Annual report

2010SCREENVICTORIA

Screen Victoria

Screen VictoriaAnnual Report 2010

SCREENVICTORIA

These stories are landscapes through which we navigate...in them we find each other, in them we find ourselves.

1 Introduction6 Achievements10 Report of operations12 Financial statements

Our visionour vision is for Victoria to have a world-leading screen economy and culture

Our screen industry plays a crucial role in Victoria’s cultural, economic and social development. It generates jobs and business activity, and enriches our cultural life by capturing local narra-tives, voices and important ideas. Through our financial support the film and television industry is able to create entertaining, culturally significant and innovative projects that Victorian audi-ences want to see and experience; stories about our history, society and life on screen. Our digi-tal media programmes support the development of diverse projects for online, mobile and video game platforms with an emphasis on technical, creative or design innovation. Through our work to promote Victoria as a leading production destination nationally and internationally, we’re also able to attract production, post-production and visual effects to the state. This enhances opportunities for employment and skills development, creates business prospects and generates a substantial boost for the Victorian economy. The result of our activity is a film, television and digital media industry that can demonstrate growth over time, with businesses becoming more sustainable.

This ultimately achieves our vision for the Victorian screen industry to have a world-leading screen economy and culture.

Initially constituted as the Victorian Film Corporation in 1976 under an Act of Parliament, the Corporation became Film Victoria in 1982 by virtue of the Film Victoria Act (1981). In 1997, the functions of Film Victoria were amalgamated with those of the State Film Centre of Victoria to form Cinemedia Corporation, under the Cinemedia Corporation Act 1997. The Film Act 2001 abolished Cinemedia Corporation and established Film Victoria and the Australian Centre for the Moving Image (ACMI) as separate statutory authorities. In November 2006, Film Victoria moved from the Arts portfolio to Innovation, and reports to the Minister for Innovation, Gavin Jennings MLC. The Film Act 2001 defines Film Victoria’s role as to provide: ‘Strategic leadership and as-sistance to the film, television and multimedia industry of Victoria to encourage innovation and the creation of new projects of high quality that are of economic or cultural benefit to Victoria’.

Film Victoria is the State Government agency that provides strategic leader-ship and assistance to the film, television and digital media industries of Victoria. We invest in projects and businesses, and promote Victoria as a world-class production destination nationally and internationally.

Our mission our mission is to lead an innovative screen industry to eliver engaging, world class content that enriches our cultural life, and generates jobs, prosperity and creative opportunities.

Our ServicesOur staff support the film, television and digital media industry by providing professional and business development support to foster industry business growth and skilled workforce. Support-ing the creation and production or original screen content and encouraging audience engagement. Marketing and developing the state as a world-class production destination to increase the economic value of Victoria’s film and television production industry. Developing and leading industry policy on behalf of the Victorian Government.

Who we are

John Howie President John has been Presi-dent of the Film Victoria Board since 2003 and was formerly the Chair of Film Victoria between 1989 and 1992. He was a member of the Film and Television Industry Task Force, which reported to the State Government in 2000, the Chair of the Film and Television Strategy Committee in 2005 and is a member of the Victorian Screen Industry Roundtable which delivered its strategy in 2009. A lawyer and former senior partner in the firm of Howie & Maher Solicitors,

Katherine Blashki With a background in Communications Arts and Information Technology faculties at numerous universities, Katherine is also known for her experience in the interactive media sector, focusing on creating narrative and systems development. Katherine has a new position as Director of Research and Education at the Australian Film, Television and Radio School (AFTRS) and Chair of New Media Technologies, a collaboration between the faculties of Arts, Science and Technology at Deakin University. She participates in community, industry and international consultancies in communica-tions, IT and interactive media.

Jo Dawson Jo is a chartered accountant with extensive experience in financial services and wealth management developed through senior roles at National Australia Bank and Deloitte. Jo has excellent management and strategy experience, and brings a strong corporate governance background to the Board through experience developed in a range of environ-ments, including CFO of National Financial Management. She is Managing Director and adviser with Executive Wealth Strategies, a fi-nancial planning practice established in 2002, and is also a director of the general insurance company Catholic Church Insurances Limited.

