Docklands Studios Melbourne Pty Ltd · R D Hanna Chair A. Fletcher-Nicholls D. Clark Company...

Docklands Studios Melbourne Pty Ltd

ABN 28 101 578 303

Annual Report 30 June 2016

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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

16

17

18

19

Note 1. Summary of significant accounting policies 20Note 2. Income from transactions 28Note 3. Expenses from transactions 28Note 4. Other economic flows included in net result 29Note 5. Cash and deposits 29Note 6. Receivables 29Note 7. Property, plant and equipment 30Note 8.Intangibl

Intangible assets 33Note 9. Other non-financial assets 34Note 10. Payables 34Note 11. Provisions 35Note 12. Superannuation 36Note 13. Issued capital 36Note 14. Number of shares 36Note 15. Reserves 37Note 16. Commitments for expenditure 37Note 17. Contingent assets and contingent liabilities 37Note 18. Financial instruments 38Note 19. Cash flow information 43Note 20. Responsible persons 43Note 21. Remuneration of auditors 44Note 22. Subsequent events 44Note 23. Segment information 44Note 24. Glossary of terms and style conventions 44

47

Notes to the financial statements

Auditor-General's Report

Comprehensive operating statement

Balance sheet

Statement of changes in equity

Cash flow statement

3


Introduction

For enquiries in relation to the Annual Report

Acronyms / Abbreviations

DSM Docklands Studios Melbourne Pty Ltd.ACN 101 578 303The 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

visit our website: http://www.dsmelbourne.com

A description of the nature of the Company’s operation and its principal activities is included in the Directors'Report.

The Annual Report has been prepared in accordance with the requirements of the Corporations Act 2001 andAustralian Accounting Standards and when relevant with the requirements of Standing Direction 4.2 of theFinancial Management Act 1994 and applicable Financial Reporting Directions.

This is the Annual Report of Docklands Studios Melbourne Pty Ltd ACN 101 578 303 (the Company) for2016. The Company is a private unlisted company incorporated in Australia on 2nd August 2002 with areporting date of 30 June.

please call: + 61 3 8327 2000, oremail to: [email protected]

4


Corporate information

ABN 28 101 578 303ACN 101 578 303

DirectorsR D Hanna ChairA. Fletcher-NichollsD. Clark

Company SecretaryV. Pythas

Registered Office and Principal Place of Business476 Docklands DriveDocklands, Victoria, 3008AustraliaPhone: + 61 3 8327 2000

ShareholderState of Victoria

SolicitorsKeelins LawyersLevel 4, 459 Little Collins StreetMelbourne, Victoria, 3000Australia

BankersWestpac Banking Corporation509 Toorak RoadToorak, Victoria, 3142Australia

Treasury Corporation of VictoriaLevel 12, 1 Collins StreetMelbourne, Victoria, 3000Australia

AuditorsVictorian Auditor-General’s OfficeLevel 24, 35 Collins StreetMelbourne, Victoria, 3000Australia

Internal AuditorsMcLean Delmo BentleysChartered AccountantsLevel 3, 302 Burwood RoadHawthorn, Victoria, 3122Australia

5


Directors’ report

Directors

The Directors submit their report for the year to 30 June 2016 and the Independent Audit Reportthereon.

Desmond Clark (ARMIT, SATC)Mr Clark has extensive experience in policy development, governance and management. Heprovides independent consulting advice in strategic communications and management services.

He was appointed Director of the Office of Film and Literature Classification in 2000 andcompleted his term in 2007. He was Deputy Chairman of the Australian Film Commission andChairman of the Melbourne International Film Festival.

He was Lord Mayor of the City of Melbourne (1992 - 1993) and served three terms as aCouncillor. He worked on the restructure of Local Government in Victoria as Chairman ofCommissioners 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 ofthe Company's Audit Committee.

The names and details of the Company’s directors in office during the period and until the date ofthis report are as follows. Directors were in office for the entire period unless otherwise stated.

Ms Eldridge was a senior executive in the Victorian Public Sector. She has held seniorappointments with the Departments of Justice, Treasury and Finance and Business andInnovation. She is also a director of Victorian Traditional Owners Fund Limited as trustee of theVictorian Traditional Owners Trust and a member of the Queen's College Council and theQueen's College Trust Corporation.

She was appointed a Director on 19 November 2008 and appointed as Chair of the Company atthe Board Meeting held on 4 December 2008. Ms Eldridge was also an alternating member of theCompany's Audit Committee. Ms Eldridge resigned on 1 June 2016.

Ms Fletcher-Nicholls has a wealth of public relations and marketing expertise, spanning more thanthree decades. She has operated at a senior executive level across a broad range of industrysectors. Currently, she is also Chair of Seymour Health, Director, Goulburn River Valley Tourismand Director, Chadcorp Communications. Her previous positions have included ManagingDirector, 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 memberof the Company's Audit Committee.

Ann Fletcher-Nicholls (BA, MAICD)

Names, qualifications, experience and special responsibilities

Elizabeth Eldridge (BA; LLM)

David Hanna (BEc, BA)Mr Hanna has more than 30 years’ experience in the public sector in Victoria and Canberra. Hehas also lived and worked in many parts of Asia. He has a strong connection to film and has beena longstanding committee member for Film Victoria’s Production Incentive Attraction Fund – whichprovides government grants to attract productions to Victoria. He is also a member of the CourseAdvisory Committee for the VCA’s School of Film and Television. Mr Hanna is currently theDirector of Business Strategy at Monash University. Prior to his Monash appointment, Mr Hannaheld a variety of senior management positions in the Victorian and Australian Governments with afocus on economic development, international policy, trade and innovation.

He was appointed a Director on 2 June 2016 and appointed as Chair of the Company at the BoardMeeting held on 8 June 2016. Mr Hanna Is also an alternating member of the Company's AuditCommittee.

6


Directors’ report - (continued)

Company Secretary

Audit Committee ChairIan Gaudion (BCom, BEd, FCPA, MBA)

Taxation Status

Dividends

Principal Activities

Operating and Financial ReviewThe Company’s objective is to service both domestic and international film and televisionproduction.

In recent years most of the Studio’s revenue has come from the domestic market. Australia’sstrong domestic production sector is underpinned by longstanding Federal Government policiesand quotas that were established to ensure that Australian content are shown on our screens.Film and television production cycles fluctuate and the Studio can be subject to the vagaries ofthe national and international production cycle.

The Company is a company limited by shares. Directors do not hold any shares in the Company.

The Company received a private ruling from the Australian Taxation Office (Authorization Number90830) which states that the Company is exempt from Commonwealth income tax under section24AM of the Income Tax Assessment Act 1936. The exemption commenced on 19 November2008 and applied for the years ending 30 June 2009, 2010, and 2011. The exemption wasextended for 3 years to 30 June 2014 during the course of 2010-11 and for a further 3 years to 30June 2017 during the course of 2013-14.

Interests in the shares and options of the Company and related bodies corporate

Ms Pythas was appointed as Company Secretary of the Company on 5 August 2010. Viola hashad over 15 years experience in Corporate Governance and Company Secretary roles with ANZ.She has extensive experience in various facets of company secretarial practice, includingcompliance with the Corporations Act, coordinating effective Board and Committee meetings,corporate structures, directors’ duties and administration of trusts. She has been an affiliatemember with the Governance Institute of Australia for over 15 years.

Viola Pythas BA (Legal), GradDipBus (Acc)

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 sinceleaving the partnership he has concentrated on insurance and superannuation organisations aswell as running a management consulting practice. Ian is currently an alternate director ofESSSuper.

No dividends were paid or declared since the start of the financial year. No recommendation forpayment of dividends has been made.

The Company’s principal activity is to hire sound stages, production offices and workshops to thirdparties for the production of film and television programmes.

The Company has successfully been able to increase its bookings from the television commercialand corporate events sectors when sound stages are available, thus providing continuing revenuebetween major bookings.

International production remains a critical component of the Company’s long-term financialperformance because these productions have big budgets and book multiple sound stages forlong periods of time. The Company is not aligned with a major international studio but worksclosely with Film Victoria and Creative Victoria to attract productions to the State. On average theStudio has booked an international production every 14 months since it opened in 2004.

The Company’s appeal to the international market is strongly influenced by the exchange rate andhow our dollar sits in relation to our competitors. If the US dollar rises but the Australian dollarretains parity with other currencies, our competitiveness will not improve significantly.

7



Operating and Financial Review - (continued)

Lease Agreement

Operating Results for the Period

This leaves an operational profit (or EBITDA) of -$51,765 (2015: $955,283). After depreciationand interest, the loss is $2,390,671 (2015: $1,350,358).

Total operating revenue for the year was $2,687,872 (2015: $3,798,219) and total operatingexpenses before depreciation and interest were $2,739,637 (2015: $2,842,936).

The Company occupies Crown land under the terms of a lease with the State of Victoria. Thelease requires the Company to pay rent subject to adjustment every two years according tomovements in the Melbourne Consumer Price Index.

The lease gives the Company the right to seek deferral of rental payments under certaincircumstances. The Company sought and was granted deferment of rent from November 2004until 1 July 2010 totalling $1,986,675.

• The ABC mini-series, Tomorrow When the War Began ;

• The Australian feature film Berlin Syndrome ;• The Melbourne episodes of the ABC panel show Q & A ;• The new Seven Network series The Big Music Quiz; and

The Studio also hosted numerous smaller bookings, including television commercials, musicvideos, short films and several corporate events.

• The ABC mini-series, Jack Irish ;

This is a solid result given that no international production was at the Studio until the final monthof the year.

