 51st State 15,395 (15,395) 0 The Film Consortium Ltd A Christmas Carol 18,699 (18,699) 0 The Film Consortium Ltd Dust 473 (473) 0 The Film Consortium Ltd Jimmy Spud (aka Gabriel and Me) (3,418) 3,418 0 The Film Consortium Ltd Silk Road (aka In This World) 19,342 (19,342) 0 The Film Consortium Ltd Twenty Four Hour Party People 645 (645) 0 Third Films Ltd Bypass 105,000 (35,000) 70,000 Three Pillows Films Ltd Unmade Beds 1,223 (1,277) 54 0 Tiber Films Ltd Catch Me Daddy 180,348 (30,348) (60,116) 89,884 Tiger Aspect Productions Ltd Billy Elliott 148,242 148,242 Touching the Void Ltd Touching the Void 13,898 (758) 758 (758) 13,140 Triangle Films Ltd Triangle 10,002 (462) 9,540 Unamimous Pictures Ltd Shadow Dancer 20,000 (20,418) 418 (0) Untitled 03 Ltd Vera Draka aka Untitled 03 (16,265) 16,265 0 Untitled 09 Ltd Another Year aka Untitled '09 (86,670) 86,670 0 Untitled 13 Ltd Mr Turner (aka Untitled 13) 335,000 (35,000) 35,000 335,000 Valhalla Films Ltd Faintheart 2,090 (563) 1,527 Venus Pictures Ltd Venus (1,602) 1,602 0 Vertigo Films Ltd Vision Award (35,000) 35,000 0 Viva Ltd Captain Jack (343) 343 0 Wall to Wall (Egypt) Ltd Man on Wire (aka Reach for the Clouds) 55,495 (1,761) 1,761 (1,761) 53,734 Warp (Submarine) Ltd Submarine 31,257 (46,611) 15,355 0 Warp Bulldog Ltd This is England (5,737) 5,737 0 Warp Films Ltd Tyrannosaur (9,376) 9,376 0 Warp Films Ltd Vision Award 7,500 (25,000) 17,500 0 Warp X (Punch) Ltd Punch (aka Donkey Punch) 5,366 (5,366) 0 Warp X Ltd For Those in Peril 83,550 (83,550) 0 Warp X Ltd & Fear Factory (Hush) Ltd Hush 24,038 (24,038) 0 Warp X Ltd & Rook Films (Kill List) Ltd Kill List 37,929 (6,277) 31,652 Weekend Productions Ltd Le Week-End 150,000 150,000 Wilder Films Ltd Up There 6,484 (6,484) 0 Yellow Sun Ltd Half of a Yellow Sun 315,111 (315,111) 0 Yemen Distributions Ltd Salmon Fishing in the Yemen (135,569) 135,569 0

Film rights as at 1 April 2013 16,375,123 0 (5,023,237) (125,000) 2,213,871 (16,979) (5,068,376) 1,640,889 (2,205,385) 337,500 8,128,406

011 Productions Ltd Couple in a Hole 35,000 (35,000) 0 10ft Films Ltd To Hull and Back 10,000 (10,000) 0 Agile Films Ltd Keeping Up with the Joneses 8,000 (8,000) 0 Aim Films Ltd The Legend of Shorty 35,000 (35,000) 0 AL Films Ltd Second is Nowhere (aka Gold) 500 (500) 0 Bard Entertainments Ltd Iona 7,250 (7,250) 0 Barge Pole Productions Ltd Bury It! 24,150 (24,150) 0 Basement Multimedia Ltd Looters 20,000 (20,000) 0 BeaglePug Ltd Bulldog Drummond 24,500 (24,500) 0 Beat Films Ltd Tutor 57,000 (57,000) 0 Bill Films Ltd Bill 35,000 (35,000) 0 Blueprint Pictures Ltd The Riot Club (aka Posh ) 16,000 (16,000) 0 Blueprint Pictures Ltd Three Miles North of Molkom 11,705 (11,705) 0 Brilliant Films Ltd The Box of Delights 34,500 (34,500) 0 Bwark Productions Ltd Untitled Paul Wright Project 10,500 (10,500) 0 Camberwell Productions Ltd Rainy Day Women 1,250 (1,250) 0 Cannon and Morley Productions Ltd The Falling 56,500 (56,500) (45,750) 45,750 0 Century Films Ltd Thomas Quick: The Making of a Serial Killer 35,000 35,000 Cloud Eight Films Ltd Ingenious Pain 90,000 (90,000) 0

120 LOTTERY FINANCIAL STATEMENTS

CMP Film Ltd The Beginning of Spring 2,500 (2,500) 0 Crab Apple Films Ltd & Warp Films Ltd '71 (18,736) 18,736 0 Crab Apple Films Ltd & Warp Films Ltd Destroyer 15,000 (15,000) 0 Cuba Pictures Ltd An Equal Music 14,000 (14,000) 0 Cuba Pictures Ltd Delinquent Season 39,250 (39,250) 0 Cuba Pictures Ltd London Road 35,000 35,000 Dawbell Consulting Ltd A Story of Children and Film 35,000 (35,000) 0 Daybreak Pictures Ltd The Muslim Patrol (aka Family Man) 10,750 (10,750) 0 Dissent Projects Ltd Father Joe 20,750 (20,750) 0 Ecosse Films Ltd The Boy Who Would Be Shakespeare 66,250 (66,250) 0 Edge City Films Ltd The Creator 53,500 (53,500) 0 Embargo Films (UK) Ltd Trivial Pursuits 20,750 (20,750) 0 Emotion Control Ltd The Ballad of Peckham Rye 34,250 (34,250) 0 Endor Productions Ltd The Rising 13,700 (13,700) 0 Equation Pictures Ltd Oliva and Jim 4,000 (4,000) 0 Feet Films Ltd & Free Range Films Ltd Up a Tree in the Park at Night with a Hedgehog 41,000 (41,000) 0 Feet Films Ltd & Free Range Films Ltd White Rose Rebel 5,000 (5,000) 0 Fiesta Productions Ltd Marked man 2,250 (2,250) 0 Fly Film Company Ltd Bill and Lena 13,000 (13,000) 0 Fly Film Company Ltd If destroyed still true. I.D.S.T 13,500 (13,500) 0 Fly Film Company Ltd Like A Virgin 37,000 (37,000) 0 Fly Film Company Ltd The Lighthouse 26,500 (26,500) 0 Forward East Ltd The Book of Stolen Time (aka The Dirty Little Book of Stolen Time) 27,500 (27,500) 0 Golden Arrow Pictures Ltd She Who Sends Gifts 35,500 (35,500) 0 Gravy Media Ltd My Haunted House 5,350 (5,350) 0 GreenAcre Films Ltd & Illa State Productions Ltd Relax 27,600 (27,600) 0 Hammer Film Productions Ltd Coven 10,000 (10,000) 0 Hillbilly Films Ltd Second Coming 35,000 (35,000) 0 Hole In The Wall Gang Ltd Aisha's Communion 12,000 (12,000) 0 Holy Cow Productions Ltd Postcards From London 10,000 (10,000) 0 Hook Pictures Ltd White on Red 26,250 (1,250) (25,000) 0 Hot Property Films Ltd The Museum of Innocence 36,350 (36,350) 0 HSI London Ltd Field Study 49,599 (49,599) 0 Humdinger Films Ltd Skyborn 13,000 (13,000) 0 Illuminations Films Ltd The Beast in the Jungle 3,500 (3,500) 0 Impact Film & Television Ltd Coram Boy 40,000 (40,000) 0 In Bed With Ltd In Bed With Chris Needham 2,500 (2,500) 0 Joke Disco Films Ltd Scouting for Rudeboys 10,000 (10,000) 0 Jonescompany Productions Ltd Patch of Fog 20,250 (20,250) 0 Junction Films Ltd Keep The Faith 23,875 (23,875) 0 Kennedy Mellor Ltd The Lonely Londoners 40,250 (40,250) 0 Kindle Entertainment Ltd Four Children and It 49,000 (49,000) 0 Kindle Entertainment Ltd White Boots 17,550 (17,550) 0 Lesata Productions Ltd Joy 18,350 (18,350) 0 Melwood Pictures ltd Gecko 53,800 (53,800) 0 MG Pictures Ltd Departure 9,000 (9,000) 0 Mint Pictures Ltd Masquerade 55,750 (55,750) 0 Missing In Action Films Ltd GBH 8,000 (8,000) 0 Newscope Films Ltd A Bollywoof Tale 19,500 (19,500) 0 Nine Acre Films Ltd Amazing Ray 26,000 (26,000) 0 Number 9 Films Ltd Dan Leno and the Limehouse Golem 18,919 (18,919) 0 Number 9 Films Ltd Dusty 49,950 (49,950) 0 Number 9 Films Ltd Hyena 5,420 (5,420) 0 Number 9 Films Ltd Strangers 44,018 (44,018) 0 Oakheart Films Ltd Alice in Lalaland 9,000 (9,000) 0 Oakheart Films Ltd Out of Russia 60,000 (8,000) (52,000) 0 Old Street Films Ltd Exterminate All The Brutes 34,500 (34,500) 0 Optimism Film Ltd Step Thirteen 6,000 (6,000) 0 Origin Pictures Ltd Silencers 64,250 (64,250) 0 Origin Pictures Ltd X Plus Y 41,000 (35,000) (6,000) 0

