ANNUALREPORT
2017-2018
2
CONTENTS
Image Credits
All cover images:
Shutterstock
About Screenrights .............................................1
Our Values ...........................................................2
The Year in Brief..................................................3
Chair’s Report .....................................................4
Chief Executive’s Report .....................................7
Simon Lake: Highlights from 20 years
of Leadership ....................................................10
Overview of Key Statistics .................................12
Governance Statement .....................................19
Company Profile ................................................20
Directors’ Report ..............................................21
Directors’ Declaration .......................................25
Independent Auditor’s Report ..........................26
Lead Auditor’s Independence
Declaration........................................................28
Annotated Statement of Financial
Performance .....................................................29
Consolidated Statement of Profit
and Loss ............................................................30
Consolidated Balance Sheet .............................31
Statement of Cash Flows ..................................32
Statement of Changes in Equity .......................33
Notes to the Consolidated Financial
Statements ........................................................34
Appendix ...........................................................56
CONTENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 1
ABOUT SCREENRIGHTS
SCREENRIGHTS IS A NOT-FOR-PROFIT COMPANY THAT PROVIDES
LICENSING, RIGHTS AND ROYALTY MANAGEMENT SERVICES FOR
FILM, TELEVISION, RADIO AND OTHER BROADCAST CONTENT.
As a ‘collecting society’ under Australia’s
Copyright Act 1968
(Cth), we facilitate
access to content through simple licensing
solutions covering:
• educational institutions, enabling them to
copy broadcast material and communicate
it to staff and students
• subscription television and other services
that retransmit free-to-air broadcasts
• state and federal government
departments, enabling them to copy from
television, radio and the internet.
We also offer voluntary educational licences
in New Zealand under the
Copyright Act
1994
(NZ).
The fees we collect from our licensees
become royalty payments to rightsholders,
who are Screenrights members.
The revenue streams from these payments
then contribute to the ongoing production
of quality screen content, which in turn
benefits licensees.
In addition, Screenrights offers a range
of other related services to its members,
including international registration of their
rights and disbursement of commercial
revenue for their projects.
Our vision: to support the growth and
diversity of screen production in Australia,
New Zealand and around the world.
Our mission: to provide access to
audiovisual content, and to collect and
distribute income for rightsholders.
Filmmakers
make programs
for TV
Programs
are copied,
communicated
or retransmitted
Screenrights
pays royalties
to rightsholders
Screenrights
collects fees
and tracks
use of programs
2
OUR VALUES
In all aspects of its operations, Screenrights is
committed to upholding its core values – the
unique set of beliefs that make up our world
view. They guide us in fulfilling our mission and
inspire us to achieve our vision. They underpin
how we make decisions and how we act, how
we respond to challenges and how we embrace
the many exciting opportunities in front of us as
we achieve our goals. We champion these ideas:
DIVERSITY ENRICHES THE
WORLD
The variety of content that our members create
makes the world more interesting, engaging
and compelling.
THE POWER OF CREATIVITY
Creativity has a unique ability to express,
communicate and spread ideas.
VALUE OF IDEAS
The ideas expressed by our members help
shape conversations and debate in our society.
ACHIEVEMENT THROUGH
COLLABORATION
We form partnerships with our members,
stakeholders and third parties and work closely
to achieve our mutual goals.
TRANSPARENCY
We are not-for-profit, we have no hidden
agendas and we are accountable. This is
reflected in everything we do.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 3
THE YEAR IN BRIEF
DURING 2017/18, SCREENRIGHTS
HAS:
• distributed a total of $42.8 million through
4,469 individual payments to members
• raised $49.5 million in licence revenue
and other income for the film and
television industries
• grown the number of titles registered by
members to 1.66 million, up 11.4%
• achieved an expenses to collections ratio
of 15.9%
HIGHLIGHTS OF THE YEAR
INCLUDE:
• accelerated takeup of our educational
streaming service, EnhanceTV, with the
service now reaching 20% of Australian
primary schools
• launch of a new Cultural Fund, which
will make available up to $200,000 in
2018/19 for initiatives designed to explore
innovative approaches to the creation of
screen content for the education sector
• 267% growth in Screenrights
Disbursements Administration Service,
with $2.1 million collected for distribution
to filmmakers and investors in 15 film and
television projects
• continued advocacy for a strong and
fair copyright regime that supports the
ongoing viability of screen production
as well as facilitates access to the content
it creates
• redevelopment of the Screenrights
website to improve navigation and
access to services for members and
content users.
“ Royalties from
Screenrights help
my business to finance
the development of
new ideas for
production.”
Member
Image Credits
Cracking the Colour Code,
Electric Pictures
Life on the Reef,
Northern Pictures
We Don’t Need a Map,
Barefoot Communications
4
Diversification of our ser vices and increased ac cess to
content for the benefit of both rightshold ers and content
users are key strategic prior ities for Screenrig hts.
In this context, we are particul arly pleased to repor t
significant growth in our disbu rsements administr ation
service, with $2.1 million colle cted during the year.
Although still accounting for a rela tively small
proportion of total funds coll ected, Disbursement s
by Screenrights has seen exp onential growth since
it began in 2013/14. Its success refle cts the trust the
industry places in us, and re cognition of our experti se
in managing rights and royalt y flows. Building on
our strengths in this way to offer new se rvices to the
industry helps ensure our on going contribution to
the ecosystem that sustains conte nt production in
Australia, New Zealand and ar ound the world.
Overall the amount collecte d and available for
distribution to our members thr ough our licences and
royalty collection se rvices totalled $ 42.1 million in
2017/18, up 5% on last year.
This growth is obviously be neficial for members. At the
same time, however, we are committed to ensu ring that
licensees continue to find value in the li cence fees they
pay for members’ content.
Our investment in EnhanceTV is one exam ple of that
commitment, providing teach ers with resources and
streaming access to a huge range of conte nt through
our educational licences acro ss the primary, seconda ry
and tertiary sector s.
Also with an eye on maintaining a heal thy content
ecosystem, the launch of our Cultur al Fund in April 2018
saw Screenrights join coll ecting societies aroun d the
world in allocating a percentag e of revenues collected
to supporting initiatives th at contribute to industry
CHAIR’S REPORT
Jill Bryant Chair
development. Up to 1% of our distributable in come
annually will be set aside for Screen rights’ Cultural
Fund, with a specific focus each year. We see this as an
investment in the future on behalf of bot h members and
licensees. The inaugura l funding round, focusing on the
education sector, will be delivere d in 2018/19 and we will
monitor its effectivene ss closely to ensure it is meeting
its objectives.
The litigation initiated by the Aust ralian Writers’ Guild
and the Australian Writers’ Gui ld Authorship Collec ting
Society was not resolve d during 2017/18 and a court
hearing is now scheduled for Nove mber 2018. We
remain open to finding a resolution in the me antime
and will continue to collect and pay roy alties to our
members in accordance with appl icable contracts and
Australian law, including to wr iters where they own th e
relevant rights and have regi stered their claim.
It’s worth noting that of the more than 6 milli on
recorded uses of program s Screenrights is managi ng,
99.5% of royalty claims are paid wi thout any ongoing
dispute.
Finally, I want to take the opportunit y to acknowledge
that this is the last annual repor t under the leadership
of Screenrights’ long-ser ving Chief Executiv e, Simon
Lake, who resigned in July 2018 after mor e than 20
years at the helm. As Chair, I have worked wi th Simon
for 10 of those years, and I will miss his genuin e desire
to deliver the very best org anisation that members and
licensees deserve. He le aves with the very be st wishes
of the Board and Management.
Jill Bryant, Chair
27 September 2018
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 5
Image Credits
The Almighty Johnsons Series 3,
South Pacific Pictures
This is Brazil
, Special Broadcasting Service
The Waler. Australia’s Great War Horse
, MagoFilms
Hunting the Ice Whales,
Natural History New Zealand
Holding the Man,
Goalpost Pictures Aust P/L
Transmission Films (Dist)
“ EnhanceTV has made
accessing content for
my subject easier –
so much easier –
no longer do I have
to battle to find a clip
due to copyright
issues online.”
Secondary school teacher
6
CASE STUDY
Yiyili Aboriginal Community
School uses EnhanceTV
Movies, documentaries and educational TV programs in
the classroom can increase student engagement.
The Yiyili Aboriginal Community School found that using
EnhanceTV videos in the classroom was an effective way
to open a lesson or introduce new concepts to students.
The use of short clips in certain lessons was of most
benefit to support a specific area of study. Teachers
found that playing a video in class needed to be followed
up with focused activities, further reading and writing.
EnhanceTV offers lesson plans and discussion ideas
that can be used in this way.
…using EnhanceTV videos
in the classroom was an
effective way to open a
lesson or introduce new
concepts to students.
Yiyili Aboriginal Community School is situated in the
heart of the Kimberley region of Western Australia.
It is an independent community school catering for
students from Kindergarten to Year 10. The school
prides itself on providing an outstanding and
supportive learning environment for its students,
underpinned by the importance of Gooniyandi country,
language and family.
“ Screenrights royalties remind
me that my works are out
there finding new audiences
and sending me little
monetary postcards each time
they travel somewhere else.”
Member
Image Credits
Yiyili Aboriginal Community School
Macarthur Girls High School
, Parramatta NSW
Cracking the Colour Code
, Electric Pictures
Dragons in a Distant Land
, Gibson Group
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 7
CHIEF EXECUTIVE’S REPORT
Screenrights looks back on 2017/18 with a strong sense
of achievement. Membership has continued to grow,
and revenue collected on behalf of our members
also increased. Our licensees reported more than
975,000 uses of members' programs in education and
government as well as for audiences of subscription
television and other platforms, up by 21%, and our
educational streaming service, EnhanceTV, goes from
strength to strength.
These results reflect our ongoing efforts to build and
diversify our services as well as promote the use of
screen content in return for a fair fee for rightsholders.
Importantly, we have helped the industry stand its
ground in maintaining a copyright regime that supports
the viability of screen production on the one hand, and
facilitates ongoing access to quality content on the
other.
After concerted advocacy last year on the risks posed by
the campaign to introduce ‘fair use’ in Australia, in
August 2017 we welcomed the government’s response
to the Productivity Commission’s report on Australia’s
Intellectual Property arrangements. We believe this
response reflects a positive approach that will keep
Australia’s copyright laws up to date while maintaining
a sound framework for supporting Australia’s creators.
Since then, we have continued to work with government
and other stakeholders to explore opportunities
for future reform, and have participated in several
roundtable discussions flowing from the Department
of Communications and the Arts’ consultation paper
on copyright ‘modernisation’ released in March 2018.
The aim is to identify areas of consensus that could
lead to reform that benefits both copyright owners
and users.
Our experience has been that under well-drafted
legislation, the licensing of secondary rights has
generally been able to accommodate new forms
of content delivery. This in turn has meant that our
educational licences, for example, have been able
to adapt and enable schools and universities to
communicate copies through streaming platforms
rather than tape or DVD-based services. There are
opportunities to improve the other statutory licences
by taking a similar approach, which will allow them to
adapt to new technologies equally well.
