Phonographic Performance Company of Australia

Home , Australian Music Prize, Courtney Barnett, Denis Handlin, Megan Washington, Youth Group

2015 PPCA ANNUAL REPORT 1

PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA ANNUAL REPORT 2015 2015 PPCA ANNUAL REPORT 2 Highlights PPCA revenues and registered artists and groups continued to increase in 2014-2015, maintaining our unbroken succession of improvements since 1990. The distributable surplus fell slightly.

Income up 7.2% $ to $45,898,762

Distribution surplus totaled $31,330,059

Over 60,000 businesses licensed for the public performance of sound recordings

The PPCA Trust approved 30 applications for funding:

24 related 6 to to further festivals, education live music & research and local artists 2015 PPCA ANNUAL REPORT 3 contents

4 Chairman’s Report 5 SUMMARY 6 the Company 7 Board Members 9 management Report 13 performers’ Trust Foundation 14 top 50 Most Played Artists 15 most Played Artists 2012–2014 16 special Purpose Financial Report 35 performers’ Trust Balance Sheet 36 tariff Categories 2015 PPCA ANNUAL REPORT 4 CHAIRMANS REPORT

Once again I am very pleased, • Encouragement and support of • Extensive advocacy on the important on behalf of the PPCA Board, developing artists through our issues of copyright protection and continued sponsorship of the reform, including submissions on to report on another Breakthrough Artist Awards at both the Copyright Amendment (Online successful year for PPCA. the AIR and ARIA Awards events. Infringement) Bill 2015 (Cth) and the Productivity Commission review into The 2014/2015 year saw • Continuing the pursuit, via the intellectual property. I would like to continuing increases in artist Copyright Tribunal, of equitable take this opportunity to acknowledge compensation for licensor labels and label registrations and and thank all of the PPCA registered and registered artists for the use of growth in our overall revenue. artists and licensor labels that recordings by subscription television. contributed to these critical public Some key points of the year include: • Welcoming an interim decision by discussions on copyright reform. • A distribution of just over $31.3M the Copyright Tribunal on the matter to licensor labels and registered of the use of recordings in internet 2014/15 has been a productive and Australian artists. simulcasts by commercial radio busy year for the organisation, and we broadcasters. anticipate 2015/2016 will be no less • Growth in revenues to $42.8M driven so. I would like to extend my thanks to by improved income from public • Regular communication with our the Board and staff of PPCA, as well performance, television broadcasting, artists, licensors and licensees via as to the PPCA Patrons for their efforts and webcasting services. email, newsletters, web and social throughout the year. media, sponsorships and attendance • Continued support of Australian at various conferences and events. artists through relationships with, PPCA also continues to communicate amongst others, the Australia Council with businesses on the benefits (the PPCA Grant Scheme), the of playing music and promoting Australian Music Prize, and Support awareness of the appropriate licences Act Limited (the music industry by liaising with peak industry bodies. benevolent scheme).

George Ash November 2015 2015 PPCA ANNUAL REPORT 5 SUMMARY

GROSS 45 REVENUE (MILLIONS) 40

0 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

DISTRIBUTION 35 (MILLIONS)

0 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 2015 PPCA ANNUAL REPORT 6 THE COMPANY

Registered Office Executive Secretariat DIRECTORS JAN 2016 L4, 11-17 Buckingham Street, Dan Rosen George Ash Surry Hills, NSW 2010 Chief Executive Officer Bill Cullen A.C.N. 000 680 704 Lynne Small A.B.N. 43 000 680 704 Denis Handlin, AM General Manager Tony Harlow Bankers: Karla Skarda Head of General Licensing Lindy Morrison, OAM Commonwealth Bank of Australia Linda Courtney David Vodicka Distribution Manager Colin Daniels Solicitors: Adrian Di Giacomo Gilbert + Tobin Communications Manager Stephen Conway Auditors: Manager - Business Technologies Moore Stephens Rohini Sivakumar Sydney Corporate Counsel - Commercial Rachel Porter Corporate Counsel - Enforcement/ Litigation 2015 PPCA ANNUAL REPORT 7 BOARD MEMBERS