121 LOTTERY FINANCIAL STATEMENTS

Pari Passu Films Limited Hunting Lila 29,000 (29,000) 0 Parti Productions Ltd Stray 45,500 (45,500) 0 Poisson Rouge Pictures Ltd Gone 2 Africa 35,000 (35,000) 0 Quark Films Ltd Pin Cushion 14,250 (14,250) 0 Rainmark Films Two Ltd Mrs. Robinson's Disgrace 55,500 (55,500) 0 Riley Productions London Ltd Mike Bassett: Interim Manager (aka Soccer Manager) 31,500 (31,500) 0 Rob Roy Films Ltd Paradise 35,500 (35,500) 0 Rook Films Ltd The Duke of Burgundy 35,000 (35,000) (20,000) 20,000 0 Ruby Films Ltd Gemma Bovery 9,250 (64,750) 55,500 0 Ruby Films Ltd Suffragette (aka The Fury) 35,000 (35,000) 0 Ruby Films Ltd Your Voice in My Head 10,000 (10,000) 0 Runaway Fridge Films Ltd The Boy Who Loves Lights 3,000 (3,000) 0 Runaway Fridge TV Ltd The Madolescents 20,750 (20,750) 0 Salon Development Ltd Churchill 23,850 (23,850) 0 Sarah Radclyffe Productions Ltd The Great Stink 32,000 (32,000) 0 Scarlet Films Ltd & Element Pictures Ltd Balance of Power 1,250 (1,250) 0 Scarlet Films Ltd & Element Pictures Ltd The Lobster 35,000 (35,000) 0 Scott Free Films Ltd Blood Red Road 30,000 (30,000) 0 Scott Free Films Ltd Crane 25,000 (25,000) 0 Scott Free Films Ltd Get Santa 35,000 (35,000) 0 Scott Free Films Ltd Settle Down 13,000 (13,000) 0 See-Saw Films Ltd Slow West 35,000 (35,000) 0 See-Saw Films Ltd The Wedding Dress 37,250 (37,250) 0 Sherbet Ltd All Day Breakfast 10,000 (10,000) 0 Shona Films Ltd Tusk 22,750 (22,750) 0 Singer Films Ltd Cold Hands 68,000 (68,000) 0 Slingshot Productions Ltd Londonstani 6,500 (6,500) 0 Spring Films Ltd Night Will Fall (aka Memory of the Camps) 45,000 45,000 Starfield Productions Ltd A Guide to Second Date Sex 32,100 (32,100) 0 Starfield Productions Ltd The Night Climbers 13,500 (13,500) 0 Steel Mill Pictures Ltd Yeti 47,250 (47,250) 0 Stone City North Films Ltd Electricity 33,350 (33,350) 0 Studio AKA Ltd The Yeti Project 64,823 (64,823) 0 Studio of the North Ltd Bit by Bit 10,000 (10,000) 0 SUMS* Film and Media Ltd Phone Book (aka Stories For A Phone Book Page) 29,500 (29,500) 0 Sunset Song Ltd Sunset Song 35,000 (35,000) 0 Sweet As A Ltd Out of Step 26,250 (26,250) 0 Synchronicity Films Ltd Glasgow Kiss 19,125 (19,125) 0 Testament Films Ltd Testament of Youth 35,000 (35,000) 0 The Bureau Film Company Ltd 45 Years (aka In Another Country) 27,000 (21,500) (5,500) 0 The Bureau Film Company Ltd Another World 17,000 (17,000) 0 The Fyzz Facility Film One Ltd Magpie 30,000 (30,000) 0 Third Films Ltd Light Years 55,000 55,000 Tiger Lily Films Ltd All I Am 9,500 (9,500) 0 Tiger Lily Films Ltd Remainder 35,000 35,000 Tiger Lily Films Ltd Sherbet Lemons 10,010 (10,010) 0 Tiny Spark Productions ltd The Story of Me and You 10,000 (10,000) 0 Touchpaper Television Ltd The Summer Book 70,000 (70,000) 0 Trouble & Desire Films Ltd Untitled London Night 10,000 (10,000) 0 TS Films Ltd The Humans 39,250 (39,250) 0 UME7 Ltd The Goob 35,000 (35,000) 0 Unanimous Entertainment Ltd Girl With A Clock For A Heart 56,000 (56,000) 0 Unanimous Entertainment Ltd Untitled Ronan Bennett (aka Michael Wilson/Balcombe Street) 37,500 (37,500) 0 Universal Spirits Ltd The Incident 11,000 (11,000) 0 Unorthodox Productions Limited The Ghost Runner 42,500 (42,500) 0 VE & B Ltd Out Of The Woods 14,400 (14,400) 0 Warp Films Ltd Benefield 21,750 (21,750) 0 Warp Films Ltd Horkmor 30,000 (30,000) 0 Warp Films Ltd Liam and Lenka 5,475 (5,475) 0 White Rabbit Films Ltd Shooting Kids 16,000 (16,000) 0

122 LOTTERY FINANCIAL STATEMENTS

Wild Horses Film Company Ltd Justified Sinner 43,000 (43,000) 0 Wildgaze Films Ltd Brooklyn 35,000 35,000 World Productions Ltd Son of Man 24,700 (24,700) 0 Wostok Ltd Passing Clouds 28,000 (28,000) 0 Young Films Ltd Lockerbie 63,750 (63,750) 0

New development awards 2013-14 0 3,934,919 (598,586) (152,000) 0 (14,750) (3,069,569) 139,986 0 0 240,000

011 Productions Ltd Couple in a Hole 305,000 (244,000) 61,000 Aim Films Ltd The Legend of Shorty 250,000 (185,000) 65,000 Alcove Entertainment Ltd The Double 57,500 (40,250) 17,250 Bill Films Ltd Bill 1,015,000 (812,000) 203,000 Bishop Films Ltd Gozo 108,000 (86,400) 21,600 Blueprint Pictures (Posh) Ltd The Riot Club (aka Posh ) 848,827 (441,390) 407,437 Bofa Productions Ltd A Story of Children and Film 92,771 (5,000) (74,217) 13,554 Brandnew-u Ltd Brand New-U 103,433 (82,746) 20,687 Bru Productions Ltd Acoustic Kitty 18,330 (18,330) 0 Bypass Ltd Bypass 45,430 (36,344) 9,086 Calamity Films Ltd Pride 1,000,000 (540,000) 460,000 Cannon and Morley Productions Ltd The Falling 750,000 (600,000) 150,000 Crab Apple Films Ltd & Warp Films Ltd '71 88,000 88,000 Cuba Pictures (London Road) Ltd London Road 500,000 (400,000) 100,000 Dark Pictures Ltd The Line 8,457 (8,457) 0 Darlow Smithson Productions Ltd and World's End Pictures Ltd Dark Horse 325,000 (260,000) 65,000 Dido Belle Ltd Belle 80,000 (64,000) 16,000 DNA Films Ltd Sunshine on Leith 53,880 (37,716) 16,164 Electric Ballroom Productions Ltd Tits 2,850 (2,850) 0 Element Pictures UK Ltd Frank 48,257 (11,257) 37,000 Film Agency for Wales Cinematic - Sinematig 300,000 (240,000) 60,000 Fury Pictures Limited Cuban Fury 100,000 (90,000) 10,000 Get Santa Productions Ltd Get Santa 1,200,000 (780,000) 420,000 Hyena Film Productions Ltd Hyena 305,420 (167,981) 137,439 iFeatures Ltd Norfolk 186,667 (149,334) 37,333 iFeatures Ltd The Goob 186,667 (149,334) 37,333 International Documentary Festival Sheffield Ltd The Big Melt (aka Steel) 30,000 (24,000) 6,000 Life To Live Films Ltd Crocodile 6,270 (6,270) 0 Lighthouse Entertainment Ltd BFI Shorts 2012 40,893 (40,893) 0 Minnow Films Ltd Shooting Big Foot (aka Of Monster and Men) 250,000 (200,000) 50,000 No Logo Films Ltd Orbit Ever After 8,000 (8,000) 0 Origin Pictures (X&Y Prod) Ltd X Plus Y 912,850 (638,995) 273,855 Pico Pictures Ltd Mohammed 8,500 (8,500) 0 Pulse Films SPV 1 Ltd 20,000 Days on Earth 200,000 (140,000) 60,000 Q and Country Ltd Queen and Country 320,000 (256,000) 64,000 Rook Films Burgundy Ltd The Duke of Burgundy 500,000 (380,000) 120,000 Ruby Films Ltd Suffragette ( aka The Fury) 1,000,000 (400,000) 600,000 Scarlet Films Ltd & Element Pictures Ltd The Lobster 300,000 (120,000) 180,000 Second Coming Productions Ltd Second Coming 370,000 (296,000) 74,000 Selfish Giant Film Ltd The Selfish Giant 13,500 (10,800) 2,700 Seventh Kingdom Productions Ltd Under the Skin 21,700 (34) (21,666) 0 Sixteen Jimmy Ltd Jimmy's Hall 1,000,000 (600,000) 400,000 Slow West Film Ltd Slow West 1,000,000 (390,000) 610,000 Smoking Dogs Films Ltd The Stuart Hall Project 22,695 (8,115) (14,580) 0 SOL Productions Ltd Sunshine on Leith 25,000 (13,000) 12,000 Stone City North Films Ltd Electricity 450,000 (360,000) 90,000 Stroke City Films Ltd A City Dreaming (aka Stroke City) 100,000 (80,000) 20,000 Sunset Song Ltd Sunset Song 1,307,500 (980,625) 326,875 Tempo Productions Ltd Our Robot Overlords 820,000 (656,000) 164,000 Testament Films Ltd Testament of Youth 500,000 (395,000) 105,000 The Bureau Film Company Ltd 45 Years 500,000 (400,000) 100,000