Copyright review is also on the agenda in New Zealand,
and we participated in forums during the year through
the WeCreate organisation, working with the new
government, industry and user groups on a framework
to assist NZ creative industries.
Our strategic plan builds on the priorities of the
previous period. We aim to encourage increased use
of content under our licences, improve and diversify
the services we provide to members, and strengthen
our relationships and reputation with stakeholders.
These goals are underpinned by good governance and
continuous improvement in our systems and processes.
INCREASED USE OF CONTENT
The education sector accounts for around two-thirds
of our licensing income and offers significant
opportunities for further growth in screen content use.
Recognising this potential, we have continued to invest
in our flagship educational resource centre and
streaming platform EnhanceTV. Now reaching 20% of
Australian primary schools and with an archive of more
than 44,000 programs and clips, the service allows
teachers to find television content relevant to their
learning area, order copies of programs or stream clips
direct, and use free resources such as study guides and
articles.
Overall, our educational licences, which cover radio as
well as broadcast screen content, now give more than
6 million students in Australia and New Zealand access
to the benefits of professionally produced audiovisual
content in learning.
In negotiating and administering these licences, we
value our collaborative and constructive relationships
with the Copyright Advisory Group, representing
Australian school licensees, and with Universities
Australia and universities in New Zealand.
James Dickinson Acting Chief Executive
8
Our licences covering the retransmission of free-to-air
content on other platforms have expanded beyond
subscription television over the years to include
retransmission in new housing developments and in
hospitals. These innovative uses show the potential of
retransmission to build new services and audiences.
It’s also worth noting that the Australian Government
licence now enables copying from the internet, with
the agreement reached last year reflected in a new
Commonwealth licence from July 2017.
SERVICES THAT SUPPORT
MEMBERS’ BUSINESSES
In 2017/18, collections from our licensing and royalty
services reached a record $48 million. At 15.9%, our
expenses to collection ratio was slightly higher than
last year due to investment in EnhanceTV.
However, despite the increase in expenditure, the
amount available for distribution to members rose by
5.1% to $42.1 million.
Screenrights’ strategy of diversifying its services in the
context of the evolving environment of rights
management has contributed to this ongoing growth.
Our disbursement service, Disbursements by
Screenrights, has grown exponentially since it began
in 2013/14, turning over $2.1 million in 2017/18.
Disbursement administration, which handles the
allocation of global revenues received by a project to its
producers and investors, is an important service that
supports our members’ businesses and one that we
are well placed to deliver. Its growth has come from
new clients, as it becomes better known in the industry,
as well as from clients happy with the outcome on
previous projects.
Screenrights International also continues to
demonstrate steady growth, with $1.8 million
collected from overseas collecting societies on behalf
of members, up from $1.3 million last year.
Both of these services are examples of how Screenrights
has built on its systems and knowledge to support
members’ businesses and assist the industry in
diverse ways.
STRATEGIC RELATIONSHIPS
Our new Cultural Fund, launched in April 2018, aims to
support initiatives in Australia and New Zealand that
will make a broad positive contribution to industry
development. However, the way the fund is designed
is also a good example of Screenrights’ emphasis on
balancing the needs of multiple stakeholders.
In choosing education as the focus, we are seeking to
solicit proposals that not only benefit rightsholders
and the production industry, but are also potentially
valuable for the education sector. More specifically, we
want people to consider ways of overcoming barriers to
accessing and using screen content for teachers and
students in education and training. For the inaugural
round, which is due to be awarded next year, we have
capped the outlay at a total of $200,000, and intend to
review and refine the process before embarking on the
second round of funding.
Screenrights’ strategy of
diversifying its services in
the context of the evolving
environment of rights
management has contributed
to this ongoing growth.
We also nurture our relationships with the industry
through our sponsorship program. In 2017/18 we
supported the Australian International Documentary
Conference, the 37°South Market at Melbourne
International Film Festival, and Screen Producers
Australia’s Screen Forever conference. In New Zealand,
we supported the Screen Production and Development
Association Summit and the Screen Edge Forum, part
of Documentary Edge.
Through its board and committee roles, Screenrights
has also been actively involved in the activities of the
Australian Copyright Council, the Copyright Society
of Australia and the international retransmission
collecting society AGICOA.
And on a very practical level, Screenrights offices in
Sydney were used by creators during the year for story
workshops, pre-production meetings and business
planning sessions.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 9
CAPABILITIES THAT DELIVER
2017/18 saw further improvements in the RightTrack
rights management system and its member-facing
online portal MyScreenrights – a world-leader for
collecting societies. It is now even easier for members
to register their rights to receive royalties through
guided workflows online. Upgrades to our proprietary
technologies continue to improve the efficiencies of
distribution through automation and algorithms -
enabling the Screenrights team to handle the ever
increasing volumes of usage and payment.
Our new corporate website, launched in April 2018,
features a much clearer information architecture,
making it easier to navigate for both members and
licensees. It provides easy access to all services, as
well as important corporate documents.
STRONG AND TRANSPARENT
GOVERNANCE
Screenrights subscribes to the voluntary Code of
Conduct governing collecting societies, designed to
ensure that these organisations operate efficiently,
effectively and equitably. An independent reviewer
assesses compliance with the code annually, and
Screenrights has once again complied with all its
obligations.
This year, we have also engaged constructively with the
Department of Communications and the Arts in
reviewing the efficacy of the code itself. Our submission
to the review in September 2017 sought to demonstrate
the code’s importance in ensuring that a culture of
service is at the heart of Screenrights’ activities. We are
looking forward to the Department’s report, which we
hope will be available soon.
Screenrights has built on
its systems and knowledge
to support members’
businesses and assist the
industry in diverse ways.
I am signing this report as Acting Chief Executive on
behalf of Simon Lake, who led the organisation during
the year under review, as he did for the past 20 years,
until his resignation for health reasons in July 2018.
Collegiate by nature, Simon gathered a great team
around him, but it was largely he who built
Screenrights into the respected global copyright
organisation that it is today. An overview of his time
here is in fact a history of the organisation itself, as you
will see from the highlights on pages 10-11. I will miss
him keenly; we will all miss him keenly. We thank him
for his professionalism, his passion and his leadership.
James Dickinson,
Acting Chief Executive
27 September 2018
10
HIGHLIGHTS FROM 20 YEARS
OF LEADERSHIP
Simon Lake joined Screenrights as Chief Executive
in 1998. Over the 20 years of his leadership the
organisation has grown and adapted in response to the
challenges and opportunities of an increasingly digital,
on-demand world.
Simon Lake
1998
First registration with overseas collecting
societies.
Television copying licence offered to
New Zealand schools.
Screenrights’ membership totals 971.
1999
First payments of royalties from overseas.
2000
Landmark agreement reached with the
Australian subscription TV industry to support
a retransmission right; rightsholders would
be remunerated for free-to-air broadcasts of
their work when retransmitted as part of a
subscription TV service.
Copyright (Digital Agenda) Act 2000
(Cth)
comes into force, allowing the retransmission
right as well as the right to ‘communicate’
copied programs. Agreements put into place
with schools, universities and TAFEs across
Australia enabling them to give students
access to programs, including via online
delivery.
Screenrights formally ‘declared’ a collecting
society for government copying in Australia.
First payments of royalties collected from
New Zealand schools.
2002
Introduction of innovative web-based service
EnhanceTV, developed in-house, to deliver
educational resources to teachers – providing
a direct link between the film and television
industry and the education sector.
Screenrights formally ‘declared’ a
collecting society for retransmission royalties
in Australia.
Agreement reached with New Zealand
universities enabling them to copy programs
from television.
2003
During negotiation of the Free Trade
Agreement between US and Australia,
Screenrights and other collecting societies
make representations on the extension to the
term of copyright and proposed amendments
to the fair dealing provision.
A look back at the
key milestones over
this period reveals
Screenrights’ journey
towards the innovative,
service-focused
organisation of
today. >
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 11
HIGHLIGHTS FROM 20 YEARS
OF LEADERSHIP
2006
EnhanceTV starts copying programs for
supply to Australian schools, TAFEs and
universities and is a finalist in the prestigious
AIMIA Awards.
Establishment of the subsidiary company
EnhanceTV Pty Ltd as a resource centre.
Establishment of ISAN Australasia by
Screenrights and APRA AMCOS – a
registration service to provide a new and
unique identification numbering system
for audiovisual work, giving Australasian
audiovisual industries access to the most
efficient means of identifying and tracking their
work in the global digital environment.
2007
Collection of first royalties from subscription
television operators for retransmission.
Agreements reached for retransmission in new
housing developments and hospitals.
2008
Retransmission collections mean the number
of records dealt with in a year by Screenrights’
increases from 8,500 to more than 390,000.
Distribution of first retransmission royalties to
members, with more than $4 million
distributed in six months.
2009
First licence agreements for the
retransmission of television on mobile phones,
and on IPTV.
2010
EnhanceTV introduces a video download
service allowing teachers and academics
to download programs directly to computers
and electronic whiteboards, rather than
purchase DVDs.
2011
Online rights registration system
MyScreenrights launched, making it easier
for members to register programs and track
payment history.
Successful trial of a new streaming service for
licensees, EnhanceTV Direct, enabling lesson
plans to be created using clips or entire
programs, with programs captioned and
searchable by learning area.
2012
Screenrights moves into new premises better
equipped to continue to meet the needs of
members and licensees in future years. All
meeting rooms available for use by members.
2013
Active engagement with all stakeholders as the
Australian Law Reform Commission (ALRC)
conducted its inquiry into copyright.
Streaming service EnhanceTV Direct delivers
more than 15,000 programs to teachers and
students across Australia.
2014
Disbursements by Screenrights introduced
as a service for film and television businesses,
handling the allocation of global revenues
received by a project to its producers
and investors.
2015
New long term licence agreement covering
99% of schools in Australia.
2016
Government copying declaration expanded to
cover copying of online audiovisual content.
2017
Proposal to simplify the Australian
educational statutory licence developed by
Screenrights with partners in the education
sector and introduced as part of a wider
copyright reform bill.
Continued advocacy on the risks proposed by
the campaign to introduce fair use or fair
dealing into Australia.
2018
Screenrights’ membership totals 4,227 across
65 countries.
Launch of the Screenrights Cultural Fund,
setting aside a percentage of revenues
collected each year to support initiatives that
contribute to industry development.
Disbursements administration service turns
over $2.1million.
12
FIGURE 2 Membership numbers 2008/09–2017/18, and breakdown by member type for current year
OUR MEMBERSHIP
Anyone who owns or controls rights in a program can join Screenrights at no cost and register their claims.
Membership grew by 3% in 2017/18, with 4,227 members from 65 countries as of June 2018. Of these, 2,174 were
Australian members (including Australian collecting societies such as APRA, PPCA and Viscopy) and 2,053
international members.
