Melbourne Community Television Consortium Ltd ACN 104 562 076
2007/2008 1 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
2 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Melbourne Community Television Consortium Limited Financial Statements For the Year Ended 30 June 2008 CONTENTS Reports Assembly Report Chairmans Report General Manager’s Report Financial Report Programming Report The 2008 Antenna Awards
Financial Statements Directors’ Report Auditor’s Independence Declaration Income Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Directors’ Declaration Independent Audit Report
4 5 6 7 8 9
10 18 19 20 21 22 23 34 35
3 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Assembly Report 2007/2008 Peter McArthur – Assembly President
Once again C31 has had a very pleasing year as our members continue to produce fine community programs. I believe our business model for community television is the best in Australia, and this has been demonstrated recently by the station’s continued stability in the face of the global economic situation. Thanks to our General Manager, Greg Dee, for implementing and overseeing the solid position we are in. I am an optimist and confident there is a strong future for our station. We are working with the Federal Government to finalise the arrangements for digital transmission. We have a passionate and dedicated group of people involved in the station – members, management and staff – who all work to achieve a TV station infused with community spirit. It is a pleasure to be involved. C31 has become a household name throughout Melbourne and Geelong. As technology advances, I hope our transmissions will be able to be seen across all of Victoria. This is not something that can happen tomorrow, but it is certainly something to think and talk about for the future.
4 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
This station has provided Melbourne and Geelong people and community organisations with the opportunity to have their say and be seen on television, something which was very rare until C31 started broadcasting in 1994. It is something of which we should all be proud. My thanks to Peter Lane (Board Chairman), Greg Dee (General Manager) and Matthew Sharp (Company Secretary) for their dedication towards a strong future for C31.
Chairman’s Report 2007/2008 Peter Lane
It is time to look ahead to a permanent home for community television on the digital airwaves. The Federal Government has committed to giving community television access to digital broadcasting, and are in the process of developing the details of implementation. The station now needs to look at developing long term sustainability into the digital age. The place to start is by identifying the core of our success so far. The Melbourne Community Television Consortium Ltd model differs from other models in many ways. These include: • Community access to decision making at both Board and policy levels. • Guaranteed access to airtime for community producers, and multiple points of access. • Sponsorship at an affordable level for local business. I believe it is our unique mix of community access and sound business management that has made the station successful, and that both are essential for a healthy future.
The priorities for the coming year are to: • Ensure stable revenue. • Continue to pursue affordable digital transmission as soon as possible. • Further develop training and support for community producers to increase their production capability and sustainability. We have achieved much already. However, 2008 is proving to be an uncertain time for individuals, communities and business. As I write, the community television service in Perth has ceased broadcasting due to financial difficulties. At C31 Melbourne we are confident of maintaining financial stability and achieving continued growth, despite a significant reduction in State Government sponsorship support, due to our robust sponsorship model. I would like to thank all Board Members and staff for their time and input this year.
As hope turns to certainty with digital, it is time to further develop ways to meet community needs in balance with efficiency. We will continue to review the station to ensure we have the best possible business model, structure and programming access in a changing world. 5 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
General Manager’s Report 2007/2008 Greg Dee
The last year has been another period of solid growth for C31. Programming has remained strong, with increasing numbers of people and organisations seeking access to airtime. We have invested $353,000 in our transmitter, doubling the broadcast power to 10kW. Although the transmitter is currently running in analogue mode, it can be easily converted to digital. This gives us flexibility when the time comes to start broadcasting in digital. Audience viewing figures have held steady despite the increase in digital take-up. Currently the station is viewed by around 1.45 million people each month. The new Federal Labour government continues to work openly and willingly with C31 and the community television sector to find an appropriate method of achieving digital broadcasting. We thank the minister, Senator Stephen Conroy, and his staff for their efforts in working to resolve this issue. After four and a half years of continued State Government sponsorship support, the arrangement was terminated by the government at the end of June 2008. This required some cost reductions in both staffing and operations. The station has taken this development on as a challenge, and the Sales team has stepped up to the mark with some great results, with sponsorship revenue on the rise. This new found vigour has energised the station, and we have continued into the new financial year with a positive mindset and a continued strong income stream. 6 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
The station has begun developing a range of training DVDs designed specifically to meet the needs of community television producers. The topics covered so far include audio; legals and sponsorship; camera and lighting; and post production. We have received very positive feedback from our producers about the DVDs, and intend to continue expanding the range in the future. Our new look website, with an increased focus on streamed videos of our programs, has given audiences an additional chance to watch their favourite shows. The site averages around 50,000 video viewings each month, with many viewers watching entire programs on line. C31 is now in its strongest position ever. We have a reliable income stream; we own our own transmitter, presentation suite and studio facilities; and we have a truly diverse range of very talented community producers. We are ready to take on the future, certain that C31 will remain a permanent fixture in Melbourne’s television viewing.