123 LOTTERY FINANCIAL STATEMENTS

Tiber Films Ltd Catch Me Daddy 60,000 (48,000) 12,000 Tiger Lily Films Ltd Remainder 600,000 (480,000) 120,000 Wildgaze Films Ltd Brooklyn 400,000 (160,000) 240,000

New production awards 2013-14 0 18,746,397 (5,000) 0 0 (19,406) (12,638,678) 0 0 0 6,083,314

42 M&P Ltd Vision Award 100,000 (50,000) 50,000 Cowboy Films Ltd Vision Award 100,000 (20,000) (50,000) 30,000 Flickerpix Ltd Vision Award 50,000 (25,000) 25,000 Fly Film Company Ltd Vision Award 50,000 (25,000) 25,000 Forward Films Ltd Vision Award 50,000 (25,000) 25,000 Independent Film Productions Ltd Vision Award 100,000 (15,000) (50,000) 35,000 Inflammable Films Ltd Vision Award 50,000 (25,000) 25,000 Lupus Films Ltd Vision Award 100,000 (50,000) 50,000 Nexus Productions ltd Vision Award 100,000 (50,000) 50,000 Origin Pictures Ltd Vision Award 50,000 (25,000) 25,000 Passion Pictures (Films) Ltd Vision Award 100,000 (50,000) 50,000 Rainy Day Films Ltd Vision Award 50,000 (25,000) 25,000 Roast Beef Productions Ltd Vision Award 50,000 (25,000) 25,000 Stray Bear Films Ltd Vision Award 50,000 (25,000) 25,000 Third Films Ltd Vision Award 50,000 (25,000) 25,000 Warp Films Ltd Vision Award 100,000 (50,000) 50,000 Wildgaze Films Ltd Vision Award 100,000 (50,000) 50,000

New vision awards 2013-14 0 1,250,000 (35,000) 0 0 0 (625,000) 0 0 0 590,000

104 Films Disability Cinema Development 104 Films Limited Programme 60,000 (45,000) 15,000 British Independent Film Awards BIFA Shorts Strand 50,000 (50,000) 0 Film London London Calling and London Calling Plus 150,000 (150,000) 0

New targeted development awards 2013-14 0 260,000 0 0 0 0 (245,000) 0 0 0 15,000

Arrow Film Distributors Ltd Love is all you Need 150,000 (150,000) 0 Artificial Eye Amour 149,600 (90,000) 59,600 Artificial Eye Holy Motors 35,000 (35,000) 0 Curzon Film World Ltd A Late Quartet 103,000 0 103,000 Curzon Film World Ltd Blue is the Warmest Colour 150,000 (120,000) 30,000 Curzon Film World Ltd Le Week-End 300,000 (250,000) 50,000 Curzon Film World Ltd The Selfish Giant 150,000 (150,000) 0 Curzon Film World Ltd What Maisie Knew 150,000 (150,000) 0 Dogwoof Ltd In Real Life 27,550 (27,550) 0 Green Lions Ltd Project Wild Thing 32,000 (32,000) 0 Kaleidoscope Film Distribution Ltd Much Ado About Nothing 101,250 (101,250) 0 Lions Gate UK Ltd Easy Money (Snabba Cash) 150,000 (150,000) 0 Metrodome Distribution Ltd Frances Ha 47,797 47,797 Metrodome Distribution Ltd Summer In February 159,964 (159,964) 0 Parkville Pictures Ltd Borrowed Time 30,000 (30,000) 0 Peccadillo Pictures Ltd Stranger By The Lake 49,750 (49,750) 0 Picturehouse Entertainment Ltd A Field In England 55,700 (44,560) 11,140 Picturehouse Entertainment Ltd The Stone Roses: Made of Stone 125,000 (125,000) 0 Soda Pictures Ltd Only Lovers Left Alive 150,000 (150,000) 0 Soda Pictures Ltd Wadjda 150,000 (150,000) 0 The Works UK Distribution Kill Your Darlings 150,000 (150,000) 0 Vertigo Distribution Ltd All Stars 300,000 (300,000) 0 Vertigo Distribution Ltd Spike Island 300,000 (300,000) 0

New distribution awards 2013-14 0 3,016,611 0 0 0 0 (2,715,074) 0 0 0 301,537

124 LOTTERY FINANCIAL STATEMENTS

New commitments 2013-14 0 27,207,927 (638,586) (152,000) 0 (34,156) (19,293,321) 139,986 0 0 7,229,851

Total Film Rights at 31 March 2014 16,375,123 27,207,927 (5,661,823) (277,000) 2,213,871 (51,135) (24,361,697) 1,780,875 (2,205,385) 337,500 15,358,256

125 LOTTERY FINANCIAL STATEMENTS

Schedule 2: New Soft Commitments

Year Ended 31 March 2014

New Soft Producer Project Commitments

011 Productions Ltd Couple in a Hole 35,000.00 10ft Films ltd To Hull and back 10,000.00 42 M&P Ltd Cry Havoc 40,000.00 Agile Films Ltd Pick Ups-Keeping Up with the Joneses - BFI Shorts 2012 Scheme 8,000.00 AL Films Ltd Second is Nowhere (aka Gold) 500.00 Awareness Films Ltd Awareness 16,000.00 Bard Entertainments Ltd Iona 7,250.00 Barge Pole Productions Ltd Bury It! 24,150.00 BeaglePug Ltd Bulldog Drummond 24,500.00 Bill Films Ltd Bill and Lena 35,000.00 Blueprint Pictures Ltd The One 27,000.00 Blueprint Pictures Ltd Three Miles North of Molkom 11,705.00 Brilliant Films The Box of Delights 34,500.00 Bwark Productions Untitled Paul Wright Project 10,500.00 Camberwell Productions 'Staying On' 42,000.00 Cannon and Morley Productions Ltd The Falling 56,500.00 Century Films Ltd Thomas Quick: The Making of a Serial Killer 35,000.00 CMP Film Ltd. The Beginning of Spring 2,500.00 Crab Apple Films Ltd / Warp Films '71 38,000.00 Crab Apple Films Ltd / Warp Films Destroyer 15,000.00 Cuba Pictures Ltd Delinquent Season 39,250.00 Cuba Pictures Ltd London Road 35,000.00 Cuba Pictures Ltd The One's Below 21,000.00 Daybreak Pictures Ltd The Muslim Patrol (aka Family Man) 10,750.00 Desperate Optimists Productions Ltd Rose Plays Julie (working title) 25,000.00 Dissent Projects Father Joe 20,750.00 Ealing Studios Entertainment Ltd Doctor In The House 26,400.00 Ecosse Films Ltd The Boy Who Would Be Shakespeare 66,250.00 Edge City Films The Creator (Pilot) 25,000.00 Element Pictures The Lobster 35,000.00 Element Pictures / Scarlet Films (Co Reg 05457039) Balance of Power 1,250.00 Equation Pictures Ltd Olivia & Jim 4,000.00 Feet Films Ltd & Free Range Films Ltd Up a Tree in the Park at Night with a Hedgehog 41,000.00 Feet Films Ltd & Free Range Films Ltd White Rose Rebel 5,000.00 Fly Film Company Ltd Bill and Lena 13,000.00 Fly Film Company Ltd The Lighthouse 26,500.00 Fly Film Company Ltd If destroyed still true. I.D.S.T 13,500.00 Fly Film Company Ltd Like a Virgin 37,000.00 Forward East Ltd The Book of Stolen Time (aka The Dirty Little Book of Stolen Time 27,500.00 Frisbee Films Limited My Young Fat Self 27,000.00 Golden Arrow Pictures Ltd She Who Sends Gifts 35,500.00 GreenAcre Films Ltd/Illa State Productions Relax 3,600.00 Hammer Film Productions Ltd Coven 10,000.00 Hillbilly Films Ltd Second Coming 35,000.00 Hole In The Wall Gang Ltd Aisha's Communion 12,000.00 Holy Cow Productions Postcards From London 10,000.00 Hook Pictures White on Red 26,250.00 Hot Property Films Ltd The Museum of Innocence 36,350.00 Humdinger Films Limited Skyborn 13,000.00 Illuminations Films Ltd The Beast in the Jungle 3,500.00 Impact Film & Television Ltd Coram Boy 40,000.00 In Bed With Ltd In Bed With Chris Needham 2,500.00 Into That Darkness Element Pictures 25,000.00 Joke Disco Films Scouting for Rudeboys 13,000.00 Jonesfilm Motion Pictures Ltd Firebird 15,250.00 Junction Films Ltd Keep the Faith 23,875.00 Kennedy Mellor Ltd The Lonely Londoners 40,250.00 Kindle Entertainment Boy2Girl 24,100.00 Kindle Entertainment Ltd/Dan Films Ltd Four Children and It 43,000.00 Lesata Productions Joy 18,350.00 Met Film Production Ltd Grinny 20,500.00 Mint Pictures Ltd Masquerade 55,750.00 Missing In Action Films Ltd GBH 8,000.00 Newscope Films and Parti Productions Darkness Visible 31,500.00 Newscope Films Ltd A Bollywoof Tale 22,500.00 Nine Acre Films Limited Amazing Ray 26,000.00 Number 9 Films Limited Dusty 49,950.00 Number 9 Films Limited Strangers 44,018.00 Number 9 Films Limited The Limehouse Golem (aka Dan Leno and the Limehouse Golem) 14,267.00 Oakheart Films Ltd Alice in Lalaland 9,000.00 Oakheart Films Ltd Out of Russia 60,000.00 Old Street Films Exterminate All The Brutes 34,500.00