FIGURE 1 Geographical distribution of Screenrights members
Members
OVERVIEW OF KEY STATISTICS
International members
2,053
Australian members
2,174
3,560 3,693 3,821 3,9573,007 3,145 3,321 3,4 64 4,107 4,227
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 13
FIGURE 4 Territories in which Screenrights collects income on behalf of its members
Territories
Under negotiation
REVENUE FROM LICENCES
Screenrights’ total income was $49.8 million in 2017/18. Of this, revenue from licences and other services
accounted for $49.5 million, comprising $48.0 million collected on behalf of members during the year and interest
of $1.5 million. This was up from $46.8 million last year.
As Figure 3 shows, revenue rose for almost all licence types, but there has been particularly significant growth
in the income collected through Screenrights’ Disbursement Administration Service (DASA), which grew from
$0.6 million to $2.1 million.
A further breakdown of revenue from the Australian educational and government licences in 2017/18 is available in
Appendix 1 (page 56).
FIGURE 3 Revenue from licences and other collection services (including interest), total and by service type,
2015/16–2017/18
2017/18
2015/16
2016/17
$47.8m $46.8m $ 49.5m
30.8m
9.2m
4.2m
2.2m
1.1m
0.2m
31. 3m
9.5m
1.7m
2.4m
1.4m
0.6m
32.0m
9.6m
1.6m
2.3m
1.9m
2.1m
Australian Educational Service (AES)
Australian Retransmission Service (ARS)
Australian Government Service (AGS)
NZ Educational Service (NZES)
International Collections Service (ICS)
Disbursements by Screenrights (DASA)
14
NZ $126,990
Legal $52,616
Operating Expenses $2,080,335
Promotions/Marketing $108,844
Licensing $17,971
Travel $61,230
Other $136,14 0
Employee Related $4,874,358
> INSIGHT: TYPES OF MATERIAL COPIED BY EDUCATIONAL INSTITUTIONS
In terms of the number of copies made by schools, colleges and universities, documentary content continues to account for
the largest share, at 37.3% in 2017/18, although the contribution of other types of content, particularly news and current
affairs, is increasing..
FIGURE 5 Share of copies made for different types of content, 2015/16–2017/18
Documentary
News & Current Affa irs
Infotainment/Ligh t Entertainment
Film – Feature
TV/Dr ama
Dedicated Educationa l
Other - Music/Variety, Short F ilm,
Radio and Sport
1.7%
2.5%
37.3%
7.8%
18.3%
16.5%
16.0%
4.3%
3.1%
38.1%
8.1%
17.1%
15.9%
13.5%
2.8%
2.6%
52.5%
3.5%
13.7%
13.3%
11.7%
2016/17
2015/16
2017/18
EXPENDITURE
Screenrights’ total expenditure for 2017/18 was $8.15 million, including expenditure from our subsidiary company
Enhance TV, compared to the previous year’s figure of $7.58 million.
FIGURE 6 Breakdown of Screenrights expenditure for 2017/18
$8.15
MILLION
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 15
15.5%
14.8%
2016/17
2015/16
15.9%
2017/18
14.8%
15.7% 16.5%
2015/16
2016/17
2017/18
15.4%14.1% 16.4%
2015/16
2016/17
2017/18
15.4%
14.1% 16.4%
2015/16
2016/17
2017/18
18.6%19.6%
20.7%
2015/16
2016/17
2017/18
> INSIGHT: EXPENDITURE IN RELATION TO COLLECTIONS
Screenrights’ total expenditure amounted to 15.9% of total collections. Total collections this year includes
collections from the Screenrights’ disbursements service (DASA). In 2016/17, using the same method of calculation,
it was 15.5%.
The expenses recouped against DASA collections were 3.6%, compared to 4.4% for the previous year, reflecting
the growth in the DASA collections and the variety of service fees now available to members. The ICS has a fixed
administration fee of 11%.
FIGURE 7
Overall expenditure to collections ratio, 2015/16–2017/18
FIGURE 8 Expenditure to collections ratio by licence type, 2015/16–2017/18
Australian Educational Service (AES)
Australian Retransmission Service (ARS)
Australian Government Service (AGS)
NZ Educational Service (NZES)
16
$41.22 m$29.45m $30.90m $30.93m $34.55m $40.54m $36.23m $39.72m $40.07m $42.13 m
NET INCOME FROM LICENCES
Deducting expenditure from revenue gives a net income from licences and collection services of $41.7 million
for 2017/18, compared to $39.6 million the previous year. A breakdown of net income for the Australian educational
and government licences in 2017/18 is available in Appendix 1 on page 56.
FIGURE 9 Net income from licences each year 2015/16–2017/18
$40.8m
$39.6m
2015/16
2016/17
$41.7m
2017/18
FUNDS AVAILABLE FOR DISTRIBUTION
A total of $42.1 million was available for distribution to members in 2017/18, 5.1% up on last year’s $40.1 million.
These funds are allocated to the relevant pool for each licence type, and held in trust for up to six years until they
are distributed to members.
The ‘distributable amount’ each year is the net income for the year plus any licence fees for which the trust period
has expired.
See Figure 12 for details of the amount actually distributed to members this year.
FIGURE 10 Total funds available for distribution to members each year, 2008/09–2017/18
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 17
FIGURE 11 Funds available for distribution to members, by type of licence, 2015/16–2017/18
$41.22 m $40 .07m $42.13 m
2017/18
2015/16
2016/17
26.5m
8.1m
3.6m
1.8m
1.0m
0.2m
26.7m
8.2m
1.4m
2.0m
1.2m
0.6m
26.9m
8.1m
1.4m
1.9m
1.7m
2.1m
AMOUNT DISTRIBUTED
Each year the funds held in trust in each licence pool are distributed to members once the registration of titles is
completed and processed.
In 2017/18, the total amount distributed was $42.8 million, including $1.6 million distributed through
Disbursements by Screenrights.
A breakdown of the amount distributed for Australian educational and government licences in 2017/18 is available
in Appendix 1 on page 56.
FIGURE 12 Amount distributed to members each year 2008/09–2017/18, and breakdown by type of member for the
past three years
Australian Educational Service (AES)
Australian Retransmission Service (ARS)
Australian Government Service (AGS)
NZ Educational Service (NZES)
International Collections Service (ICS)
Disbursements by Screenrights (DASA)
$34.9 $34.9 $38.6 $43.1$25.6 $26.7 $30.8 $32.2 $43.1 $42 .8
Any members
Australian members
Australian collecting
society members
International members
$20.6$21.3 $21.6
$4.6$4.1 $4.4
$17.7$17. 6 $17.1
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
18
Overcoming barriers to use of screen
content in education
Students are an important audience for the screen industry in Australia
and New Zealand.
Demographically, they are members of Generation Z (8–22 years), whose
viewing habits are driving rapid and profound shifts in how content is
created, delivered, packaged and used. According to PwC’s
Entertainment
and Media Outlook 2017–2021
, Generation Z is privacy savvy, safety
conscious and hates interruptive advertising. They also need to navigate
an increasingly fragmented online world and a glut of digital resources.
In such an environment, the role that professionally produced screen
content can play in contributing meaningfully to teaching and learning
has never been more vital — and the opportunities for both the education
sector and screen content creators have never been greater.
However, the opportunities offered by digital technology and new ways of
accessing content are not necessarily shared equally. For some, the
benefits are pushed out of reach by such barriers as geographical
location, family income, technical knowledge and access to a reliable and
fast internet connection.
In launching its new Cultural Fund in April 2018 with an education focus,
Screenrights is seeking to help find ways to overcome such barriers.
From a total pool of $200,000 for this inaugural round, it will provide
grants of up to $50,000 to Australian and/or New Zealand initiatives
that explore innovative approaches to the creation, packaging and use
of high-quality screen content to the education sector.
The initial response has been positive, with applications closing on
6 July 2018. The outcomes will be included in the 2018/19 Annual Report.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 19
1. GENERAL STATEMENT
1.1 Screenrights is dedicated to maximising the
incentive provided by the copyright system for
the production of audiovisual works. Specifically
Screenrights aims to:
• maximise returns to audiovisual rightsholders
through collective management of rights; and
• encourage access to our members’ content in
return for fair fees.
1.2 In furtherance of these goals, Screenrights seeks
to maintain and foster principles of corporate
governance that accord with best practice and
are appropriate for a declared collecting society,
requiring the highest standards of behaviour and
accountability.
1.3 It is recognised that it is neither possible nor
desirable to lay down prescriptive rules to
dictate actions in the varied circumstances
that may confront an organisation in its future.
Nonetheless the Board of Directors of Screenrights
acknowledges the general statements concerning
governance, ethics and the obligations of Directors
in this paper and adopts this policy, and will review
it as necessary.
1.4 The aim of the Screenrights Board of Directors is
stewardship that is effective, accountable and fair.
2. THE SCREENRIGHTS BOARD
2.1 The Board comprises individuals elected by the
members of Screenrights. It has collective
legal responsibility for directing the affairs of
Screenrights for the benefit of the members
(present and future), recognising the interests of
other stakeholders, notably the public (directly
and through the office of the Minister for
Communications and the Arts), the statutory and
voluntary licensees, employees and other parties
with whom Screenrights interacts.
2.2 In a more general sense, Directors of all
companies have a role in economic and social
development through effective management of
resources in the national and global interest.
Screenrights Directors recognise a direct
responsibility to rightsholders but also a
partnership with copyright users and with the
Federal Government
2.3 The Board (and Screenrights) stand in a fiduciary
relationship to relevant rightsholders who are
members. Although the interests of members are
paramount, the interests of groups other than the
membership are important and the Board seek
solutions that benefit all parties, where possible.
2.4 There are no nominees or Directors
representing a constituency within the
membership. Some Directors are associated
with member organisations and/or have
knowledge of the views of member groups.
It is desirable and proper for Directors to present
the views of individual members or member
groups to the Board. It is neither desirable nor
proper for Directors to act in the interests of
individual members, member groups or groups
that may have supported their election to the
Board. Directors acknowledge their legal duty to
act in the best interests of Screenrights.
GOVERNANCE STATEMENT
Extract from Screenrights Corporate Government Statement.
