Phonographic Performance Company of Australia Annual ... PPCA Annual Re… · Auditors: Moore Stephens Sydney Directors January 2015 George Ash Bill Cullen Denis Handlin, AM Tony

Annual Report 2014

Phonographic Performance Company of Australia

PPCA Annual Report 20142

HighlightsPPCA revenues and registered artists and groups continued to increase in 2013-2014, maintaining our unbroken succession of improvements since 1990. The distributable surplus fell slightly.

•Incomeup5.8%to$42,824,808

•Distributionsurplusdown2%to$32,823,205

•Over60,000businesseslicensedforthepublicperformanceofsoundrecordings

The PPCA Trust approved 31 applications for funding:

•29relatedtofurthereducationandresearch

•2tofestivals,livemusicandlocalartists


Contents4 Chairman’s Report 6 The Company 7 Board Members 9 Management Report 13 Performers’ Trust Foundation 14 Top 50 Most Played Artists15 Most Played Artists 2010–201316 Special Purpose Financial Report38 Performers’ Trust Balance Sheet39 TariffCategories


It is my great pleasure to once again, on behalf of the PPCA Board, report on a successful year for the organisation. During the period we have seen increases in artist and label registrations, the breadth of our licence coverage, and our overall revenue. The period has not been without its difficulties, in particular the challenge of settling an appropriate licence scheme for the use of recordings in internet simulcasts by commercial broadcasters. We trust this matter will be concluded before the next AGM.

Some key points of the last year include:• A surplus of $32.8M, slightly below last year ($33.6M),

as a result of our investment in securing future income streams (eg radio and subscription television tribunal matters)

• Revenue of $42.8M (up almost 6% on the previous year)

• Distributing over $33M to licensor labels and Australian artists in December 2013

• Continued support of Australian artists through, for example, our relationships with the Australia Council (initiation of the PPCA Grant Scheme), the Australian Music Prize and Support Act Limited

• Support of developing artists, through our relationships with AIR and ARIA, and sponsorship of the Breakthrough Artist Awards at both events

• Successfully concluding the initial simulcast matter, with the High Court rejecting CRA’s application for leave to appeal

• Establishing an interim Tribunal mandated scheme for the simulcast of recordings by commercial radio, during the conduct of the rate setting Tribunal reference

• Enhancing our member communications by increasing our use of social media channels, and growing our online audience

• Implementing the cutover to the replacement Financial and Licensing system software, which provides the organisation with enhanced CRM and electronic document management capabilities. The new system also allows us to more easily segment our customer database, and provide more targeted communications to particular market segments

• Extensive advocacy on the important issues of copyright protection and reform, including detailed submissions and engagement with the Australian Law Reform Commission (re the review of copyright exceptions in the digital environment), the inquiry into radio simulcasts by the Senate Environment and Communications Reference Committee, and the more recent Online Copyright Infringement Discussion Paper.

2013/14 has been a very busy year for the organization, as we deal with issues that will greatly impact PPCA’s capacity to help deliver meaningful income streams for content creators in the future. I would like to take this opportunity to acknowledge and thank all of the PPCA registered artists and licensor labels that contributed to these critical public discussions on copyright reform, through their individual submissions to these important inquiries. In this regard the PPCA Artist Directors and Patrons deserve particular mention.

Finally, I would like to extend my thanks and congratulations to both the Board and staff of PPCA for their efforts during this very demanding year. I look forward to working with you all to further enhance PPCA’s impact in 2015.

GeorgeAshNovember 2014

Chairman’s Report


Summary

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91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Distribution (Millions)

Gross Revenue (Millions)

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91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

45


The CompanyExecutive Secretariat

Dan Rosen Chief Executive Officer

Lynne Small General Manager

Karla Skarda Head of General Licensing

Linda Courtney Distribution Manager

Adrian Di Giacomo Communications Manager

Stephen Conway Manager - Business Technologies

Rohini Sivakumar Corporate Counsel - Commercial

Rachel Porter Corporate Counsel - Enforcement/Litigation

Registered Office

Level 4. 11-17 Buckingham Street, Surry Hills, NSW 2010A.C.N. 000 680 704 A.B.N. 43 000 680 704

Bankers: Commonwealth Bank of Australia

Solicitors: Gilbert + Tobin

Auditors: Moore Stephens Sydney

Directors January 2015

George Ash

Bill Cullen

Denis Handlin, AM

Tony Harlow

Lindy Morrison, OAM

David Vodicka

Colin Daniels

6


George Ash PPCA Board Chairman George Ash became a member of the PPCA Board in August 2003.

George is also the President, Australasia of Universal Music Australia (UMA), a division of the Universal Music Group.

Prior to George’s current position with Universal Music Australia, he held positions as Managing Director, UMA, Managing Director, Universal Music NZ, Managing Director, MCA Geffen NZ and held key management roles at BMG NZ. George has also held roles in Polygram Manufacturing and in the retail sector.

George’s passion for the music industry began as a musician and has spanned 25 years including holding a variety of roles in key industry bodies within the NZ Industry before relocating to Australia in his current role in 2001.

Bill Cullen PPCA Board MemberBill is the Managing Director of One Louder Entertainment, the management home to Paul Kelly, Sarah Blasko, Kate Miller-Heidke, and Ball Park Music.

He has been involved in the music business since leaving school, and did a long stretch working with Grant Thomas Management, working with acts such as Crowded House and The Rockmelons. A five year stint in London followed, where he worked with the legendary Pete Jenner (manager of Pink Floyd, The Clash, Billy Bragg etc.), before going on to co-manage New Zealand act OMC (How Bizarre) who went on to a number one single and gold album in the US. He returned to Australia in 1999, and established One Louder, and has since had gold plus success with Alex Lloyd, George, Amiel, Sarah Blasko, Kate Miller-Heidke, End Of Fashion and Paul Kelly.

Denis Handlin, AM PPCA Board MemberDenis is the Chairman & CEO of Sony Music Entertainment Australia & New Zealand and President, Asia. He commenced his career with the company in 1970 and has been leading it since 1984.

Denis has a deep involvement in the music industry. He has served on the committees of several industry associations and has held various positions including Chairman of the Phonographic Performance Company of Australia (PPCA) and of the Australian Record Industry Association. He is the current Chairman of ARIA, a position he has held over many years since the early 90s including for 10 consecutive years from 1999 - 2008.

In November 2012, Denis was elected to the position of Vice Chairman of the International Federation of the Phonographic Industry (IFPI) Asia Regional Board and in November 2014, Denis was elected as Chairman of the IFPI Asia Pacific Board.

In May 1996, Denis became the first Australian and the first Sony Music Entertainment executive to be honoured with the CEO Special Recognition Award presented by Sony Corporation’s Chairman and CEO Norio Ohga.