He has been involved in the music In November 2012, Denis was elected business since leaving school, and did a to the position of Vice Chairman of long stretch working with Grant Thomas the International Federation of the Management, working with acts such as Phonographic Industry (IFPI) Asia Crowded House and The Rockmelons. Regional Board and in November 2014, A five year stint in London followed, Denis was elected as Chairman of the where he worked with the legendary IFPI Asia Pacific Board. Pete Jenner (manager of Pink Floyd, The Clash, Billy Bragg etc.), before going on In May 1996, Denis became the first to co-manage New Zealand act OMC Australian and the first Sony Music (How Bizarre) who went on to a number Entertainment executive to be honoured George Ash one single and gold album in the US. with the CEO Special Recognition PPCA Board Chairman He returned to Australia in 1999, and Award presented by Sony Corporation’s George Ash became a member of the established One Louder, and has since Chairman and CEO Norio Ohga. PPCA Board in August 2003. had gold plus success with Alex Lloyd, Denis is the co-founder of the Sony George, Amiel, Sarah Blasko, Kate Miller- Foundation which was established in George is also the President, Australasia Heidke, End Of Fashion and Paul Kelly. of Universal Music Australia (UMA), a 1998 and has raised $20 million for division of the Universal Music Group. youth based causes. He is also very proud to be Patron of the Youth off the Prior to George’s current position with Streets Scholarship Program since its Universal Music Australia, he held inaugural year in 2004. He is also an positions as Managing Director, UMA, inaugural board member of the Ricky Managing Director, Universal Music NZ, Stuart Foundation established in 2012 Managing Director, MCA Geffen NZ and to raise funds to establish awareness held key management roles at BMG NZ. and services for autism. George has also held roles in Polygram Manufacturing and in the retail sector. In the Australia Day 2005 Honours List, Denis was made a Member of the Order George’s passion for the music industry of Australia receiving “AM” in recognition began as a musician and has spanned of his service to the music industry, 25 years including holding a variety of Denis Handlin, AM particularly through the promotion of roles in key industry bodies within the NZ PPCA Board Member Australian musicians, to professional Industry before relocating to Australia in Denis is the Chairman & CEO of Sony organisations in the industry and for the his current role in 2001. Music Entertainment Australia & New work he has done in the community for Zealand and President, Asia. He charitable organisations. commenced his career with the company In June 2009, Denis received from the in 1970 and has been leading it since peak Composer and Music Publisher 1984. organisation APRA, their prestigious Ted Denis has a deep involvement in the Albert Award for Outstanding Services to music industry. He has served on the Music Industry. the committees of several industry In April 2012, Denis received the “Label associations and has held various Executive of the Year - Major” award from positions including Chairman of the the Worldwide Radio Summit Industry Phonographic Performance Company Awards held in Los Angeles. of Australia (PPCA) and of the Australian Bill Cullen Record Industry Association. He is the Denis was awarded the ARIA Industry PPCA Board Member current Chairman of ARIA, a position he Icon Award by the ARIA Board in has held over many years since the early November 2014. The award is made Bill is the Managing Director of One 90s including for 10 consecutive years in recognition of Denis’ outstanding Louder Entertainment, the management from 1999 - 2008. contribution to the development of the home to Paul Kelly, Sarah Blasko, Kate Australian music industry, in particular Miller-Heidke, and Ball Park Music. 2015 PPCA ANNUAL REPORT 8 BOARD MEMBERS

Australian artists and industry copyright Lindy has a Bachelor of Social Work and is a current board member of and reform matters. and is the part time social worker for ARIA (Australia Recording Industry Support Act Ltd—the benevolent society Association). Denis is renowned for his highly for musicians and workers in the music competitive spirit and his championing industry. In 2009 she completed her He believes that the new digital era of local talent. Under his leadership, Masters in Legal Studies at UNSW. provides specific challenges for the Australian artists such as Men At Work, Lindy has been a passionate advocate recording industry and that ensuring Midnight Oil, Daryl Braithwaite, John for artists’ rights throughout her career, that PPCA’s members, and in particular Farnham, Delta Goodrem, Silverchair, speaking at conferences and seminars on the independent record labels,obtain a Tina Arena, Human Nature, Pete this topic. She teaches Music Business at fair and equitable return for the public Murray, Rogue Traders, Guy Sebastian, Sydney Institute Ultimo. performance of their works is paramount. Jessica Mauboy, Timomatic, Justice Crew and The Veronicas have achieved In 2013 Lindy was awarded an Order international recognition and success. of Australia medal for service to the Australian music industry. Denis has been married to his wife Jan for longer than he has been leading Sony Lindy can be contacted at lindy. Music. They have been married for [email protected] or 37 years and have six children. at 0409224720