Financial Report 2007/2008 Amy Herbohn, Finance Manager
The figures for the 2007/08 financial year were quite positive, despite C31 undergoing a few financial hiccups towards the end of the year. These were due to State Government media buyers Mitchells, wishing to pull sponsorship announcement spending as of January 2008. With vigorous negotiations however the contract was extended to June 2008 with reduced spending continuing on after this date. This has allowed C31 time to plan for the future, making some trims on expenses and restructuring some roles within the company before the agreement ended. The result has been an achievable, if not conservative budget for the 2009 financial year which should allow C31 to reach and exceed budgets throughout the next financial year. In light of these changes it is quite encouraging that Melbourne Community Television has continued its positive trend of returning a surplus for the year. Although the $45,788 surplus is lower than budgeted, this is still quite an achievement especially considering $134,100 was expended during the year on upgrading the transmitter from the existing 5kW to 10kW.
The increase in quality of reception seems to have somewhat counteracted any digital impact as viewing figures remain strong. This has helped the station to raise $2.755M in revenue during the year which is considerably higher than previous years – a very positive result considering the lack of digital access. These results are also very encouraging in light of recent meetings with the Federal Government that seem to promise imminent access to digital which will further increase C31s reach and hopefully also increase sponsorship revenue figures. Indeed the future of Melbourne Community Television looks bright and is tribute to its ability to soldier on against the odds, assisted by some wonderful support from the Melbourne & Geelong community.
7 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Programming Report 2007/2008 The Programming Team – Elisa Allen, Kat Barron, Laura Kelly, Lisa Richardson
C31’s programming has continued to expand during the 2007/08 financial year, with the station broadcasting an average of 90 first-run locally produced programs every week. C31 continues to lead the way as the strongest community television station for new local content. C31 reflects the increased demand for airtime with an exciting, diverse grid, themed nights, and more flexibility to include seasonal sports and programs starting and ending out of fixed season dates. Strong, diverse local programming is an integral part of the station’s push for digital, and programs are continuing to improve in quality. The C31 studio continues to be in strong demand. A live one hour program is broadcast from there every weekday, and it is used for the production of a increasing number of pre-recorded programs. C31 and Open Channel continue to develop a strong relationship. In the last financial year a television production course was structured for students to learn how to make a show and have it broadcast on C31. This covered the initial idea and pitching stage, through to preproduction, production and post production. C31 also continues to offer camera kits at Open Channel to C31 producers at a special low rate of $50 per day that are in high demand.
8 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
In the 2007/ 2008 financial year, C31 welcomed 22 brand new locally made shows (not including returning programs or one off specials): • Our Melbourne • Gasolene • Bite Size • The Magic of Musicals • Sophie’s Wedding Guide • IMA – Interactive Martial Arts • Teenie Weenie Greenies • The Melbourne Update • Snow Rave • Open TV • Room to Grow • Viva Melbourne • Wrokdown • Trak Attak • Going 4WD • The Blue Line • Love Bunker • The Surfers Life • The Jazz Show • 100% Pure Fishing • Inline Plus • Conflict of Interest
The 2008 Antenna Awards Simon Myers, Antennas Producer
The 2008 Antenna Awards were presented at BMW Edge at Federation Square in Melbourne on Thursday April 24th 2008. This year for the first time the awards were not broadcast live. Instead the Antennas were recorded “as live” and shown nationally at 7.30pm on Sunday 27th April, ensuring the interstate producers unable to attend were able to watch the program. The 2008 Antennas was a great opportunity for all to meet, celebrate and reward the makers of community television, whilst also focusing on the essential role community television has in representing the many diverse communities of Australia. The event itself was again a sell-out, with over 450 people gathering in the BMW Edge. All states were represented well on the night which captured the excitement of celebrating and recognising the national community television sector. All the artists performing at this year’s awards agreed to do so completely free of charge.