126 LOTTERY FINANCIAL STATEMENTS

New Soft Producer Project Commitments

Origin Pictures Ltd Silencers 64,250.00 Origin Pictures Ltd Untitled Christmas Romance 26,000.00 Origin Pictures Ltd X plus Y 35,000.00 Pari Passu Films Limited Hunting Lila 29,000.00 Parti Productions Stray 45,500.00 Poisson Rouge Pictures Gone 2 Africa 35,000.00 Quark Films Pin Cushions 14,250.00 Riley Productions London Ltd Mike Bassett: Interim Manager (aka Soccer Manager) 31,500.00 Roast Beef Productions Other Halves 10,000.00 Rob Roy Films Ltd Paradise (working title) 35,500.00 Rook Films Ltd The Duke of Burgundy 35,000.00 Ruby Films Limited The Fury (a/k/a Suffragettes) 35,000.00 Runaway Fridge Limited The Madolescents 2,000.00 Runaway Fridge Television Ltd The Boy Who Loves Lights 3,000.00 Salon Development Limited Churchill 23,850.00 Salon Pictures Limited Intercourse: the life & work of Andrea Dworkin 15,750.00 Scott Free Films Limited Crane 25,000.00 Scott Free Films Limited Get Santa 35,000.00 See-Saw Films Ltd Slow West 35,000.00 See-Saw Films Ltd The Wedding Dress 37,250.00 Sherbet All Day Breakfast 10,000.00 Singer Films Cold Hands 68,000.00 Sixteen Films Ltd Welcome To Alaska 12,300.00 Slingshot Productions Limited Londonstani 6,500.00 Spring Films Ltd Memory of the Camps (working title) 10,000.00 Spring Films Ltd Night Will Fall 35,000.00 Starfield Productions A Guide to Second Date Sex 32,100.00 Starfield Productions The Night Climbers 13,500.00 Steel Mill Pictures Limited Yeti 47,250.00 Stone City North Films Electricity 33,350.00 Stray Bear Productions Ltd Bad Drawings 17,000.00 Studio AKA Ltd The Yeti Project 64,823.00 Studio of the North Ltd Bit by Bit 10,000.00 Sunset Song Ltd Sunset Song 35,000.00 Sweet As A Ltd. Out of Step 13,750.00 Testament Films Limited Testament of Youth 35,000.00 The Fyzz Facility Film One Limited Magpie 30,000.00 The Illuminated Film Company Ltd. Little Princess and the Legend of Blue Foot 12,500.00 Third Films Ltd Light Years 55,000.00 Tiger Lily Films Ltd Remainder 35,000.00 TigerLily Films Ltd All I Am 9,500.00 Touchpaper Television Ltd The Summer Book 70,000.00 TS Films Ltd The Humans 39,250.00 UME7 Limited The Goob 35,000.00 Unanimous Entertainment Girl with A Clock for a Heart 56,000.00 Unanimous Entertainment Untitled Ronan Bennett (aka Michael Wilson/Balcombe Street) 2,500.00 Unorthodox Productions Limited The Ghost Runner 42,500.00 VE & B Ltd Out Of The Woods 14,400.00 Warp Films Horkmor 30,000.00 Wellington Films Ltd English Rose 16,000.00 White Rabbit Films Shooting Kids 16,000.00 Wild Horses Film Company Ltd Justified Sinner 43,000.00 Wildgaze Films Ltd Brooklyn 35,000.00 World Productions Ltd Son of Man 5,200.00 Wostok Ltd Passing Clouds 18,750.00 Young Films Ltd Lockerbie 23,500.00 Young Films Ltd Trumped 35,250.00

Total development awards 2013-14 3,420,538.00

011 Productions Ltd Couple in a Hole 305,000.00 Aim Films Ltd The Legend of Shorty 15,521.00 Alcove Entertainment The Double 57,500.00 Bill Films Ltd Bill 1,015,000.00 Bishop Films Ltd Gozo 108,000.00 Blueprint Pictures (Posh) Limited Posh 48,827.00 Blueprint Pictures Ltd Posh 800,000.00 Bofa Productions Limited A Story of Children and Film 2,771.00 Brandnew-u Limited Brand New-U 103,433.00 Bru Productions Ltd Acoustic Kitty 18,330.00 Bypass Ltd Bypass 25,430.00 Calamity Films Pride 1,000,000.00 Cannon and Morley Productions Ltd The Falling 750,000.00 Crab Apple Films Ltd / Warp Films 71 50,000.00 Dark Pictures Limited The Line 8,457.00

127 LOTTERY FINANCIAL STATEMENTS

New Soft Producer Project Commitments

Darlow Smithson Productions and World's End Pictures Dark Horse 325,000.00 Dawbell Consulting Limited A Story of Children and Film 90,000.00 DNA Films Limited (on behald of DNA and Black Camel Picture Company Limited Sunshine on Leith 53,880.00 Electric Ballroom Productions Limited Tits 2,850.00 Element Pictures / Scarlet Films Frank 48,257.00 Element Pictures / Scarlet Films The Lobster 300,000.00 Emu Films LLP Catch Me Daddy 17,500.00 Film Agency for Wales Cinematic 300,000.00 Get Santa Productions Limited Get Santa 200,000.00 Grand Union Productions/Cuba Pictures London Road 500,000.00 HeyDay Films Testament of Youth 500,000.00 Hillbilly Films Limited Second Coming 350,000.00 Hyena Film Productions Limited Hyena 305,420.00 iFeatures Limited Norfolk 186,667.00 iFeatures Limited The Goob 186,667.00 International Documentary Festival Sheffield Ltd Steel 30,000.00 Life To Live Films Crocodile 6,270.00 Lighthouse Arts and Training Ltd BFI Shorts 2012 40,100.00 Lighthouse Entertainment Ltd. BFI Shorts 2012 4,243.00 Number 9 Films (Hyena) Limited Hyena 20,000.00 Origin Pictures (X&Y Prod) Limited X Plus Y 912,850.00 Pico Pictures Mohammed 8,500.00 Pulse Films SPV 1 Limited 20,000 Days on Earth 214,733.00 Q and Country Limited Queen and Country 320,000.00 Rook Films Burgundy Ltd The Duke of Burgundy 500,000.00 Ruby Films Limited The Fury 1,000,000.00 Scott Free Films Limited Get Santa 1,000,000.00 Second Coming Productions Ltd Second Coming 25,095.00 Selfish Giant Film Ltd The Selfish Giant 13,500.00 Sixteen Films Ltd Jimmy's Hall 1,000,000.00 Slow West Film Ltd Slow West 1,000,000.00 Smoking Dogs Films The Stuart Hall Project 22,695.00 Spring Films Ltd Night Will Fall 100,000.00 Stone City North Films Electricity 450,000.00 Stroke City Films Limited Stroke City 100,000.00 Sunset Song Ltd Sunset Song 1,307,500.00 Tempo Productions Ltd Our Robot Overlords 820,000.00 The Bureau Film Company 45 Years 507,000.00 Third Films Ltd Bypass 20,000.00 Tiber Films Ltd Catch Me Daddy 85,000.00 Tiger Lily Films Ltd Remainder 600,000.00 View from the Hill Limited Thomas Quick: The Making of a Serial Killer 300,000.00 Wildgaze Films Ltd Brooklyn 400,000.00