Colin Daniels PPCA Licensor Representative & Board Member Colin Daniels is the Managing Director of independent distributor and record company, Inertia. He is also a director of concert promoter Handsome Tours and publisher Gaga Music, as well as Lindy Morrison, OAM David Vodicka being a founding Patron of The Australian PPCA Artist Representative & Board Member PPCA Licensor Representative & Board Member Music Prize and a board member of the Lindy Morrison has been a member of global digital rights organization, Merlin. the PPCA Board, as a representative of David Vodicka is the owner of Daniels started in the music industry registered Australian recording artists, Rubber Records and the principal as a product manager for distributor since 1994. of entertainment law firm Media MDS, a division of Mushroom Records. Arts Lawyers and has had extensive Moving into A&R in the early 90s, Daniels Lindy toured the world as a drummer, experience with over 20 years practice helped set up Mushroom Records UK with Zero (1978 – 79), The Go-Betweens representing musicians, artists, before returning back to Australia to be (1980 – 89) and Cleopatra Wong, (1990 composers, and recording and publishing General Manager at the rapidly growing – 93). entities. He has dealt in all facets of law MDS. Towards the turn of the millennium affecting the creative industries, and has Since 1993, Lindy has worked around Daniels became Head of A&R for EMI had considerable hands on experience in Australia as the musical director or Records Australia then moved on to the music recording and publishing fields performer in shows, parades and become the Senior Director of A&R for as director of independent label Rubber festivals, and has led drum and music EMI Records Europe. After a stint as the Records and music publisher Rubber workshops with many diverse and CEO of Vicious Pty Ltd which included Music Publishing. He is a passionate varied community groups. She has streetwear clothing label Vicious Threads, advocate for local music and creative been the musical director of the Junction Daniels moved on to take on his current industries and presently is chairman House Band a group of musicians with roles at Inertia and Handsome. of the board of AIR (the Australian intellectual disabilities since 1993. Independent Record labels association) 2015 PPCA ANNUAL REPORT 9 MANAGEMENT REPORT

Financial Music Community Support • Luke Howard will record his second The 2014/15 year saw solid growth in PPCA is proud of its record of supporting solo album of contemporary chamber PPCA revenues, with total revenue of the local music industry through a range music featuring collaborators Daniel around $42.8M representing an increase of initiatives, including Sounds Australia, Farrugia, Leonard Grigoryan and of just over 7% on the previous financial the Arts Law Centre of Australia, the Ryan Monro. year. These increases were principally Copyright Council of Australia, the driven by improved income from public Music Matters campaign, the Australian • The Growl to record their third full- performance, television broadcasting, Songwriters Association Awards, AIR length album in Los Angeles. and webcasting services. and the ATSI Office. Licence Scheme Reviews Unfortunately expenditure during the We are particularly pleased to be able PPCA manages thousands of sound period also increased, predominantly to report on our continuing partnership recording licences each year, ranging driven by the continuation of two with the Australia Council, under which from occasional use at a community Copyright Tribunal rate setting exercises, another five grants of $15K were event to featured use by DJs in a in regard to the use of sound recordings provided to recording artists during nightclub. Generally the establishment in subscription television broadcasts 2014/2015. After a rigorous application of such licences is a routine matter and commercial radio online simulcasts. process, recipients of the second round under standard schemes, which can be These are both important matters that of PPCA Australia Council grants were viewed on the PPCA website, or settled will impact future revenue streams, and announced in March 2015. PPCA via negotiation as new business models further details of the status of these looks forward to the outcome of these for use emerge. In some circumstances matters is provided later in this report. projects, and is delighted to congratulate however, when PPCA is unable to settle the following successful applicants, terms through negotiation, a proposed Distributions spanning a range of genres from jazz scheme may be referred to the Copyright The PPCA distribution for the 14/15 to classical and contemporary singer- Tribunal of Australia, the specialist financial year was paid in December songwriters: body established for this purpose, for 2015, and saw just over $31.3M determination. As we reported last year, • Singer-songwriter and guitarist Mia distributed to licensor labels and PPCA currently has two schemes before Dyson to record and release three registered Australian artists. the Tribunal for determination. EPs over 12 months. Each EP will