Denis is the co-founder of the Sony Foundation which was established in 1998 and has raised $20 million for youth based causes. He is also very proud to be Patron of the Youth off the Streets Scholarship Program since its inaugural year in 2004. He is also an inaugural board member of the Ricky Stuart Foundation established in 2012 to raise funds to establish awareness and services for autism.

In the Australia Day 2005 Honours List, Denis was made a Member of the Order of Australia receiving “AM” in recognition of his service to the music industry, particularly through the promotion of Australian musicians, to professional organisations in the industry and for the work he has done in the community for charitable organisations.

In June 2009, Denis received from the peak Composer and Music Publisher organisation APRA, their prestigious Ted Albert Award for Outstanding Services to the Music Industry.

In April 2012, Denis received the “Label Executive of the Year - Major” award from the Worldwide Radio Summit Industry Awards held in Los Angeles.

Denis was awarded the ARIA Industry Icon Award by the ARIA Board in November 2014. The award is made in recognition of Denis’ outstanding contribution to the development of the Australian music industry, in particular Australian artists and industry copyright and reform matters.

Board Members


Denis is renowned for his highly competitive spirit and his championing of local talent. Under his leadership, Australian artists such as Men At Work, Midnight Oil, Daryl Braithwaite, John Farnham, Delta Goodrem, Silverchair, Tina Arena, Human Nature, Pete Murray, Rogue Traders, Guy Sebastian, Jessica Mauboy, Timomatic, Justice Crew and The Veronicas have achieved international recognition and success.

Denis has been married to his wife Jan for longer than he has been leading Sony Music. They have been married for 37 years and have six children.

Lindy Morrison, OAM PPCA Artist Representative & Board MemberLindy Morrison has been a member of the PPCA Board, as a representative of registered Australian recording artists, since 1994.

Lindy toured the world as a drummer, with Zero (1978 – 79), The Go-Betweens (1980 – 89) and Cleopatra Wong, (1990 – 93).

Since 1993, Lindy has worked around Australia as the musical director or performer in shows, parades and festivals, and has led drum and music workshops with many diverse and varied community groups. She has been the musical director of the Junction House Band a group of musicians with intellectual disabilities since 1993.

Lindy has a Bachelor of Social Work and is the part time social worker for Support Act Ltd—the benevolent society for musicians and workers in the music industry. In 2009 she completed her Masters in Legal Studies at UNSW. Lindy has been a passionate advocate for artists’ rights throughout her career, speaking at conferences and seminars on this topic. She teaches Music Business at Sydney Institute Ultimo.

In 2013 Lindy was awarded an Order of Australia medal for service to the Australian music industry.

Lindy can be contacted at [email protected] or at 0409224720

David Vodicka PPCA Licensor Representative & Board MemberDavid Vodicka is the owner of Rubber Records and the principal of entertainment law firm Media Arts Lawyers and

has had extensive experience with over 20 years practice representing musicians, artists, composers, and recording and publishing entities. He has dealt in all facets of law affecting the creative industries, and has had considerable hands on experience in the music recording and publishing fields as director of independent label Rubber Records and music publisher Rubber Music Publishing. He is a passionate advocate for local music and creative industries and presently is chairman of the board of AIR (the Australian Independent Record labels association) and is a current board member of ARIA (Australia Recording Industry Association).

He believes that the new digital era provides specific challenges for the recording industry and that ensuring that PPCA’s members, and in particular the independent record labels,obtain a fair and equitable return for the public performance of their works is paramount.

Colin Daniels PPCA Licensor Representative & Board MemberColin Daniels is the Managing Director of independent distributor & record company, Inertia. He is also a director of concert promoter Handsome Tours and publisher Gaga Music, as well as being a founding Patron of The Australian Music Prize and a board member of the global digital rights organization, Merlin. Daniels started in the music industry as a product manager for distributor MDS, a division of Mushroom Records. Moving into A&R in the early 90s, Daniels helped set up Mushroom Records UK before returning back to Australia to be General Manager at the rapidly growing MDS. Towards the turn of the millennium Daniels became Head of A&R for EMI Records Australia then moved on to become the Senior Director of A&R for EMI Records Europe. After a stint as the CEO of Vicious Pty Ltd which included streetwear clothing label Vicious Threads, Daniels moved on to take on his current roles at Inertia & Handsome.

Board Members


Management ReportFinancialThe 2013/2014 financial year has been another strong period for PPCA.

The year saw a 6% increase in total PPCA revenues, moving from $40.5M to $42.8M, resulting in a $32.8M distribution to licensor labels and registered artists in December 2014.

The positive movements in revenues were principally driven by increases in public performance licensing (up 3%), commercial television licences (up 17%) and commercial radio broadcast licences (up 21%, but driven by adjustments to prior periods).

Expenditure during the period also increased, as a result of the investment in the Copyright Tribunal matters which will settle the appropriate licence fees for the use of sound recordings by (a) the subscription television sector, and (b) commercial radio broadcasters in their internet simulcasts. These are both important matters which will have an impact on future revenue streams, and further details are provided in this report.

DistributionThe fundamental role of PPCA is to distribute net licence fees to licensors and registered artists and in December 2014 PPCA allocated and paid almost $33M to over 2,400 recipients.

Registrations under the Artist Direct Distribution Scheme continue to increase, and currently the repertoire of over 1,700 licensors (including independent artists) is covered by PPCA’s standard blanket licensing schemes. The standard blanket licence provides users with access to the repertoire of over 20,000 labels and millions of individual recordings, across a broad range of genres.

As a result the Distribution Team now deals with an ever increasing number of repertoire registration updates, and handled around 900,000 amendments (including initial registrations) last year.

During the coming year we plan to initiate system amendments to allow for online access to distribution statements, and effect direct deposits for distribution payments to artists and licensors. To enable this change we will be reviewing our registration processes, and liaising with artists and licensors to ensure that we have the relevant information to safely and securely make this transition.

We look forward to providing these service enhancements to our artist and licensor stakeholders.

CommunicationsIn 2014 PPCA continued to work closely with its registered artists, licensees and licensors, promoting the PPCA brand and benefits of registering with PPCA, via email, newsletters, web and social media, sponsorship and a presence at various conferences and events.

Throughout the year PPCA continued its strategy of communicating with business operators via their peak industry bodies to educate music users on the need to establish appropriate licences when they use music in their business. This included the state based outlets of Australian Hotel Associations and the various Clubs outlets. We advertised in association publications and a variety of trade magazines and supported Industry events such as the WA Club Awards for Excellence and the AHA Victoria Awards as ongoing efforts to improve brand recognition and profile.

First launched in March 2012, the PPCA Patron program continues to better educate artists, records labels and businesses around the country about the work PPCA does in safeguarding the rights of Australian artists, through well-respected recording artists Paul Dempsey, Josh Pyke, Tim Levinson and Clare Bowditch acting as PPCA ambassadors. Each of the patrons educate artists on the benefits of registering with PPCA, through social media, newsletter features and media commitments.