Sue Ling is the Principal/Director of In- Context Finance, which provides financial consulting, financial management and strategic business advisory services to small and medium enterprises (SMEs). She is an accredited sponsor of the Australian Small Scale Offerings Board (ASSOB). Previously the holder of management positions with GE Capital, Bank of Melbourne (Westpac) and Citibank, Siu Ling is also a freelance writer. She holds a Bachelor of Economics degree (Accounting) from Monash University and is a member of the Institute of Chartered Secretar-ies and Administrators.

Ana Kokkinos Ana is an independent film-maker based in Melbourne who commenced her career as a lawyer and industrial officer before graduating from the VCA School of Film and Television. She directed and co-wrote the award-winning films ONLY THE BRAVE and HEAD ON, the latter selected for Director’s Fortnight at Cannes and the winner of numerous awards including an AWGIE for Best Adaptation. Ana’s latest feature film BLESSED, premiered at the Melbourne Inter-national Film Festival in 2009. It won the Jury prize at San Sebastian for Best Screenplay and the Jury Prize for Best Film at the Kosmorama Trondheim Film Festival in Norway. Ana recently wonan Emerging Master Award at the 2010 Seattle International Film Festival.

Jim McGrath Jim McGrath joined the Board in 2010. He has over 20 years experience in public policy development and implementa-tion in a range of portfolio areas, including the screen industry and governance. He is currently engaged by the United Nations De-velopment Program on the former Victorian Premier, Steve Bracks’ Timor- Leste Govern-ance Project. Kim also serves on the Board of the Melbourne International Film Festival.

.Our funding programmes leveraged $179 mil-lion in 2009/10, almost double the production expenditure of the previous year. Local television production was the strongest performing sector, and the 37 productions we supported this financial year contributed $87 million to the Victorian economy - a 56% in-crease on last year’s figure. And significantly, we saw and heard more Victorian stories on screen, increasing the cultural benefit to the state. On our screens, viewership of the 33 Screen Victoria supported television programs on air this year exceeded 73 million views, signifying the strong appeal of our projects among Australian audiences. Victorian films also performed incredibly well at the box office - of the top 10 Australian films at the Australian box office, half were Victorian projects or from Victorian teams. Screen Victoria supported films released at the Australian box office took more than $24 million, which represents an estimated attend-ance of 2.1 million Australians experiencing

our stories on the big screen. Victoria continues its reputation as a leader in the games sector, winning eight of the nine Games Developers Association of Australia Game Developer Awards in 2009. We received a record number of digital media applications – up 45 % on the previous year, signalling that local companies are embrac-ing the opportunity to develop commercially appealing content for new platforms, as well the growth of digital media developers and projects in Victoria. At Screen Victoria we lead the response to an ever-changing landscape to ensure a sustainable, innovative and resilient industry that performs strongly year after year. The Victorian Screen Industry Strategy provides the framework for the Victorian Government’s vision for the industry. It is a five-year plan and we are alreadyimplementing several strategy projects. In the coming financial year we will continue to consolidate and align our activities to

the objectives of the strategy, and deliver programmes that reflect its aims: to extend Victoria’s reputation as Australia’s foremost location for film, television and digital media production, to increase investment, exports and jobs, to enhance industry skills and increase exposure to Victorian creativity. As always, my heartfelt thanks to the Board, led by John Howie, for its continued commit-ment and leadership, and to Screen Victorias-taff for their hard work throughout the year. Finally, thanks to our talented screen profes-sionals for their energy, creative vision and high-calibre projects, which have once again made Victoria the leading state for screen activity.

Tony RellmanDirector

It’s been a remarkable year for Screen Victoria and the Victorian screen industry. At Screen Victoria we lead the response to an ever-changing landscape to ensure a sus-tainable, innovative and resilient industry that performs strongly year after year.