• The final episodes of the Seven Network's drama series, Winners and Losers;

• The international mini-series, The Leftovers , which began production in May 2016. More than75% of the revenue from this project will fall into the next financial year.

This year the Studio renewed its contract with GTV9 for another two years and the Nine Networkremains the most consistent source of revenue.

This is a summary of the major projects that the Studio hosted in 2015-16, again demonstrating itscapacity to cater for all production types:

During 2015-16, $310,179 was repaid leaving an amount payable at 30 June 2016 of $1,114,522.

The Company is required to repay the deferred rent out of EBITDA once it reaches a threshold of$400,000 in any one year. The Company will pay 50 cents in the dollar of all EBITDA earnedabove the threshold.

• GTV 9's production of Millionaire Hot Seat and The Footy Show;

Rental payments have been made in full to the State in accordance with the lease agreementsince 1 July 2010.

8



Review of Financial ConditionLiquidity

Non Current Assets

Equity and Called Up Capital

- 200,000 fully paid up 1 cent shares- 45,492,625 fully paid up $1.00 shares- 2,501,400 fully paid up $5.00 shares

(i)(i) see Notes 13 and 14

Capital reserves

Significant Events after the Balance Date

Auditor's Independence DeclarationA copy of the auditor’s independence declaration as required under section 307C of theCorporations Act 2001 is set out on page 13.

There are no significant events subsequent to the reporting date that will have a material effect onthe Company's operations.

The Company received cash from operating activities during the year which together with theopening cash balances was sufficient to cover all operating cash payments. The closing cashbalance at 30 June 2016 including term deposits, was $3,293,506 down from $3,916,734 at 30June 2015.

The Company incurred a loss after depreciation and interest of $2,390,671 (2015: $1,350,358)which, when added to the prior year's accumulated losses, brings the accumulated loss at 30June 2016 to $23,516,623 (2015: $21,125,952). The revaluation reserve at 30 June 2016 was$9,999,563 (2015: $8,056,519).

12,507,000$58,001,625$

At balance date the Company had non-financial assets totalling $42,753,500 (2015: $42,866,190)comprised of the written down value of buildings $42,578,976 (2015: $42,688,720) and plant andequipment of $174,524 (2015: $177,470).

The issued and called up capital of the Company at 30 June 2016 was $58,001,625. The State ofVictoria is the sole owner of the shares comprising:

2,000$45,492,625$

During the financial year Buildings were revalued by $1,943,044 (2015: Nil)

9



Likely Developments and Expected Results

Environmental Regulation and Performance

Indemnification and Insurance of Directors and Officers

Directors’ meetings and Committee membership

Audit Committee Meetings2016 2015 2016 2015

Number of meetings held: 10 8 4 5Number of meetings attended:DirectorsD Hanna 2 - 1 -E. Eldridge 8 7 3 4A. Fletcher-Nicholls 10 8 4 3D. Clark 5 5 2 3Audit Committee ChairI. Gaudion (Audit Committee Chair) 4 5

The total amount of insurance contract premium paid was $11,594 (2015: $13,333).

The Company has secured the international mini-series, The Leftovers , which began productionin May 2016. As such, the Company will commence the 2016-17 financial year with over 50% ofits budgeted revenue confirmed compared to 28% at the commencement of the 2015-16 financialyear.

The Directors expect operating expenses to be slightly higher than prior years and operatingrevenue will be dependent on winning new bookings that will be reliant on market conditions andthe level of competition.

The Company’s operations are not regulated by any significant environmental regulation under alaw of the Commonwealth or State or Territory. The Company holds no specific environmentallicences or permits.

During the year, the Company paid a premium to insure officers of the Company. The officers ofthe Company covered by the insurance policy include all Directors.

The liabilities insured are legal costs that may be incurred in defending proceedings that may bebrought against the officers in their capacity as officers of the Company, and any other paymentsarising from liabilities incurred by the officers in connection with such proceedings, other thanwhere such liabilities arise out of conduct involving a wilful breach of duty by the officers or theimproper use by the officers of their position or of information to gain advantage for themselves orsomeone else to cause detriment to the Company.

The number of directors' meetings and audit committee meetings held during the period andattended by each director and member were as follows:

Directors’ Meetings

The Company has not otherwise, during or since the end of the financial year, except to the extentpermitted by law, indemnified or agreed to indemnity any current or former officer of the Companyagainst a liability incurred as such by an officer.

The Audit Committee comprises three members, being Mr. Gaudion (Chair) and any two of the three non-executive directors.

E Eldridge resigned as director of the Company and member of the Audit Committee on 1 June 2016 and was eligible to attend 8 boardmeetings and 3 audit committee meetings during the relevant period.

D Hanna was appointed as director of the Company on 2 June 2016 and was eligible to attend 2 board meetings during the relevantperiod. D Hanna was appointed to the Company’s Audit Committee on 8 June 2016 and was eligible to attend 1 audit committee meetingduring the relevant period.

10


11


Five year financial summary

Five year financial summary 2016 2015 2014 2013 2012

$ $ $ $ $

Income from rental of facilities 2,611,625 3,704,464 2,938,980 2,984,510 3,556,596

Interest income 76,247 93,755 77,660 107,191 82,185

Total expenses from transactions (5,076,074) (5,136,934) (4,865,489) (4,641,015) (4,028,822)

Earnings before depreciation and interest (51,765) 955,283 428,325 414,750 1,387,373

Net result from transactions (2,388,202) (1,338,715) (1,848,849) (1,549,314) (390,042)

Net result for the period (2,390,671) (1,350,358) (1,849,716) (1,549,342) (398,163)

Net cash flow from operating activities (302,754) 1,086,205 309,825 (1,817) 1,632,711

Total assets 46,203,987 47,031,889 48,243,465 50,102,533 42,309,548

Total liabilities 1,719,422 2,099,697 2,188,892 2,198,244 2,472,386

Total net assets 44,484,565 44,932,192 46,054,573 47,904,289 39,837,161

12


13


14


15



Note 2016 2015$ $

Income from transactionsIncome from rental of facilities and recoveries for services provided 2(a) 2,611,625 3,704,464Interest income 2(b) 76,247 93,755

Total income from transactions 2,687,872 3,798,219

Expenses from transactionsEmployee expenses 3(a) (1,089,346) (1,077,473)Supplies and services 3(b) (1,647,822) (1,753,820)Depreciation and amortisation expenses 3(c) (2,338,906) (2,305,641)

Total expenses from transactions (5,076,074) (5,136,934)

Net result from transactions (net operating balance) (2,388,202) (1,338,715)

Other economic flows included in net resultOther gains/(losses) from other economic flows 4(a) (2,469) (11,643)

Total other economic flows included in net result (2,469) (11,643)

Net result (2,390,671) (1,350,358)

Other economic flows - other comprehensive incomeItems that will not be classified to net resultChanges in physical asset revaluation surplus (deficit) 15 1,943,044 -

Total other economic flows - other comprehensive income 1,943,044 -

Comprehensive result (447,627) (1,350,358)

for the financial year ended 30 June 2016

This comprehensive operating statement should be read in conjunction with the notes to the financialstatements.

16


Balance sheetas at 30 June 2016

Note 2016 2015$ $

AssetsFinancial assets Cash and deposits 5 3,293,506 3,916,734 Receivables 6 138,609 232,973Total financial assets 3,432,115 4,149,707

Non-financial assets Property, plant and equipment 7 42,753,500 42,866,190 Intangible assets 8 1,858 4,398 Other non-financial assets 9 16,514 11,594Total non-financial assets 42,771,872 42,882,182

Total assets 46,203,987 47,031,889

Liabilities Payables 10 1,593,176 1,990,350 Provisions 11 126,246 109,347Total liabilities 1,719,422 2,099,697

Net assets 44,484,565 44,932,192

Equity Accumulated loss (23,516,623) (21,125,952) Physical asset revaluation surplus 15 9,999,563 8,056,519 Issued capital 13 58,001,625 58,001,625Net worth 44,484,565 44,932,192

Commitments for expenditure 16Contingent assets and contingent liabilities 17

This balance sheet should be read in conjunction with the notes to the financialstatements.

17



Note Physical AssetRevaluation

Surplus

AccumulatedLoss

Issued Capital Total

Balance at 30 June 2014 8,056,519 (19,775,593) 57,773,647 46,054,573

Net result for the year - (1,350,358) - (1,350,358)Revaluation adjustment of buildings 15 - - - -Issue of new ordinary shares 13 - - 227,978 227,978

Balance at 30 June 2015 8,056,519 (21,125,952) 58,001,625 44,932,192

Net result for the year - (2,390,671) - (2,390,671)Revaluation adjustment of buildings 15 1,943,044 - - 1,943,044Issue of new ordinary shares 13 - - - -

Balance at 30 June 2016 9,999,563 (23,516,623) 58,001,625 44,484,565


This statement of changes in equity should be read in conjunction with the notes to the financial statements.

18


Cash flow statement

2016 2015Note $ $

Cash flows from operating activitiesReceipts Receipts from customers 3,444,729 4,733,875 Interest received 76,247 93,755Total receipts 3,520,976 4,827,630

Payments Payments to suppliers and employees (3,783,344) (3,502,743) Goods and Services Tax paid to the ATO (i) (40,386) (238,682) Interest and other costs -Total payments (3,823,730) (3,741,425)

Net cash flows from/(used in) operating activities 19(b) (302,754) 1,086,205

Cash flows from investing activities Proceeds from sale of non-financial assets - 205 Purchases of non-financial assets (320,474) (361,708)Net cash flows from/(used in) investing activities (320,474) (361,503)

Net increase/(decrease) in cash and cash equivalents (623,228) 724,702Cash and cash equivalents at the beginning of financial year 3,916,734 3,192,032Cash and cash equivalents at the end of financial year 19(a) 3,293,506 3,916,734

(i) Goods and Services Tax paid to the ATO is presented on a net basis.