This was a fantastic show of support for community television by these performers: • The Pearly Shells – 12 piece Swing Orchestra • Swing Thing - Circus / Acrobatic Trio • Folk Waves – Bollywood Dance Ensemble • Nicky Bomba and the Melbourne Ska Orchestra - Ska Big Band For the first time the services of Bella P.R., a public relations company, were contracted to help lift the profile of the Antennas. Whilst well know amongst the community TV sector, these awards are relatively unknown to the wider community. Bella agreed to work on the awards and came on board as a sponsor of C31 Melbourne. VIPS who attended and presented awards included: • The Hon. Peter Batchelor - Minister for the Department of Communities and Planning • Corrine Grant - Comedian • Chris Chapman - CEO of the Australian Media and Communications Authority • David Parker – Film Producer • Graeme Hill – Head of Programming, Seven Network • Amy Parks – Reporter, Nine Network News The 2008 Antenna Awards was an exceptional night of celebration and entertainment for all involved in community television around Australia. The awards achieved success in demonstrating the diversity of the national community television sector, a key factor in making it a valuable part of the Australian media landscape.
Photo: Sustainable Image - www.sustainableimage.com.au
9 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Directors’ Report 30 June 2008
Back row (L-R): Paul Spanos, Walter Adamson, Noel Fanning, Joe Varga, Tom Padula, Louis-robert Stomm, Campbell Manderson, Scott Star, David Wong Front row (L-R): Ben Todica, Peter McArthur, Peter Lane, Bec Brown
Your directors (acting as the Committee) present their report on the company for the financial year ended 30 June 2008. Directors The names of the directors in office at any time during, or since the end of, the year are as follows: During the financial year, meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: 10 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Directors Meetings Board directors appointed as at June 30th 2008
Name Campbell Manderson Peter McArthur Tom Padula Peter Lane (Chair) David Wong Alex Jobbagy Ben Todica Walter Adamson Sudha Saini Bec Brown Paul Spanos Louis-robert Stomm Joe Varga Christina Critch Noel Fanning Gladys Liu Scott Star
Eligible to Attend
14 14 14 14 14 14 13 13 12 11 9 9 9 9 7 5 3
13 13 13 12 10 9 13 11 9 10 9 9 8 2 2 3 3
Term finished at 2007 AGM; co-opted by Board for 2008 Appointed alternate directors 26-7-07 to 4-10-07 Appointed as alternate by Simon Moore 25-10-07; Term commenced at 2007 AGM Term commenced at 2007 AGM Term commenced at 2007 AGM Term commenced at 2007 AGM Term commenced 31-1-08 Term commenced 25-3-08 Term commenced 15-5-08
11 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Directors Meetings Board directors whose terms finished during the financial year
Name Wah Yeo Matthew Sharp Taswinder Minhas Simon Meyer Gregory Vaisman Luki Kalonta Roman Zapedowski Janja Jamon Nick Bassett Simon Moore Lisa Fagan Judy Magassy Stanley Chang Julio Altamirano
Eligible to Attend
7 6 5 5 5 5 5 5 4 3 2 1 1 1
6 6 3 3 3 1 0 0 0 0 2 1 1 0
12 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Notes: Term commenced 23-8-07; resigned 31-1-08 Term finished at 2007 AGM; coopted by the Board for 25-3-08 meeting only Term finished at 2007 AGM Term finished at 2007 AGM Term finished at 2007 AGM Term finished at 2007 AGM Term finished at 2007 AGM Term finished at 2007 AGM Term commenced 23-8-07; term finished at 2007 AGM Term finished at 2007 AGM; appointed alternates for October 07 meetings Appointed as an alternate by Bec Brown for 23-8 and 4-10 meetings Appointed as an alternate director by Simon Moore 4-10-07 Resigned 26-7-07 Resigned 26-7-07
Board directors appointed as at June 30th 2008 Peter Lane (Chair) (Elected by Assembly delegates at the AGM) Peter Lane has worked in media for 25 years, as an actor, crew member, director, and producer. One of the founding fathers of community television in Australia, he has been active in many areas of the sector, including lobbying, planning, development, management and governance. Peter has extensive experience in language, employment, arts and media training across tertiary education, labour market programs, traineeships, short courses, work experience and volunteers. Previous Board and Committee memberships include the Community Broadcasting Association of Australia (CBAA), TVU, SKA TV, Professional and Graduate Education (PAGE), and the Program Development Committee of ACFE. Bec Brown (Deputy Chair) (Appointed by Student Community Television Inc - RMITV) Bec Brown has been an active member of the RMITV Board for several years, during which time she has also completed an Advanced Diploma of Screen at RMIT University. Bec has also acted as production manager on various television programs screened on C31, SBS, the Nine Network, Foxtel and internationally. Walter Adamson (Appointed by Russian Television Victoria Association Inc) Now retired, Walter Adamson qualified with an Associateship Diploma in Electrical Engineering from RMIT, and rose to become a Senior Professional Engineer with the Buildings Engineering Services Section of Australia Post. Christina Critch (Appointed by Inner South-Eastern Access Television Inc – SKA-TV) Christina Critch brings to C31 her experience on the boards and committees of a wide range of not for profit arts organizations. She has worked in and advocated for the arts and cultural industries.
