Docklands Studios Melbourne Pty Ltd ABN 28 101 578 303 Annual Report 30 June 2015 This page is intentionally blank Docklands Studios Melbourne Pty Ltd Contents of the Annual Report Introduction 4 Acronyms / Abbreviations 4 Corporate Information 5 Directors’ Report 6 Five year financial summary 12 Auditor's Independence Declaration 13 Directors’ declaration 14 Accountable officer’s and chief finance officer’s declaration 15 Comprehensive operating statement 16 Balance sheet 17 Statement of changes in equity 18 Cash flow statement 19 Notes to the financial statements Note 1. Summary of significant accounting policies 20 Note 2. Income from transactions 28 Note 3. Expenses from transactions 28 Note 4. Other economic flows included in net result 29 Note 5. Cash and deposits 29 Note 6. Receivables 29 Note 7. Property, plant and equipment 30 Note 8. Intangible assets 33 NoteIntangibl 9. Other non-financial assets 34 Note 10. Payables 34 Note 11. Provisions 35 Note 12. Superannuation 36 Note 13. Issued capital 36 Note 14. Number of shares 36 Note 15. Reserves 37 Note 16. Commitments for expenditure 37 Note 17. Contingent assets and contingent liabilities 37 Note 18. Financial instruments 38 Note 19. Cash flow information 43 Note 20. Responsible persons 43 Note 21. Remuneration of auditors 44 Note 22. Subsequent events 44 Note 23. Segment information 44 Note 24. Glossary of terms and style conventions 44 Auditor-General's Report 47 3 Docklands Studios Melbourne Pty Ltd Introduction This is the Annual Report of Docklands Studios Melbourne Pty Ltd ACN 101 578 303 (the Company) for 2015. The Company is a private unlisted company incorporated in Australia on 2nd August 2002 with a reporting date of 30 June. The Annual Report has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards and when relevant with the requirements of Standing Direction 4.2 of the Financial Management Act 1994 and applicable Financial Reporting Directions. A description of the nature of the Company’s operation and its principal activities is included in the Directors' Report. For enquiries in relation to the Annual Report please call: + 61 3 8327 2000, or email to: [email protected] visit our website: http://www.dsmelbourne.com Acronyms / Abbreviations DSM Docklands Studios Melbourne Pty Ltd. ACN 101 578 303 The owner of the film studio assets. AAS Australian Accounting Standards AASB Australian Accounting Standards Board DEDJTR Department of Economic Development, Jobs, Transport and Resources FMA Financial Management Act 1994, Victoria FRD Financial Reporting Directions issued by the Minister for Finance GST Goods and Services Tax IFRS International Financial Reporting Standards VAGO Victorian Auditor-General’s Office State The Crown in right of the State of Victoria 4 Docklands Studios Melbourne Pty Ltd Corporate Information ABN 28 101 578 303 ACN 101 578 303 Directors E. Eldridge Chair A. Fletcher-Nicholls D. Clark Company Secretary V. Pythas Registered Office and Principal Place of Business 476 Docklands Drive Docklands, Victoria, 3008 Australia Phone: + 61 3 8327 2000 Shareholder State of Victoria Solicitors Keelins Lawyers Level 4, 459 Little Collins Street Melbourne, Victoria, 3000 Australia Bankers Westpac Banking Corporation 509 Toorak Road Toorak, Victoria, 3142 Australia Treasury Corporation of Victoria Level 12, 1 Collins Street Melbourne, Victoria, 3000 Australia Auditors Victorian Auditor-General’s Office Level 24, 35 Collins Street Melbourne, Victoria, 3000 Australia Internal Auditors McLean Delmo Bentleys Chartered Accountants Level 8, 607 Bourke Street Melbourne, Victoria, 3000 Australia 5 Docklands Studios Melbourne Pty Ltd Directors’ Report The directors submit their report for the year to 30 June 2015 and the Independent Audit Report thereon. Directors The names and details of the Company’s directors in office during the period and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated. Names, qualifications, experience and special responsibilities Elizabeth Eldridge (BA; LLM) Ms Eldridge was a senior executive in the Victorian Public Sector. She has held senior appointments with the Departments of Justice, Treasury and Finance and Business and Innovation. She is also a director of Victorian Traditional Owners Fund Limited as trustee of the Victorian Traditional Owners Trust and a member of the Queen's College Council. She was appointed a Director on 19 November 2008 and appointed as Chair of the Company at the Board Meeting held on 4 December 2008. Ms Eldridge is also an alternating member of the Company's Audit Committee. Ann Fletcher-Nicholls (BA, MAICD) Ms Fletcher-Nicholls has a wealth of public relations and marketing