Screen Victoria unveils its new corporate vision to filmmakers in Sydney and Mel-bourne as part of national tour to discuss the organisation’s plans.

Launch of learning@screenaustralia. Screen Australia Roadshow travels to high schools around the country. Launched in February 2004, Screen Victoria Library Online provides worldwide access to the company’s heritage audio-visual collection.

Silent Storm won best film at Earth Vision-Tokyo Global Environmental Film Festival in Japan while on the homefront, Dhakiyarr vs the King was the winner of the audio/visual history prize at the NSW Premier’s History Awards and Land of the Morning Star received an AFI (Australian Film Institute) Award for best sound in a non-feature as well as an Australian Screen Sound Guild Award.

Screen Victoria archival footage is shown at the London New Media Gallery for the exhibi-tion ‘Strange scapes’.

Since last we spoke...

1 Develop an innovative industrySupport and invest in Innovative local pro-jects that reflect Australian Perspectives and engage audiences. Create strategic frame-work and action plans for screen industry sustainability. Maximise oppotunities for local production and post-production activity. Build local and international relationships that ben-efit the local screen industry. Recognise best practice in creative and business partnerships and projects.

2 build skills and capacityIdentify and encourage industry growth op-potunities. Support professional development and other approaches to foster a skilled and productive workforce. Work with industry, associations and other government agencies to improve business skills capability.

Throughout the past 12 months Screen Victoria has been striving to achieve the objectives set for the 2009/2010 financial year.

3 Market Victoria and attract pro-duction Position Melbourne and provincial Victoria as a world-class production destination. Increase international and national production and post-ptoduction activity in Victoria. Build awareness and recognition of Victorian prod-uct and talent in Australia and overseas.

4 Enhance Audience engagementIncrease oppotunities for people to view, understand and appreciate local content. Sup-port organisations, events and iniatives that engage audiences.

Australian film festival. Recipients of inaugu-ral Screen Victoria/NSW Film and Television Office Hothouse Scheme announced. The Art of War wins NSW Premier’s Literary Award and Screen Victoria’s Immigration DVD wins an international award—the Focal Award for best use of footage in electronic publishing

Shooting begins in Regional Victoria for the international mini-series ‘Culprits’

At the Australian International Documentary Conference, Screen Victoria announces new terms of trade and distribution advance and that the Central Australian Aboriginal Media Association (CAAMA) is the recipient of this year’s Stanley Hawes Award for outstanding contribution to Australian documentary.Company-wide implementation of new finan-cial management system.

Australian Government announces Screen Victoria to receive $7.5 million over next three years for ten-part history series.

5 shape industry policy Provide an integrated and focused industry policy framework that enhances sustainability, cultural outcomes, innova-tion, and excellence. Strengthen Screen Victoria’s research and analysis capacity and management and dissemination of industry knowledge.

6 Strengthen organisational capabilityProvide effective and transparent cor-porate services, business systems and infrastructure to achieve Screen Victoria’s stategic objectives. Maintain corporate governance, through policies, procedures, relevent legislation and departmental standards. Value and enhance our people and their skills.

An estimated attendance of 2.1 million Australians at the box office for local films – a 411% increase on last year’s results.

5/10 top Australian films at the Australian box office were supported by Screen Victoria

45% Increase in digital media production applications from the previous year

The value of films beginning production in 2009/10 grew by 186% over the previous year, with production expenditure of $101 million

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14 productions filmed in 37 locations in regional Victoria with the support of the Regional Location Assistance Fund (RLAF)resulted in a regional spend of $2.7 million. This is an increase of 124% from the previous year

37 television productions support-ed by Screen Victoria contributed $87 million to the state’s economy – a 56% increase from last year’s leveraged spend of $56 million

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Screen Victoria supported films released at the Australian Box Office in 2009/10 took $24 million – a 46% share of the total box office takings for Australian films.

Your projectsI was getting a little bit desperate for a really, really good film and then, wouldn’t you know it, along come the Dardon brothers from Melbourne with their THE KID WITH A BIKE and it’s an absolutely searing story about this boy who is desperate to contact his father. He’s been abandoned by him. He’s just relentless and wilful about finding his father and in the process he runs into an un-likely friend, and the film is really about the connection between the two of them.