Noel Fanning (Appointed by Geelong Newsbeat Inc) Noel Fanning has produced nearly 500 programs within the Geelong community. His qualifications include a Bachelor of Arts, an Associate Diploma in Media, and a Graduate Diploma in Education. Alex Jobbagy (Elected by Assembly delegates at the AGM) Alex Jobbagy has been involved in community television production and management for over a decade. He is a professional graphic and web designer, with Bachelor of Arts and a certificate in New Media Studies. Gladys Liu (Appointed by Asian Television Australia Association Inc) Gladys Liu has been an active member of ATVAA since 2002. She has also been involved in other community organizations such as the Chinese Professional and Business Association, and the Chinese New Year Festival. Gladys is currently an advisor to the leader of the Victorian Liberal Party, and stood as a candidate in the 2006 state election. Campbell Manderson (Elected by Assembly delegates at the AGM) Campbell Manderson has a long history with C31 as both a producer and an activist. Campbell has a particular interesting in training, and holds a Certificate IV in Workplace Training & Assessment. Peter McArthur (Appointed by Eastern Regional Access Television Inc) Peter McArthur has had over forty years experience in radio and television, including nearly 30 years with the ABC as a newsreader, reporter and broadcaster. He has served as the mayor of Croydon, and in Victorian state parliament as the member for Ringwood from 1976 to 1982. In addition to his long-standing contributions to C31, Peter has also co-founded two community radio stations, WhitehorseBoroondara and Eastern FM.
Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Tom Padula (Appointed by Italian TV Inc) In addition to being a director of C31, Tom Padula is also a member of the Moreland City Arts Board and public officer of the Italian Drama Company. Tom retired from secondary school teaching to start Insegna Booksellers, publishing and distributing books in a wide variety of languages. Sudha Saini (Appointed by The Indian Television Broadcasting Association Inc until 2007 AGM; thereafter co-opted by the Board) Sudha Saini graduated from Delhi University with Physics, Chemistry and Advanced Maths as majors; and has subsequently gained a Masters in IT at Swinburne University, and is currently studying Law at RMIT. She has been active within the Indian Community since 1996, being an executive member of Hindi Niketan, the Federation of Indian Associations of Victoria, and now an executive member of Australian Indian Innovations Inc (AIII), which organizes the annual Indian Diwali fair at Sandown. Paul Spanos (Appointed by Northern Access Television Association Inc) Paul Spanos holds a Business Administration Degree from the University of Thessilonika, a Graduate Diploma of Education from Monash University, a Diploma in Business from Swinburne University and a Master of Arts from the Sydney College of Divinity. Paul is also a co-producer and presenter of the Zontas 100% program, and assists in the translation and creation of English language subtitles for the program. Scott Star (Appointed by Student Youth Network Inc) Scott Star has been a producer of community radio and television programs since 2006 for SYN-FM and C31. 14 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Louis-robert Stomm (Appointed by Yarra Access Inner-City Television Inc) Louis-robert Stomm has been involved in community television since 1987, and produced over 1500 programs for C31. He has been a director of the Cosmopolitan Art Group and is a member of the Wyndham City Community Arts Project. Louis-robert also has a background in community radio, having been a presenter and committee member with Southern FM and a producer and spoken word co-ordinator at PBS-FM. Ben Todica (Appointed by Australian Romanian Community Television) Ben Todica is a long term volunteer with Australian Romanian Community Television, and has produced, shot and edited many programs for broadcast on C31. Joe Varga (Appointed by Melbourne Hungarian Television Association Inc) Joe Varga is a veteran of the television industry, with 37 years employment in commercial television. For the last ten years he has also volunteered his time to the Melbourne Hungarian Television Association in both management and production roles. David Wong (Elected by Assembly delegates at the AGM) David Wong is the Vice President of the Asian Television Association Australia Inc, and holder of a Diploma in Business Administration.