Total production awards 2013-14 18,481,996.00

104 Films Ltd 104 Films Disability Cinema Development Programme 60,000.00 Aardman Animations Limited Aardman Animation Development Initiative 189,248.00 British Independent Film Awards British Independent Film Awards 2013 (BIFA) - Shorts Strand 50,000.00 Film London Film London Shorts Schemes - London Calling and London Calling 150,000.00

Total targeted development programme awards 2013-14 449,248.00

Creative Scotland Creative Scotland - NET.WORK 2014-16 400,000.00 Film Agency Wales FAW Talent Network 200,000.00 Northern Ireland Screen NIS Talent Network 150,000.00

Total new talent network awards 2013-14 750,000.00

42 M&P Ltd Vision award 2013-14 100,000.00 Blue-Zoo Productions Ltd Vision award 2013-14 50,000.00 Cowboy Films / Punk Cinema Vision award 2013-14 100,000.00 Flickerpix Vision award 2013-14 50,000.00 Fly Film Company Ltd Vision award 2013-14 50,000.00 Forward Films Ltd Vision award 2013-14 50,000.00 Independent Film Productions Ltd Vision award 2013-14 100,000.00 Inflammable Films Ltd Vision award 2013-14 50,000.00 Lupus Films Vision award 2013-14 100,000.00 Modern Films Ltd Vision award 2013-14 50,000.00 Nexus Productions Vision award 2013-14 100,000.00 Origin Pictures Ltd Vision award 2013-14 50,000.00 Passion Pictures (Films) Ltd Vision award 2013-14 100,000.00

128 LOTTERY FINANCIAL STATEMENTS

New Soft Producer Project Commitments

Rainy Day Films Vision award 2013-14 50,000.00 Roast Beef Productions Vision award 2013-14 50,000.00 Stray Bear Films Ltd Vision award 2013-14 50,000.00 Third Films Limited Vision award 2013-14 50,000.00 Warp Films Vision award 2013-14 100,000.00 Wildgaze Films Ltd Vision award 2013-14 100,000.00

Total vision awards 2013-14 1,350,000.00

Alliance Films UK Ltd Populaire 150,000.00 Altitude Film Entertainment 20 Feet from Stardom 125,000.00 Curzon Film World Ltd The Great Beauty 40,000.00 Curzon Film World Ltd The Selfish Giant 150,000.00 Curzon Film World Ltd What Maisie Knew 150,000.00 Curzon Film World Ltd Blue is the Warmest Colour 150,000.00 Curzon Film World Ltd Nymphomaniac 56,500.00 Curzon Film World Ltd Frank 300,000.00 Curzon Film World Ltd The Lunchbox 99,988.00 Dogwoof Ltd In Real Life 27,550.00 Dogwoof Ltd A Story of Children and Film 30,000.00 Green Lions Ltd Project Wild Thing 32,000.00 Kaleidoscope Film Distribution Much Ado About Nothing 101,250.00 Le Week-end Curzon Film World 300,000.00 Lions Gate UK Ltd Easy Money (Snabba Cash) 150,000.00 Lions Gate UK Ltd Locke 150,000.00 Lions Gate UK Ltd The Invisible Woman 150,000.00 Metrodome Distribution Ltd Summer In February 159,964.00 Metrodome Distribution Ltd Frances Ha 47,797.00 Metrodome Distribution Ltd We Are the Best! 126,500.00 Parkville Pictures Borrowed Time 30,000.00 Peccadillo Pictures Ltd Stranger By The Lake 49,750.00 Picturehouse Entertainment Limited The Stone Roses: Made of Stone 125,000.00 Picturehouse Entertainment Limited A Field In England 55,700.00 Picturehouse Entertainment Limited The Pervert's Guide To Ideology 30,106.00 Soda Pictures Wadjda 150,000.00 Soda Pictures Only Lovers Left Alive 150,000.00 Soda Pictures Ltd Half of a Yellow Sun 56,500.00 Studiocanal Ltd Under the Skin 160,000.00 Studiocanal Ltd The Doub;e 150,000.00 The Works UK Distribution Kill Your Darlings 150,000.00 Vertigo Distribution Ltd Spike Island 300,000.00

Total Distribution Awards 2013-14 3,903,605.00

Altitude Film Sales Ltd Pulp: A film about life, death and supermarkets... 6,047.00 Beta Cinema GmbH Still Lifr 11,980.00 British Council Short Film Travel Grant Scheme 20,000.00 Cargo Film & Releasing Mirage Men 3,000.00 Dogwoof Ltd In Real Time 6,000.00 Ealing Metro International Half of a Yellow Sun 18,500.00 Film Export UK Film Export UK - TIFF 2013 36,825.00 Film Export UK Film Export UK - EFM, Filmart, TIFF 2014 159,426.00 Film London 2013 inward investment: BFC, LUFF, PFM 275,000.00 Film London Best of Boroughs 10,000.00 Focus Features International Sunshine on Leith 18,000.00 Goalpost Film The Trip to Italy 1,840.00 HanWay Films Ltd A Story of Children and Film 8,500.00 HanWay Films Ltd Only Lovers Left Alive 14,595.00 HanWay Films Ltd A Story of Children and Film 5,500.00 HanWay Films Ltd 20,000 Days on Earth 8,826.00 HanWay Films Ltd God Help the Girl 4,585.00 HanWay Films Ltd God Help The Girl 4,182.00 Independent Film Company For No Good Reason 3,400.00 Independent Film Sales Starred Up 25,000.00 Power To The Pixel Ltd Power to the Pixel 2013 30,000.00 Protagonist Pictures Ltd For Those in Peril 19,579.00 Protagonist Pictures Ltd The Selfish Giant 22,311.00 Protagonist Pictures Ltd How I Live Now 8,450.00 Protagonist Pictures Ltd Calvary 12,711.00 Protagonist Pictures Ltd Frank 12,771.00 Protagonist Pictures Ltd Lilting 4,177.00 Protagonist Pictures Ltd 71 10,400.00 Protagonist Pictures Ltd The Legend of Shorty 6,600.00 Submarine Entertainment Garnet's Gold 4,100.00 Various UK delegation to Rio Film Festival 2013 40,000.00

129 LOTTERY FINANCIAL STATEMENTS

New Soft Producer Project Commitments

Various UK Delegation to Beijing British Film Week 2014 94,000.00 Various UK Presence at Cannes Film Festival for 2014, 2015 and 2016 1,170,000.00 Visit Films Exhibition 12,642.00

Total international awards 2013-14 2,088,947.00

Creative England Creative England 3,895,655.00 Creative Skillset Creative Skillset - Capital 2013-2017 5,000,000.00 Creative Skillset Creative Skillset - Revenue 2013-2017 16,000,000.00

Total partnerships 2013-14 24,895,655.00

British Federation of Film Societies BFI Film Audience Network Strategic Partners 80,000.00 Chapter (Cardiff) Ltd Audience Network - Stage 2 800,000.00 Queen's University of Belfast Cinema City 50,000.00 Cornerhouse (Greater Manchester Arts Centre - GMAC) Audience Network- Stage 2 1,100,000.00 Film London Audience Network - Stage 2 800,000.00 Independent Cinema Office BFI Film Audience Network Strategic Partners 180,000.00 Nottingham Media Centre Ltd Audience Network - Stage 2 1,100,000.00 Queen's University of Belfast Audience Network - Stage 2 800,000.00 Regional Screen Scotland Audience Network - Stage 2 800,000.00 SCMG Enterprises Ltd Audience Network 5,000.00 The Sheffield Media & Exhibition Centre Limited and SCMG Enterprises Ltd Audience Network - Stage 2 1,175,000.00 The Watershed Arts Trust Ltd Audience Network - Stage 2 1,200,000.00 University of Brighton Audience Network - Stage 2 900,000.00 Your local cinema.com BFI Film Audience Network Strategic Partners 25,000.00