Full statement available from www.screenrights.org/about-us/corporate-governance
Image Credit
The A - Z of Contemporary Art,
Photoplay Films
20
OFFICE OF THE CHIEF EXECUTIVE
Chief Executive: Simon Lake
ACCESS
Head, Licensing & Regulatory Affairs &
General Manager:
James Dickinson
ENHANCETV TEAM
Head Product & Business Development:
Stefan Savva
Project Director:
Terry Watts*
Content & Catalogue Editor: Paul Stock
Curriculum Content Producer:Duha Samin
Product & Customer Director:
Richard le Bas
Stack Developer: Alex Corzo
Senior Relationship Manager:
Suzanne Attar
SERVICES
Head of Service Design: Emma Madison
Head of Member Services: Maha Ismail
Member Relations Manager: Annabel Holt
Distribution Manager: Sean Price
International Service Manager:
Gaëlle Clark
Disbursement Service Manager:
Jasmina Matic
Project Manager: Luke Asprey
Competing Claims Manager: Kat di Rocco
Cultural Fund Assistant:
Georgie Payne-Loy*
MEMBER RELATIONS TEAM
Portfolio Coordinator: John Alexander
Portfolio Coordinator: Awa Momtazian
DISTRIBUTION TEAM
Senior Distribution Officer: Kate Bowley*
Senior Research Officer: Clare Macken*
Distribution Officer: Ian Laird
Distribution Officer: Wade Clarke*
Registration Data Administrator:
Ross Sharp
RELATIONSHIPS
Public Affairs Advisor: Virginia Gordon*
CAPABILITIES
Head, Information Services: Mike Lynch
Business Development Manager, ISAN:
Darryl Robinson*
NETWORK & INFRASTRUCTURE TEAM
Network & Infrastructure Manager:
Justin Franks
User & Systems Support:
Somdeep Sengupta
APPLICATION DEVELOPMENT
Lead, Application Development:
Brian Chambers
Applications Developer: Sandra Bhalla
DATA & SYSTEMS TEAM
Data & Systems Manager: Nick Grodzicki
Data Entry Officer: Mary Luque*
PEOPLE & CULTURE
Chief Operating Officer/Company
Secretary:
Anne Audette
Executive Assistant/Office Manager:
Kylie Cooke
ADMINISTRATION TEAM
Office Administrator: Belle Darcy
Administrative Assistant:
Wendy Lee-Lusher*
GOVERNANCE
General Counsel:
Marie Foyle*
Associate Counsel: Mona Forghani
Accountant & Internal Auditor:
Angela Cheung
* Indicates part-time employee/consultant
Full time equivalent = 36.9
DIRECTORS & OFFICERS
Jill Bryant
Chair
Ben Grant
Deputy Chair
DIRECTORS
David Anderson
Geoffrey Atherden AM
Larissa Behrendt
Jonathan Carter
Anne Chesher
Kim Dalton OAM
John Ford
Alastair McKinnon
[Alternate for
David Anderson]
Chris Oliver-Taylor
Cathy Service
Victoria Spackman
AUDITORS
KPMG
BANKERS
National Australia Bank
Westpac
Bank of New Zealand
SOLICITORS
Banki Haddock Fiora
Harmers Workplace
Lawyers
Curwood Solicitors
Emery Legal
Sainty Law
Sparke Helmore
Audio-Visual Copyright Society Limited trading as Screenrights ABN 76 003 912 310
Registered office: Level 1, 140 Myrtle Street Chippendale NSW 2008
Phone: +61 2 9904 0133 Fax: +61 2 9904 0498 www.screenrights.org
COMPANY PROFILE
As at 30 June 2018
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 21
DIRECTORS’ REPORT
DIRECTORS’ MEETINGS
The number of Directors’ meetings (including meetings of Committees of Directors) and number of meetings attended by
each of the Directors of the Company during the financial year are:
DIRECTOR DIRECTORS’ MEETINGS
AUDIT & RISK
COMMITTEE MEETINGS
REMUNERATION
COMMITTEE MEETINGS
A B A B A B
D Anderson 0 6 0 0 0 0
G Atherden 6 6 0 0 0 0
L Behrendt 3 4 0 0 0 0
J Bryant 5 6 2 3 0 1
J Carter 3 3 0 0 1 1
A Chesher 6 6 0 0 0 0
F Crago 2 2 0 0 0 0
K Dalton
5 6 3 3 0 0
J Ford 5 6 0 0 0 0
B Grant 6 6 2 2 1 1
A McKinnon 3 4 0 0 0 0
C Oliver-Taylor 5 6 0 0 0 0
D Ormston 3 3 0 0 0 0
C Service 6 6 3 3 1 1
V Spackman 5 6 0 0 0 0
A Number of meetings attended
B Number of meetings held during the time the Director held office during the year
CHRIS OLIVER-TAYLOR
Chris Oliver-Taylor is the incoming
CEO of FremantleMedia Australia
& New Zealand. Formerly the
Managing Director of Matchbox
Pictures and Head of Business and
Operations at ABC Television. Chris
is a former President and Board
member of Screen Producers.
Director since 2010.
22
DAVID ANDERSON
Australian Broadcasting
Corporation’s Director Entertainment
and Specialist. David has enjoyed a
successful career in the broadcast
television and media industry for
nearly 30 years, with a long history
as television executive and a strong
track record in television production
and commissioning successful
programs across all genres.
Director since 2012.
LARISSA BEHRENDT
Distinguished Prof. Larissa Behrendt,
a graduate of UNSW and Harvard
Law School, is Chair of Indigenous
Research, Jumbunna Indigenous
House of Learning UTS. Multi award
winner - 2018 Australian Directors
Guild Award, 2002 David Uniapon
Award, 2005 Commonwealth
Writer's Prize & Victorian Premiers
Literary Award. Board member
Sydney Festival & Major Performing
Arts Panel, Australia Council. 2009
NAIDOC Person of the Year award
& 2011 NSW Australian of the Year.
Host of
Speaking Out
, ABC Local &
Radio National. Director Since 2017.
BEN GRANT
Managing Director of Goalpost
Pictures, with credits spanning
three decades of award-winning
feature films and television. Member
of the Film Certification Advisory
Board. Member of the Australian
Institute of Company Directors.
Ambassador for the Sydney Swans.
Director since 2013. Elected Deputy
Chair 2016.
VICTORIA SPACKMAN
Director of Te Auaha New Zealand
Institute of Creativity. Co-owner of
the Gibson Group, Board member of
Education New Zealand and previous
Board member of SPADA (the NZ
Screen Production and Development
Association).Director since 2011.
CATHY SERVICE
Associate with KJA Engaging
Solutions previously Chief Operating
Officer from Feb 2013 to June 2018.
Former Head of Finance with BBC
Worldwide Australasia. Over 20 years
experience in the media industry.
Director since 2011.
GEOFFREY ATHERDEN AM
Writer and former president of both
the Australian Writers’ Guild and
Australian Writers’ Foundation.
Geoffrey is well known for his
multi award-winning television
programs including
Mother & Son,
BabaKiueria
and
Grass Roots
.
Geoffrey has also served two terms
on the board of Screen NSW, and in
2009 received an Order of Australia.
Director since 2016.
DIRECTORS’ REPORT [CONTINUED]
JILL BRYANT
Producer,
Dinosaurs in the Wild
.
Originating Producer,
Walking with
Dinosaurs – The Arena Spectacular
.
Former Marketing Director, Asia-
Pacific, BBC Worldwide Ltd. Director
since 2003. Elected Chair 2006.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 23
ANNE CHESHER
Education consultant with PhD
thesis “
Television Content in the
21st Century Classroom
”. Over
20 years experience producing
online education creative media
for the television industry (clients
include ABC, SBS, Foxtel, National
Geographic Channel). Former
secondary school teacher and
writer of ATOM study guides.
Director since 2014.
JONATHAN CARTER
Head of the Legal, Corporate and
Policy Group, APRA AMCOS.
Management Committee member
and Past President of the Copyright
Society of Australia. Casual Vacancy
Director since 2017.
JOHN FORD BA, LLB
Media Consultant, Lawyer and
Company Director. Clients have
included: Telstra Corporation, TVI/
Sci-Fi and TVN Channel. Director,
Sydney Children’s Hospital Network.
Director since 1997.
KIM DALTON OAM
Producer, distributor and
broadcaster with over 40 years
experience in the Australian and
international screen industries.
Former CEO Australian Film
Commission, Director ABC
Television, Chair Freeview Australia
and non-executive Director of
National Institute of Dramatic Arts
(NIDA) and December Media. Chair
of the Asian Animation Summit,
member NIDA Academic Board and
consultant and mentor to a range
of media organisations. Recipient of
Order of Australia Medal for service
to the Australian film and television
industry. Director since 2015.
ALASTAIR MCKINNON
Alternate Director for David Anderson 2018
ANNE AUDETTE CA
Chief Operating Officer and Company Secretary. Appointed Company
Secretary August 2017
FIONA CRAGO
Director 2011 to November 2017
DEAN ORMSTON
Director 2007 to November 2017
24
LEAD AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Lead Auditor’s Independence Declaration, as
required under Section 307C of the Corporations Act 2001,
is included at page 28 of the Annual Report.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the course of
the financial year was utilisation of its right as a declared
collecting society under Part VA, s183 and Part VC of
the Copyright Act, to collect monies from educational
institutions, for distribution to relevant copyright owners.
REVIEW AND RESULTS OF OPERATIONS
The amount of $42.1 million (2017: $40.1 million) was
determined to form the Distributable Amount available for
distribution to relevant rightsholders from monies collected
for the accounting year ended 30 June 2018.
The net operating profit/(loss) after income tax for the year
was $Nil (2017: $Nil).
STATE OF AFFAIRS
On 3 March 2017, the Australian Writers’ Guild (AWG) and
the Australian Writers’ Guild Authorship Collecting Society
(AWGACS) filed proceedings against Screenrights in the
Federal Court of Australia alleging amongst other things
that Screenrights has failed to pay scriptwriters their
royalty entitlements.
Screenrights has filed its defence which rejects those claims.
Screenrights continues to collect and pay royalties on behalf
of all its members in a fair and transparent manner, in
accordance with applicable contracts and Australian law.
In the opinion of the Directors there were no other significant
changes in the state of affairs of the Company or consolidated
entity that occurred during the financial year under review.
ENVIRONMENTAL REGULATION
The Company’s operations are not subject to any significant
environmental regulations under either Commonwealth or State
legislation. The Board believes that the Company has adequate
systems in place for the management of its environmental
requirements and is not aware of any breach of those
environmental requirements as they apply to the Company.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the end of
the financial year and the date of this report any item,
transaction or event of a material and unusual nature that
is likely, in the opinion of the Directors, to affect significantly
the operations of the consolidated entity, the results of those
operations or the state of affairs of the consolidated entity in
future financial years.
LIKELY DEVELOPMENTS
The Company will continue its current activities. Potential
new revenue streams in development include copying from
the internet by governments and educational copying by
training providers.
INDEMNIFICATION AND INSURANCE OF OFFICERS
During the year, the Company paid a premium of $31,052
in respect of a contract of insurance indemnifying those
persons who are or have been officers of the Company
against liabilities that may arise from their position as
officers, except where the liability arises out of conduct
involving a lack of good faith. That insurance policy does not
contain details of the premiums paid in respect of individual
officers of the Company.
GOALS
We are leveraging our current reputation to achieve:
Access – greater access to content for licensees
Services – increased distribution efficiency and diversified
range of services for members
Relationships – strategic relationships, bringing educators
and filmmakers together, positioning and partnering with
stakeholders
Capability – ensured capability to serve the current and
future needs of the organisation
Governance – strong and transparent governance and
risk management.
MEMBERS’ LIABILITY
The Company is a company limited by guarantee. The
guarantee in the event of the winding up of the Company
is $10 for each member. At 30 June 2018, membership of
the Company comprised 4,227 full members (2017: 4,107 ),
resulting in a total liability of $42,270 (2017: $41,070).