Board directors whose terms finished during the financial year 2007/08 Wah Yeo Appointed by Asian Television Australia Association Inc Matthew Sharp Appointed by Yarra Access Inner-City Television Inc Taswinder Minhas Appointed by Punjabi Television Network Inc Simon Meyer Appointed by Inner South-Eastern Access Television Inc – SKA-TV Gregory Vaisman Appointed by Russian Cultural & TV Association Inc Luki Kalonta Appointed by Indonesian Club Melbourne Inc Roman Zapedowski Appointed by Southern TV Inc Janja Jamon Appointed by Australian Croation Cultural Association Inc Nick Bassett Appointed by Bent TV Association Inc Simon Moore Appointed by Northern Access Television Association Inc Lisa Fagan Appointed as an alternate director by Bec Brown for two meetings Judy Magassy Appointed as an alternate director by Simon Moore for one meeting Stanley Chang Appointed by Asian Television Australia Association Inc Julio Altamirano Appointed by Hispanic Community TV Antenna Hispana Inc
15 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Finance Committee 2007/08 Name Greg Dee Campbell Manderson Peter Lane Sudha Saini Bec Brown Paul Spanos Matthew Sharp Wah Yeo Julio Altamirano
Eligible to Attend
11 11 11 9 6 6 5 5 1
11 11 9 4 5 5 5 3 0
Term finished at 2007 AGM; re-appointed from March 2008 Term commenced at 2007 AGM Term commenced at 2007 AGM Term finished at 2007 AGM Term commended with Sep 07 meeting; resigned after Jan 08 meeting Resigned after July 07 meeting
Programming Committee 2007/08 Bec Brown 8 8 David Wong 8 4 Louis-robert Stomm 6 6 Term commenced at 2007 AGM Joe Varga 6 5 Term commenced at 2007 AGM Simon Meyer 2 2 Term finished at 2007 AGM Silvia Tejedor 2 0 Term finished at 2007 AGM Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. An amount of $14,382 was paid to Matthew Sharp for services rendered as a company secretary. An amount of $1,290 was paid to Peter Lane for his services rendered as Chairman of the Board. Other directors are honorary and did not receive any remuneration for their services.
16 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
After balance day events
Matthew Sharp has held the position of company secretary for the financial year.
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of Melbourne Community Television Consortium Limited, the results of those operations or the state of affairs of Melbourne Community Television Consortium Limited in future financial years.
Principal Activities The principal activities of Melbourne Community Television Consortium Limited during the financial year were broadcasting of community television programs, developing and maintaining television presentation and transmission facilities and seeking sponsorship revenue. No significant change in the nature of these activities occurred during the year.
Auditors Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out at page 18. Signed in accordance with a resolution of the Board of Directors:
Operations and Results The surplus of Melbourne Community Television Consortium Limited amounted to $45,788 (2007: $146,761). Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The company was not a party to any such proceedings during the year. Indemnifying Officers or Auditors No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of Melbourne Community Television Consortium Limited.
17 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
18 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Income Statement For the Year Ended 30 June 2008 Note Revenue 2 Other revenue Employee costs Depreciation, amortisation and impairments Cost of goods sold Occupancy expenses Marketing expenses Other expenses Finance costs Surplus
The accompanying notes form part of these financial statements
2,755,173 - (1,413,693) (142,955) (141,491) (110,000) (15,301) (878,518) (7,427)
2,391,140 63,928 (1,050,403) (131,710) (151,521) (100,017) (8,932) (863,548) (2,178)
19 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Balance Sheet 30 June 2008 Note ASSETS Current assets Cash and cash equivalents 4 Trade and other receivables 5 Inventories Other current assets 6 Total current assets Non-current assets Plant and equipment 7 Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Trade and other payables 8 Financial liabilities 9 Short-term provisions 10 Other current liabilities 11 Total current liabilities Non-current liabilities Other long-term provisions 10 Total non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Retained surplus TOTAL EQUITY 20
The accompanying notes form part of these financial statements
Melbourne Community Television Consortium Ltd Annual Report 2007/2008
50,911 439,355 4,500 45,454 540,220
50,752 361,842 44,055 456,649
595,601 595,601 1,135,821
557,188 557,188 1,013,837
398,438 67,141 59,776 55,164 580,519
343,766 69,250 32,557 64,350 509,923
5,600 5,600 586,119 549,702
Statement of Changes in Equity For the Year Ended 30 June 2008 2008
Balance at 1 July 2007 Surplus for the year Balance at 30 June 2008 2007
Balance at 1 July 2006 Surplus for the year Balance at 30 June 2007
The accompanying notes form part of these financial statements
Retained Surplus $ 503,914 45,788 549,702
Retained Surplus $ 357,155 146,759 503,914
Total $ 503,914 45,788 549,702
Total $ 357,155 146,759 503,914
21 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Cash Flow Statement For the Year Ended 30 June 2008 Note Cash from operating activities: Receipts from customers Payments to suppliers and employees Interest received Interest paid Net cash provided by (used in) operating activities 13 Cash flows from investing activities: Payment to acquire property, plant and equipment Net cash provided by (used in) investing activities Other activities: Net increase (decreases) in cash held Cash at beginning of financial year Cash at end of financial year 4
The accompanying notes form part of these financial statements
Melbourne Community Television Consortium Ltd Annual Report 2007/2008
2,478,059 (2,317,444) 2,374 (7,427) 155,636
2,147,796 (2,075,121) 416 (2,178) 70,913
2,268 (18,498) (16,230)
(203,214) 184,716 (18,498)
Notes to the Financial Statements For the Year Ended 30 June 2008 1 Statement of Significant Accounting Policies General information The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Urgent Issues Group Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Melbourne Community Television Consortium Limited is an unlisted public company limited by guarantee, incorporated and domiciled in Australia The following is a summary of the material accounting policies adopted by the company in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. Basis of Preparation The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected noncurrent assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. Statement of compliance The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (“IFRS”). Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