Total audience network 2013-14 9,015,000.00

Abandon Normal Devices Abandon Normal Devices 2013 10,000.00 Aberystwyth University Abertoir Horror Festival 2013 5,000.00 Aesthetica Magazine Ltd Aesthetica Short Film Festival 2013 5,000.00 Afrika Eye CIC Afrika Eye 2013 5,000.00 Animate & Create Community Interest Company Cantebury Anifest 2013 5,000.00 Audio Visual Arts North East AV Festival 2014 25,000.00 Bath Film Festival Bath Film Festival 2013 8,000.00 Belfast Film Festival Ltd Belfast Film Festival 15,000.00 Belfast Film Festival Ltd 14th Belfast Film Festival 15,000.00 Berwick Film & Media Arts Festival Ltd Berwick Film & Media Arts Festival 2013 10,000.00 Berwick Film & Media Arts Festival Ltd 10th Berwick Film & Media Arts Festival 15,000.00 Birds Eye View Birds Eye View Film Festival 2014 14,000.00 Borderlines Film Festival Community Interest Company Borderlines Film Festival 2014 20,000.00 Bridport Arts Centre From Page to Screen 2014 4,000.00 Cambridge Film Trust Cambridge Film Festival 30,000.00 Chichester Cinema at New Park Chichester International Film Festival 2013 5,000.00 Cinemagic International Film and Television Festival for Young People Cinemagic Ltd 9,000.00 Cornerhouse (Greater Manchester Arts Centre - GMAC) VIVA 20th Spanish and Latin American Film Festival 8,000.00 Cornwall Film Festival Cornwall Film Festival 2013 2,500.00 Derby QUAD Ltd Derby Film Festival 7,500.00 East End Film Festival CIC East End Film Festival 15,000.00 Edinburgh International Film Festival Ltd Edinburgh International Film Festival 2013 300,000.00 Encounters Festivals Ltd Encounters Short Film and Animation Festival 2013 70,000.00 Encounters Festivals Ltd Encounter Short Film and Animation Festival (2014) 90,000.00 Flatpack Festival Ltd Flatpack Festival 2014 25,000.00 Genesis Entertainment Ltd East End Film Festival 10,000.00 Glasgow Film Theatre Glasgow Film Festival 2014 25,000.00 Holmfirth Film Festival CIC Holmfirth Film Festival 5,000.00 International Documentary Festival Sheffield Limited Sheffield Doc/Fest 2013 150,000.00 International Documentary Festival Sheffield Limited International Documentary Festival Sheffield [Doc/Fest] 2014-2016 600,000.00 Iris Prize Festival 2013 The Festivals Company Limited 5,000.00 Kendal Mountain Festival CIC Kendal Mountain Festival 2013 8,000.00 Leeds City Council Leeds International Film Festival 2013 30,000.00 Leeds City Council 15th Leeds Young Film Festival, 2014 20,000.00 London Indian Film Festival Ltd London Indian Film Festival 10,000.00 London Indian Film Festival Ltd London Indian Film Festival 2014 10,000.00 London Short Film Festival The 11th London Short Film Festival 8,000.00 National Media Museum Bradford Animation Festival 2013 8,000.00 Purbeck Film Charitable Trust Purbeck Film Festival 2013 4,000.00 Raindance Film Festival Raindance Film Festival 2014 20,000.00 SCMG Enterprises Ltd 20th Bradford International Film Festival (2014) 20,000.00 Slapstick festival Ltd. Slapstick Festival 2014 12,000.00

130 LOTTERY FINANCIAL STATEMENTS

New Soft Producer Project Commitments

The Edinburgh International Film Festival Ltd Edinburgh International Film Festival 2014 300,000.00 The Festivals Company Limited Iris Film Festival 2014 7,500.00 The Royal African Society Film Africa 2013 5,000.00 The Sensoria Festival Sensoria Festival 2013 7,000.00 The White Bus Limited Southend Film Festival 2014 5,000.00 Tongues On Fire Ltd London Asian Film Festival 2014 8,000.00 UK Jewish Film Festival UK Jewish Film Festival 2013 8,000.00 University of Brighton Cinecity: Brighton Film Festival 2013 10,000.00 University of Plymouth It's All About the River 10,000.00 WOW WALES ONE WORLD FILM FESTIVAL WOW: Wales One World Film Festival 2014 10,000.00

Total film festivals 2013-14 2,033,500.00

A Nos Amours Ltd Chantal Akerman: complete retrospective 15,000.00 Arts Alive Inspiring, Developing and Delivering 19,800.00 Cambridge Film Trust Prepare for Darkness 50,000.00 Carousel Oska Bright On The Road 27,325.00 Centre for the Moving Image A Season on Children and Film 8,500.00 Centre for the Moving Image McLaren 2014 Touring Film Programme 40,000.00 Centre for the Moving Image The Cinema of Childhood 150,000.00 Cinema Nation Scalarama 2014 37,000.00 DVDBANG DVD-Bang 10,130.00 Film London Greater London Gothic Programme 31,000.00 Glasgow Film Theatre Scottish Film - Gothic in Scotland 15,000.00 Queen's University of Belfast Gothic Programme - UK Audience Network 141,500.00 Soda Pictures Ltd Children's Cinema Club 150,000.00

Total programme development fund 695,255.00

Amersham and Wycombe College Centroid Superhero Academy 60,000.00 Calling The Shots Films Bristol Film Camp - Animation 60,720.00 Cinemagic Ltd Cinemagic Film Academy Series 32,000.00 CTVC BFI Film Academy: Residential (Documentary) 119,968.00 Dundee Contemporary Arts Limited Dundee Film School 12,995.00 GMAC Film Reimagining Gregory's Girl 32,000.00 Media Academy Wales BFI Documentary Academy Wales Network (DAWN) North Wales 93,184.00 Screen Education Edinburgh Script to Screen 32,000.00 The Film and Video Workshop Animation 120,000.00 The Nerve Centre Moving Image Arts Masterclasses 62,408.00 Tyneside Cinema BFI Young Screenwriting Residential Programme 75,000.00

Total film academies 700,275.00

Arts Alive Flicks in the Sticks Mid Wales 26,550.00 Creative Arts East Cinema For Rural Norfolk 19,788.00 Leicester Arts Centre Limited Centre Screen: The Centre for Neighbourhood Cinema 15,000.00 Moviola Ltd Moviola "Cinematheque" 20,000.00 National Media Museum: SCMG Enterprises Ltd Cine North 25,000.00 North East Arts Touring Limited NEAT Flicks 17,050.00 Various BFI Neighbourhood Cinema Website 150,000.00

Total BFI Neighbourhood 273,388.00

ADeC (Arts Development in East Cambridgeshire) Ely Cinema at Ely Festival 3,806.00 Aesthetica Short Film Festival (ASFF) ASFF Organisational Development 10,000.00 Aldeburgh Cinema Limited Film, Music, Creativity 6,700.00 Borderlines Film Festival Community Interest Company Organisational Development 22,000.00 Cambridgeshire Film Consortium Organisational Development 20,000.00 Carousel Oska Bright on the Road 5,000.00 Cornerhouse (Greater Manchester Arts Centre - GMAC) Cornerhouse Organisational Development Project 38,500.00 Cornwall Film Festival C Fylm Community Cinema 5,000.00 Curzon Clevedon Community Centre for the Arts Ltd Building capacity for the next phase of development 10,000.00 Derby QUAD Ltd ID Fest 2013 10,000.00 Encounters Festivals Ltd Diagnostics for Encounters & Showroom (provided by RW Arts) 8,000.00 Encounters Festivals Ltd Organisational Strategic Review 30,000.00 Flatpack Festival Ltd Flatpack Festival - 2013 Development Programme 17,500.00 Ludlow Assembly Rooms Strengthening and building a sustainable and socially enterprising 13,500.00 Media Archive for Central England (MACE) Building the SiN Parternship- Organisational Development 61,000.00 MundoJumbo Ltd Diagnostic Support 8,000.00 North West Film Archive (NWFA) Pennine Lancashire A Reel History 8,620.00 Phoenix Square Film and Digital Media Centre Disability Access Cinema Programme 11,000.00 Saffron Walden Community Cinema Limited Saffron Screen - feasibility and organisational development 18,152.00 Sheringham Little Theatre Society Spring into Cinema 5,250.00 Showroom Workstation Staff and Board Development Project 35,000.00

131 LOTTERY FINANCIAL STATEMENTS

New Soft Producer Project Commitments

South West Film & Television Archive (SWFTA) Sustaining SWFTA through Volunteers 37,000.00 The Dukes Play House Limited Cinema Box Office Feasbility Study 6,500.00 The Lost Picture Show Lost Picture Organisational Development 15,000.00 The Sensoria Festival Sensoria Organisational Development 8,000.00 The Watershed Arts Trust Ltd Filmic+ 10,000.00 The White Bus Limited Southend on Sea Film Festival 2013 5,000.00 Xtend (UK) Ltd Learning Networks 40,000.00 York St John College - Yorkshire Film Archive YFA A New Future- Organisational Development 29,700.00