Registrations under the Artist Direct be recorded in a different city with a Subscription Television Broadcast Distribution Scheme continue to different producer (Joe Pisapia, Erin Scheme increase, as does the number of “Syd” Sidney and Ben Tolliday). licensors (including independent artists). It has long been PPCA’s view that the As at January 2016 PPCA had almost • Alex Masso with Sydney-based jazz licence that has applied since 2001 2,000 licensors, allowing PPCA to group The Vampires will record their to cover the use of recordings by offer users blanket licensing schemes fifth album featuring collaborations subscription television services no longer covering millions of recordings across with West African-born and US-based adequately covers the increased use all genres. guitarist/vocalist Lionel Loueke and of recordings by such services. After produced by bassist Lloyd Swanton extensive but unsuccessful negotiations At present the PPCA team is working (The Necks). with the sector, PPCA referred a on the development of an online portal proposed scheme to the Copyright • Genevieve Campbell will create which will allow registered artists and Tribunal in September 2012. Extensive a body of new work based on licensors to access their distribution evidence was prepared and lodged by traditional Tiwi songs featuring statements and amend their personal both PPCA and the respondent, and the collaborator Teresita Puruntatameri. details (including bank details) anytime, matter was heard by the Tribunal in April anywhere. We look forward to delivering 2015. At the time of writing, we continue these important service enhancements to await the Tribunal’s decision. during the 2016 calendar year. 2015 PPCA ANNUAL REPORT 10 MANAGEMENT REPORT