This cash flow statement should be read in conjunction with the notes to the financial statements.

19


(a)

(b)

.

.

.

.

.

There is nothing to suggest that the financial support will be withdrawn or not renewed and accordingly thesefinancial statements have been prepared on a going concern basis.

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement is directly or indirectly observable; andLevel 3 — Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement is unobservable.

Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revisionaffects only that period, or in the period of the revision and in future periods, if the revision affects both current andfuture periods.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30June 2016 and comparative information is presented for the year ended 30 June 2015.

This financial report is a general purpose financial report prepared in accordance with the requirements of theCorporations Act 2001 , Australian Accounting Standards (AAS), and other authoritative pronouncements of theAustralian Accounting Standards Board (AASB).

There is an economic dependency by the Company on the State of Victoria in respect of:• acquisition and replacement of major assets; and• the deferred rent repayment plan.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorisedwithin the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fairvalue measurement as a whole:

Consistent with AASB 13Fair Value Measurement , the Company determines the policies and procedures for bothrecurring fair value measurements such as property, plant and equipment, biological assets, investment propertiesand financial instruments and for non

‑recurring fair value measurements such as non

‑financial physical assets held

for sale, in accordance with the requirements of AASB 13 and the relevant Financial Reporting Directions.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basisof the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explainedabove.

In addition, the Company determines whether transfers have occurred between levels in the hierarchy byre

‑assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a

whole) at the end of each reporting period.

The Valuer

‑General Victoria (VGV) is the Company’s independent valuation agency.

The Company, in conjunction with VGV, monitors changes in the fair value of each asset and liability throughrelevant data sources to determine whether revaluation is required.

Judgements and assumptions made by management in the application of the AASs that have significant effects onthe financial statements and estimates relate to:

the fair value of property, plant and equipment (refer to Note 1(k));actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns ofleave claims, future salary movements and future discount rates (refer to Note 1(l)).

Notes to the financial statements

Summary of significant accounting policiesNote 1.

Statement of compliance


Where relevant this financial report has also been prepared in accordance with the Financial Management Act1994 and the Financial Reporting Directions issued by the Minister for Finance.

Basis of accounting preparation and measurement

These financial statements have been prepared on an historical cost basis, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair value of the consideration given in exchange forassets. All amounts are presented in Australian dollars.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilitiesthat are not readily apparent from other sources. The estimates and associated assumptions are based onprofessional judgements derived from historical experience and various other factors that are believed to bereasonable under the circumstances. Actual results may differ from these estimates.

These annual financial statements represent the audited general purpose financial statements for DocklandsStudios Melbourne for the year ended 30 June 2016. The purpose of this report is to provide users with informationabout the Company's stewardship of resources entrusted to it.

Accounting policies are selected and applied in a manner which ensures that the resulting financial informationsatisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactionsor other events is reported.

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets,liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless ofwhen cash is received or paid.

20


(c)

(d)



Cash flow statement

(e)

(f)

(g)

The comprehensive operating statement comprises three components, being 'net result from transactions' (ortermed as 'net operating balance'), 'other economic flows included in net result', as well as 'other economic flows -other comprehensive income'. (Refer to Note 24- Glossary) The sum of the former two represents the net result.The net result is equivalent to profit or loss derived in accordance with AASs. This classification is consistent withthe whole of government reporting fomat and is allowed under AASB 101Presentation of Financial Statements.

Assets and liabilities are presented in liquidity order with assets aggregated into financial assets and non-financialassets. Current and non-current assets and liabilities (non-current being those assets or liabilities expected to berecovered or settled more than 12 months after the reporting period) are disclosed in the notes, where relevant.

Balance sheet

Income from rental of facilities and recoveries for services provided

Income from transactions

Income arising from the provision of services is recognised when the following conditions have been satisfied:

rental income in relation to the licensing of the Company's assets is recognised when received orreceivable under the terms of the lease agreement.

Changes in accounting policies

There have been no changes in accounting policies as a result of new and revised standards.

Cash flows are classified according to whether or not they arise from operating, investing, or financing activities.This classification is consistent with requirements under AASB 107Statement of Cash Flows .

The statement of changes in equity presents reconciliations of non-owner and owner changes in equity fromopening balances at the beginning of the reporting period to the closing balances at the end of the reporting period.It also shows separately changes due to amounts recognised in the ‘Comprehensive result’ and amountsrecognised in ‘Other economic flows – other movements in equity’ related to ‘Transactions with owner in itscapacity as owner ’.

Income is measured at the fair value and amounts disclosed as income are net of returns, trade allowances, dutiesand taxes paid.

the amount of the revenue and transaction costs incurred can be reliably measured;it is probable that the economic benefits associated with the transaction will flow to the Company; and

Its principal address is:

Scope and presentation of financial statements

Reporting entity

The financial statements cover the Docklands Studios Melbourne as an individual reporting entity which managesthe sound studios located in the Docklands precinct Melbourne.

Docklands Studios Melbourne Pty Ltd476 Docklands Drive,Docklands, VIC, 3008

Note 1. Summary of significant accounting policies (continued)

Interest revenue includes interest on bank term deposits and is recognised on a time proportionate basis that takesinto account the effective yield on the financial asset.

Interest income

21


(h)

Useful lives

Building 40 yearsBuilding improvements 6 - 20 yearsPlant and equipment 5 – 10 yearsOffice equipment 10 yearsComputer equipment 2.5 yearsVehicles 6 yearsSoftware 2.5 years

Class of fixed asset

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.There has been no change to the useful lives since the previous year.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount isgreater than its estimated recoverable amount.

Intangible assets with finite useful lives are amortised as an expense from transactions on a systematic (straight-line) basis over the asset's useful life. Amortisation begins when the asset is available for use, that is, when it is inthe location and condition necessary for it to be capable of operating in the manner intended by management.The useful lives used to calculate depreciation for each class of depreciable assets are:

Depreciation is provided on property, plant and equipment.The depreciable amount of all fixed assets is depreciated on a straight line basis over their useful lives to theCompany. For buildings and plant and equipment, depreciation commences from the time the asset is held readyfor use.

Note 1.

The amount recognised in the comprehensive operating statement is the employer contributions for members ofdefined contribution plans that are paid or payable during the reporting period.

Summary of significant accounting policies (continued)

Expenses from transactions

Supplies and Services

These expenses generally represent the day-to-day running costs, including maintenance costs, which have beenincurred in the normal operations of the Company. These items are recognised as an expense in the reportingperiod in which they are incurred. The carrying amount of any inventories held for distribution is expensed whendistributed.

The Company occupies Crown land under the terms of a lease with the State of Victoria. The lease requires theCompany to pay rent subject to adjustment every two years according to movements in the Melbourne ConsumerPrice Index. The lease gives the Company the right to seek deferral of rental payments under certaincircumstances. The Company sought and was granted deferment of rent from November 2004 until 1 July 2010totalling $1,986,675. Rental payments have been made in full to the State in accordance with the lease agreementsince 1 July 2010. The Company is required to repay the deferred rent out of EBITDA once it reaches a thresholdof $400,000 in any one year. The Company will pay 50 cents in the dollar of all EBITDA earned above the threshold.During 2015-16, $310,179 was repaid leaving an amount payable at 30 June 2016 of $1,114,522.

Employee expenses

Depreciation and amortisation expenses

Employee benefits expenses include all costs related to employment including wages and salaries, leaveentitlements and superannuation contributions. These are recognised when incurred.

Rent

Superannuation

22


(i)

(j)

Financial instrumentsFinancial instruments arise out of contractual agreements that give rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. Due to the nature of the Company’s activities, certainfinancial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financialliabilities do not meet the definition of financial instruments in AASB 132Financial Instruments: Presentation . Forexample, statutory receivables arising from taxes, fines and penalties do not meet the definition of financialinstruments as they do not arise under contract. However, guarantees issued by the Treasurer on behalf of theCompany are financial instruments because, although authorised under statute, the terms and conditions for eachfinancial guarantee may vary and are subject to an agreement.

Where relevant, for note disclosure purposes, a distinction is made between those financial assets and financialliabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not.

The following refers to financial instruments unless otherwise stated.

Categories of non

‑derivative financial instruments

Loans and receivables

Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted onan active market. These assets are initially recognised at fair value plus any directly attributable transaction costs.Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effectiveinterest method, less any impairment.

Loans and receivables category includes cash and deposits, term deposits with maturity greater than three months,trade receivables, loans and other receivables, but not statutory receivables.

Financial liabilities at amortised costFinancial instrument liabilities are initially recognised on the date they are originated. They are initially measured atfair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financialinstruments are measured at amortised cost.

Financial instrument liabilities measured at amortised cost include all of the Company's contractual payables anddeposits held other than those designated at fair value through profit or loss.

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as written off by mutualconsent are classified as a transaction expense. The allowance for doubtful receivables and bad debts not writtenoff by mutual consent are adjusted as 'other economic flows'.

Impairment of financial assets

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceedstheir recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference iswritten off as an other economic flow, except to the extent that the write-down can be debited to an assetrevaluation surplus amount applicable to that class of asset.