Dated at Sydney this 27 September 2018 and signed in
accordance with a resolution of the Directors:
Jill Bryant
Chair
DIRECTORS’ REPORT [CONTINUED]
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 25
DIRECTORS’ DECLARATION
In the opinion of the Directors of Audio-Visual Copyright Society Limited:
(a) The consolidated financial statements and notes, set out on pages 30 to 55, are in accordance with the
Corporations
Act 2001
, including:
(i) giving a true and fair view of the financial position of the consolidated entity as at 30 June 2018
and of its performance for the financial year ended on that date, and
(ii) complying with
Australian Accounting Standards
and the
Corporations Regulations 2001
.
(b) The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
(c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Dated at Sydney this 27 September 2018 and signed in accordance with a resolution of the Directors:
Jill Bryant
Chair
26
INDEPENDENT AUDITOR’S REPORT TO MEMBERS OF
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the Financial Report of Audio-Visual
Copyright Society Limited (the Group).
In our opinion, the accompanying Financial Report of the
Group is in accordance with the
Corporations Act 2001
,
including:
• giving a true and fair view of the Group’s financial position
as at 30 June 2018 and of its financial performance for the
year ended on that date; and
• Complying with
Australian Accounting Standards
to
the extent described in Note 1 and the
Corporations
Regulations 2001
.
The Financial Report comprises:
• Consolidated Statement of financial position as at 30
June 2018
• Consolidated Statement of profit or loss and other
comprehensive income, Consolidated Statement of
changes in equity, and Consolidated Statement of cash
flows for the year then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with
Australian
Auditing Standards
. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our opinion.
Our responsibilities under those standards are further
described in the
Auditor’s responsibilities for the audit of the
Financial Report
section of our report.
We are independent of the Group in accordance with the
Corporations Act 2001
and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants
(the
Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities
in accordance with the Code.
Emphasis of matter – basis of preparation and restriction
on use
We draw attention to Note 1 to the Financial Report, which
describes the basis of preparation.
The Financial Report has been prepared for the purpose of
fulfilling the Directors’ financial reporting responsibilities
under the
Corporations Act 2001
. As a result, the Financial
Report and this Auditor’s Report may not be suitable for
another purpose. Our opinion is not modified in respect of
this matter.
Our report is intended solely for the members of Audio-
Visual Copyright Society Limited and should not be used by
parties other than the members of Audio-Visual Copyright
Society Limited. We disclaim any assumption of responsibility
for any reliance on this report, or on the Financial Report
to which it relates, to any person other than the members
of Audio-Visual Copyright Society Limited or for any other
purpose than that for which it was prepared.
Other Information
Other Information is financial and non-financial information
in Audio-Visual Copyright Society Limited’s annual reporting
which is provided in addition to the Financial Report and the
Auditor’s Report. The Directors are responsible for the Other
Information.
Our opinion on the Financial Report does not cover the Other
Information and, accordingly, we do not express an audit
opinion or any form of assurance conclusion thereon.
In connection with our audit of the Financial Report, our
responsibility is to read the Other Information. In doing so,
we consider whether the Other Information is materially
inconsistent with the Financial Report or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a
material misstatement of this Other Information, and based
on the work we have performed on the Other Information
that we obtained prior to the date of this Auditor’s Report we
have nothing to report.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 27
KPMG, an Australian partnership and a member firm of the KPMG network
of independent member firms affiliated with KPMG International Cooperative
(“KPMG international”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair
view and have determined that the basis of preparation
described in Note 1 to the Financial Report is appropriate
to meet the requirements of the
Corporations Act 2001
and is appropriate to meet the needs of the members
• implementing necessary internal control to enable the
preparation of a Financial Report that gives a true and fair
view and is free from material misstatement, whether due
to fraud or error
• assessing the Group’s ability to continue as a going
concern. This includes disclosing, as applicable, matters
related to going concern and using the going concern
basis of accounting unless they either intend to liquidate
the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the
Financial Report
Our objective is:
• to obtain reasonable assurance about whether the
Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
Australian Auditing Standards
will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error. They are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of this
Financial Report.
A further description of our responsibilities for the audit
of the Financial Report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.
gov.au/auditors_files/ar7.pdf. This description forms part of
our Auditor’s Report.
KPMG
Anthony Travers, Partner
Sydney, 27 September 2018
28
To: The Directors of Audio-Visual Copyright Society Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2018,
there have been:
(i) no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001
in relation
to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Anthony Travers, Partner
Sydney, 27 September 2018
LEAD AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
KPMG, an Australian partnership and a member firm of the KPMG network
of independent member firms affiliated with KPMG International Cooperative
(“KPMG international”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 29
ANNOTATED STATEMENT OF FINANCIAL
PERFORMANCE FOR THE YEAR ENDED
30 JUNE 2018
Royalty collections for the
year from Australian schools,
TAFE colleges, universities,
retransmission income,
New Zealand educational
institutions, overseas, and
revenue from services
including Enhance TV and
DASA.
Includes interest.
The cost of running
Screenrights, including
employee expenses,
depreciation and other
ordinary expenses.
Screenrights can hold
allocations in trust for a
maximum of six years while
trying to locate relevant
rightsholders. Under the
Attorney-General’s Guidelines,
these funds are then added
to the Distributable Amount
in the current year. For 2012,
expired trust funds scheme
were, by amount and
percentage of Distributable
Amount, Pt VA $211,000
(0.9%), NZ $22,000 (1.6%),
Pt VC $119,000 (2.3%) and
AGS $53,000 (1.9%).
We know that not everyone wants to analyse financial statements, so below is our annual summary of the most important
information in these accounts. The notes show the calculations which determine how much money is available to distribute to
rightsholders from the royalties collected and interest received, and after the deduction of tax and expenses.
NON-IFRS FINANCIAL MEASURES
The annotated statement of financial position includes certain non-IFRS financial measures. The directors believe the
presentation of non-IFRS financial measures is useful for the users of this document as they reflect the amounts available for
distribution to rightsholders after the addition of expired trust funds and the transfer of surplus reserves. The below non-IFRS
financial measures have not been subject to review or audit.
Consolidated
2018 2017
$000s $000s
Revenue from Ordinary Activities:
Gross Revenue 48,272 45,414
Other Revenues 1,597 1,750
Expenses
(8,146)
(7,583)
41,723 39,581
Transfer (to)/from retained
earnings and reserves – –
Amount available for Distribution 41,723 39,581
Add Expired Trust Funds (2011) – 492
Add Expired Trust Funds (2012) 405
–
Total amount available for Distribution 42,128 40,073
Amount transferred to Statutory
Distributable Pools:
Australian Education Service (26,921) (26,653)
Australian Retransmission Service (8,106) (8,154)
Australian Government Copying (1,382) (1,443)
Amount transferred to Non-Statutory
Distributable Pools:
NZ Education Service (1,878) (1,996)
Disbursements by Screenrights (2,132) (582)
International Collections Service (1,709) (1,245)
Total amount transferred to
distribution pools (42,128) (40,073)
30
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
The Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the
notes to the Consolidated Financial Statements set out on pages 34 to 55.
For the year ended 30 June 2018
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
Note 2018 2017
$000s $000s
Revenue from rendering of services 2 48,272 45,414
Other income 3 1,597 1,750
Total revenue and other income 49,869 47,164
Employee expenses 4 (4,874) (4,716)
Depreciation and amortisation expense (436) (169)
Operating expense (2,332) (2,119)
Licensing expense (23) (117)
Travel expense (73) (67)
Marketing expense (149) (94)
Legal expense (53) (99)
Other expenses 5 (206) (202)
Royalties paid and payable to members and
affiliated societies 2 (41,723) (39,581)
Net profit/(loss) before income tax
– –
Income tax expense 7 – –
Net operating profit/(loss) after income tax
– –
Other comprehensive income – –
Total comprehensive profit/(loss)
– –
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 31
For the year ended 30 June 2018
CONSOLIDATED BALANCE SHEET
Note 2018 2017
$000s $000s
Current assets
Cash and cash equivalents 8 3,299 3,511
Cash on deposit 8 63,752 65,559
Trade and other receivables
9
4,031 2,998
Total current assets
71,082 72,068
Non-current assets
Property, plant and equipment 10 400 467
Intangibles 11 1,728 1,417
Total non-current assets
2,128 1,884
Total assets
73,210 73,952
Current liabilities
Trade and other payables 12 744 628
Royalties in advance 14,536 14,358
Employee benefits 13 501 516
Other 14 55,626 56,717
Total current liabilities
71,407 72,219
Non-current liabilities
Employee benefits 13 199 142
Provisions 67 54
Total non-current liabilities
266 196
Total liabilities
71,673 72,415
Net assets
1,537 1,537
Equity
Retained earnings 1,337 1,337
Reserves 200 200
Total equity
1,537 1,537
The Balance Sheet is to be read in conjunction with the
notes to the Consolidated Financial Statements set out on pages 34 to 55.
32
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
For the year ended 30 June 2018
STATEMENT OF CASH FLOWS
The Statement of Cash Flows is to be read in conjunction with the
notes to the Consolidated Financial Statements set out on pages 34 to 55.
Note 2018 2017
$000s $000s
Cash flows from operating activities
Cash receipts in the course of operations 47,160 49,037
Cash payments in the course of operations (50,520) (50,987)
Net cash from operating activities 17(b) (3,360) (1,950)
Cash flows from investing activities
Interest received 2,022 1,409
Proceeds from sale of fixed assets – –
Payments for property, plant and equipment (52) (48)
Payments for intangibles (629) (1,211)
Decrease/(increase) in cash on deposit 1,807 1,552
Net cash from investing activities 3,148 1,702
Net increase/(decrease) in cash held
(212) (248)
Cash at the beginning of the financial year 3,511 3,759
Cash at the end of the financial year 17(a) 3,299 3,511
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 33
For the year ended 30 June 2018
STATEMENT OF CHANGES IN EQUITY
The Statement of Changes in Equity is to be read in conjunction with the
notes to the Consolidated Financial Statements set out on pages 34 to 55.
Reconciliation of movements in capital and reserves attributable to members
Society
Reserve Fund
Retained
Earnings
Total
Equity
$000s $000s $000s
Balance at 1 July 2016 200 1,337 1,537
Total comprehensive profit – – –
Transfer between retained earnings
and reserves
– – –
Balance at 30 June 2017 200 1,337 1,537
Balance at 1 July 2017 200 1,337 1,537
Total comprehensive profit – – –
Transfer between retained earnings
and reserves – – –
Balance at 30 June 2018 200 1,337 1,537
34
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
1. SIGNIFICANT ACCOUNTING POLICIES
Audio-Visual Copyright Society Ltd trading as Screenrights
(the ‘Company’) is a company domiciled in Australia.
The consolidated financial report of the Company for the
financial year ended 30 June 2018 comprises the Company
and its subsidiary (together referred to as the ‘consolidated
entity’). The financial report was authorised for issue by the
Directors on 27 September 2018.
(a) Principal Activities
The principal activities of the Company during the course
of the financial year were utilisation of its right as a
declared collecting society under Part VA, s183 and Part
VC of the Copyright Act, to collect money from educational
institutions, government departments and agencies and
retransmitters for distribution to relevant copyright owners.