Commercial Radio Broadcasters consideration of this matter. In any event, Independent Artist of the Year Simulcast Licence Scheme we would hope to have the matter Award at the tenth annual Carlton In previous annual reports, and in finalised by mid-2016. Dry Independent Music Awards in interim updates, we have reported Melbourne, which was taken out by PPCA was very pleased that, in its interim on the progress of this longstanding #1 Dads. decision, the Tribunal agreed that: issue. Since our last report PPCA has • PPCA sponsored the Breakthrough continued to work hard to ensure that • PPCA’s proposed reporting Artist – Release award at The 29th its registered artists and label licensors requirements were reasonable, Annual ARIA Awards Connected will be equitably compensated when • The simulcast right has a value over By Telstra, which was awarded to their repertoire is used by commercial and above that of broadcasting, Courtney Barnett. It was the fifth radio broadcasters as part of online and there is no ‘double-counting’ in consecutive year PPCA sponsored simulcasts. Having been unable to settle levying licence fees for both activities, the award. a scheme with commercial broadcasters and via their industry representative body, • PPCA’s longstanding support of the Commercial Radio Australia (CRA), • The 1% cap acts as a significant Australian Music Prize (the AMP) PPCA referred its proposed simulcast distortion on the market rate for continued in 2015. PPCA provided licence scheme to the Copyright Tribunal broadcasting the major prize of $30,000 to the in September 2013. winner of The Australian Music Prize. Communications The 2015 winner was Melbourne We previously reported that the Tribunal PPCA was in regular communication artist Remi. He was awarded the prize established an ‘interim scheme’ in with its artists, licensors and licensees December 2013, which allowed at the PPCA-hosted ‘Amped Up In throughout 2015/16, via email, commercial broadcasters to continue Conversation’ event in Sydney which newsletters, web and social media, simulcast activity without risking saw representatives from across the sponsorships and a presence at infringement. At present some 190 music industry come together for a various conferences and events. PPCA interim licences have been established sit-down dinner and a Q&A session continually encourages artists and labels under that arrangement. featuring leading artist managers to register with PPCA to ensure they are John Watson (Gotye, Silverchair, Cold In March and June 2015 the Copyright adequately compensated when their Chisel) and Scott MacLachlan (Lorde) Tribunal conducted hearings to consider music is used by businesses. in conversation, moderated by Fairfax PPCA’s proposed scheme for this use. 2015 was a great year for Australian Commercial Radio Australia (CRA) Senior Music Writer (and Coopers music both at home and abroad and responded on behalf of its members, AMP judge) Bernard Zuel. PPCA continued to do all it could with both parties submitting extensive to support our local artists and the • Promoting PPCA at a host of music expert evidence. In August 2015 the industry via maintaining and developing Tribunal issued an interim decision industry events through banners, relationships with specific music industry but did not yet settle the terms of any flyers and other promotional materials. bodies and events, sponsoring new and industry simulcast scheme. Instead the established music initiatives, speaking In 2015 PPCA continued to Tribunal has given some indications at industry seminars, participating in communicate with business operators of the sort of scheme it would find education programs and advertising at reasonable, and asked the parties to on the benefits of playing music, numerous music industry events and in respond with further information. We promoting awareness of the appropriate music related media. have subsequently been in discussion licences and ensuring that information with CRA, in an effort to settle agreed Examples include: on music licensing was readily terms, but note that the Tribunal has set available. This was done by liaising • In 2015 PPCA was pleased to aside two days in April 2016 for further again sponsor the Breakthrough with peak industry bodies, advertising 2015 PPCA ANNUAL REPORT 11 MANAGEMENT REPORT in association publications and trade copy of the Code itself, is available on agree about how a code would operate magazines, securing relevant editorials the PPCA website. to deter unlicensed use of creative and supporting industry events; all of content by consumers. The goal of the Advocacy which strengthened PPCA’s presence code is to deter and educate consumers Online Copyright Infringement among the business community. about how to source their creative Legislation content from licensed services. These key industry bodies include the In April 2015, PPCA submitted a The code is not yet operational as Australian Hotels Association, Restaurant response to the Senate Legal and the parties continue to discuss some & Catering, the various Club associations Constitutional Affairs Committee in outstanding issues. and the Australian Retailers Association. relation to the Copyright Amendment Harper Review and the Productivity During the period, PPCA has continued (Online Infringement) Bill 2015 (Cth) Commission to produce a number of newsletters (the “Bill”). The Federal Government including “On the Record” for registered passed the Bill in June 2015, introducing In early 2014 the Federal Government artists and licensors and “In the Loop” section 115A to the Copyright Act 1968. appointed a review panel to oversee a for all licensees. Section 115A gives copyright owners wholesale “root and branch” competition the right to seek injunctions with require review, which has been referred to as PPCA also continued to embrace ISPs to block access to illegal off shore the “Harper Review”. PPCA provided social media, and has steadily grown its sites which have the primary purpose of two submissions in relation to the presence on both Facebook and Twitter, infringing or facilitating the infringement Harper Review – the first in June 2014 giving additional means of connecting of copyright. This legislation is of great in response to the Issues Paper and the with both recording artists, labels and significance to PPCA’s registered artists second in November 2014 in response the industry more broadly. PPCA keeps and licensor labels, particularly as prior to to the draft report that was issued by the all parties informed by providing up-to- the introduction of the legislation, rights review panel. date information on PPCA’s activities, holders were unable to take effective all permanently made available on our action or obtain any form of relief against The review panel released its final report comprehensive website at www.ppca. infringing online locations/websites in March 2015, and recommended com.au located outside of Australia. Although extensive changes to Australian the legislation will not completely competition law and policy. Although Code of Conduct eradicate online copyright infringement, the review panel recommended a wide PPCA continues to subscribe to the it nevertheless marks a significant range of changes, the recommendation voluntary Code of Conduct for Collecting development in the protection of rights that is of most relevance to the music Societies, which was jointly developed of music creators and the creative creators was Recommendation 6 – with other Australian collecting societies industries at large. Intellectual Property Review. The review in 2001. Each year an independent panel recommended that the Federal reviewer examines and subsequently Copyright Notice Scheme Code Government should task the Productivity reports on each society’s compliance Since December 2014, copyright Commission with an overarching review with the requirements of the Code. holders have been in discussions with of intellectual property. The review by the ISPs to develop a code to address Productivity Commission was announced The current independent Code Reviewer unlicensed use of creative content in August 2015. As part of its submission is the Hon Kevin Lindgren AM, QC. In on ISPs’ networks through the use of to the Commission, PPCA, together December 2015, Dr Lindgren published P2P technologies. In April 2015, as with the other societies, News Corp and his report for the 2014/2015 financial a result of these discussions, a draft Foxtel, commissioned a PwC study into year period. We are pleased to once code was lodged with the ACMA, the ‘the costs and benefits of introducing a again report that PPCA was found to be regulatory body which oversees the “fair use” exception’. The Commission operating in compliance with the Code. telecommunications sector. This was the is due to issues its draft report in Dr Lindgren’s full report, together with a first time the parties had been able to April 2016. 2015 PPCA ANNUAL REPORT 12 MANAGEMENT REPORT