Summary of significant accounting policies (continued)

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses fromrevaluations, impairments, and disposals of all physical assets.

Other economic flows included in the net result

Other economic flows measure the change in volume or value of assets or liabilities that do not result fromtransactions.

Note 1.

Disposal of non-financial assets

Net gain/(loss) on non-financial assets

Any gain or loss on the disposal of non-financial assets is recognised at the date that control of the asset is passedto the buyer and is determined after deducting from the proceeds of sale the carrying value of the asset at thattime.

All assets are assessed annually for indications of impairment.

Impairment of non-financial assets

Net gain/(loss) on financial instruments includes impairment and reversal of impairment of financial instrumentsmeasured at amortised cost and disposals of financial assets.

Net gain/(loss) on financial instruments

It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the assetwill be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assetsis measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amountsfor assets held primarily to generate net cash inflows is measured at the higher of the present value of future cashflows expected to be obtained from the asset and fair value less costs to sell.

Financial instruments including Financial assets

23


(k)

Financial assets


Cash and deposits

Cash and deposits recognised on the balance sheet comprise cash on hand and cash at bank, deposits at call andthese highly liquid investments (with an original maturity of three months or less), which are held for the purpose ofmeeting short term cash commitments rather than for investment purposes, and readily convertible to knownamounts of cash with an insignificant risk of changes in value.

Non-financial assets

Buildings are reported at their fair value. At each reporting date, the Company reviews the carrying value of itstangible and intangible assets to determine whether there is any indication that those assets have been impaired. Ifsuch an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less coststo sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over itsrecoverable amount is expensed to the income statement.

Buildings

Intangible assetsIntangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carriedat cost less accumulated amortisation. Cost incurred subsequent to initial acquisition are capitalised when it isexpected that additional future economic benefits will flow to the Company.

Property, plant and equipment

Receivables consist predominantly of debtors in relation to goods and services, and GST input tax creditsrecoverable.Receivables are recognised initially at fair value and subsequently measured at amortised cost, less anyaccumulated impairment.

An independent valuation of the Company's buildings was performed by the Valuer-General Victoria who contractedNapier Blakeley Pty Ltd. The valuation was performed using the depreciated replacement cost. The effective dateof the valuation is 30 June 2016.

For the cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which areincluded as borrowings on the balance sheet.

Revaluation increases are recognised as income (other economic flows) in determining the net result, whereasrevaluation decreases are recognised as expenses (other economic flows) in the net result.

Receivables

Revaluations of non-current physical assets

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

A provision for doubtful receivables is made when there is objective evidence that the debts will not be collected.Bad debts are written off when identified.

All non-financial physical assets are measured initially at cost and subsequently revalued at fair value lessaccumulated depreciation and impairment. Items with a cost value in excess of $1,000 and a useful life of morethan one year are recognized as an asset. All other items are expensed. More details about the valuationtechniques and inputs used in determining the fair value of non-financial physical assets are discussed in Note 7Property, plant and equipment.

Non-financial physical assets are measured at fair value on a cyclical basis, in accordance with the FinancialReporting Directions (FRDs) issued by the Minister for Finance. A full revaluation normally occurs every five years,based upon the asset’s government purpose classification but may occur more frequently if fair value assessmentsindicate material changes in values. Independent valuers are generally used to conduct these scheduledrevaluations. Certain infrastructure assets are revalued using specialised advisors. Any interim revaluations aredetermined in accordance with the requirements of the FRDs.

Revaluation increases and decreases relating to individual assets within a class of property, plant and equipment,are offset against one another within that class but are not offset in respect of assets in different classes.

Prepayments

Other non-financial assets include prepayments which represent payments in advance of receipt of goods andservices or that part of expenditure made in one accounting period covering a term extending beyond that period.

24


(l)

(i)

(ii)

(m)

Lease of Crown Land

(n)

(o)

(p)

Equity - Issued capital

Leases

The Company occupies Crown land under the terms of one primary lease and two licences with terms ending on 21November 2024 (licence for Crown Allotment 2004, licence for Crown Allotment 2003 and lease of Crown Allotment2002). The Company has a right to purchase the leased land at the expiry of the lease if the Company has repaidthe outstanding amount in accordance with the Lease Agreement. The Company has a right to renegotiate afurther period occupancy if the land is not purchased in fee simple.

This non-current LSL liability is measured at present value. Any gain or loss following revaluation topresent value of non-current LSL liability due to changes in bond interest rates is recognised as an othereconomic flow (refer to Note 1(i)).

present value - if the Company does not expect to wholly settle within 12 months.

The components of this current LSL liability are measured at:

nominal value - if the Company expects to wholly settle within 12 months; orpresent value - if the Company does not expect to wholly settle within 12 months.

Payables

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of anote (refer to Note 17) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities arepresented inclusive of GST receivable or payable respectively.

Contributions for new shares issued by the Company or for the payment of called up share capital are designatedas issued capital.

Commitments

Contingent assets and contingent liabilities

Provisions are recognised when the Company has a present obligation, the future sacrifice of economic benefits isprobable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the presentobligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where aprovision is measured using the cash flows estimated to settle the present obligation, its carrying amount is thepresent value of those cash flows, using discount rate that reflects the time value of money and risks specific to theprovision.

Provisions

Payables represent liabilities for goods and services provided to the Company that are unpaid at the end of thefinancial year. Payables are initially measured at fair value, being the cost of the goods and services, and thensubsequently measured at amortised cost. The amounts are unsecured and usually paid within 30 days ofrecognition.

Summary of significant accounting policies (continued)Note 1.

Deferred Rent

Provision for employee benefits on-costs such as payroll tax, workers compensation and superannuation arerecognised separately from the provision for employee benefits.

Commitments which include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources are disclosed at their nominal value and inclusive of GST payable.

Liabilities for wages and salaries, including non-monetary benefits and annual leave are all recognised inthe provision for employee benefits as 'current liabilities', because the Company does not have anunconditional right to defer settlement of these liabilities.

Employee benefits

Wages and salaries and annual leave

Employee benefits on-costs

Conditional LSL (representing less than seven years of continuous service for Company employeesincluding executives) is disclosed as a non-current liability. There is an unconditional right to defer thesettlement of the entitlement until the employee has completed the requisite years of service.

Liability for long service leave (LSL) is recognised in the provision for employee benefits.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries and annualleave are measured at:

Long service leave

Unconditional LSL (representing seven or more years of continuous service for Company employeesincluding executives) is disclosed as a current liability even where the Company does not expect to settlethe liability within 12 months because the Company will not have the unconditional right to defer thesettlement of the entitlement should an employee take leave within 12 months.

undiscounted value - if the Company expects to wholly settle within 12 months; or

Liabilities

The Company is required to repay the deferred rent out of cash EBITDA once it reaches a threshold of $400,000 inany one year. The Company will pay 50 cents in the dollar of all EBITDA earned above the threshold. During 2015-16, $310,179 was repaid leaving an amount payable at 30 June 2016 of $1,114,522.

25


(q)

(r)

(s)

(t)

(u) Rounding of amounts

Events after the reporting period

The functional currency of the Company is the Australian dollar, which has also been identified as the presentationcurrency of the Company.

Functional and presentation currency

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount ofGST recoverable from, or payable to, the taxation authority is included with other receivables or payables in thebalance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financingactivities, which are recoverable from or payable to the taxation authority, are presented as operating cash flow.

Goods and services tax

During 2009 the Company received a private ruling from the Australian Taxation Office (Authorization Number90830) which states that the Company is exempt from Commonwealth income tax under section 24AM of theIncome Tax Assessment Act 1936. The exemption commenced on 19 November 2008 and has been extended to30 June 2017.

Accordingly, the trading results during the period 19 November 2008 to 30 June 2016 have been treated as exemptfrom income tax.

Income Tax

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is notrecoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset oras part of the expense.

Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactionsresult from an agreement between the Company and other parties, the transactions are only recognised when theagreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financialstatements for events which occur after the reporting date and before the date the statements are authorised forissue, where those events provide information about conditions which existed in the reporting period. Notedisclosure is made about events between the balance date and the date the statements are authorised for issuewhere the events relate to conditions which arose after the reporting date and which may have a material impact onthe results of subsequent years. Refer to Note 22.

Amounts in the financial statements have been rounded to the nearest dollar, unless otherwise stated.


26



(v)

Curent reportng period

Future reporting periods

Topic Key requirements Effective dateAASB 9 Financial Instruments The key changes introduced by AASB 9 include the simplified requirements for the classification and

measurement of financial assets, a new hedging accounting model and a revised impairment lossmodel to recognise impairment losses earlier, as opposed to the current approach that recognisesimpairment only when incurred.

1-Jan-18

AASB 15 Revenue from Contracts withCustomers

The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies aperformance obligation by transferring a promised good or service to a customer. Note thatamending standard AASB 2015 8 Amendments to Australian Accounting Standards – Effective Dateof AASB 15 has deferred the effective date of AASB 15 to annual reporting periods beginning on orafter 1 January 2018, instead of 1 January 2017.

1-Jan-18

AASB 16 Leases The key changes introduced by AASB 16 include the recognition of most operating leases (which arecurrently not recognised) on balance sheet.