Margaret PomeranzAt The Movies ABC

Under the current five-year contract, the company must deliver 100 programs by 2011. It will focus on great stories that are engaging and entertaining; distinctive in look and content through an approach that is fresh and original; with an intelligent voice that is insightful and revealing; and an Australian perspective. All productions are commissioned from, and made by, Australian creative and technical personnel who constitute Australia’s independent documentary sector. In 2009–2010, Screen Victoria worked with filmmakers from Tasmania, Queensland, the Australian Capital Ter-ritory, Victoria and New South Wales to deliver 20 titles nationally under the agreement. These ranged from television documentaries to online projects, and covered topics of concern to contemporary Australia, from adoption to abor-tion, drought to divorce, painting to politics. Whatever the format or subject, Screen Victoria aims to be distinctive, producing outstanding documentaries and education programs that are recognised for their excellence, creativity and integrity. The following productions, declared in 2008–2009, add to that exceptional body of work, the National Interest Program Productions Delivered in 2008–2009. The Art of War The former director of the National Gallery of Australia, Betty Churcher, brought her unique perspective to a series on Australian art inspired by a century of conflict. The recipient of this year’s NSW Premier’s Literary Award for Scriptwriting, The Art of War was written and presented by Churcher, who also produced the series with director John Hughes. Produced in association with Early Works and SBS Independent, The Art of War was made with the support of the Australian War Memorial, where it was officially launched on 10 April 2005. It was broadcast nationally by SBS TV on 23 and 24 April 2005 to coincide with Anzac Day commemorations.

The Archibald, In another high-profile arts program, stand-up comic, media presenter and former art student Peter Berner swapped banter for brushes as

he attempted a self-portrait for the Archibald Prize. Peter Berner’s Loaded Brush is a video diary of the process, including interviews with other artists and critics about the creative process and the background to one of Australia’s highest profile art competitions. Directed by Edwina Throsby with Sally Regan as producer, the one-hour program was produced with the assistance of the Australian Broadcasting Corporation. It was broadcast nationally on ABC TV on 5 May 2009 coinciding with the Archibald exhibition at the Art Gallery of New South Wales, which opened on 30 April. Also produced in association with the Australian Broadcasting Corporation is Remembering Rain, a one-hour documentary that introduces viewers to the members of one rural community as they attempt to weather the worst drought on record. Directed by Mandy Chang—who also produced with Megan McMurchy—this is an iconic portrait of a land and a character shaped by drought—one that raises the question of the very viability of farming in the driest inhabited continent on earth.Who’s Afraid of Designer Babies? screened nationally on SBS TV on 30 September 2004. Writ-ten and directed by Sean Cousins, this one-hour documentary follows a couple who are trying to have a child with the right genetic make-up to save their son’s life. It also talks to parents who have used the same technology (pre-implantation genetic diagnosis) for gender selection and to leading scientists and ethicists from around the world. Going beyond sensationalist media headlines, this thoughtprovoking film presents a wide range of perspectives on a complex and emotionally charged issue. It was produced by Tony Wright and Stuart Menzies of December Films in association with Film Victoria and SBS Independent, and developed with the assistance of Film Victoria and the Australian Film Commission.

An iconic portrait of a land and a character shaped by drought—one that raises the question of the very viability of farming in the driest inhabited continent on earth

Screen Victoria receives finance from the Australian Gov-ernment under the National Interest Program agreement, requiring the company to devise, produce, distribute and market programs that deal with matters of national inter-est to Australia and the Australian people.