Standards applied for the first time Melbourne Community Television Consortium Limited have adopted AASB 7 Financial Instruments: Disclosures and all consequential amendments for the first time in its 2008 financial statements. This standard has been applied retrospectively, i.e. with amendments to the presentation of items disclosed in the 2007 accounts. The 2007 comparatives contained in these financial statements therefore differ from those published in the financial statements for the year ended 30 June 2007 in presentation only. No changes have been made to the recognition or measurement criteria associated with any amounts disclosed in the 2007 accounts. AASB 7 Financial Instruments: Disclosures is mandatory for reporting periods beginning on or after 1 January 2007. The new standard replaces and amends disclosure requirements previously set out in AASB 132 Financial Instruments: Presentation and Disclosures. All disclosures relating to financial instruments including all comparative information have been updated to reflect the new requirements. In particular: The company’s financial statements now feature, a sensitivity analysis to explain the company’s market risk exposure in regards to its financial instruments and a maturity analysis that shows the remaining contractual maturities of financial liabilities as at the balance sheet date. The first-time application of AASB 7 however has not resulted in any prior-period adjustments of cash flows, net income or balance sheet line items.
23 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
1 Statement of Significant Accounting Policies (continued)
Plant and Equipment Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment are measured on the cost basis. Depreciation The depreciable amount of all fixed assets and capitalised leased assets is depreciated on a straight-line basis over their useful lives to the company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Depreciation rates The depreciation rates used for each class of depreciable assets are:
Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
Class of Fixed Asset Plant and Equipment Office Equipment Leasehold improvements
Provisions Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
30% 11.25 - 30% 20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
24 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at present value of the estimated future cash outflows to be made for those benefits.
Revenue Revenue from broadcasting services other than Telemarketing is recognised upon delivery of the service to the customers. Revenue from Telemarketing is recognised when non-cancellable contracts are executed. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and services tax (GST). Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement. Income Tax The company is exempt from income tax under Section 50-45 item 9-1, 9-2 of the Income Tax Assessment Act 1997 as amended, as the company’s objective is the encouragement of art and culture and its business is not carried on for the purpose of profit or gain for its individual members. New Accounting Standards and AASB Interpretations Certain new accounting standards and AASB Interpretations have been published that are not mandatory for 30 June 2008 reporting periods but contain an option for early adoption. The company has reviewed each of these new standards and Interpretations and is satisfied that they have no impact on the reported financial position or performance of the company for the year ended 30 June 2008 and therefore there has been no early adoption of these standards or interpretations.
Impairment of Assets At each reporting date, the company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication 25 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
2 Revenue 2008 $ Services revenue 2,752,725 Interest received (a) 2,374 Donations 74 Total 2,755,173 (a) Interest revenue from: Other persons 3 Surplus Cost of goods sold Finance Costs: external Bad and doubtful debts Doubtful debts
2007 $ 2,390,724 416 2,391,140
26 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
4 Cash and Cash Equivalents Cash on hand Cash at bank
2008 $ 653 50,258 50,911
2007 $ 61 50,691 50,752
(a) Reconciliation of Cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: 50,911 (67,141) (16,230)
50,753 (69,250) (18,498)
5 Trade and Other Receivables CURRENT Trade receivables 499,999 Provision for impairment of receivables (60,644) 439,355 Other receivables - 439,355
365,673 (53,557) 312,116 49,726 361,842
Cash and cash equivalents Bank overdraft
5 Trade and Other Receivables (continued) Trade receivables have been aged according to their original due date in the ageing analysis below, including where repayment terms for certain long outstanding trade receivables have been renegotiated. The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short term nature of the balances. Payment terms for Sponsorship are always in advance of going to air. Payments made up front at the time of sale are incentivised by offering the client bonus spots – otherwise set dates for payment are agreed and entered on the booking form. In some cases agreed payments may be spread over several months as the campaign is aired The basis for our estimate of the doubtful debt provision required for trade receivables is that we consider all balances where there is an indication that the client is not going to utilise the company’s services. In most cases this would be noted at or before the production stage. As at 30 June 2008, trade receivables with a carrying amount of $214,978 (2007: $143,164) were past due but not doubtful. These trade receivables are not considered doubtful as they comprise customers who there is no recent history of default and the Company expects to recover in full. An allowance has been made for estimated irrecoverable trade receivable amounts arising from the past provision of goods and services, determined by reference to past default experience. During the current financial year, the allowance for doubtful debts increased by $7,087 (2007: ($23,042). This movement was recognised in profit for the year. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements. No collateral is held over impaired receivables. Refer to note 18 (Financial Instruments Note) for more information on the risk management policy of Melbourne Community Television Consortium Ltd.