1-Jan-19

AASB 2010-7 Amendments toAustralian Accounting Standards arisingfrom AASB 9 (December 2010) [AASB1, 3, 4, 5, 7, 101, 102, 108, 112, 118,120, 121, 127, 128, 131, 132, 136, 137,139, 1023 & 1038 and Interpretations 2,5, 10, 12, 19 & 127]

The requirements for classifying and measuring financial liabilities were added to AASB 9. Theexisting requirements for the classification of financial liabilities and the ability to use the fair valueoption have been retained. However, where the fair value option is used for financial liabilities thechange in fair value is accounted for as follows:• the change in fair value attributable to changes in credit risk is presented in other comprehensiveincome (OCI); and• other fair value changes are presented in profit or loss. If this approach creates or enlarges anaccounting mismatch in the profit or loss, the effect of the changes in credit risk are also presentedin profit or loss.

1-Jan-18

AASB 2014-1 Amendments toAustralian Accounting Standards [Part EFinancial Instruments]

Amends various AASs to reflect the AASB’s decision to defer the mandatory application date ofAASB 9 to annual reporting periods beginning on or after 1 January 2018; as a consequence ofChapter 6; and to amend reduced disclosure requirements.

1-Jan-18

AASB 2014-4 Amendments toAustralian Accounting Standards –Clarification of Acceptable Methods ofDepreciation and Amortisation[AASB 116 & AASB 138]

AASB 2014 4 amends AASB 116 and AASB 138 to:• establish the principle for the basis of depreciation and amortisation as being the expected patternof consumption of the future economic benefits of an asset;• clarify that the use of revenue based methods to calculate the depreciation of an asset is notappropriate because revenue generated by an activity that includes the use of an asset generallyreflects factors other than the consumption of the economic benefits embodied in the asset; and• clarify that revenue is generally presumed to be an inappropriate basis for measuring theconsumption of the economic benefits embodied in an intangible asset. This presumption, however,can be rebutted in certain limited circumstances.

1-Jan-16

AASB 2014-5 Amendments toAustralian Accounting Standards arisingfrom AASB 15

Amends the measurement of trade receivables and the recognition of dividends.1-Jan-17, exceptamendments to AASB 9(December 2009) andAASB 9 (December2010) apply 1-Jan-18

AASB 2014-7 Amendments toAustralian Accounting Standards arisingfrom AASB 9

Amends various AASs to incorporate the consequential amendments arising from the issuance ofAASB 9.

1-Jan-18

AASB 2015-6 Amendments toAustralian Accounting Standards –Extending Related Party Disclosures toNot for Profit Public Sector Entities[AASB 10, AASB 124 & AASB 1049]

AASB 2015 6 extends the scope of AASB 124 Related Party Disclosures to not for profit publicsector entities. Guidance has been included to assist the application of the Standard by not for profitpublic sector entities.

1-Jan-16

• AASB 1057 Application of Australian Accounting Standards• AASB 2015-9 Amendments to Australian Accounting Standards – Scope and Application Paragraphs [AASB 8, AASB 133 & AASB 1057]• AASB 2015-10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128

Summary of new/revised accounting standards effective for current and futire reporting periods

The following accounting pronouncements effective from the 2015-16 reporting period are considered to have insignificant impacts on public sector reporting:• AASB 1048 Interpretation of Standards• AASB 2013-9 Amendments to Australian Accounting Standards [Part C Financial Instruments]• AASB 2014-8 Amendments to Australian Accounting Standards arising from AASB 9 – Application of AASB 9 (December 2009) and AASB 9 (December 2010) [AASB9 (2009 & 2010)]• AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality

Note: Amending standard AASB 2015 7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not for Profit Public Sector Entities, which is operative from 1 July 2016 provides anexemption for not for profit public sector entities from certain fair value disclosures. Please note that the State early adopted AASB 2015 7 in the 2014 15 reporting period and gave not for profit entities theoption to early adopt this amending standard last year. As a result, all not for profit entities must now comply this amending standard for the current financial year.

The table below outlines the accounting pronouncements that have been issued but not effective for 2015-16, which may result in potential impacts on public sectorreporting for future reporting periods.

The following accounting pronouncements are also issued but not effective for the 2015-16 reporting period. At this stage, the preliminary assessment suggests they mayhave insignificant impacts on public sector reporting.

27


Note 2. Income from transactions

2016 2015$ $

(a) Income from transactions

2,611,625 3,704,464

(b) Interest

On bank deposits 76,247 93,755Total Income from Transactions 2,687,872 3,798,219

Note 3. Expenses from transactions

2016 2015$ $

(a) Employee expenses

Salary and wages including termination payments 899,742 889,839Superannuation 81,643 82,348Annual leave and long service leave expense 67,058 66,817Other on-costs 40,903 38,469

1,089,346 1,077,473

(b) Supplies and services

Contractors and consultants 104,086 125,833Maintenance expenses 420,624 493,134Insurance expense 83,032 83,715Travel expense 18,089 16,106Security expense 55,214 69,506Rent 390,813 383,907Electricity expense 182,333 202,794Municipal rates 75,605 72,983Water rates 39,564 15,183IT and communication expenses 109,764 119,698Legal expense 15,030 20,557Audit fees 28,300 27,230Other expenses 125,368 123,174

1,647,822 1,753,820

(c) Depreciation and amortisation expenses

Buildings and building improvements 2,278,157 2,247,892Office equipment 15,723 22,078Computer 40,669 28,635Motor vehicles 1,817 1,817Software 2,540 5,219

2,338,906 2,305,641

Income from rental of facilities and recoveries for servicesprovided

28


Note 4. Other economic flows included in net result

2016 2015$ $

(a) Other (gain)/loss from other economic flows

3 1,568

2,466 -Loss/(profit) on disposal of property, plant and equipment - 10,075

Total Other economic flows included in net result 2,469 11,643

(i) Revaluation gain / (loss) due to change in bond rates

Note 5. Cash and deposits

2016 2015$ $

Cash on hand 2,000 2,000Cash at bank 1,159,186 1,939,238Term deposits 2,132,320 1,975,496

Total Cash and deposits 3,293,506 3,916,734

Note 6. Receivables

2016 2015$ $

Contractual

Trade receivables (i) 70,292 118,412Statutory

GST input tax credit recoverable (net) 68,317 114,561

Total receivables (ii) 138,609 232,973

Notes:(i)

(ii) All receivables balances held at reporting date are classified as current.

Net (gain)/loss arising from revaluation of long serviceliability (i)

The average credit period on sales of goods is 30 days. No interest has been charged on tradereceivables. No allowance for doubtful debts has been recognised as all amounts have beendetermined recoverable by reference to past default experience.

For details of ageing analysis of contractual receivables and the nature and extent of risk arising fromcontractual receivables, please refer to Note 18.

Net (gain)/loss arising from change in estimation methodfor long service leave from 2004 to 2008 model

29


Note 7. Property, plant and equipment

(a) Carrying amounts

2016 2015Note $ $

Buildings and building improvements

1(k) 42,404,000 -1(k) 181,296 49,063,168

Less accumulated depreciation (6,320) (6,374,448)42,578,976 42,688,720

Office equipment

329,261 304,593Less accumulated depreciation (217,401) (201,678)

111,860 102,915Computer equipment


59,429 69,503Motor vehicles


3,235 5,052

Total property, plant and equipment 42,753,500 42,866,190

2016 2015Years Years

Buildings 40 40Building improvements 6 to 20 6 to 20Office equipment 10 10Computer equipment 2.5 2.5Motor vehicles 6 6

The following useful lives of assets are used in thecalculation of depreciation:

At fair value

At fair value

At fair value

At fair value

At 2016 valuation

30


Note 7. Property, plant and equipment (continued)

Buildings andbuilding

improvements

Officeequipment

Computerequipment

Motor vehicles Total

$ $ $ $ $Opening Balance 42,688,719 102,915 69,504 5,052 42,866,190Asset reclassification and adjustments - - -Revaluation increment 1,943,044 - - - 1,943,044Additions 225,370 24,668 30,594 - 280,632Disposals - - - - -Depreciation expense (2,278,157) (15,723) (40,669) (1,817) (2,336,366)Closing Balance 42,578,976 111,860 59,429 3,235 42,753,500

$ $ $ $ $Opening Balance 44,438,550 111,129 29,742 6,869 44,586,290Additions 280,363 13,864 68,397 - 362,624Transfer of assets from DEDJTR 227,978 - - - 227,978Disposals (10,280) - - - (10,280)Depreciation expense (2,247,892) (22,078) (28,635) (1,817) (2,300,422)Closing Balance 42,688,719 102,915 69,504 5,052 42,866,190

Carrying amountas at

30 June 2016 Level 1 (i) Level 2 (i) Level 3 (i)

Buildings and building improvements at fair valueNon-specialised buildings and building improvements

42,578,976 42,578,976Total of buildings and building improvements at fair value 42,578,976 - - 42,578,976

Office equipment at fair valueOffice equipment 111,860 111,860

Total office equipment at fair value 111,860 - - 111,860

Computer equipment at fair valueComputer equipment 59,429 59,429

Total computer equipment at fair value 59,429 - - 59,429

Motor vehicles at fair valueMotor vehicles 3,235 3,235

Total motor vehicles at fair value 3,235 - - 3,235

Carrying amountas at

30 June 2015 Level 1 (i) Level 2 (i) Level 3 (i)

Buildings and building improvements at fair valueNon-specialised buildings and building improvements

42,688,720 42,688,720Total of buildings and building improvements at fair value 42,688,720 - - 42,688,720

Office equipment at fair valueOffice equipment 102,915 102,915

Total office equipment at fair value 102,915 - - 102,915

Computer equipment at fair valueComputer equipment 69,503 69,503

Total computer equipment at fair value 69,503 - - 69,503

Motor vehicles at fair valueMotor vehicles 5,052 5,052

Total motor vehicles at fair value 5,052 - - 5,052

Notes:(i) Classified in accordance with the fair value hierarchy, see Note 1(b)

There have been no transfers between levels during the period.