2014 was a great year for Australian music both at home and abroad and PPCA continued to do all it could to support our local artists and the industry via sponsorship of numerous music-based initiatives. Examples include:

- In 2014 PPCA was pleased to sponsor for the first time the Breakthrough Independent Artist of the Year Award at the ninth annual Australian Independent Music (AIR) Awards in Melbourne, which was taken out by Brisbane band Sheppard.

- For the fourth year running PPCA sponsored the Breakthrough Artist Award at the 28th Annual ARIA Awards which was awarded to Mullumbimby’s Iggy Azalea.


Management Report

- Provision of the $30,000 cash prize to The Australian Music Prize (AMP) 2014 winner, Melbourne band Big Scary. PPCA has provided the cash prize to The AMP since its inception in 2005.

- PPCA is also a proud supporter of the Music Matters campaign - a collective of people across the music community, including artists, retailers, songwriters, labels and managers, formed to remind listeners of the significance and value of music.

PPCA actively promotes itself to artists to encourage them to register with the organisation in order to receive their share of our annual distribution. PPCA continued the production of the quarterly newsletter “In The Loop” for PPCA licensees and “On The Record” for registered artists and licensors.

Finally, www.ppca.com.au continues to be the hub of all communications activity and is regularly updated to reflect the latest PPCA news. The website includes a comprehensive list of FAQs including copyright information made available to assist music users to understand their music copyright obligations.

Licence Scheme ReviewsPPCA’s core business is issuing blanket licences for the use of the extensive sound recording repertoire it is authorised to represent. We have a range of licence schemes covering such diverse uses as the public performance of recordings in a medical centre waiting room, right through to the featured use of recordings in a nightclub or by a semi interactive music streaming service. In the majority of circumstances the licences are routinely issued under existing schemes, or settled by negotiation when new types of use begin to emerge. In some instances, where PPCA is unable to agree appropriate terms for an industry sector, or potential or existing licensees, a proposed scheme can be referred to the Copyright Tribunal of Australia for determination. The Copyright Tribunal is the independent expert body specifically established for this purpose. At present PPCA has two proposed licence schemes before the Tribunal.

1. Subscription Television Broadcast Licence SchemeAs previously reported, following extensive but unsuccessful negotiations, in September 2012 PPCA referred to the Tribunal a scheme to cover the use of recordings by subscription television broadcasters. It had long been

Josh Pyke

Sheppard at the AIR Awards.

The AMP Winners Big Scary with PPCA CEO Dan Rosen


Management ReportPPCA’s view that the licence which had applied since 2001 no longer adequately covered the increased use of recordings made by an evolving subscription television service such as Foxtel.

As with most Tribunal proceedings, extensive evidence including expert economic evidence - has been submitted by all parties. The Tribunal is scheduled to hear this matter during April 2015. On that basis we would anticipate the Tribunal delivering its decision before the end of the 2015 calendar year.

2. Commercial Radio Broadcasters Simulcast Licence SchemeOver the last six to seven years PPCA has been working hard to ensure that its registered artists and label licensors are equitably compensated when their repertoire is used by commercial radio broadcasters as part of their internet simulcasts.

In previous annual reports, and in interim updates, we have provided information on the progress of this longstanding issue. In last year’s report we advised that, having been unable to amicably settle a scheme with commercial broadcasters via their industry body, Commercial Radio Australia (CRA) in September 2013 PPCA’s proposed simulcast licence scheme was referred to the Copyright Tribunal for consideration.

In December 2013 the Tribunal established an ‘interim scheme’, which would allow commercial broadcasters to continue their simulcast activity without risking infringement, under the Tribunal mandated interim licence scheme. At present some 49 interim licences, covering 66 stations, have been established.

As usual in such important matters, PPCA and CRA (on behalf of commercial radio broadcasters), have both prepared extensive economic and technical evidence to assist the Tribunal in its consideration of the scheme proposed by PPCA and the alternative schemes subsequently put forward by CRA.

The Tribunal is scheduled to hear the matter in late March, with further hearing dates allocated in June. We currently expect the Tribunal to publish its decision towards the end of 2015.

PPCA is always willing to engage in discussion with interested parties about its proposed licence schemes.

PPCA’s objective is always to ensure that any licence scheme it proposes delivers a fair return, for the commercial use of its repertoire of recordings.

Music Community SupportPPCA is pleased to support the local music industry through a range of ongoing initiatives, including Sounds Australia, the Arts Law Centre of Australia, the Copyright Council of Australia, the Music Matters campaign, the Australian Songwriters Association Awards, AIR, and the ATSI office.

PPCA is particularly proud of its longstanding relationship with Support Act, the registered charity established by the music industry to provide a safety net for music professionals facing hardship. PPCA was a founding member of the charity, and continues to provide annual financial aid in kind support.

In our last report we were pleased to report on the partnership established with the Australia Council, under which five grants of $15k were provided to recording artists. The initial five recipients, announced in March 2014, were Courtney Barnett, the Grigoryan Brothers, Lance Ferguson, Ben Salter and Ainslie Wills and we have been delighted to watch those recording projects come to fruition. In August 2014 a further round of grants was confirmed, and an announcement detailing the successful recipients will be made during the first quarter of 2015. We are grateful for the expertise and support provided by the Australia Council in regard to the administration of these grants, and look forward to continuing this productive relationship. These grants are additional to those provided by the PPCA Performers’ Trust Foundation. Further information on the specific activities of the Trust during the period can be found in a dedicated section of this annual report.

Code of ConductTogether with other Australian collecting societies, PPCA subscribes to the voluntary Code of Conduct for Collecting Societies, which was jointly developed by the societies in 2001. Each year an independent reviewer examines and subsequently reports on each society’s compliance with the requirements of the Code.

The current independent Code Reviewer is the Hon Kevin Lindgren AM, QC. In December 2014 Dr. Lindgren completed and published his report for the 2013/2014 financial year period. We are pleased to once again report


Management Reportthat PPCA was found to be operating in compliance with the Code.

AdvocacyDuring the 2013/14 year the Australian Law Reform Commission (ALRC) issued its much anticipated report on copyright. PPCA had actively participated in this inquiry, lodging a number of submissions and meeting with the ALRC to explain the importance of copyright to music industry participants. It was gratifying to see engagement right across the industry for this important review, with submissions also lodged by many PPCA registered artists and label licensors.

On a positive note the report did address the longstanding issue of the caps on radio broadcasting licence fees, and suggested that there is a strong case for their repeal.