Total film culture awards transferred from Creative England 498,228.00

Total commitments 2013-14 68,555,635.00

Soft commitments as listed above are net of soft decommitments (fall ins) of £239,500 where awards fell in with the year in which the award was made

132 LOTTERY FINANCIAL STATEMENTS

Schedule 3: Lottery commitments (soft) made by delegate bodies (not audited) Year ended 31 March 2014

Award Recipient Project £

Creative England

104 films Into Darkness 75,000.00 Alex Kirkland Burning Dogs 18,000.00 Amy Neil The Mousehole 15,000.00 Artdocs Paa Joe: Dead not Buried 12,500.00 BAFTA BAFTA Crew 2014 10,000.00 Billy O'Brien The Doones 10,000.00 Broken Light Films Scuttler 20,000.00 Chi Thai China Blues 20,000.00 Compass Compass Programme 46,000.00 Compass Programme DV Talent 51,400.00 Crybaby Ltd Only You 25,000.00 Dog Day Films The Viking of 6th Avenue (uplift) 10,000.00 Eleanor Productions Ltd Eleanor 16,000.00 Forward East Ltd The Book of Stolen Time 17,000.00 Glimmer Films Ltd ORION: The man who would be King 10,000.00 Hellflower Film Ltd The Lovers and the Despot 115,000.00 Hook Pictures Ltd Battles 18,000.00 Hook Pictures Ltd Residual 16,500.00 Human FIlm In The Sands 20,000.00 iFeatures Ltd iFeatures3 500,000.00 iFeatures Ltd Production award 155,000.00 iFeatures Ltd 8 Minutes Idle 30,000.00 Inflammable Films Ltd Polar Bear 50,000.00 iShorts Skills and Training External Mentoring for iShorts Skillset Training 21,200.00 Mint Pictures Ltd Crime Fiction 30,000.00 Motion Films (UK) Ltd The Drifters (aka Koffee) 25,000.00 National Film & Television School NFTS Development slate 18,000.00 North of Watford (Now) films Ltd Year of Wonders (YOW) 14,000.00 Northern Film & Media CREATE.iNNOVATE 22,000.00 Pari Passu Films A Pail of Air 28,500.00 Paul Fraser Breakpoint 15,000.00 Pico Pictures Ltd and Lost Property Productions Ltd Emotional Fusebox 26,000.00 Puma Events and Training Knowledge Bytes 35,000.00 Rachel Tunnard I Could Live Yours 38,500.00 Riverhorse Hustlers Convention 75,000.00 Salon Development Ltd Meet Me In Ten Years 24,000.00 Screen Yorkshire Triangle 2013/2014 20,000.00 Sheffield International Documentary Festival (Sheffield Doc/Fest) Crossover Doc/Hackathon 34,000.00 Sixteen Fly Limited Spirit of '45 29,579.00 Sodalite Films Ltd The Fahrenheit Twins 10,000.00 Speakit Films Cashback 10,000.00 Square Circle Films Limited The Incident 100,000.00 Stampede Ltd Into The Badlands 10,000.00 Steve Sheil Special 11,000.00 Stray Bear Productions Ltd The Enemy Within 10,000.00 Stray Bear Productions Ltd The Enemy Within 10,000.00 SUMS Film & Media Senka 33,000.00 Tenner Films The Greatest Story Ever Sold 10,000.00 The Bureau Film Company 45 Years 150,000.00 The Television Workshop Workshop/Hat Trick programme development 20,000.00 Third Films Ltd Light Years 150,000.00 Total Film Development Exeat 24,000.00 UK Business Angels Association Angels Investing in Film and Creative Industries ( working title) 46,000.00 Warp Films Ltd Numbers 10,000.00 79 awards < £10,000 365,106.00 2,685,285.00

Creative Skillset

104 Films Ltd Digital Revolutionaries (formally known as - DSBLTY on Demand) 20,000.00 104 Films Ltd Generation 104 15,000.00 Atlantic Film Group Think-Shoot-Distribute 2013 27,000.00 Birds Eye View Filmonomics 30,000.00 Business Management and Strategy Skills - HR & Training Conley Consultants Ltd & Jerrard Consulting Services Consultant 30,000.00 Creative England iFeatures3 (Professional Development Strand) 70,000.00 Creative England iShorts 34,580.00 Directors Guild Trust Tools of Directing - Regional Introduction Scheme 18,234.00 Edinburgh International Film Festival EIFF Network 28,000.00 Screen Academy Scotland Course Enhancement and Bursaries Edinburgh Napier University - Screen Academy Scotland 2013-14 149,577.00 eQuinoxe Europe e.V. 14. & 15. Intl Screenwriters' Workshops & Master Classes 15,000.00

133 LOTTERY FINANCIAL STATEMENTS

Award Recipient Project £

Escape Studios Ltd Mentoring for HE institutes 35,000.00 Film Agency For Wales Market Mentors - Digital Horizons 25,000.00 Film London Digital Film Curatorship - A Bigger Picture 45,000.00 Film London BoBs aka London Borough Film Funds 40,000.00 Film London Micro Market 27,847.00 Interactive Audiences - Creating new distribution and promotion filmtiki Limited avenues through new design technologies 25,000.00 Fundacion Cultural Media - Media Business School MULTIPLATFORM BUSINESS SCHOOL (MPBS) 39,000.00 Guild of British Camera Technicians (GBCT) Steadicam training for camera professionals 10,000.00 Independent Cinema Office Get It Seen - Distribution & Exhibition Innovation for Producers 130,200.00 Independent Cinema Office Elevate 45,000.00 Lighthouse Arts & Training Guiding Lights 6 45,000.00 LOCO The London Comedy Film Foundation (aka LOCO - The London Comedy Film Festival) LOCO Training Programme 2014 20,000.00 London Film School The London Film School - Capital Stage One 468,596.00 London Film School / Creative Skillset Film Academy Bursary and London Film School CEO Funding 2013-2014 239,333.00 London Film School Fast Forward Producing 2014 25,000.00 Lupus Films Storyboarding Course 70,000.00 Named individual Creative Skillset Certificate in Temporary Power Systems 10,000.00 NFTS Application to Skillset Film Academies Course Enhancement National Film & Television School and Outreach 2013-14 770,403.00 National Film & Television School NFTS Digital Village -- Capital Stage One 598,388.00 National Film & Television School Inside Pictures 2014 90,000.00 Northern Ireland Screen Commission Production, Craft and Technical Skills 2013 55,000.00 Power to the Pixel Ltd The Cross-Media Forum 2013 20,000.00 Power to the Pixel Ltd The Pixel Lab: The Cross-Media Workshop 2014 20,000.00 Ravensbourne 3D Creative Summit 2014 50,000.00 Sara Putt Associates Sara Putt Associates Trainee Scheme 15,000.00 Screen South Green Runner Production Training 35,000.00 Screen Yorkshire Triangle 4 55,000.00 Sheffield Doc/Fest Devise to Deliver 34,500.00 Sheffield Doc/Fest Fast Track To Features 20,000.00 Sheffield International Documentary Festival Ltd. The Future Producer School 26,000.00 Short Courses@NFTS 2nd AD Training 15,530.00 Step Up Training Mentoring in Film 21,000.00 Talking Point Film and Television Ltd Industry Masterclass Programme 15,000.00 The Production Guild Limited Assistant Production Accountant Training Scheme IX 116,774.00 The Production Guild Limited Assistant Location Management Training 51,722.00 The Production Guild Limited Production Management (V) 41,069.00 The Production Guild Limited Runners Basic Training 30,254.00 The Production Guild Limited Assistant Coordinators IV 22,525.00 The Production Guild Limited US Unions and Payrolls 22,333.00 University of York Visual Effects Tutor Boot Camp 18,000.00 148 awards less than £10,000 each 210,985.81 4,091,850.81

Total awards by delegate bodies 2013-14 6,777,135.81

134 STATUTORY BACKGROUND

Statement of compliance with the Government’s Lottery policy and financial directions

Financial directions Under the National Lottery etc Act 1993, the Secretary of State issued financial directions to the British Film Institute (the BFI). These are as follows:

The BFI shall comply with the requirements contained within the Statement of Financial Requirements, which have the status of directions under section 26 of the National Lottery etc. Act 1993, (“the Act”) as amended by the National Lottery Act 1998 (“the 1998 Act”).

The BFI has implemented procedures to ensure the provisions of the Statement of Financial Requirements are followed and the BFI confirms that, to the best of its knowledge, it complied fully with the financial requirements in 2013/14.

The BFI shall devise and abide by a procedure for handling potential conflicts of interest which may arise in the evaluation of applications by BFI or individual members of the BFI. This procedure together with a statement confirming the arrangements that have been applied, should be provided to the Secretary of state for Culture, Media and Sport before the distribution of any funds under section 25 of the Act, and thereafter at the beginning of each financial year.