Specialised buildings and building improvements

(b) Movements in carrying amounts

(c) Fair value measurement hierarchy for assets

Fair value measurement at end ofreporting period using:

2016

2015

There were no changes in valuation techniques throughout the period to 30 June 2016.For all assets measured at fair value, the current use is considered the highest and best use.


For the Company's majority of specialised buildings, the depreciated replacement cost method is used, adjusting for the associated depreciations. Asdepreciation adjustments are considered as significant, unobservable inputs in nature, specialised buildings are classified as Level 3 fair valuemeasurements.

Office equipment, computer equipment and vehicles are held at fair value. When equipment is specialised in use, such that it is rarely sold other thanas part of a going concern, fair value is determined using the depreciated replacement cost method.

Office equipment, computer equipment and vehicles

Fair value measurement at end ofreporting period using:


An independent valuation of the Company's buildings was performed by the Valuer-General Victoria who contracted Napier Blakeley Pty Ltd. Thevaluation was performed using the depreciated replacement cost. The effective date of the valuation is 30 June 2016.

31


Note 7. Property, plant and equipment (continued)

(d) Description of significant unobservable inputs to Level 3 valuations

Valuation Significanttechnique (i) unobservable

inputs (i)

Specialised buildings and building Depreciated Useful life ofimprovements replacement specialised

cost buildings andimprovements

Direct cost persquare metre

Office equipment Depreciated Useful life ofreplacement officecost equipment

Cost per unit

Computer equipment Depreciated Useful life ofreplacement computercost equipment

Cost per unit

Vehicles Depreciated Useful life ofreplacement vehiclescost

Cost per unit

(i)

The significant unobservable inputs have remain unchanged from 2015.

Illustrations on the valuation techniques, significant unobservable inputs and the related quantitative range of those inputs are indicative andshould not be directly used without consultation with the Company's independent valuer. Refer Note 1(k).

32


Note 8. Intangible assets

(a) Carrying amounts

2016 2015$ $

Software

18,319 18,319Less accumulated amortisation (16,461) (13,921)

Total Intangible assets 1,858 4,398

Software$

Opening Balance 4,398AdditionsAmortisation expense (2,540)Closing Balance 1,858

$Opening Balance 3,267Additions 6,350Amortisation expense (5,219)Closing Balance 4,398

The following useful lives of assets are used in the calculation of amortisation:

2016 2015Years Years

Software 2.5 2.5

2015

At cost

2016

(b) Movements in carrying amounts

33


Note 9. Other non-financial assets

2016 2015$ $

Prepayments 16,514 11,594

Total prepayments 16,514 11,594

Note 10. Payables

2016 2015$ $

Contractual

CurrentTrade Creditors (i) 19,805 140,542Accruals 92,116 119,839Deferred rent (ii) - 310,178Security Deposits 182,500 225,000Unearned Income 31,503 33,681

Non CurrentSecurity Deposits 100,000 -Deferred rent (ii) 1,114,522 1,114,523

1,540,446 1,943,763Statutory

CurrentTaxes Payable 52,730 46,587

52,730 46,587

Total Payables 1,593,176 1,990,350

Notes:(i) The average credit period is 30 days. No interest is charged on late payments.(ii)

For maturity analysis and nature and extent of risks arising from payables, refer to Note 18.

The current and non-current amounts are determined based on the result for the financial year - Refer Note 1(l)

34


Note 11. Provisions

2016 2015$ $

Current provisions

Employee benefits (i)

Annual leave (iii)

Unconditional and expected to be settled within 12 months (ii) 42,467 33,017Unconditional and expected to be settled after 12 months (iii) -Long service leaveUnconditional and expected to be settled within 12 months (ii)

Unconditional and expected to be settled after 12 months (iii) 55,094 22,90597,561 55,922

On-costsUnconditional and expected to be settled within 12 months (ii) 6,285 4,837Unconditional and expected to be settled after 12 months (iii) 8,431 3,356

14,716 8,193

Total current provisions 112,277 64,115

Non-current provisions

Employee benefits (i)

Long service leave 12,115 39,453

On-costs 1,854 5,779

Total non-current provisions 13,969 45,232

Total provisions 126,246 109,347

(a) Employee benefits and related on-costs (i)

2016 2015$ $

Current employee benefits

Annual leave 42,467 33,017Long service leave 55,094 22,905

97,561 55,922Non-current employee benefits

Long service leave 12,115 39,45312,115 39,453

Total employee benefits 109,676 95,375

Current on-costs 14,716 8,193Non-current on-costs 1,854 5,779

Total on-costs 16,570 13,972

Total employee benefits and related on-costs 126,246 109,347

Notes:(i)

(ii) Amounts are disclosed at nominal values.(iii)

Employee benefits consist of annual leave and long service leave accrued by employees. On-costs such as payrolltax and workers' compensation insurance are not employee benefits and are reflected as a separate provision.

Amounts disclosed are discounted to present values.

35


Note 12. Superannuation

Fund Name 2016 2015 2016 2015$ $ $ $

Defined contribution plans

REST 1 1 4,933 4,509VicSuper Pty Ltd 1 1 9,926 9,211Care Super 4 4 21,075 16,578Australian Super 3 1 3,288 6,833AMP Flexible Super 1 1 5,266 5,723Suncorp Master Trust 1 1 4,883 4,572Media Super 2 1 4,154 3,907Unisuper 1 - 230 -Other 5 5 27,888 31,015

Total paid contributions for the year 81,643 82,348

Contributions outstanding at year end - -

Note 13. Issued capital

2016 2015$ $

Share Capital

58,001,625 57,773,647 - 227,978

58,001,625 58,001,625

Notes:(i)

Note 14. Number of shares

Par Number of shares Number of sharesValue 2016 2015

The Crown in right of the State of Victoria $0.01 200,000 200,000The Crown in right of the State of Victoria $1.00 45,492,625 45,492,625The Crown in right of the State of Victoria $5.00 2,501,400 2,501,400

48,194,025 48,194,025

The Company is a private company limited by shares.The shareholders are:

Paid up share capital at the beginning of the yearAdditional fully paid shares issued (i)Paid up share capital at the end of the year

During 2015, capital improvements to the value of $227,978 were transferred to the Company. As consideration forthe transfer of these assets, the Company issued 227,978 ordinary shares with a par value of $1. The shares wereissued to the State of Victoria on 1 May 2015.

Number of Employees

The name and details of the employee superannuation funds are as follows:

Employees of the Company are entitled to receive superannuation benefits and the Company contributes to definedcontribution plans.

Superannuation contributions paid or payable for the reporting period are included as part of the employee benefits in theComprehensive operating statement of the Company.

Paid contributions for the year

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Note 15. Reserves

2016 2015$ $

Physical asset revaluation surplus (i)

Balance at beginning of financial year 8,056,519 8,056,519Revaluation increments/(decrements) 1,943,044 -Balance at end of financial year 9,999,563 8,056,519

Net changes in reserves 1,943,044 -

Notes: (i)

Note 16. Commitments for expenditure

(i) Lease of crown land

The following lease commitments payable have not been recognised as liabilities in the financial statements:

2016 2015$ $

Lease payments

Not longer than one year 436,164 429,895Longer than one year and not longer than five years 1,797,614 1,775,533Longer than five years 1,604,892 2,063,137Total commitments 3,838,670 4,268,565

(ii) Property, plant and equipment commitments

Note 17. Contingent assets and contingent liabilities

(2015: Nil)There are no legal claims against the Company nor any other claim that creates a contingency for the Company.

The Company has no contractual obligations to purchase property plant and equipment.

The Company occupies Crown land under the terms of one primary lease and two licences with terms ending on 21 November2024 (licence for Crown Allotment 2004, licence for Crown Allotment 2003 and lease of Crown Allotment 2002). The Companyhas a right to purchase the leased land at the expiry of the lease if the Company has repaid the outstanding amount inaccordance with the Lease Agreement. The Company has a right to renegotiate a further period occupancy if the land is notpurchased in fee simple.

The lease requires the Company to pay rental subject to review every two years according to movements in the MelbourneConsumer Price Index. The current annual rental is $429,895 (inclusive of GST).

The physical assets revaluation surplus arises on the revaluation of buildings.

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Note 18. Financial instruments

(a) Financial risk management objectives and policies

2016 2015Financial assets Note Category $ $

Cash and deposits 5 Loans and receivables 3,293,506 3,916,734Receivables 6 Loans and receivables 70,292 118,412

Total contractual financial assets (i) 3,363,798 4,035,146Financial liabilities

Trade creditors and accruals 10 Financial liabilities at amortised cost 111,921 260,381Other payables 10 Financial liabilities at amortised cost 282,500 225,000Deferred Rent 10 Financial liabilities at amortised cost 1,114,522 1,424,701

Total contractual financial liabilities (i) 1,508,943 1,910,082

2016 2015Financial assets Note $ $Cash and deposits 2(b) 76,247 93,755

(b) Credit Risk

Provision of impairment for financial assets is calculated based on past experience, and current and expected changes inclient credit ratings.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents theCompany's maximum exposure to credit risk without taking account of the value of any collateral obtained.

In addition, the Company does not engage in hedging for its contractual financial assets and mainly obtains contractualfinancial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy fordebtors, the Company's policy is only to deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Company willnot be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debtswhich are more than 60 days overdue, and changes in debtor credit ratings.Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in thefinancial statements, net of any allowance for losses, represents the Company's maximum exposure to credit risk withouttaking account of the value of any collateral obtained.