At present the Government has given no indication that it intends to adopt any of the ALRC recommendations, but has merely indicated its intention to ‘simplify’ the Copyright Act. PPCA looks forward to participating in this very important process, and working with government to ensure any reforms balance effective access to content with the need to foster creativity and equitably remunerate creators for the use of their work. The year aheadThere seems no question that the coming year will prove to be another very busy one for PPCA. 2014/15 should see the conclusion of the long-running simulcast radio matter, and also finalisation of the licence scheme applicable to subscription television broadcasters, and we look forward to rolling these new schemes out across those licensee sectors.

We will be enhancing our systems to improve the experience for artists and licensors receiving distribution payments, and our capacity to handle the increased volumes of repertoire data that is now being routinely lodged. We will continue to leverage the licensing system (implemented in 2013) to streamline and improve the process for licensees, and increase our capacity to deal with the large and growing number of public performance licences in place.

Our core goal is to increase the net licence fee amounts paid to registered artists and licensors. To that end we continue to seek efficiencies in the way we deliver our services, and work to ensure that equitable compensation is achieved whenever sound recording content is used in a commercial environment.


PPCA Performers TrustSince its inception, PPCA has funded and co-administered with the Musician’s Union and the Media Entertainment and Arts Alliance (formerly Actor’s Equity) the “PPCA Trust”. The Trustees during the period 1 July 2013 – 30 June 2014 were George Ash, Dan Rosen, Patricia Amphlett and Denis Shelverton.

In exercising their powers pursuant to the provisions of the Trust, the Trustees have the power to pay or to apply the Trust Fund to or for the benefit of such beneficiaries as the Trustees in their absolute discretion from time to time determine in respect of one or more of the following purposes: 1. performance at concerts at or for charitable institutions such as hospitals or homes for the aged; or, 2. scholarships for the promotion and encouragement of musical and theatrical education; or 3. the promotion and encouragement of the performing arts to the general public; or, in particular, 4. the aid or assistance of any beneficiary who in the opinion of the Trustees is unable to adequately maintain herself/

himself by her/his own exertions and other income.

Total funds provided since creating the Trust have been $2,502,2011 (up to 30 June 2014).

In the 2013-2014 year, four Trust meetings were held and 107 applications were put to the Trustees. Of these, 31 were approved totaling $73,210. Of the successful applications 29 related to further education and research; and 2 to festivals, live music and local artists.

The names of the recipients are as follows:

The Trust Balance Sheet can be found on page 38 of this report. Feedback from many of the grants recipients has been welcome and useful. Here are some examples:

“I would like to take the opportunity to thank the Trustees of the PPCA Performers Trust Foundation for their generous support of this project. It was refreshing to be rewarded funds without onerous administrative demands placed on me. Your contribution has assisted me to realize musical goals and aspirations that will have a significant bearing on my musical conception for years to come.” – Lucas Michailidis “This scholarship helps to support my attendance at competitions and applications for Doctoral programs while studying at the Grieg Academy, Norway.” – Stephen Whale

“I will be paying the next installment of my tuition fees next week and so am extremely grateful for the final help” – Rhia Parker“This award will be enormously helpful to me through my studies at the Guildhall School of Music and Drama. It really is much appreciated” – Peter Wilson

Adele QuerolAnna CooperAnna PokornyBethany ShepherdBrooke PrendergastCampbell James McInnesClaire LinquistDianne Kay AldeHannah DahlenburgHarry Edwards

India HooiJenny WynterKhaida FosterLatham HornLucas MichakidisMatthew BubbMedia Entertainment & Arts AllianceMusicians Union of AustraliaParis FavillaPeter Wilson

Rhia ParkerRichard NarrowayRichard RourkeSam HowieStephanie JacksonStephanie ViciStephen WaleThomas MarlinVicky YangVladimir Fanshil


50 Most Played Artists

Katy PerryAviciiJason DeruloOneRepublicP!nkImagine DragonsJessica MauboyLordeBruno MarsCalvin HarrisMKTORihannaBastillePharrell WilliamsVance JoyEminemRudimentalZeddLana Del ReyGuy SebastianPitbullSheppardDavid GuettaJustice CrewMiley Cyrus

Ed SheeranINXSU2Magic!ColdplayTaylor HendersonSamantha JadeNathanielJessie JJustin TimberlakeLady Gaga5 Seconds Of SummerJohn LegendThe VampsEllie GouldingMaroon 5Joel FletcherTimomaticFlo RidaMacklemore & Ryan LewisOne DirectionKim CesarionClean BanditMatt CorbyJames Blunt

123456789

10111213141516171819202122232425

26272829303132333435363738394041424344454647484950

July 2013-June 2014


Most Played Artists 2011-20132011

1.Katy Perry 2.P!nk 3.Lady Gaga 4.Bruno Mars 5.Rihanna 6.Enrique Iglesias 7.Kings Of Leon 8.Ke$ha 9.Usher 10.Birds Of Tokyo 11.Good Charlotte 12.The Black Eyed Peas 13.Powderfinger 14.Train 15.The John Butler Trio 16.Adam Lambert 17.Taio Cruz 18.David Guetta 19.The Script 20.INXS 21.U2 22.Flo Rida 23.Chris Brown 24.Nickelback 25.Jet

2012

1.David Guetta 2.Rihanna 3.Katy Perry 4.Coldplay 5.Bruno Mars 6.Flo Rida 7.Maroon 5 8.Foo Fighters 9.Lady Gaga 10.Calvin Harris 11.Jason Derulo 12.Adele 13.Kelly Clarkson 14.P!nk 15.LMFAO 16.Ed Sheeran 17.Jessie J 18.Pitbull 19.Jessica Mauboy 20.Nicki Minaj 21.Gym Class Heroes 22.Nickelback 23.Gotye 24.Good Charlotte 25.U2

2013

1.P!nk 2.Calvin Harris 3.Bruno Mars 4.Ed Sheeran 5.Maroon 5 6.Taylor Swift 7.Rihanna 8.Guy Sebastian 9.Flo Rida 10.David Guetta 11.Rudimental 12.Matchbox 20 13.Katy Perry 14.Fun. 15.Of Monsters And Men 16.Macklemore & Ryan Lewis 17.Olly Murs 18.Birds Of Tokyo 19.Justice Crew 20.The Script 21.Train 22.will.i.am 23.Pitbull 24.Labrinth 25.Rita Ora

July 2013-June 2014

15

16 PPCA Annual Report 2014

Special Purpose Financial ReportFor the financial year ending 30 June 2014

Directors’ report 17

Auditor’s independence declaration 20

Statement of profit or loss and 21 other comprehensive income

Statement of financial position 22

Statement of changes in equity 23

Statement of cash flows 24

Notes to the financial statements 25

Directors’ declaration 36

Independent auditor’s report 37


Directors’ ReportThe directors of Phonographic Performance Company of Australia Limited submit herewith the annual financial report of the company for the financial year ended 30 June 2014. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Information about the directors and senior managementThe names and particulars of the directors of the company during or since the end of the financial year are:

Name ParticularsGeorge William Ash Managing Director, Record Company

Elizabeth Ann Blakey (Alternate for Antony Harlow) Business Affairs Director, Record Company

Emmanuel Candi (Alternate for Denis Handlin); General Manager, Human Resources and Business Strategy, Australia and New Zealand; Executive Vice President, Human Resources and Business Strategy, ASIA, Record Company

Graham John Connors Independent Artist

David William De Barran Cullen Director, Management Company

Colin Daniels Managing Director, Record Company

Karen Ann Don (Alternate for George William Ash); Director, Legal & Business Affairs, Record Company

Denis Anthony Handlin Chairman and CEO; Australia and New Zealand, President: Asia, Record Company

Antony David Harlow Managing Director, Record Company

Belinda Morrison Independent Artist

Gordon James Pitt (Alternate for Denis Handlin); Legal & Business Affairs, Record Company

David Andrew Vodicka Managing Director, Record Company

The above named directors held office during the whole of the financial year and since the end of the financial year except for:• Colin Daniels Appointed 1 July 2014• Emmanuel Candi Appointed Alternate 18 August 2014, Resigned 19 August 2014

Company secretaryMs Lynne Maree Small, Certified Practising Accountant, held the position of company secretary of Phonographic Performance Company of Australia Limited during and since the end of the financial year. She joined Phonographic Performance Company of Australia Limited in 1996 and was appointed company secretary on 16 May 1997.

Principal activitiesThe principal activity of the company in the course of the financial year was acting for the copyright owners in the licensing throughout Australia of the broadcast and public performance of sound recordings and music video clips.

During the financial year there was no significant change in the nature of those activities.

Review of operationsThe company’s results are fairly static in the amount to be distributed to Copyright owners as compared with the previous year. The results of the operations of the company during the year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.


Directors’ ReportThe company’s distribution to its licensors in relation to the current year was $32,530,208 (2013: $33,310,470).

The company’s results for the financial year ended 30 June 2014 was a profit of $nil (2013: $nil).

Significant changes in state of affairsThere were no significant changes in the state of affairs of the company during the financial year.

Matters subsequent to the end of the financial yearThere has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the company, the results of those operations, or the state of affairs of the company in future financial years.

Future developmentsDisclosure of information regarding likely developments in the operations of the company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the company. Accordingly, this information has not been disclosed in this report.

Environmental regulationsThe company’s operations are not subject to any particular and significant environmental regulations under any State or Federal laws.

DividendThe company distributes the licence fees it collects to the Copyright owners and artists after deducting operating expenses. As a result of this no profit or loss is reported and, for the financial year ended 30 June 2014, the directors do not recommend the payment of dividend for the current year (2013: $nil)

Indemnification of officers and auditorsDuring the financial year, the company paid a premium in respect of a contract insuring the directors of the company (as named above), the company secretary, Lynne Maree Small, and all executive officers of the company and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The company has not otherwise, during or since the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor.

DistributionThe annual surplus to be distributed in accordance with the Company’s distribution policy is $32,530,208.

Directors’ meetingsThe following table sets out the number of directors’ meetings held during the financial year and the number of meetings attended by each director (while they were a director). During the financial year, 6 board meetings were held.


Directors’ Report Board of Directors Eligible to attend Attended

George William Ash 6 5Elizabeth Blakey (alternate) 6 5Graeme Connors 6 6David William De Barran Cullen 6 3Colin Daniels - -Karen Ann Don (alternate) 1 1Denis Anthony Handlin 6 -Antony Harlow 6 -Belinda Morrison 6 6Gordon James Pitt (alternate) 6 6David Vodicka 6 5

Proceedings on behalf of the CompanyNo person has applied to the Court under section 237 of the Corporation Act 2001 for leave to bring proceedings on behalf of the company, or to 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 part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporation Act 2001.

Auditor’s independence declarationThe auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 4 of the annual report.

This directors’ report is signed in accordance with a resolution of directors made pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the Directors

George William Ash Director

Sydney, 21st October 2014


Independent Auditors DeclarationDECLARATION OF INDEPENDENCE BY MELISSA ALEXANDER TO THE DIRECTORS OF PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED

As lead auditor of Phonographic Performance Company of Australia Limited for the year ended 30 June 2014, I declare that, to the best of my knowledge and belief, there have been no contraventions of:• the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and• any applicable code of professional conduct in relation to the audit.

Moore Stephens SydneyChartered Accountants

Melissa AlexanderPartner

Dated in Sydney, this 21st day of October 2014


StatementofProfitor Loss and Other Comprehensive IncomeFor the financial year ended 30 June 2014

2014 2013 Note $ $ Revenue 5 42,824,808 40,478,145Other income 5 720,000 - Subscription fees paid or payable to the International Federation of Phonographic Industry (321,335) (307,287)Employee benefits expense (3,402,119) (3,163,627)Depreciation and amortisation expense (428,268) (270,253)Occupancy expense (194,756) (199,287)Distribution to licensors (32,530,208) (33,310,470)Legal expenses (4,021,060) (1,131,307)Other expenses (2,647,062) (2,095,914) Profit before tax 6 - -Income tax expense 4(c) - - Profit after income tax - - Other comprehensive income - - Total comprehensive income for the year - -

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.


Statement of Financial Position 2014 2013 Note $ $ Current assets Cash and cash equivalents 14(a) 1,302,409 1,784,543Trade and other receivables 7 10,026,585 8,758,208Other financial assets 8 31,192,801 31,592,801 Total current assets 42,521,795 42,135,552 Non-current assets Property, plant and equipment 9 2,303,647 2,417,223 Total non-current assets 2,303,647 2,417,223 Total assets 44,825,442 44,552,775 Current liabilities Trade and other payables 10 44,320,050 44,114,735Provisions 11 412,017 368,427 Total current liabilities 44,732,067 44,483,162 Non-current liabilities Provisions 11 93,366 69,601 Total non-current liabilities 93,366 69,601 Total liabilities 44,825,433 44,552,763 Net assets 9 12 Equity Issued capital 12 9 12 Total equity 9 12

The above statement of financial position should be read in conjunction with the accompanying notes.

As at 30 June 2014


Statement of Changes in EquityFor the financial year ended 30 June 2014

Share capital Retained earnings Total $ $ $ Balance as at 1 July 2012 12 - 12 Total comprehensive income for the year - - - Balance as at 30 June 2013 12 - 12

Cancelled shares (3) - (3)

Total comprehensive income for the year - - - Balance as at 30 June 2014 9 - 9

The above statement of changes in equity should be read in conjunction with the accompanying notes.