Consolidated Parent

2010 2009 2010 2009

Notes $ $ $ $

Current Assets

Cash and cash equivalents 8 10,072,893 14,283,824 5,584,431 12,361,134

Trade and other receivables 9 1,334,725 2,824,267 1,436,423 94,292

Total current assets 11,407,618 17,108,091 7,020,854 12,455,426

Non-current assets

Property, plant and equipment 11 1,110,801 1,431,124 - -

Intangible assets 12 17,785,573 4,086,538 3,688,680 4,086,538

Investments accounted for using the equity method 13 76,286 2,387,312 - -

Deferred tax assets 14 43,201 - - -

Other financial assets 15 - - 16,291,538 5,208,750

Total non-current assets 19,015,861 7,904,974 19,980,218 9,295,288

Total assets 30,423,479 25,013,065 27,001,072 21,750,714

Current Liabilities

Trade and other payables 16 1,854,515 1,897,819 1,369,731 1,484,154

Borrowings 17 68,587 142,092 - -

Provisions 18 356,463 331,447 - -

Deferred income 19 980,161 661,337 - -

Total current liabilities 3,259,726 3,032,695 1,369,731 1,484,154

Non-current liabilities

Borrowings 20 260,147 315,412 - -

Provisions 21 57,257 107,630 - -

Deferred income 22 168,946 241,342 - -

Deferred tax liabilities 23 953,373 - - -

Total non-current liabilities 1,439,723 664,384 - -

Total liabilities 4,699,449 3,697,079 1,369,731 1,484,154

Net assets 25,724,030 21,315,986 25,631,341 20,266,560

Equity

Contributed equity 24 76,226,627 65,375,467 76,226,627 65,375,467

Reserves 25 1,299,253 497,374 697,213 421,838

Accumulated losses 26 (51,801,850) (44,556,855) (51,292,499) (45,530,745)

Total equity 25,724,030 21,315,986 25,631,341 20,266,560

- - - -

Consolidated Parent

2010 2009 2010 2009

Notes $ $ $ $

Revenue from continuing operations 5 1,462,771 571,837 580,687 526,606

Other income 5 8,090,536 6,422,066 - -

Administration expense 6 (5,325,403) (3,906,186) (1,899,381) (2,037,530)

Research and development expense (11,983,590) (9,945,396) - -

Provision for diminution - - (4,443,060) (7,996,332)

Finance costs (32,738) (23,285) - -

Share of results of associates accounted for using the equity method (178,446) (641,825) - -

Loss before income tax (7,966,870) (7,522,789) (5,761,754) (9,507,256)

Income tax credit 7 721,874 - - -

Loss for the year (7,244,996) (7,522,789) (5,761,754) (9,507,256)

Loss attributable to minority interests - - - -

Loss attributable to members of Company (7,244,996) (7,522,789) (5,761,754) (9,507,256)

Loss per share for loss from continuing operations attributable to ordinary equity holders of the company

Basic loss per share 37 ($0.04) ($0.06)

Diluted loss per share ($0.04) ($0.06)

Balance sheet Income Statement

Consolidated Parent

2010 2009 2010 2009

Notes $ $ $ $

Total equity at the beginning of the year 21,315,986 9,965,965 20,266,560 11,017,082

Exchange differences on translation of foreign operations 25 (1,688,014) 116,075 - -

Share of revaluation of IP within subsidiary 25 2,214,519 - - -

Net income recognised directly in equity 526,505 116,075 - -

Loss for the year (7,244,996) (7,522,789) (5,761,754) (9,507,256)

Total recognised income and expense for the year (6,718,491) (7,406,714) (5,761,754) (9,507,256)

Transactions with equity holders in their capacity as equity holders:

Employee share options 25 275,374 203,223 275,374 203,223

Contributions of equity, net of transaction costs 24 10,851,160 18,553,512 10,851,160 18,553,512

Total equity at the end of the year 25,724,029 21,315,986 25,631,340 20,266,560

1 - 1 (0)

Consolidated Parent

2010 2009 2010 2009

Notes $ $ $ $

Cash flow from operating activities

Receipts from trade and other debtors 1,042,324 110 - -

Grant income (inclusive of GST) 10,567,298 4,360,527 - -

Payments to suppliers and employees (inclusive of GST) (15,591,264) (12,405,980) (1,462,830) (1,046,208)