Note (i)

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis ofmeasurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset,financial liability and equity instrument, are disclosed in Note 1 to the financial statements.

The Company's main financial risks include credit risk, liquidity risk, interest rate risk, price risk and fair value.

The Company uses different methods to measure and manage the different risks to which it is exposed. Primaryresponsibility for the identification and management of financial risks rests with the Audit Committee of the Company.

The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST inputtax credit recoverable, and taxes payable).

The net holding gains or losses disclosed above are determined as follows:* for cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculatedby taking the interest revenue, plus or minus losses arising from revaluation of the financial assets and minus anyimpairment recognised in the net result; and* for financial liabilities measured at amortised cost, the net gain or loss is equal to the interest expense incurred during thereporting period.

Credit risk arises from the contractual financial assets of the Company, which comprise cash and deposits, non-statutoryreceivables and available-for-sale financial assets. The Company's exposure to credit risk arises from the potential default ofcounter parties on their contractual obligations resulting in financial loss to the Company. Credit risk is measured at fair valueand is monitored on a regular basis.

Credit risk associated with the Company's contractual financial assets is minimal because it is the Company's policy to onlydeal with entities of a minimum AA credit rating for cash and deposits.Receivables are not rated, however the Company'spolicy of invoicing in advance and holding security deposits minimises the credit risk. In addition, the Company does notengage in hedging for its financial assets and mainly obtains financial assets that are on fixed interest.

Table 18.1: Catergorisation of financial instruments

Table 18.2: Net holding gains (losses) on financial instruments by category

OLDTE

OLDTE

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Note 18. Financial instruments (continued)

(b) Credit Risk (continued)

Financialinstitutions

Governmentagencies

Governmentagencies Other Total

(Double-Acredit rating)

(Triple-Acredit rating)

(Triple-Bcredit rating) $

2016

Cash and deposits 2,993,506 300,000 - - 3,293,506Receivables - - - 70,292 70,292Total contractual financial assets (i) 2,993,506 300,000 - 70,292 3,363,798

2015

Cash and deposits 3,666,734 250,000 - - 3,916,734Receivables - - - 118,412 118,412Total contractual financial assets (i) 3,666,734 250,000 - 118,412 4,035,146

Table 18.4: Ageing analysis of contractual financial assets

Past due but not impairedCarrying Not past due Less than 1 - 3 months 3 months -

amount and notimpaired 1 month 1 year

2016ReceivablesSale of goods and services 70,292 60,758 - 9,534 -Total (i) 70,292 60,758 - 9,534 -

2015ReceivablesSale of goods and services 118,412 94,899 - 23,513 -Total (i) 118,412 94,899 - 23,513 -

(i)

Contractual Financial assets that are either past due or impaired

Table 18.3: Credit quality of contractual financial assets that are neither past due nor impaired

The total amount of contractual financial assets disclosed here exclude statutory amounts (e.g. amounts owing fromVictorian government and GST input tax recoverable).

There are no material financial assets which are individually determined to be impaired. Currently, the Company does not hold anycollateral as security nor credit enhancements relating to any of its financial assets.

Note (i)

As at the reporting date, there is no evidence to indicate that any of the financial assets were impaired. There are no financialassets that have had their terms renegotiated so as to prevent them being past due or impaired, and they are stated at the carryingamount as indicated. The ageing analysis table above discloses the ageing only of contractual financial assets that are past due butnot impaired.

The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input taxcredit recoverable, and taxes payable).

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(c) Liquidity risk

The Company manages its liquidity risk by:-

--

Table 18.5: Maturity analysis of contractual financial liabilities

Carryingamount

Nominalamount

2016 Less than 1month

1- 3 months 3 months -1 year

1 - 5 years

$ $ $ $ $ $

PayablesTrade creditors and accruals 111,921 111,921 111,921 - - -Other payables 282,500 282,500 72,500 - 110,000 100,000Deferred rent 1,114,522 1,114,522 - - - 1,114,522

1,508,943 1,508,943 184,421 - 110,000 1,214,522

Carryingamount

Nominalamount

2015 Less than 1month

1- 3 months 3 months -1 year

1 - 5 years

$ $ $ $ $ $

PayablesTrade creditors and accruals 260,381 260,381 260,381 - - -Other payables 225,000 225,000 45,000 50,000 130,000 -Deferred rent 1,424,701 1,424,701 - 310,178 - 1,114,523

1,910,082 1,910,082 305,381 360,178 130,000 1,114,523

Notes:(i)(ii)

Maturity analysis is presented using the contractual undiscounted cash flows.The carrying amounts disclosed exclude statutory amounts (e.g. GST payables).

The following table discloses the contractual maturity analysis for the Company's financial liabilities.

Liquidity risk is the risk that the Company would be unable to meet its financial obligations as and when they fall due. The Companyoperates under the Government fair payments policy of settling financial obligations within 30 days and in the event of a dispute, makingpayments within 30 days from the date of resolution.

The Company's maximum exposure to liquidity risk is the carrying amounts of the financial liabilities as disclosed in the face of thebalance sheet.

close monitoring of future cash flows and maturities planning to ensure adequate holding of high quality liquid assets and dealingin highly liquid markets. All cash is deposited with the Westpac Banking Corporation (AA rating) and Treasury Corporation ofVictoria.maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet its short-term obligations; andcareful maturity planning of its financial obligations based on forecasts of future cash flows.

The Company's exposure to liquidity risk is deemed insignificant based on prior periods' data and current assessment of risk. Cash forunexpected events is generally sourced from its cash and cash equivalents balance.

The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements represents theCompany's maximum exposure to liquidity risk.

Maturity dates (i)

Total (i)(ii)

Maturity dates (i)

Total (i)(ii)

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(d) Market risk

Interest rate risk

Weightedaverage

Carryingamount

2016 interest rate Fixed interestrate

Variableinterest rate

Non-interestbearing

% $ $ $ $

2.32 3,293,506 2,132,320 1,159,186 2,000- 70,292 - - 70,292

Total Financial assets 3,363,798 2,132,320 1,159,186 72,292

- 1,508,943 - - 1,508,943Total Financial liabilities 1,508,943 - - 1,508,943

Weightedaverage

Carryingamount

2015 interest rate Fixed interestrate

Variableinterest rate

Non-interestbearing

% $ $ $ $

2.83 3,916,734 1,975,496 1,939,238 2,000- 118,412 - - 118,412

Total Financial assets 4,035,146 1,975,496 1,939,238 120,412

- 1,910,082 - - 1,910,082Total Financial liabilities 1,910,082 - - 1,910,082

Financial liabilitiesPayables (i)

Cash and depositsReceivables (i)

Note (i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Governmentand GST input tax credit recoverable, and taxes payable).

Company’s exposures to market risk are primarily through interest rate risk and price risk. Objectives, policies andprocesses used to manage each of these risks are disclosed below:

Table 18.6: Interest rate exposure of financial instruments

Interest rate exposure

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes inmarket interest rates. The Company does not hold any interest bearing financial instruments that are measured at fairvalue, and therefore no exposure to fair value interest rate risk.Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because ofchanges in market interest rates.The Company has minimal exposure to cash flow interest rate risks through its cash and deposits that are at a floatingrate.The Company manages this risk by undertaking floating rate bank deposits, and its floating rate interest bearingliabilities. However, the Company's exposure to this risk is insignificant due to its policy to minimise risk by mainlyundertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles.

Interest rate exposure

Financial assetsCash and depositsReceivables (i)

Financial liabilitiesPayables (i)

Financial assets

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(d) Market risk (Continued)

Sensitivity disclosure analysis and assumptions

2016 + 100 basispoints

-100 basispoints

$ $ $

3,293,506 32,935 (32,935)3,293,506 32,935 (32,935)

2015 + 100 basispoints

-100 basispoints

$ $ $

3,916,734 39,167 (39,167)3,916,734 39,167 (39,167)

Price risk

(e) Fair value

Level 1

Level 2

Level 3

Carryingamount

Interest rate risk

Net result Net result

Carryingamount

The impact on net result and equity for each category of financial instrument held by the Company at year end if theabove movements were to occur is shown at Table 18.7.

Table 18.7: Interest rate risk sensitivity

Interest rate risk

Net result Net result

The Company's sensitivity to market risk is determined based on the observed range of actual historic data for thepreceding five year period, with all variables other than the primary risk variable held constant. Sensitivity analysesshown are for illustrative purposes only. The following movements are 'reasonably possible' over the next 12 months.

Financial assetsCash and deposits

Financial assets

However, the Company manages any potential risk by requiring all clients to sign a licence agreement which fixes therental rates for the duration of the agreement.

The fair values and net fair values of financial assets and financial liabilities are determined as follows:

Taking into account past performance, future expectations and economic forecasts, the Company believes that aparallel shift of 100 basis points up and 100 basis points down (100 basis points up and down in 2015) in marketinterest rates.

the fair value is determined in accordance with generally accepted pricing models based on discounted cashflow analysis using unobservable market inputs.

The Company considers the carrying amount of financial instrument assets and liabilities recorded in the financialstatements to be a fair approximation of their fair values, because of the short-term nature of the financial instrumentsand the expectation that they will be paid in full.

Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market prices.The Company is not exposed to price risk, but is aware that due to the strong Australian dollar, internationalproductions may not find the current Australian market attractive.

the fair value of financial instruments with standard terms and conditions and traded in activeliquid markets are determined with reference to quoted market prices;the fair value is determined using inputs other than quoted prices that are observable for the financial asset orliability, wither directly or indirectly; and

Cash and deposits

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Note 19. Cash flow information

2016 2015$ $

(a) Reconciliation of cash and cash equivalents

Cash at bank and on hand 1,161,186 1,941,238Term deposits 2,132,320 1,975,496Balance as per cash flow statement 3,293,506 3,916,734

(b)

Net result for the period (2,390,671) (1,350,358)

Non cash movements(Gain)/loss on sale of property, plant and equipment 10,075Depreciation and amortisation 2,338,906 2,305,641

Movements in assets and liabilities(Increase)/decrease in current receivables 94,364 228,902(Increase)/decrease in other current assets (4,920) (11,594)Increase/(decrease) in current payables (457,332) 222,722Increase/(decrease) in current provisions 48,162 (2,734)Increase/(decrease) in non-current payables 100,000 (318,079)Increase/(decrease) in non-current provisions (31,263) 1,631

Net cash from operating activities (302,754) 1,086,206

Note 20. Responsible persons

Names

Minister

Board of Directors

Accountable Officer

Remuneration

2016 2015 2016 2015No. No. No. No.1 - 1 -2 2 2 21 1 1 1- - - 1- - 1 01 1 - -

5 4 5 4$331,771 $327,472 $322,793 $309,808

Other Transactions

$250,000 – 259,999

Reconciliation of the net result for the period

Chairman

The persons who held the positions of ministers, directors and accountable officer in the Company are as follows:

Ms Elizabeth Eldridge

Martin Foley MPMinister for Creative Industries 1 July 2015 to 30 June 2016

1 July 2015 to 1 June 2016Chairman 2 June 2016 to 30 June 2016Mr David Hanna

1 July 2015 to 30 June 2016

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 , thefollowing disclosures are made regarding responsible persons for the reporting period.

$0 – 9,999$10,000 - 19,999

$240,000 – 249,999$30,000 - $39,999

Income Band

1 July 2015 to 30 June 2016

Chief Executive Officer

Total Remuneration

DirectorDirector

Ms Ann Fletcher-Nicholls

1 July 2015 to 30 June 2016

Base Remuneration

Mr Desmond Clark

Mr Rod Allan

The number of responsible persons, other than Ministers, and their total remuneration in connection with the management of theCompany during the reporting period are shown in the first two columns in the table below in their relevant income bands. The baseremuneration of responsible persons is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments,long-service leave payments, redundancy payments and retirement benefits.

$260,000 – 269,999

Total amountTotal number of responsible persons

Other related party transactions and loans requiring disclosure under the Ministerial Directions issued by the Minister for Financehave been considered and there are no matters to report.

No other executive officers have been paid remuneration during 2016 and 2015 financial year.

Amounts relating to Ministers are reported in the financial statements of the Department of Premier and Cabinet. For informationregarding related party transactions of ministers, the register of members' interests is publicly available from:www.parliament.vic.gov.au/publications/register-of-interests.

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Note 21. Remuneration of auditors

2016 2015$ $

Victorian Auditor-General's OfficeAudit of the financial statements 28,300 27,600

Other service providersInternal audit services 20,030 18,675

Note 22. Subsequent events

Note 23. Segment information

Note 24. Glossary of terms and style conventions

Amortisation

The Company

Comprehensive result

Commitments

Depreciation

Employee benefits expense

Effective interest method

Financial asset

(a)(b)

(c)

Financial instrument

to receive cash or another financial asset from another entity; orto exchange financial assets or financial liabilities with another entity under conditions that are potentiallyfavourable to the entity.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument ofanother entity. Financial assets or liabilities that are not contractual (such as statutory receivables or payables that arise as a resultof statutory requirements imposed by governments) are not financial instruments.

The net result of all items of income and expense recognised for the period. It is the aggregate of operating result and othercomprehensive income.

Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual orstatutory sources.

Depreciation is an expense that arises from the consumption through wear or time of a produced physical or intangible asset. Thisexpense is classified as a ‘transaction’ and so reduces the ‘net result from transaction’.

Employee benefits expenses include all costs related to employment including wages and salaries, fringe benefits tax, leaveentitlements, redundancy payments and superannuation contributions.

The effective interest method is used to calculate the amortised cost of a financial asset or liability and of allocating interest incomeover the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through theexpected life of the financial instrument, or, where appropriate, a shorter period.

A financial asset is any asset that is:

cash;an equity instrument of another entity;

a contractual or statutory right:

The Company refers to Docklands Studios Melbourne Pty Ltd.

Amortisation is the expense which results from the consumption, extraction or use over time of an intangible asset.

The Company is not aware of any events subsequent to reporting date that will have a material effect on its operations.

The Directors of the Company consider all of it operations to be covered by a single business segment operating in a singlegeographic area.

Owning and licensing the use of film and television stages is the sole business activity and this is undertaken within Australia.

OLDTEXT

OLDTEXT

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Note 24. Glossary of terms and style conventions (continued)

Financial liability

A financial liability is any liability that is a contractual obligation:(i)(ii)

Financial statements

(a)(b)(c)(d)(e)(f)

(g)

General government sector

Intangible assets

Interest expense

Interest income

Net result

Net result from transactions/net operating balance

Net worth

Non-financial assets

Other economic flows included in net result

comparative information in respect of the preceding period as specified in paragraphs 38 of AASB 101 Presentation of financialStatements ; anda balance sheet as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes aretrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements in accordancewith paragraphs 41 of AASB101

gains and losses from disposals, revaluations and impairments of non-financial physical and intangible assets; andfair value changes of financial instruments

Intangible assets represent identifiable non-monetary assets without physical substance and include such items as computer software.

a balance sheet as at the end of the period;a comprehensive operating statement and other comprehensive income for the period;a statement of changes in equity for the period;a statement of cash flows for the period;notes, comprising a summary of significant accounting policies and other explanatory information;

Non-financial assets are all assets that are not ‘financial assets’. It includes inventories, land, buildings, infrastructure, road networks, landunder roads, plant and equipment, investment properties, cultural and heritage assets, intangible and biological assets.

Other economic flows included in net result are changes in the volume or value of an asset or liability that do not result from transactions. Itincludes:

Net result is a measure of financial performance of the operations for the period. It is the net result of items of income, gains and expenses(including losses) recognised for the period, excluding those that are classified as ‘other economic flows - other comprehensive income'.

Net result from transactions or net operating balance is a key fiscal aggregate and is income from transactions minus expenses fromtransactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes inprice levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions and canbe attributed directly to government policies.

Assets less liabilities, which is an economic measure of wealth.

A complete set of financial statements comprises:

to deliver cash or another financial asset to another entity; or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to theentity.

The general government sector comprises all government departments, offices and other bodies engaged in providing services free ofcharge or at prices significantly below their cost of production. General government services include those which are mainly non-market innature, those which are largely for collective consumption by the community and those which involve the transfer or redistribution ofincome. These services are financed mainly through taxes, or other compulsory levies and user charges.

Costs incurred in connection with the borrowing of funds. Interest expenses include interest on bank overdrafts and short term and long-term borrowings, amortisation of discounts or premiums relating to borrowings, the interest component of finance leases repayments, andthe increase in financial liabilities and non-employee provisions due to the unwinding of discounts to reflect the passage of time.

Interest income includes unwinding over time of discounts on financial assets and interest received on bank term deposits and otherinvestments.

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Note 24. Glossary of terms and style conventions (continued)

Other economic flows - other comprehensive income

Payables

Public non-financial corporation sector

Receivables

Supplies and services

Style conventions

- zero, or rounded to zero(xxx.x) negative numbers200x year period200x-0x year period

Other economic flows - other comprehensive income comprises items (including reclassification adjustments) that are not recognised in netresult as required or permitted by other Australian Accounting Standards. The components of other economic flows - other comprehensiveincome include;

The notation used in the tables is as follows:

The financial statements and notes are presented based on the illustration for a government department in the 2015-16 Model Report forVictorian Government Departments. The presentation of other disclosures is generally consistent with the other disclosures made in earlierpublications of the Company’s annual reports .

Refers to income from the direct provision of goods and services and includes fees and charges for services rendered, sales of goods andservices, fees from regulatory services and work done as an agent for private enterprises. It also includes rental income under operatingleases and on produced assets such as buildings and entertainment, but excludes rent income from the use of non-produced assets suchas land. User charges includes sale of goods and services income.

Figures in the tables and in the text have been rounded. Discrepancies in tables between totals and sums of components reflect rounding.Percentage variations in all tables are based on the underlying unrounded amounts.

Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between twoentities by mutual agreement. They also include flows within an entity such as depreciation where the owner is simultaneously acting as theowner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreedinteractions between the government and taxpayers. Transactions can be in kind (e.g. assets provided/given free of charge or for nominalconsideration) or where the final consideration is cash. In simple terms, transactions arise from the policy decisions of the government.

Transactions

Supplies and services generally represent cost of goods sold and the day-to-day running costs, including maintenance costs, incurred inthe normal operations of the Company.

Includes short and long-term trade debt and accounts payable, grants, taxes and interest payable.

changes in physical asset revaluation surplus

Sales of goods and services

The public non-financial corporation (PNFC) sector comprises bodies mainly engaged in the production of goods and services (of a non-financial nature) for sale in the market place at prices that aim to recover most of the costs involved (e.g. water and port authorities). Ingeneral, PNFCs are legally distinguishable from the governments which own them.

Includes amounts owing from government through appropriation receivable, short and long term trade credit and accounts receivable,accrued investment income, grants, taxes and interest receivable.

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