Statement of Cash Flows 2014 2013 Note $ $

Cash flows from operating activities Receipts from customers 44,736,035 40,150,030Payments to suppliers and employees (13,378,783) (11,353,055)Distributions to licensors (33,191,741) (28,718,539) Net cash (used in)/provided by operating activities 14(b) (1,834,489) 78,436 Cash flows from investing activities Interest received 1,267,047 1,406,423Payments for plant and equipment (314,692) (961,174)Movement in cash on deposit 400,000 (100,000) Net cash provided by investing activities 1,352,355 345,249 Net (decrease)/increase in cash and cash equivalents (482,134) 423,685 Cash and cash equivalents at the beginning of the financial year 1,784,543 1,360,858 Cash and cash equivalents at the end of the financial year 14(a) 1,302,409 1,784,543


For the financial year ended 30 June 2014


1. General informationPhonographic Performance Company of Australia Limited (the company) is an unlisted public company limited by shares, incorporated in Australia and operating in Australia. The financial statements are presented in the Australian currency.

The financial statements were authorised for issue by the directors on 21st October 2014.

2. Basis of preparationPhonographic Performance Company of Australia Limited applies Australian Accounting Standards – Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising from the Reduced Disclosure Requirements

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. These financial statements do not comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’).

The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

The financial report, except for the cash flow information, has been prepared on an accruals basis and is based on historical cost. Cost is based on the fair values of the consideration given in exchange for assets.

3. Critical accounting judgements and key sources of estimation uncertaintyIn the application of the company’s accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following judgements have been applied:

Net current asset deficiency As at 30 June 2014 the company has a net current asset deficiency of $2,210,272 (2013: $2,347,610). Included in the company’s current liabilities are aggregate amounts representing the licence fees received in advance of $8,311,731 (2013: $8,099,511) and amounts payable to licensors of $32,647,145 (2013: $33,308,678). While the amount payable to the licensors will be settled in December 2014, the licence fees received in advance will be used to support the operations of the company in the next financial year with only the surplus forming part of the amount which will be distributed to the licensors in relation to the financial year ending 30 June 2014.

Notes to the Financial StatementsFor the financial year ended 30 June 2014


Consequently, the net current asset deficiency position at the 30 June 2014 is due to the nature of the business and does not highlight an issue relating to the going concern assumption of the company.

4. Summary significant accounting policies The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Goods and services taxRevenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii. for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the statement cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(b) RevenueRevenue is measured at the fair value of the consideration received or receivable.

Revenue is brought to account over the terms of the licences issued on the following basis:

• Public performance licence fees are normally issued for a period of one year, although shorter periods are accommodated. In all cases licence fees are payable in advance. Income is brought to account on a monthly basis over the life of the contract.

• Broadcast licences are issued for various terms - income is brought to account on a monthly basis over the life of the contract.

• Revenue from the disposal of other assets is recognised when the entity has passed control of the other assets to the buyer.

Interest revenueInterest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

(c) Income taxThe company prepares its income tax returns on the basis that it acts as agent for the copyright holders that it represents. As such, it does not derive income on its own account. Rather, it is entitled under its constituent document to be reimbursed for expenditure incurred in the course of its activities. The basis of assessment has been agreed with the Australian Taxation Office.

The net effect of temporary and permanent differences arising from expenditure incurred by the company is passed on to the recipients of the royalties collected.

(d) Cash and cash equivalentsCash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and have a maturity of



three months or less at the date of acquisition. Deposits with a maturity of greater than three months from the date of acquisition are classified as other financial assets.

(e) Financial assetsOther financial assets are classified into the following specified categories: ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Loans and receivablesTrade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Interest income is recognised by applying the effective interest rate.

Effective interest methodThe effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Impairment of financial assetsFinancial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of financial assets including uncollectible trade receivables is reduced by the impairment loss through the use of an allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

(f) Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition or construction of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on property, plant and equipment.

Depreciation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value.

Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis. The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.



The following useful lives are used in the calculation of depreciation: • Office furniture 5 to 10 years • Office equipment 3 to 7 years • Computer equipment 3 to 7 years • Leasehold improvements 7 years • Software 3 to 10 years

(g) IntangiblesIT development and softwareCosts incurred in developing products or systems and costs in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software. Costs capitalised included external direct costs of materials and service and direct payroll and payroll rated costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis from the date the asset is brought into use over periods generally ranging from three to ten years.

IT development costs include only those costs directly attributable to the development phase and are only recognised following completion of technical feasibility and where the Company has an intention and ability to use the asset.

IT development and software are included in property, plant and equipment.

(h) Leased assetsOperating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(i) Employee benefitsA liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the company in respect of services provided by employees up to reporting date.

Defined contribution plans Contributions to defined contribution superannuation plans are expensed when employees have rendered service entitling them to the contributions.

(j) ProvisionsProvisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.



When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

(k) Financial instruments issued by the companyOther financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

5. Revenue and other income


2014 2013 $ $

Revenue Licence fees 41,662,765 39,021,135Interest revenue – other parties 1,162,043 1,457,010

Total Revenue 42,824,808 40,478,145

Other income Litigation settlement 720,000 -

6. Profit for the year

Other specific disclosuresProfit for the year before income tax includes the following expenses:

2014 2013 $ $

Post employment benefits - defined contribution plans 308,160 279,986Impairment of trade receivables 362,496 245,630



7. Trade and other receivables

2014 2013 $ $

Trade receivables 7,626,832 7,489,290Allowance for doubtful debts (793,835) (750,000) 6,832,997 6,739,290

Prepaid expenses 135,217 67,063Other licence receivables 2,715,010 1,474,884Other receivables 343,361 476,971 10,026,585 8,758,208

8. Other financial assets

2014 2013 $ $

Held-to-maturity financial assets Cash on deposit 31,192,801 31,592,801



Cost Balance at 1 July 2012 201,864 107,605 1,292,774 410,028 611,702 2,623,973Additions - 6,952 941,695 12,527 - 961,174Disposals - - - - - - Balance at 30 June 2013 201,864 114,557 2,234,469 422,555 611,702 3,585,147Additions - - 306,460 8,232 - 314,692Disposals - - - - - - Balance at 30 June 2014 201,864 114,557 2,540,929 430,787 611,702 3,899,839 Accumulated depreciation Balance at 1 July 2012 (70,747) (47,567) (450,013) (241,958) (87,386) (897,671)Depreciation expense (22,232) (17,399) (72,268) (70,968) (87,386) (270,253)Disposals - - - - - - Balance as at 30 June 2013 (92,979) (64,966) (522,281) (312,926) (174,772) (1,167,924)Depreciation expense (21,975) (16,078) (245,795) (57,034) (87,386) (428,268)Disposals - - - - - - Balance at 30 June 2014 (114,954) (81,044) (768,076) (369,960) (262,158) (1,596,192) Net book value As at 30 June 2013 108,885 49,591 1,712,188 109,629 436,930 2,417,223 As at 30 June 2014 86,910 33,513 1,772,853 60,827 349,544 2,303,647

9. Property, plant and equipment

Office Office Computer Leasehold furniture equipment equipment improvem- at cost at cost Software at cost ents at cost Total $ $ $ $ $ $



10. Trade and other payables

Trade payables 2,274,674 1,610,972Lease equalisation provisions 274,934 311,997Goods and services tax payable 811,566 783,577Licence fees received in advance 8,311,731 8,099,511Amounts payable to licensors 32,647,145 33,308,678 44,320,050 44,114,735

2014 2013 $ $

11. Provisions

Current Employee benefits 412,017 368,427 Non-current Employee benefits 93,366 69,601

2014 2013 $ $

12. Issued capital

9 fully paid ordinary shares (2013: 12) 9 12

2014 2013 No. $ No. $

Fully paid ordinary shares Balance at the beginning of the financial year 12 12 12 12Cancelled shares (3) (3) - -Balance at the end of the financial year9 9 9 12 12

Fully paid ordinary shares carry one vote per share and carry the right to dividends.Three shares were cancelled in the year following a merger of two shareholders, in line with the company’s constitution.