(b) Statement of compliance and basis
of preparation
The financial report is a general purpose financial report
which has been prepared in accordance with Australian
Accounting Standards (‘AASBs’) adopted by the Australian
Accounting Standards Board (‘AASB’) and the Corporations
Act 2001. The financial report of the consolidated entity
also complies with International Financial Reporting
Standards (IFRSs) adopted by the International Accounting
Standards Board.
The financial report is prepared in Australian dollars,
which is the Company’s functional currency. The Company
is of a kind referred to in ASIC Corporations (Rounding in
Financial / Directors’ Report) Instrument 2016/191 dated
24 March 2016 and in accordance with that Instrument
amounts in the financial report and Directors’ report have
been rounded off to the nearest one thousand dollars,
unless otherwise stated.
The financial report is prepared on the historical cost basis.
The preparation of a financial report in conformity with
Australian Accounting Standards requires management
to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates
and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these
estimates.
These accounting policies have been consistently applied
by each entity in the consolidated entity.
(c) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Company.
Control exists when the Company is exposed to, or has
rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through
its power over the entity. The financial statements of
subsidiaries are included in the consolidated financial
statements from the date that control commences until the
date that control ceases.
(ii) Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses
or income and expenses arising from transactions within
the consolidated entity are eliminated in preparing the
consolidated financial statements.
(d) Foreign currency transactions
Transactions in foreign currencies are translated at the
foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies at the balance date are translated to Australian
dollars at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are
recognised in profit or loss. Non-monetary assets and
liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at
the date of the transaction.
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 35
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(e) Derivatives
The consolidated entity is exposed to changes in interest
rates and foreign exchange balances. The consolidated
entity does not use derivative financial instruments to
hedge these risks.
(f) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment are stated at cost
or deemed cost less accumulated depreciation (see f(ii))
and impairment losses (see accounting policy j).
(ii) Depreciation
With the exception of freehold land, depreciation is charged
to profit or loss on a straight-line basis over the estimated
useful life of each part of an item of property, plant or
equipment. Land is not depreciated. The estimated useful
lives in the current and comparative periods are as follows:
• Plant and equipment – 3-10 years;
• Computer hardware/Laptops – 3 years;
The residual value, the useful life and the depreciation
method applied to an asset are reassessed at least
annually.
(iii) Leased assets
Leases in terms of which the consolidated entity assumes
substantially all the risks and rewards of ownership are
classified as finance leases. Upon initial recognition the
leased asset is measured at an amount equal to the lower
of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset is
accounted for in accordance with the accounting policy
applicable to that asset.
Other leases are operating leases and the leased assets
are not recognised on the consolidated balance sheet.
(g) Intangible assets
(i) Intangible assets
Intangible assets that are acquired by the consolidated
entity are stated at cost less accumulated amortisation
(see g(ii)) and impairment losses (see accounting policy j).
(ii) Amortisation
Amortisation is charged to profit or loss on a straight-line
basis over the estimated useful lives of intangible assets
from the date they are available for use. The estimated
useful lives in the current and comparative periods are
as follows:
• Capitalised software costs – 3-5 years
(h) Trade and other receivables
Trade and other receivables are stated initially at fair value
and then amortised cost less impairment losses (see
accounting policy j).
(i) Cash and cash equivalent
Cash and cash equivalents comprise cash balances, short-
term bills and call deposits.
(j) Impairment
The carrying amounts of the consolidated entity’s assets
are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any
such indication exists, the asset’s recoverable amount
is estimated (see accounting policy j(i)). An impairment
loss is recognised whenever the carrying amount of an
asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the profit or
loss. Impairment losses recognised in respect of cash-
generating units are allocated to reduce the carrying
amount of the other assets in the unit (group of units) on a
pro rata basis.
36
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(i) Calculation of recoverable amount continued
The recoverable amount of the consolidated entity’s
receivables carried at amortised cost is calculated as the
present value of estimated future cash flows, discounted
at the original effective interest rate (i.e. the effective
interest rate computed at initial recognition of these
financial assets). Receivables with a short duration are not
discounted. Impairment of receivables is not recognised
until objective evidence is available that a loss event
has occurred. Significant receivables are individually
assessed for impairment. Impairment testing of significant
receivables that are not assessed as impaired individually
is performed by placing them into portfolios of significant
receivables with similar risk profiles and undertaking a
collective assessment of impairment.
Non-significant receivables are not individually assessed.
Instead, impairment testing is performed by placing non-
significant receivables in portfolios of similar risk profiles,
based on objective evidence from historical experience
adjusted for any effects of conditions existing at each
balance sheet date.
The recoverable amount of other assets is the greater
of their fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an
asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
(ii) Reversals of impairment
Impairment losses are reversed when there is an indication
that the impairment loss may no longer exist and there
has been a change in the estimate used to determine
the recoverable amount. An impairment loss in respect
of a receivable carried at amortised cost is reversed if
the subsequent increase in the recoverable amount can
be related objectively to an event occurring after the
impairment loss was recognised. An impairment loss is
reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
(k) Employee benefits
(i) Defined contribution superannuation funds
Obligations for contributions to defined contribution
superannuation funds are recognised as an expense in
profit or loss as incurred.
(ii) Long-term service benefits
The consolidated entity’s net obligation in respect of
long-term service benefits is the amount of future benefit
that employees have earned in return for their service in
the current and prior periods. The obligation is calculated
using expected future increases in wage and salary rates,
including related on-costs and expected settlement
dates, and is discounted using the rates attached to the
Commonwealth Government bonds at the balance sheet
date which have maturity dates approximating to the terms
of the consolidated entity’s obligations.
(iii) Wages, salaries and annual leave
Liabilities for employee benefits for wages, salaries
and annual leave that are expected to be settled within
12 months of the reporting date and represent present
obligations resulting from employees’ services provided
to reporting date are calculated at undiscounted amounts
based on remuneration wage and salary rates that the
consolidated entity expects to pay as at reporting date,
including related on-costs such as workers compensation
insurance and payroll tax.
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 37
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(l) Provisions
A provision is recognised in the balance sheet when the
consolidated entity has a present legal or constructive
obligation as a result of a past event and it is probable that
an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting
the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value
of money and, where appropriate, the risks specific to
the liability.
(m) Trade and other payables
Trade and other payables are stated initially at fair value
and then amortised cost. Trade payables are non-interest-
bearing and are normally settled on 60-day terms.
(n) Distributions
The consolidated entity holds the net distributable amount
for each year in trust for rightsholders of the copyright
in film and television programs. These rightsholders
are eligible to receive the royalties held on their behalf
upon completing necessary documentation, including a
membership agreement and warranty. With respect to
the Statutory Service (Part VA, s183 and Part VC, Copyright
Act 1968), the distributable pool is allocated to all copied
programs, and actual distributions are made as and when
the required documentation is completed. Until this stage
is reached for a given title, all funds are held in trust for
the rightsholders of the copied program up to a period
of four years. The Board of Directors may decide that
special circumstances exist and continue to hold the pool
in trust for a maximum of two further years. The Board
has exercised this discretion for all relevant distribution
periods to date. After that period, the remaining
allocations that have not been distributed are forfeited and
placed into general revenue for inclusion in the current
distribution period in accordance with Guidelines issued
by the Attorney-General. In administering the Statutory
Service, the consolidated entity collects and distributes
remuneration payable by educational institutions. The
Distributable Amount is the total amount received
from record-keeping and sampling institutions for the
distribution period (financial year) together with bank
interest after deducting operating expenses, providing for
taxation if applicable and allocating the relevant portion to
the Reserve Fund. Results of record-keeping and sampling
procedures are collated so that the total number of
minutes for each program title and episode is ascertained.
Allocations are made to each program according to the
number of minutes copied and the type of program. Once
an allocation per program by title has been established, a
further allocation is made to the various forms of copyright
subsisting in the programs (e.g. cinematograph films,
literary/dramatic works, artistic works, sound recordings).
Claimants warrant that they own or control the relevant
copyright in one or more of these components and at
the close of the distribution period are paid accordingly.
This same process has been instituted for the allocation
and distribution of royalties for the copying of programs
by educational institutions in New Zealand. This is so
even though the mechanism of conducting the service is
different, with the Company licensing this recording right in
New Zealand on behalf of the rightsholders. With respect
to the international registration and collection process,
the Company simply distributes the royalties it receives
from other audiovisual societies for titles it has registered
on behalf of the rightsholders. The Company follows the
allocations set by the relevant society and only makes
an adjustment for interest and the expenses incurred in
providing the service for its members.
(o) Revenue and other income
Revenues are recognised at fair value of the consideration
received net of the amount of goods and services tax (GST)
payable to the taxation authority.
(i) Revenue from rendering services
Royalty receipts are based partly on information provided
by copyright users. Receipts are generally determined
either based on agreed rates per user, or agreed rates
overall. Revenue is recognised over the period for which
the copying licence has been granted.
38
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(ii) Interest income
Interest is generally recognised as it accrues, taking into
account the effective yield on the financial asset.
(iii) Net gain/loss on disposal of property, plant
and equipment
The net gains of non-current asset sales are included as other
income at the date control of the asset passes to the buyer,
usually when an unconditional contract of sale is signed.
The net losses on non-current asset sales are included in
other expenses. The gain or loss on disposal is calculated
as the difference between the carrying amount of the asset
at the time of disposal and the gross proceeds on disposal.
(p) Income tax
The Income Tax Assessment Act 1997, as amended by the
Tax Laws Amendment (2004 Measures No 6) Act 2005,
provides the following for collecting societies:
• Collecting societies will not be taxed on any copyright
income that they collect and hold on behalf of members,
pending allocation to them;
• Non-copyright income derived by collecting societies will
not be taxed (provided that the amount of non-copyright
income derived is within certain limits); and
• Any copyright and non-copyright income collected or
derived by the collecting society that is exempt from
income tax is included in the assessable income of the
members upon distribution.
The amending Act contains definitions of:
(a) Declared collecting society;
(b) Collecting society;
(c) Copyright income, which includes licence fees and
interest received or derived from the copyright income.
Non-copyright income is subject to a de minimis rule.
Non-copyright income of collecting societies will be exempt
from income tax to the extent that this non-copyright income
does not exceed the lesser of:
• 5% of the total amount of copyright income and non-
copyright income of the collecting societies for the
income year; and
• $5 million or such other amount as is prescribed by
the regulations.
The Society will not be taxed on any copyright income
(defined as ordinary or statutory royalties/licence fees and
interest received or derived by the Society) it collects and
holds on behalf of members, pending allocation to them.
Additionally, the Society will not be taxed on non-copyright
income to the extent that this non-copyright income does
not exceed the above specified limitations.
(q) Goods and services tax
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expense. Receivables and payables are
stated with the amount of GST included. The net amount
of GST recoverable from, or payable to, the Australian Tax
Office (ATO) is included as a current asset or liability in the
balance sheet. Cash flows are included in the statement of
cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which
are recoverable from, or payable to, the ATO are classified
as operating cash flows.