expertise, spanning more than three decades. She has operated at a senior executive level across a broad range of industry sectors. Currently, she is also a Board Member of Seymour Health, Director, Chadcorp Communications and Director, Resources for Resources. Her previous positions have included Managing Director, Porter Novelli in Sydney, a member of the Clemenger Group; Principal, P.R. Fletcher; Senior Consultant Marita Blood & Associates; Public Affairs Manager, Shell Australia. She has been a Director of the Company since 1 March 2012 and is also an alternating member of the Company's Audit Committee. Desmond Clark (ARMIT, SATC) Mr Clark has extensive experience in policy development, governance and management. He provides independent consulting advice in strategic communications and management services. He was appointed Director of the Office of Film and Literature Classification in 2000 and completed his term in 2007. He was Deputy Chairman of the Australian Film Commission and Chairman of the Melbourne International Film Festival. He was Lord Mayor of the City of Melbourne (1992 - 1993) and served three terms as a Councillor. He worked on the restructure of Local Government in Victoria as Chairman of Commissioners at the City of Port Phillip and in two other municipalities. He has been a Director of the Company since 1 March 2012 and is also an alternating member of the Company's Audit Committee. 6 Docklands Studios Melbourne Pty Ltd Directors’ Report - (continued) Company Secretary Viola Pythas BA (Legal), GradDipBus (Acc) Ms Pythas was appointed as Company Secretary of the Company on 5 August 2010. Viola has had over 15 years experience in Corporate Governance and Company Secretary roles with ANZ. She has extensive experience in various facets of company secretarial practice, including compliance with the Corporations Act, coordinating effective Board and Committee meetings, corporate structures, directors’ duties and administration of trusts. She has been an affiliate member with Governance Institute of Australia for over 15 years. Audit Committee Chair Ian Gaudion (BCom, BEd, FCPA, MBA) Ian has extensive experience in financial management and financial management consulting. Prior to joining Deloitte, where he became a partner, he was a management accountant and since leaving the partnership he has concentrated on insurance and superannuation organisations as well as running a management consulting practice. Ian is currently a director of the VMIA and an alternate director of ESSSuper. Interests in the shares and options of the Company and related bodies corporate The Company is a company limited by shares. Directors do not hold any shares in the Company. Taxation Status The Company received a private ruling from the Australian Taxation Office (Authorization Number 90830) which states that the Company is exempt from Commonwealth income tax under section 24AM of the Income Tax Assessment Act 1936. The exemption commenced on 19 November 2008 and applied for the years ending 30 June 2009, 2010, and 2011. The exemption was extended for 3 years to 30 June 2014 during the course of 2010-11 and for a further 3 years to 30 June 2017 during the course of 2013-14. Dividends No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made. Principal Activities The Company’s principal activity is to hire sound stages, production offices and workshops to third parties for the production of film and television programmes. Operating and Financial Review The Company’s objective is to service both domestic and international film and television production. 2014-15 was a successful year and in the reporting period the Studio hosted a range of different productions, again demonstrating its capacity to cater for all production types. The major bookings included: • GTV 9's production of Millionaire Hot Seat and The Footy Show; • The fifth series of the Seven Network's drama series, Winners and Losers; • The elimination rounds for the new series of Masterchef; • The Australian feature film The Dressmaker; and • The international mini-series, Childhoods End. 7 Docklands Studios Melbourne Pty Ltd Directors’ Report - (continued) Operating and Financial Review - (continued) The Studio also hosted numerous smaller bookings, including television commercials, music videos, short films and several corporate events. This year the Studio hosted Childhoods End, an international mini series. GTV9 (now in the final year of a five year contract) remains the most consistent source of revenue. The Company’s appeal to the international market is strongly influenced by the exchange rate and how our dollar sits in relation to our competitors. If the US dollar