2014 2013 $ $



13. Capital and leasing commitments

Operating leasesNon-cancellable operating lease commitments

Not longer than 1 year 354,843 341,190Longer than 1 year and not longer than 5 years 1,117,509 1,472,352Longer than 5 year and not longer than 10 years - -

1,472,352 1,813,542

The company has no capital commitments at reporting date (2013: nil).

14. Notes to the statement of cash flows

(a) Reconciliation of cash and cash equivalentsFor the purposes of the statement cash flows, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the statement cash flows is reconciled to the related items in the statement of financial position as follows: 2014 2013 $ $

Cash and cash equivalents 1,302,409 1,784,543

(b) Reconciliation of profit for the year to net cash flows from operating activities 2014 2013 $ $

Profit for the year - -Depreciation and amortisation 428,268 270,253Interest income received and receivable (1,267,050) (1,406,423)

Changes in assets and liabilities (Increase)/decrease in assets: Trade and other receivables (1,268,377) (4,114,540)Increase in liabilities: Trade and other payables 205,315 5,306,645Provisions 67,355 22,501

Net cash provided by operating activities (1,834,489) 78,436

2014 2013 $ $



15. Key management personnel compensation

The aggregate compensation made to directors and other members of key management personnel of the company is set out below: 2014 2013 $ $

Short-term employee benefits 1,084,427 1,074,740Post-employment benefits 100,309 96,727 1,184,736 1,171,467

16. Related party transactions(a) Key management personnel compensationDetails of key management personnel compensation are disclosed in note 15 to the financial statements.

(b) Transactions with other related partiesOther related entities include entities with common control. Related entities include Australian Recording Industry Association Limited, Music Rights Australia Pty Limited and PPCA Performers’ Trust Foundation.

Aggregate amounts receivable from other related parties are disclosed in note 7 to the financial statements. Amounts receivable from related parties are unsecured, non-interest bearing and is repayable at call.

Rental expense of $91,742 (2013: $96,120) was charged to Australian Recording Industry Association Limited. The rental cost is deemed to be under normal terms and conditions.

Clerical services expense of $820,806 (2013: $642,012) was charged to Australian Recording Industry Association Limited and Musical Rights Australia Pty Limited.

A grant of $35,749 (2013: $25,701) was paid to PPCA Performers’ Trust Foundation.

17. Financial risk managementThe company’s financial instruments consist mainly of deposits with banks, short term investments, accounts receivable and accounts payable.

The carrying amounts for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements are as follows: 2014 2013 Note $ $

Financial assets Cash and cash equivalents 14(a) 1,302,409 1,784,543Loans and receivables 7 10,026,585 8,758,208Held-to-maturity investments 8 31,192,801 31,592,801Total financial assets 42,521,795 42,135,552Financial liabilities Financial liabilities at amortised cost - Trade and other payables 10 44,320,050 44,114,735Total financial liabilities 44,320,050 44,114,735



18. Subsequent eventsThere has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the company, the results of those operations, or the state of affairs of the company in future financial years.

19. Company detailsThe registered office and principal place of business of the company is:Level 4, 11-17 Buckingham Street, Surry Hills, NSW 2010


Directors’ DeclarationThe directors of the company declare that:1. The financial statements comprising the statement of profit or loss and other comprehensive income, statement of

financial position, statement of cash flows, statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001, and

(a) comply with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Regulations 2001; and

(b) give a true and fair view of the company’s financial position as at 30 June 2014 and of its performance for the year ended on that date.

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 and is signed for and on behalf of the directors by:

George William AshDirector

Sydney, 21st October 2014


Independent Auditors ReportIndependent Auditor’s Report to the members of Phonographic Performance Company Of Australia Limited.We have audited the accompanying financial report of Phonographic Performance Company of Australia Limited, which comprises the statement of financial position as at 30 June 2014, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

IndependenceIn conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Phonographic Performance Company of Australia Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

OpinionIn our opinion the financial report of Phonographic Performance Company of Australia Limited is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the company’s financial position as at 30 June 2014 and of its performance for the year ended

on that date; and (b) complying with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations

Regulations 2001.

Moore Stephens Sydney Chartered Accountants

Melissa AlexanderPartnerDated in Sydney, this 21st day of October 2014


Performers’ Trust Balance Sheet

2014 2013 $ $

Current assets Cash and cash equivalents 94,875 20,508Trade and other receivables 3,355 3,429Term deposits 350,000 450,000 Total current assets 448,230 473,937 Total assets 448,230 473,937 Current liabilities Trade and other payables 2,600 2,400Grants allocated and unexpended at the end of the financial year held by trustees for beneficiaries 423,836 454,046 Total current liabilities 426,436 456,446 Total liabilities 426,436 456,446 Net assets 21,794 17,491 Funds Funds retained in the Trust 21,794 17,491 Total funds 21,794 17,491

Statement of financial position as at 30 June 2014


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TariffCategoriesGENERAL LICENCES For the playing of protected sound recordings at fetes, garden parties, school, church or dance academy concerts; and during presentations or performances by motivational speakers (single event licences are available)

EVENTS AND FESTIVALS For the playing of protected sound recordings at festivals including arts, dance, fringe, food/wine, sporting, film and community festivals as well as eisteddfods, exhibitions, fashion shows and similar events.

CINEMAS (FILM EXHIBITORS) AND LEGITIMATE THEATRES For the public exhibition of films which include protected sound recordings as part of their soundtrack or for the playing of sound recordings as background music at theatres

DANCE STUDIOS, DANCE INSTRUCTORS, LINE DANCE INSTRUCTORS For the playing of protected sound recordings by dance studios, dance instructors and line dance instructors.