The BFI has ine plac procedures for dealing with conflicts of interest and, to the best of its knowledge, it abided by this procedure in 2013/14.

Policy directions Under the National Lottery etc Act 1993, the Secretary of State for Culture, Media and Sport issued policy directions, which the BFI must take into account in distributing National Lottery funds.

A The need to involve the public and local communities where reasonably practicable, in making policies and setting priorities.

The BFI consulted widely on its five year strategy including its proposed new and existing Lottery funding schemes, through a wide‐scale public consultation undertaken in 2012.

In 2013/14 the BFI ran a series of roadshows at 11 venues across the UK which over 1,200 attended and provided an update on progress but also discussing issues facing the UK film sector.

B The need to increase access and participation for those sections of society who do not currently benefit from opportunities available in the United Kingdom.

The BFI aims to ensure that equality and diversity are central to all activities thus allowing sections of society to have access to or benefit from funding, taking into account differences in values, attitudes, cultural perspectives, beliefs, ethnic background, able or disabled, , skills knowledge, geography, age and life experiences. The BFI Board agreed a Diversity Strategy in February 2014 and will in summer 2014 launch the BFI Diversity Fund which will help promote equal access, participation as well as strengthening cultural diversity.

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C The need to inspire children and young people, awakening their interest and involvement in the activities covered by the good cause.

The BFI is fully committed to education and learning and strongly believes that film has the power to transform the way people see and understand the world and as such has committed a significant investment into the BFI 5‐19 education scheme, which is managed by Into Film.

In 2013‐14, although very much a start‐up year, the 5‐19 education fund has supported just over 8,000 film clubs.

Going forward, Into Film will implement a detailed plan mfor fil education and learning across the UK which is aimed at people of all ages to include a new education offer aimed at inspiring young people from 5‐19 to watch, understand and make films.

D The need to improve community cohesion and/or social inclusion.

The BFI ensures that the benefits of Lottery funding are spread widely, in both geographical and social terms. Creativity and diversity in the film sector is enriched by encouraging the participation of people from a wide range of communities.

E The need to encourage new talent, innovation, and excellence and help people to develop new skills.

The BFI provides opportunities for filmmaking talent to flourish. The freshness and relevance of the films produced have been recognised by the international film industry awards they have won. As well as direct support for filmmaking, the BFI invests in training talent, notably in partnership with Creative Skillset, the Sector Skills Council for the audiovisual industry, a comprehensive funding programme was delivered during the year for training and skills; and in establishing a new UK Talent Network – Net.work – across the UK with talent centres established in Brighton, Sheffield, Cardiff, Belfast and Glasgow.

F The need to ensure that money is distributed for projects which promote public value and which are not intended primarily for private gain.

It has always been a primary intention of the National Lottery that it should improve the quality of life for people throughout the UK.

All applicants, including private, voluntary or commercial organisations, have to be able to demonstrate the benefit to the public that would result from their proposed project. The BFI applies a range of criteria in order to ascertain that an appropriate level of public benefit is derived from the project. The criteria include the creative and technical quality of the project and its contribution towards the BFI’s strategic objectives.

G The need to further the objectives of sustainable development.

The BFI provides leadership and practical support for the wider film industry, including leading the UK‐wide sustainability Group. Following the launch of the British Standard (BS 8909), specifically for film, sustainability is an intrinsic element to the new five year plan.

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The Greening the Screen event was held, in partnership with BAFTA, which examined the latest thinking on sustainable and low impact production and business practices within film, television and the games industry.

Technological development is supported through encouraging the use of digital production techniques and associated processes.

On location filming of any Lottery‐funded films, producers are expected to be sensitive to the needs of the environment and the use of natural resources, returning locations back to their original state in environmental terms, after use.

The BFI works with other Lottery Distributors and the Department for Culture, Media and Sport in developing proposals for sustainable development.

H The importance of ensuring equality of opportunity and the desirability of reducing economic and social deprivation and of ensuring that all areas of the United Kingdom have access to the money distributed.

All parts of the country have access to BFI Lottery funding through applications for training, development, production, education, distribution, exhibition and unlocking film heritage activity.

I The desirability of the British Film Institute working jointly with other organisations, including other distributors.

The BFI is increasing its partnership working with other Lottery distributors, most notably with Arts Council England and the Heritage Lottery Fund.

The BFI delegates funding to Creative England in support of its strategic objectives that can be delivered at a local and/or regional level. Creative Skillset and the national screen agencies of Wales – Film Agency for Wales – Northern Ireland – Northern Ireland Screen – and Scotland – Creative Scotland were other Lottery delegate partners delivering key aspects of our strategy.

J The need to ensure that all those receiving Lottery money acknowledge it using the common Lottery branding.

The BFI ensures that the Lottery is credited on all projects in receipt of Lottery funding through the use of the credits on films and branding on other materials.

K The need to require an element of partnership funding, or contributions in kind from other sources, to the extent that this is reasonable to achieve for different kinds of applicants in particular areas.

The BFI requires all applications to include an element of partnership funding, to demonstrate commitment to the project. The level of partnership funding required depends on each fund and the activity being supported.

L The need (a) for money distributed to be distributed to projects only where they are for a specific, time‐limited, purpose, (b) to ensure that the BFI has the necessary information and expert advice to make decisions on each application and (c) for applicants to demonstrate the financial viability of projects.

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Funding is either provided on a specifically time limited basis or will only benefit individuals while they remain within the definition of a particular programme.

The BFI undertakes an appraisal of each application for funding prior to final decision.

The BFI reserves the right to request that applicants provide any additional information that may be required in order to properly assess such application, in addition to the requirements set out in the application guidelines. It also seeks, where necessary, the confidential, independent and objective views of expert advisers. As a publicly accountable body, the BFI has a duty to ensure that National Lottery funds are properly spent and accounted for, that risk is minimised, and that fraud is avoided.

M Where setting up costs are sought, the need for a clear business plan showing how any running and maintenance costs will be met for a reasonable period.

Financial viability is a key factor in the assessment of BFI Lottery applications and is examined using appropriate criteria for all funded applications in the context of assessing the potential risk of each Lottery award. Each potential recipient of Lottery funding has to demonstrate that its finances are secure and, in respect of larger projects, sufficient to ensure project exploitation after the funding period.

N The need to ensure that film is central to the lives of UK citizens, and to improve the quality of British film and raise its profile in the marketplace, by: i. Expanding education and learning opportunities and boosting audience choice across the UK; ii. Supporting the future success of British film; iii. Unlocking film heritage for everyone in the UK to enjoy.

The allocation of National Lottery funds by the BFI is influenced by the need to strengthen the industry’s structure and workforce; to improve the quality and commercial viability of British films; and to support the distribution of specialised film in the analogue and digital environments, helping to ensure UK audiences have access to film in all its variety.

O Where awards are made in relation to feature film production or distribution projects the BFI should take into account:

 A clearly identified target audience for their projects  The need for recipients of awards for film production to pay the set contribution towards the Skills Investment Fund (SIF)  The need for recipients of awards to comply with recognised industry best practice and agreements relating to pay and the employment of trainees  The need to conserve and expand the UK’s film heritage by requiring the deposit of Lottery funded productions and other selected material in the collections of the British Film Institute or regional archives  The need for feature film development and production projects to be capable of qualifying as “British films” in accordance with the procedures set out by the DCMS  The need to improve public access to film through the use of audio‐description and/or subtitling for the hard of hearing.

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All relevant projects in receipt of this type of funding are required, contractually, to comply with these conditions.

Awards of £5m and above - Progress

RECIPIENT TOTAL AWARD PROJECT DETAIL 2013‐14 PROGRESS ORGANISATION (£m) Creative Skillset Delivery of the Bigger £21m for the period Year 1 delivered with 604 Future 3 Film Skills to March 2017 trainees, apprentices and Strategy individuals supported

Capital Fund launched and made first stage awards to the London Film School and the National Film and Television School Into Film Delivery of the BFI 5‐ £26m for the period Delivery Plan agreed and (formerly Film 19 Education scheme to March 2017 8,056 Film Clubs supported Nation) BFI Delivery of the £15m for the period 1,552 titles from the BFI Unlocking Film to March 2017 National Collection in Heritage Project – progress; with 468 titles 10,000 titles to be digitised and available via digitised and made BFI Player; 112,909 stills available to the digitised public 11 Discovery Fund awards made to significant Regional and National Collections with Digitisation Fund (for the significant collections) launched – planned to support 1,185 titles

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Lottery administrative costs for the last five years

FINANCIAL YEAR ENDING 31 ACTUAL OPERATING COSTS INFLATED OPERATING COSTS MARCH £M (CPI ‐ 2010 = BASE YEAR) £M 2010 £7.55 million £7.55 million 2011 £5.27 million £7.78 million 2012 £4.19 million £8.06 million 2013 £4.69 million £8.28 million 2014 £5.05 million £8.41 million

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