The aging of the impaired trade receivables is: Not past due
2008 2008 2007 2007 Gross Allowance Gross Allowance $ $ $ $ 499,999 60,644 365,673 53,557
A reconciliation of the movement in the provision for impairment of trade receivables is shown below: Opening balance - additional provisions - amounts used Total
2008 $ 53,557 71,383 (64,296) 60,644
2007 $ 76,599 164,142 (187,184) 53,557
44,973 481 45,454
43,574 481 44,055
6 Other Assets CURRENT Prepayments Other assets
27 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
7 Plant and Equipment PLANT AND EQUIPMENT Plant and equipment At cost Less accumulated depreciation Total plant and equipment
876,456 (406,102) 470,354
717,032 (316,989) 400,043
Office equipment At cost Less accumulated depreciation Total office equipment
175,412 (91,236) 84,176
157,558 (64,437) 93,121
Leasehold improvements At cost Less accumulated depreciation Total leasehold improvements
136,100 (95,029) 41,071
132,009 (67,985) 64,024
Total plant and equipment
Movements in Carrying Amounts Current Year Balance at the beginning of year Additions Depreciation expense Carrying amount at the end of year
400,043 159,423 (89,112) 470,354
93,121 17,855 (26,798) 84,176
64,024 4,091 (27,044) 41,071
557,188 181,369 (142,956) 595,601
Prior Year Balance at the beginning of year Additions Depreciation expense Carrying amount at the end of year
260,718 220,285 (80,960) 400,043
82,838 36,325 (26,042) 93,121
65,817 22,915 (24,708) 64,024
409,373 279,525 (131,710) 557,188
28 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Plant and Office Leasehold Equipment Equipment Improvements $ $ $
8 Trade and Other Payables CURRENT Unsecured liabilities Trade payables Other payables 9 Financial Liabilities CURRENT Secured liabilities Bank overdraft
157,361 241,077 398,438
132,278 211,490 343,768
The bank overdraft is secured by a registered mortgage over the business.
10 Provisions CURRENT Employee entitlements
NON-CURRENT Employee entitlements
11 Other Liabilities Deferred income
12 Members’ Guarantee The company is limited by guarantee. If the company is wound up, the Constitution states that each member is required to contribute a maximum of $20 each towards any outstanding obligations of the company. At 30 June 2008 the number of members was 28 (2007: 26).
13 Cash Flow Information Reconciliation of Cash Flow from Operations with Surplus 2008 2007 $ $ Net surplus for the year 45,788 146,759 Cash flows excluded from surplus attributable to operating activities Non-cash flows in surplus Amortisation - 24,707 Depreciation 142,955 107,003 Assets received on contra account - (5,400) changes in assets and liabilities (Increase)/decrease in trade & term receivables (77,513) (10,116) (Increase)/decrease in inventory (4,500) (Increase)/decrease in prepayments (1,400) 4,381 Increase/(decrease) in trade payables & accruals 2 6,670 32,671 Increase/(decrease) in unearned income (9,186) (227,412) Increase/(decrease) in provisions 32,822 (1,680) 155,636 70,913 Loan Facilities Overdraft facilities Amount utilised
2008 2007 $ $ 130,000 130,000 (67,141) (69,250) 62,859 60,750
The company has a bank overdraft facility. The facility may be terminated at any time at the option of the bank.
29 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
14 Capital and Leasing Commitments Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements 2008 2007 $ $ Payable - minimum lease payments - not later than 12 months 47,917 110,833 - between 12 months and 5 years - 47,917 47,917 158,750
15 Key Management Personnel Compensation Post Short-term employment benefits benefits Total $ $ $ 2008 Total compensation 244,881 21,374 266,255 2007 Total compensation 224,257 17,371 241,628
The lease is a non-cancellable property lease, with rent payable in advance. An option exists to renew the lease at the end of the term for an additional term of 5 years.