(r) New standards and interpretations not yet adopted
A number of new standards and amendments to standards
are effective for annual periods beginning after 30 June
2017, and have not been applied in preparing these
financial statements. None of these is expected to have
a significant effect on the financial statements of the
Company, except for:
• AASB 9 Financial Instruments, which becomes
mandatory for the Company’s 2019 financial statements
and could change the classification and measurement of
financial assets.
• AASB 15 Revenue, which becomes mandatory for the
Company’s 2019 financial statements and could change
when revenue is recognised.
• AASB 16 Leases, which becomes mandatory for the
Company’s 2020 financial statements and could change
the classification and measurement of leases.
The Company does not plan to adopt these standards early
and the extent of the impact has not been determined.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 39
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
2. RECONCILIATION OF INCOME STATEMENT
Note 2018 2017
$000s $000s
Revenue from rendering of services:
– Statutory Royalty Receipts (Part VA) 30,946 30,237
– Statutory Royalty Receipts (Part VC) 9,236 9,087
– International Collection Service 1,818 1,292
– Government Copying 1,576 1,558
– NZ Educational Service 2,253 2,322
– Disbursements by Screenrights 2,132 582
– EnhanceTV Resource Centre 311 336
Total revenue 48,272 45,414
Other income 3 1,597 1,750
Total revenue and other income 49,869 47,164
Employee expenses 4 (4,874) (4,716)
Depreciation and amortisation expense (436) (169)
Operating expense (2,332) (2,119)
Licensing expense (23) (117)
Travel expense (73) (67)
Marketing expense (149) (94)
Legal expense
(53) (99)
Other expenses 5 (206) (202)
Net royalties collected and interest received
thereon before income tax
41,723 39,581
Income tax benefit
– –
Net royalties collected and interest received
thereon after income tax
41,723 39,581
40
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
2. RECONCILIATION OF INCOME STATEMENT CONTINUED
Note 2018 2017
$000s $000s
Royalties paid and payable:
Add expired statutory trust funds 405 492
Less amount transferred to statutory
VA distributable pool 2017 – (26,653)
Less amount transferred to statutory
VA distributable pool 2018 14 (26,921) –
Less amount transferred to statutory
VC distributable pool 2017 – (8,154)
Less amount transferred to statutory
VC distributable pool 2018 14 (8,106) –
Less amount transferred to statutory s183
distributable pool 2017 – (1,443)
Less amount transferred to statutory s183
distributable pool 2018 14 (1,382) –
Less amount transferred to
New Zealand distributable pool 2017 – (1,996)
Less amount transferred to
New Zealand distributable pool 2018 14 (1,878) –
Disbursements by Screenrights (2,132) (582)
International Collection Service (1,709) (1,245)
Net royalties paid and payable
(41,723) (39,581)
Net operating profit (loss)
– –
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 41
3. OTHER INCOME
2018 2017
$000s $000s
Interest and other income
– Part VA interest income 1,025 1,088
– Part VC interest income 316 359
– Bank interest for International Collections Service
(non-statutory) 72 81
– Government Copying interest income 50 116
– Bank interest for NZ Educational Service (non-statutory) 48 73
– Bank interest for ISAN 1 1
- DASA and interest 82 28
– Non trust interest income 3 4
1,597 1,750
4. EMPLOYEE EXPENSES
Wages and salaries (including director fees) 4,122 4,022
Contributions to defined contribution superannuation funds 416 393
(Decrease)/Increase in liabilities for annual and long service leave
42 20
Other employee expenses 294 281
4,874 4,716
5. OTHER EXPENSES
NZ educational service expenses 127 119
Recruitment expenses 16 18
International Standard AV Numbering (ISAN) 17 11
Other 46 54
206 202
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
42
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
6. AUDITOR’S REMUNERATION
2018 2017
$000s $000s
Audit services 56 56
Non-audit services 3 3
59 59
7. TAXATION
Audio-Visual Copyright Society Limited was granted tax exempt status effective 1 July 2002. EnhanceTV Pty Ltd
(the Company’s controlled entity) was incorporated on 15 May 2006 and is not tax exempt. In the current financial
year, EnhanceTV Pty Ltd did not make a profit. As a consequence there is no tax expense for the consolidated entity
(2017: $Nil). As at 30 June 2018, EnhanceTV has carried forward losses of $32,426 (2017: $32,426). No tax losses
have been recognised as a deferred tax asset.
8. CASH ASSETS
2018 2017
$000s $000s
Cash at bank 3,299 3,511
Cash on deposit 63,752 65,559
67,051 69,070
The interest rate at 30 June 2018 on cash accounts is 1.00% (2017: 1.00%) which is the prevailing interest rate on
cash at bank. The cash on deposit with banks mature within 240 days. The weighted average interest rate at
30 June 2018 on cash on deposit is 2.69% (2017: 2.66%).
9. TRADE AND OTHER RECEIVABLES
2018 2017
$000s $000s
Trade receivables 3,730 2,023
Sundry receivables 301 975
4,031 2,998
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 43
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
10. PROPERTY, PLANT & EQUIPMENT
Plant and
equipment
Total
$000s $000s
Cost
Balance at 1 July 2016 1,597 1,597
Acquisitions 48 48
Balance at 30 June 2017 1,645 1,645
Balance at 1 July 2017 1,645 1,645
Acquisitions 51 51
Balance at 30 June 2018 1,696 1,696
Accumulated depreciation
Balance at 1 July 2016 1,062 1,062
Depreciation charge for the year 116 116
Balance at 30 June 2017 1,178 1,178
Balance at 1 July 2017 1,178 1,178
Depreciation charge for the year 118 118
Balance at 30 June 2018 1,296 1,296
Carrying amounts
At 1 July 2017 467 467
At 30 June 2018 400 400
44
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
11. INTANGIBLES
Computer
software WIP Total
$000s $000s $000s
Cost
Balance at 1 July 2016 801 194 995
Acquisitions 115 1,096 1,211
Balance at 30 June 2017 916 1,290 2,206
Balance at 1 July 2017 916 1,290 2,206
Acquisitions 1,863 (1,234) 629
Balance at 30 June 2018 2,779 56 2,835
Accumulated amortisation
Balance at 1 July 2016 736 – 736
Amortisation charge for the year 53 – 53
Balance at 30 June 2017 789 – 789
Balance at 1 July 2017 789 – 789
Amortisation charge for the year 318 – 318
Balance at 30 June 2018 1,107 – 1,107
Carrying amounts
At 1 July 2017 127 1,290 1,417
At 30 June 2018 1,672 56 1,728
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 45
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
12. TRADE AND OTHER PAYABLES
2018 2017
$000s $000s
Trade and other creditors 342 357
Accrued expenses 402 271
744 628
13. EMPLOYEE BENEFITS
2018 2017
$000s $000s
Current
Liability for annual leave 249 262
Liability for long service leave 252 254
501 516
Non-current
Liability for long service leave
199 142
199 142
14. OTHER CURRENT LIABILITIES
2018 2017
$000s $000s
Cultural Fund 382 –
Trust – IBNR Fund 1,064 905
Trust – Artistic Works 1,595 1,887
3,041 2,792
46
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
14. OTHER CURRENT LIABILITIES CONTINUED
2018 2017
$000s $000s
Trust – Statutory
2012 VA Distributable amount payable to copyright owners – 421
2013 VA Distributable amount payable to copyright owners 383 681
2014 VA Distributable amount payable to copyright owners 638 1,278
2015 VA Distributable amount payable to copyright owners 820 1,801
2016 VA Distributable amount payable to copyright owners 1,586 3,694
2017 VA Distributable amount payable to copyright owners 3,056 26,653
2018 VA Distributable amount payable to copyright owners 26,921 –
2012 VC Distributable amount payable to copyright owners 147 434
2013 VC Distributable amount payable to copyright owners 265 381
2014 VC Distributable amount payable to copyright owners 374 560
2015 VC Distributable amount payable to copyright owners 443 794
2016 VC Distributable amount payable to copyright owners 655 1,248
2017 VC Distributable amount payable to copyright owners 1,189 8,154
2018 VC Distributable amount payable to copyright owners 8,106 –
2012 s183 Distributable amount payable to copyright owners – 29
2013 s183 Distributable amount payable to copyright owners 35 70
2014 s183 Distributable amount payable to copyright owners 14 22
2015 s183 Distributable amount payable to copyright owners 19 96
2016 s183 Distributable amount payable to copyright owners 17 114
2017 s183 Distributable amount payable to copyright owners 171 1,443
2018 s183 Distributable amount payable to copyright owners 1,382 –
Sound Recordings Distributable amount 31 34
46,252 47,907
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 47
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
14. OTHER CURRENT LIABILITIES CONTINUED
2018 2017
$000s $000s
Trust – Non-statutory
NZ Educational Services:
2012 Distributable amount payable to copyright owners – 90
2013 Distributable amount payable to copyright owners 103 156
2014 Distributable amount payable to copyright owners 129 204
2015 Distributable amount payable to copyright owners 162 274
2016 Distributable amount payable to copyright owners 200 366,
2017 Distributable amount payable to copyright owners 348 1,996
2018 Distributable amount payable to copyright owners 1,878 –
Disbursements by Screenrights 905 349
International Collection Service 2,608 2,583
6,333 6,018
55,626 56,717
15. EQUITY
Retained earnings
Funds held as part of the Company’s retained earnings will be used for the benefit of all members at the discretion of
the Board.
Reserve Fund
In accordance with 15.4(c) of the Articles of Association, the Company is required to establish a reserve fund.
From time to time, the Board will authorise funds to be released from the reserve fund to meet the costs of
abnormal or exceptional expenditure.
16. FINANCIAL RISK MANAGEMENT
(a) Overview
The consolidated entity has exposure to the following risks from the use of financial instruments:
• Credit risk;
• Liquidity risk; and
• Market risk.
48
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
16. FINANCIAL RISK MANAGEMENT CONTINUED
(a) Overview continued
This note presents information about the consolidated entity’s exposure to each of the above risks, their objectives, and
the policies and processes for measuring and managing risk. Further quantitative disclosures are included in this note.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board has established the Audit & Risk Committee, which is responsible for developing and
monitoring risk management policies. The Committee reports regularly to the Board on its activities.
Risk management policies are established to identify and analyse the risks faced by the consolidated entity, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the consolidated activities. The Company
and its subsidiary, through their training and management standards and procedures, aim to develop a disciplined
and constructive control environment in which all employees understand their roles and obligations.
The
Audit & Risk
Committee oversees how management monitors compliance with the consolidated entity’s risk
management
policies and procedures, and reviews the adequacy of the risk management framework in relation to
the risks faced by the consolidated entity.
Credit risk
Credit risk represents the loss that would be recognised if a customer or counterparty failed to perform their
contractual obligations and arises principally from the consolidated entity’s receivables from licensees and
investments in short-term deposits.
Trade receivables
The consolidated entity’s exposure to credit risk is influenced mainly by the individual characteristics of each licensee.
Concentrations of credit risk are minimised by undertaking transactions with a large number of licensees and
counterparties with no geographical concentration of credit risk.