Interest received 636,152 574,151 544,904 538,295

Interest paid (34,704) (18,756) - -

Net cash outflows from operating activities 35 (3,380,194) (7,489,948) (917,926) (507,913)

Cash flow from investing activities

Loans advanced to subsidiaries - - (5,597,031) (7,683,238)

Loans advanced from subsidiaries - - - 50,129

Receipts from property, plant and equipment 1,010 25,904 - -

Payments for property, plant and equipment (182,185) (463,184) - -

Payments for transaction costs on acquisition of subsidiary (net of cash acquired) (90,986) - (231,630) -

Net cash outflows from investing activities (272,161) (437,280) (5,828,661) (7,633,109)

Cash flow from financing activities

Proceeds from issue of shares - 14,990,045 - 14,990,045

Share issue transaction costs - (810,413) - (810,413)

Lease repayments (126,739) (134,839) - -

Net cash inflows / (outflows) from financing activities (126,739) 14,044,793 - 14,179,632

Net increase / (decrease) in cash and cash equivalents held (3,779,094) 6,117,565 (6,746,587) 6,038,610

Cash and cash equivalents at the beginning of the period 14,283,824 8,166,259 12,361,134 6,322,524

Effects of exchange rate changes on cash and cash equivalents (431,837) - (30,116)

Cash and cash equivalents at the end of the period 10,072,893 14,283,824 5,584,431 12,361,134

Changes in equity

Cash flow

To the members of Screen Victoria Limited Scope The financial statements comprise: “ Direc-tors’ Declaration; “ Statements of Financial Performance, Financial Position and Cash Flows; and “ Notes to and forming part of the financial statements of Screen Victoria Limited for the year ended 30 June 2010. The directors of Screen Victoria Limited are responsible for prepar-ing a financial report that gives a true and fair view of the financial position and performance of the company, and that complies with accounting standards and other mandatory financial reporting requirements in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. Audit approach I have conducted an independent au-dit of the financial report in order to express an opinion on it to the members of the company. My audit has been conducted in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing and Assurance Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstate-ment. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive, rather than conclusive, evidence. Therefore, an audit cannot guarantee that all material mis-statements have been detected. While the effectiveness of management’s internal controls over financial reporting was considered when determining the nature and extent of audit procedures, the audit was not designed to provide assurance on internal controls.

Screen Victoria Limited ACN 008 639 316

The directors declare that:a the financial statements and notes are in accordance with the Corporations Act 2001 and comply with the Accounting Standards and Corporations Regulations 2001;b the financial statements and notes give a true and fair view of the financial position as at 30 June 2005 and of the performance of the company and the cash flows for the year then ended;c in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts when they become due and payable.

Made in accordance with a resolution of the directors:

Steven Skala Daryl KarpDirector Director13 September 2010 13 September 2010

We declareIndependent Audit Report

I have performed procedures to assess whether, in all material respects, the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with accounting standards and other mandatory financial reporting requirements in Australia, a view which is consistent with my understanding of Screen Victoria Limited’s financial position, and of its performance as represented by the statements of financial performance and cash flows. The audit opinion is formed on the basis of these procedures, which included: “ examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report; and “ assezssing the appropriateness of the accounting policies and disclosures used, and the reasonableness of significant accounting estimates made by man-agement. Independence Independence requirements of the Australian professional ethical pronouncements and the Corporations Act 2001 have been met. I have given to the directors of the company a written Auditor’s Independence Declaration. Audit Opinion In my opinion, the financial statements of Screen Victoria Limited are in accordance with: a the Corporations Act 2001, including: (i) giving a true and fair view of Screen Victoria Limited’s financial position as at 30 June 2005 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and b other mandatory professional reporting requirements in Australia.

Australian National Audit Office

P Hinchey Senior Director For the Auditor-General Sydney, 14 September 2010

Image creditsThank you to The Vancouver film School,The Oslo Opera House, and Film Victoria, Playing for Charlie, for the use of production images, under a Creative Commons Licence.