16 Auditors’ Remuneration 2008 $ Remuneration of the auditor of the company for: - auditing or reviewing the financial report 13,000 - other services 3,000
Capital Expenditure Commitments Capital expenditure commitments contracted for: Transmitter upgrade 28,000 Payable: - not later than 12 months 28,000
30 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
2007 $ 12,000 3,000
17 Segment Reporting The company operates predominately in one business and geographical segment being Television Broadcasting in the greater region of Melbourne and Geelong.
18 Financial Instruments The company is exposed to a variety of financial risks through its use of financial instruments. This note discloses the company’s objectives, policies and processes for managing and measuring these risks. The company’s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets. The company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed to are describe below. Specific risks - Market risk (interest rate risk); - Credit risk - Liquidity risk Financial assets/liabilities used The principal categories of financial assets/liabilities used by the company are: - Cash at bank; - Trade receivables; - Bank overdraft; and - Trade payables.
Objectives, policies and processes The risk management policies of the company are designed to mitigate the above risks and reduce volatility on the financial performance of the company. Financial risk management is carried out by management and is overseen by the Finance Committee and the Board. Capital Risk Management The Company manages its capital to ensure that it will be able to continue as a going concern while maximising returns through the optimisation of equity balances. Market risk Interest rate risk Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates.
31 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
18 Financial Instruments (continued) The following table outlines the Company’s financial instruments: 2008 2007 $ $ Financial Assets Cash at bank 50,258 50,691 Cash on Hand 653 61 Trade receivables 439,355 312,355 Financial Liabilities Trade payables Bank Overdraft
The following table demonstrates the impact on net profit if the average interest rate had either increased or decreased by 1% over the whole year ending 30 June 2008.
Interest rate sensitivity
2008 2008 2007 Interest Net (Profit) Interest (revenue) / / Loss (revenue) / expense expense $ $ $ If interest rates were 1 percent higher with all other variables held constant -increase/(decrease) (185) (185) 1,175 If interest rates were 1 percent lower with all other variables held constant - increase/(decrease) 185
32 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
2007 Net (Profit) / Loss $
Credit risk The company trades only with recognised, creditworthy third parties. It is the company policy that all telemarketing customers do not have access to credit terms as sponsor’s programs do not go to air until consideration is obtain from sponsor. In addition, receivable balances are monitored on an ongoing basis. With respect to credit risk arising from the other financial assets of the company which comprise cash and cash equivalents, the companies exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. There are no significant concentrations of credit risk within the company. Liquidity risk analysis Liquidity risk arises from the company’s management of working capital. It is the risk that the company will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk includes the risk that, as a result of our operational liquidity requirements; - We will not have sufficient funds to settle a transaction on the due date; - We will be forced to sell financial assets at a value which is less than what they are worth; - We may be unable to settle or recover a financial asset at all. To help reduce these risks we: - have readily accessible overdraft facilities in place (refer to note 13).
Amounts presented below represent the future undiscounted principal and interest cash flows.
Effective Interest Rate 2008 %
1 - 5 Over 5 Non-Interest Years Years Bearing 2008 2008 2008 $ $ $
Cash and cash equivalents 6.91 50,258 Trade receivables -
Total Financial Assets Financial Liabilities
Bank Overdraft 14.02 67,141 Trade payables -
653 50,911 499,999 499,999
- 67,141 - 157,361 157,361
20 Subsequent Events No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of Melbourne Community Television Consortium Limited, the results of those operations or the state of affairs of Melbourne Community Television Consortium Limited in future financial years. 21 Company Details Registered office and principal place of business The registered office of the company is: Melbourne Community Television Consortium Limited Level 1, 501 Swanston Street Melbourne Victoria 3000
Total Financial Liabilities The above contractual maturities reflect the gross cash flows, which may differ to the carrying values of the liabilities at the balance sheet date. Fair Value Estimation The directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values (2007: net fair value) The fair values and net fair values of financial assets and financial liabilities are determined as follows: - Cash & cash equivalents, bank overdraft, receivables and payables – due to the short-term nature, the carrying value approximates fair value. - The carrying value less impairment provisions of trade receivables and payables is a reasonable approximation of their fair values due to the short term nature of trade receivables and payables. 33 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Directors’ Declaration The directors of the company declare that: 1. The financial statements and notes, as set out on pages 19 to 33, are in accordance with the Corporations Act 2001 and: (a) comply with Accounting Standards and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 30 June 2008 and of the performance for the year ended on that date of the company. 2. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.
34 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Melbourne Community Television Consortium Ltd Annual Report 2007/2008
36 Melbourne Community Television Consortium Ltd Annual Report 2007/2008
Melbourne Community Television Consortium Ltd Annual Report 2007/2008