Approximately 70% of the consolidated entity’s revenue base is attributable to general licensing in Australia, where
licensee fees are paid at the beginning of the licence period, normally 12 months. The Audit & Risk Committee has
established a credit policy under which defaulting licensees are pursued rigorously.
The consolidated entity has established, where necessary, an allowance for impairment that represents its estimate
of incurred losses in respect of trade and other receivables. The main component of this allowance is for trade debtor
balances assessed on an individual account basis and provided for when recovery is considered doubtful.
Investments in short-term deposits
The consolidated entity minimises credit risks in relation to its investments in short-term deposits by only dealing
with Australian banks maintaining an acceptable credit rating.
Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its obligations as they fall due.
The consolidated entity’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and unusual conditions, without incurring unacceptable losses or
risking damage to the consolidated entity’s reputation.
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 49
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
16. FINANCIAL RISK MANAGEMENT CONTINUED
Liquidity risk continued
Typically the consolidated entity ensures that it has sufficient cash on demand to meet expected member distributions
and operational expenses for a period of 60 days; this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters. The consolidated entity has additional deposits invested for
short terms varying from 30 to 240 days.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect
the consolidated entity’s income or the value of its holding of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising
the return.
Interest rate risk
The consolidated entity is exposed to interest rate risk in relation to its cash and cash on deposit balances.
The weighted average interest rate on cash and cash on deposit of $67,051,110 at 30 June 2018 is 2.61%
(2017: $69,069,548 – 2.57%). It is the Company’s policy not to hedge this exposure to interest rate risk.
Currency risk
The consolidated entity receives royalties from overseas affiliates in foreign currencies. It is group policy not to
hedge this exposure to foreign exchange risk.
Fair values
The carrying value of financial assets and liabilities in the balance sheet approximates their fair values.
(b) Financial transactions
Credit risk
Exposure to credit risk
The carrying amount of the consolidated entity’s financial assets represents the maximum credit exposure.
The consolidated entity’s maximum exposure to credit risk at the reporting date was:
2018 2017
$000s $000s
Trade and other receivables 4,031 2,998
Cash and cash equivalents 3,299 3,511
Cash on deposit 63,752 65,559
71,082 72,068
50
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
16. FINANCIAL RISK MANAGEMENT CONTINUED
(b) Financial transactions continued
Impairment losses
The ageing of the consolidated entity and the Company’s trade receivables at the reporting date was:
2018 2017
$000s $000s
Not past due 1,204 987
Past due 0-30 days 801 56
Past due 31-120 days 111 541
Past due 121 days 1,615 439
3,730 2,023
As at 30 June 2018, the Consolidated Entity did not recognise a provision for impairment due to the Directors being
of the opinion that the amounts receivable are recoverable (2017: $Nil).
Liquidity risk
The contractual maturities of financial liabilities, as represented by trade and other payables (Note 12) and other
current liabilities (Note 14), are all within one year. The carrying amount of these liabilities also represents the
contractual cash flows.
Currency risk
Exposure to currency risk
The exposure to foreign currency risk at balance date was as follows, based on notional amounts:
2018 2017
AUD equivalent of NZD exposure
$000s $000s
Trade receivables 75 66
Total balance sheet exposure 75 66
The following significant exchange rates applied during the year:
Average rate
2018
Average rate
2017
Spot rate
2018
Spot rate
2017
New Zealand Dollar 1.0874 1.0575 1.0913 1.0495
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 51
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
16. FINANCIAL RISK MANAGEMENT CONTINUED
(b) Financial transactions continued
Sensitivity
A 10% strengthening/weakening of the Australian Dollar against the New Zealand Dollar at 30 June would have
increased/(decreased) the consolidated entity’s profit/(loss) by $7,537 at 30 June 2018 (2017: $6,619). This analysis
assumes that all other variables, in particular interest rates, remain constant.
Interest rate risk
Profile
At the reporting date the interest rate profile of the consolidated entity’s interest-bearing financial instruments was:
Carrying Amount
2018 2017
$000s $000s
Fixed rate instruments
Cash on deposits
63,752 65,559
Variable rate instruments
Cash at bank 3,299 3,511
Sensitivity analysis
If interest rates had changed by plus (or minus) 100 basis points per annum from the year end interest rate, with
all other variables held constant, the consolidated entity profit for the year would have been $32,990 (2017: $35,110
higher (lower)).
52
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
17. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of cash
For the purposes of the Statement of Cash Flows, cash includes cash on hand and at bank and short term deposits
at call. Cash as at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related
items in the balance sheet as follows:
2018 2017
$000s $000s
Cash 3,299 3,511
3,299 3,511
(b) Reconciliation of cash flows from operating activities
Operating profit (loss) – –
Add/(less) items classified as investing activities:
Interest received (2,022) (1,409)
Add/(less) non-cash items:
Gain on sale of non-current assets – –
Depreciation and amortisation 436 169
Net cash utilised by operating activities before change in
assets and liabilities (1,586) (1,240)
Change in assets and liabilities:
(Increase)/decrease in trade and other receivables (1,009) 2,061
Increase/(decrease) in trade creditors and accruals 116 (30)
Increase/(decrease) in royalties in advance 178 764
Increase/(decrease) in provision for employee entitlements 43 20
Increase/(decrease) in provisions 12 12
Increase in distributable amounts (1,114) (3,537)
Net cash (used in)/provided by operating activities (3,360) (1,950)
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 53
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
18. RELATED PARTY DISCLOSURES
Key management personnel compensation
The key management personnel compensation included in ‘employee expenses’ (see Note 4) is as follows:
2018 2017
$000s $000s
Short-term employee benefits 1,899 2,081
Post-employment benefits 118 187
Other long-term benefits 38 42
2,056 2,310
Statement of management remuneration
Salary range*
Screenrights Executives
in range 2017/18
Screenrights Executives
in range 2016/17
$0-99k 4** 2**
$100-149k – –
$150-199k 2 1
$200-249k 3 4
$250-299k 2 1
$300-400k – 1
* Includes superannuation and incentive payments
** Includes executives who held a key management position for part of the year
Other key management personnel transactions with the Company or its controlled entities
A number of key management persons of the Company, or their related parties, hold positions in other entities
that result in them having control or significant influence over the financial or operating policies of these entities.
A number of these entities transacted with the Group in the reporting period. The terms and conditions of the
transactions with key management personnel and their related parties were no more favourable than those
available, or which might reasonably be expected to be available, on similar transactions to non-key management
personnel related entities or on an arm’s length basis. Related entities of David Anderson, Geoffrey Atherden
Kim Dalton, Ben Grant, Chris Oliver-Taylor, Dean Ormston and Victoria Spackman, or entities in
which they hold a management position, are entitled to distributions calculated in accordance with Note 1(n).
Apart from the details disclosed in this note, no key management personnel have entered into a material contract
with the Company or consolidated entity since the end of the previous financial year and there were no material
contracts involving key management personnel interests subsisting at year end.
54
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
18. RELATED PARTY DISCLOSURES CONTINUED
Loans to key management personnel
There were no loans to key personnel at any time during the year ended 30 June 2018.
Controlled entity
On 15 May 2006, Audio-Visual Copyright Society Limited (the Company) established a wholly owned subsidiary
company called EnhanceTV Pty Ltd. The objectives of the Company are to operate as an educational resource
centre and to operate as a distribution outlet for the Australian educational market. At 30 June 2018, in respect of
management fees, the company owed the subsidiary $179,427 (2017: the subsidiary owed the company $194,110).
19. MEMBERS’ LIABILITY
The Company is a company limited by guarantee. The guarantee of members in the event of the winding up of the
Company is $10 for each member. At 30 June 2018, membership of the Company comprised 4,227 full members
(2017: 4,107 ), resulting in a total guarantee of $42,270 (2017: $41,070).
20. COMMITMENTS FOR EXPENDITURE
Operating leases – leases as lessee
Non-cancellable operating leases rentals are payable as follows:
2018 2017
$000s $000s
Less than one year 311 166
Between one and five years 1,267 –
Later than five years – –
21. CONTINGENT LIABILITY
The Company is defending an action brought by the Australian Writers’ Guild (AWG) and the Australian Writers’ Guild
Authorship Collecting Society (AWGACS) in the Federal Court of Australia claiming amongst other things that the
Company has failed to pay scriptwriters their royalty entitlements. The Company has filed its defence which wholly
rejects these claims. The Company’s insurers are paying the costs of the court case. The Company believes that the
defence against the action will be successful.
SCREENRIGHTS ANNUAL REPORT 2017–2018 | 55
For the year ended 30 June 2018
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
22. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ended 30 June 2018, the parent entity of the consolidated entity was
Audio-Visual Copyright Society Limited.
2018 2017
$000s $000s
Result of parent entity
Profit/(loss) for the period – –
Other comprehensive income – –
Total comprehensive profit/(loss) – –
Financial position of parent entity at year end
Current assets 71,067 72,107
Total assets 73,196 73,992
Current liabilities 71,361 72,226
Total liabilities 71,627 72,423
1,569 1,569
Total equity of the parent entity comprising of:
Retained earnings 1,369 1,369
Reserves 200 200
Total equity
1,569 1,569
The directors are of the opinion that a provision is not required in respect of the litigation referred to in Note 21 and
the parent entity does not have any other contingent liabilities as at 30 June 2018 (2017: $Nil)
23. SUBSEQUENT EVENTS
There have been no events subsequent to balance date which would have a material effect on the consolidated entity’s
financial statements at 30 June 2018.
56
AUDIO-VISUAL COPYRIGHT SOCIETY LIMITED
SUPPLEMENTARY REPORTING FOR EACH
AUSTRALIAN STATUTORY LICENSEE CLASS
APPENDIX
Commonwealth
Government
$
State and
Territory
Governments
$
Schools
$
Universities
$
TAFE
$
Other
Australian
Educational
Institutions
$
TOTAL
$
Total licence
fees received
59,672 1,516,504 25,187,148 5,491,568 224,203 42,510
32,521,605
Income on
investments
of licence fees
1,896 48,173 834,035 181,845 7,424 1,408
1,074,781
Total amount
allocated to
members
52,311 1,329,441 21,911,066 4,777,282 195,041 36,981
28,302,122
Total amount
paid to
members
56,335 1,431,702 22,298,395 4,861,732 198,489 37,634
28,884,287
Total amount
of licence fees
held in trust
70,613 1,794,551 27,904,679 6,084,073 248,393 47,097
36,149,405
Total licence
fees for which
the trust period
expired*
836 21,251 170,597 37,195 1,519 288
231,686
For the year ended 30 June 2018
* Licence fees for which the trust period expired during the year are recorded in separate distribution pools for Government and
Education. Any further breakdown by statutory licensee class is calculated pro rata, based on licence fees received.
3
Artwork and print production:
Susan Oliver 0411 33 65 88
Printed in Australia 2018
4
Screenrights
ABN: 76 003 912 310
Level 1, 140 Myrtle Street
Chippendale NSW Australia 2008
Email info@screenrights.org
screenrights.org
Australia
Phone +61 2 9904 0133
Fax +61 2 9904 0498
New Zealand
Freephone 0800 44 2348
Freefax 0800 44 7006