LIVE PERFORMANCE GROUPS AND DANCE COMPANIES For the playing of protected sound recordings by live performance groups and dance companies

NIGHTCLUBS For the playing of protected sound recordings in a licensed venue for the purpose of dancing

DANCES AND DANCE PARTIES For the playing of protected sound recordings for the purpose of dancing at Dances or Dance Parties

BARS FOREGROUND MUSIC For the playing of protected sound recordings at a bar or similar venue as a predominant means of entertaining patrons

MUSIC EVENTS & FESTIVALS For the playing of protected sound recordings at any ticketed multi-act music event (or part thereof), where a sound recording is used in any form; or at a not-for-profit event soley for underage participants

MOBILE DJS For the playing of protected sound recordings by a Mobile DJ, or any other person using a Mobile DJ unit, in a venue that would not ordinarily require a PPCA licence

MOBILE VJS For the public exhibition of music videos by a Mobile VJ, or any other person using a Mobile VJ unit, in a venue that would not ordinarily require a PPCA licence

HALLS For the playing of protected sound recordings as background musical entertainment in church, council, scout, town or other community halls.

MUSIC ON HOLD For the playing of protected sound recordings (including from the radio or television) to telephone callers while they are waiting “on hold”

FACTORIES, INDUSTRIAL PREMISES AND OFFICES For the playing of protected sound recordings for employees in factories, industrial premises and offices, in areas of those premises that are not generally accessible to customers or members of the public

AUDIO JUKEBOXES For the playing of protected sound recordings through an audio jukebox

AUDIO JUKEBOX OPERATORS For Audio Jukebox Operators that lease, hire or otherwise supply audio jukeboxes to venues and/or for general party hire

VIDEO JUKEBOX OPERATORS For Video Jukebox Operators that lease, hire or otherwise supply video jukeboxes to venues and/or for general party hire

AMUSEMENT CENTRES, POOL ROOMS, SQUASH COURTS, SWIMMING POOLS, TEN PIN BOWLING CENTRES For the playing of protected sound recordings for the background musical entertainment of patrons at amusement centres, snooker/pool halls, squash centres, swimming pools, ten pin bowling centres and similar establishments.

COMMERCIAL OR PROFESSIONAL PREMISES For the playing of protected sound recordings at art galleries, bars, beauty salons / spas, clubs, corridors, elevators, foyers, function rooms, funeral parlours, hairdressers, health/medical offices (eg doctors, dentists, chiropractors, massage therapists, osteopaths, physiotherapists), hotels, libraries, lounges, motels, museums, nail bars, reception areas, retail stores, taverns, zoos, and/or similar establishments. This tariff also covers the use of protected sound recordings for demonstration purposes in electrical, video/DVD rental and hi-fi stores.

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ELECTRICAL & HI-FI STORES For the public exhibition of music videos for demonstration purposes in electrical and hi-fi stores, and the electrical/home entertainment sections of department stores and other retail premises

SHOPPING CENTRES, PLAZAS, CONCOURSES For the playing of protected sound recordings as a general amenity, or as background music, for the entertainment of patrons, customers or other attendees; or as background music or accompaniment to exhibitions or displays in common areas of shopping centres, plazas and concourses

PUBLIC VEHICLES For the playing of protected sound recordings in public vehicles (e.g., aircraft, buses, charter boats, coaches, ferries, hire cars, light rail, monorail, ships, taxis, trains, trams)

RESTAURANTS, CAFES For the playing of protected sound recordings in Restaurants/Cafes and similar establishments

RESTAURANTS, RESTAURANT AREAS (HOTELS AND MOTELS) For the playing of protected sound recordings in Restaurants or Restaurant Areas operating within a hotel, motel, guest house or similar establishment offering accommodation as its primary function, and where the Restaurant or Restaurant Area is exclusively or primarily for the benefit of residents of that establishment and their guests (i.e. the Restaurant or Restaurant Area is not promoted to the general public).

SPORTS ARENAS, RACE TRACKS, SHOWGROUNDS, OUTDOOR AMUSEMENT PARKS For the playing of protected sound recordings as background musical entertainment at sports arenas, race tracks, showgrounds, speedways and similar venues and at outdoor amusement parks

OUTDOOR RECREATIONAL AREAS For the playing of protected sound recordings as background musical entertainment at outdoor recreational or informal sporting areas, including beaches and parks.

SKATING RINKS For the playing of protected sound recordings as background musical entertainment, or as an accompaniment to skating, for patrons of roller skating and ice skating rinks.

FITNESS CENTRES, GYMNASIUMS, HEALTH CLUBS, SPAS, SOLARIUMS and similar establishments For the playing of protected sound recordings when accompanying Fitness Classes (Tariff V1) or when used as a general amenity for the informal entertainment of patrons in a free weights area or specialised exercise type equipment area (Tariff V2).

MUSIC VIDEOS - GENERAL For the public exhibition of music videos

MUSIC VIDEOS - NIGHTCLUBS For the public exhibition of the visual component of music videos in nightclubs

MUSIC VIDEOS - PUBLIC VEHICLES For the public exhibition of music videos in public vehicles including hire cars, taxis, aircraft, buses, charter boats, coaches, ferries, light rail, monorail, ships, trains and trams.

MUSIC VIDEOS - RETAIL PREMISES For the public exhibition of music videos in shops, department stores and other retail premises

CONCERT VENUES For the playing of protected sound recordings as background musical entertainment (including during breaks in live performances) at concerts

CONFERENCE ROOMS For the playing of protected sound recordings as a general amenity, or as background music, for the entertainment of conference delegates and other users of conference room facilities.

BUSINESS COPYING LICENCE FOR SOUND RECORDINGS (supplement licence only – only valid in conjunction with a public performance licence) To cover the electronic or physical copying of sound recordings by the licence holder from a licensed physical copy (e.g. a CD) or from a licensed electronic copy (e.g. an MP3 download purchased from a legal online music store) to either one electronic copy or one physical copy.

Licence fees are calculated differently in each category (eg, fees may be flat fees per annum, fees per person or per machine, or fees determined by size of venue depending on category) – contact PPCA for full details. It is quite possible, depending on your needs, that you may have a licence with any number of Tariffs eg a hotel may have a number of bar areas (Tariff M), restaurants (Tariff R1), nightclubs (Tariff E1), gymnasium (Tariff V), and video jukebox (Tariff W).

Real Music • Real Artists • Real Impact

PHONOGRAPHICPERFORMANCE COMPANYOFAUSTRALIALTD

ACN 000 680 704 ABN 43 000 680 704LEVEL 4, 11 BUCKINGHAM ST, SURRY HILLS NSW 2010 PO BOX Q20, QUEEN VICTORIA BUILDING NSW 1230T. 02 8569 1100 F. 02 8569 1183 [email protected] www.ppca.com.au

Documents

Phonographic Performance Company of Australia Annual ... PPCA Annual Re… · Auditors: Moore Stephens Sydney Directors January 2015 George Ash Bill Cullen Denis Handlin, AM Tony