2014 and 2015 Commonwealth Our key goal is to increase the net Budget decisions on the Arts licence fee income available for In July 2015 PPCA also lodged a distribution to licensors and registered submission to the Legal and artists. In seeking to achieve that goal Constitutional Affairs Reference we continue to re-evaluate our processes Committee in relation to the 2014 and and find further efficiencies in the delivery 2015 budget decisions in respect of arts of our services to both the creative funding. In its submission PPCA noted and business communities we serve. the positive relationship with the Australia As always, we are committed to Council, particularly demonstrated obtaining a fair return for content by the partnership between the two owners and creators, when their organisations that has successfully sound recordings are used by others. delivered our grants program. In that submission PPCA also stressed the importance of arts funding generally, and the additional certainty, so important to programs like Sounds Australia and the Australian Copyright Council, that the pre-existing Australia Council arrangements provided for programs and arts support organisations.

The coming year….. We anticipate that the 2015/16 year will be no less busy, as we expect to receive decisions on both our current Tribunal matters, and move to the implementation stage of new schemes for both Commercial Radio Simulcasts and Subscription Television Broadcasters.

We will be working to deliver enhanced access to distribution reports and statements for licensors and registered artists, and more streamlined means of payment, through the introduction of our online portal.

There continues to be great debate about how copyright legislation should be reviewed and potentially amended, and we expect that the foreshadowed review by the Productivity Commission will provide a further opportunity for PPCA to explain the need for reasonable and adequate copyright protection for creators in a modern world. 2015 PPCA ANNUAL REPORT 13 PPCA PERFORMERS’ TRUST

PPCA TRUST ACTIVITIES In the 2014-2015 year, four Trust The Trust Balance Sheet can be found Since its inception, PPCA has funded meetings were held and 90 applications on page 35 of this report. and co-administered with the Musician’s were put to the Trustees. Of these, Union and the Media Entertainment and 30 were approved totaling $58,025. Feedback from many of the grants Arts Alliance (formerly Actor’s Equity) Of the successful applications 24 related recipients has been welcome and useful. the “PPCA Trust”. The Trustees during to further education and research; and Here are some examples. the period 1 July 2014 – 30 June 2015 6 to festivals, live music and local artists. were George Ash, Dan Rosen, Patricia “Our group wished to thank PPCA for the Amphlett and Denis Shelverton. The names of the recipients are as $300 grant for music. The youth group is an ongoing organisation rehearsing 40 weeks follows: of the year and presenting performances In exercising their powers pursuant to Alexandra Flood within the City of Darebin and the wider the provisions of the Trust, the Trustees Alix Hamilton community. We appreciate your support” have the power to pay or to apply the Andrea Nicole Lim Yi Zhuang Jack Kelly Trust Fund to or for the benefit of such Andrea White beneficiaries as the Trustees in their Anita Pollard “I’ve received the cheque for the generous absolute discretion from time to time Ashlyn Skye Tymms grant you awarded me and i just want to express my appreciation. The grant will determine in respect of one or more Balkanu Cape York Development Corp definitely go a long way in helping of the following purposes: Batteau Bay Police Citizens Youth Club to support my studies” Bronte Anna Zemlic Stephanie Li 1. performance at concerts at or Clare Johnstone for charitable institutions such as Darebin City Brass Inc “What a wonderful surprise to receive hospitals or homes for the aged; or, Hamish Michael your latter last week and the news that Hannah Readon-Smith my grant application had been successful. 2. scholarships for the promotion and I cannot tell you the feeling as an artist Jacqui Rutten encouragement of musical and - who like many others are compelled to Jeremy So theatrical education; or follow our calling often against odds Johnathon Henderson and very little external reward... 3. the promotion and encouragement Josephine Grech and then the cheque appears in the mail! of the performing arts to the general Katherine Philp It speaks volumes!! public; or, in particular, Maddilyn Goodwin I really appreciate the support of the Musicians Union of Australia PPCA Performers’ Trust Foundation” 4. the aid or assistance of any Rachel Sui Anita Pollard beneficiary who in the opinion of Raymond Shon the Trustees is unable to adequately RISE: Refugees Survivors & Ex “I Am writing to express my sincere gratitude to PPCA for offering me the maintain herself/himself by her/his Detainees $2000 grant for my study in chetham’s own exertions and other income. Shanie Klas summer school in UK. I was very thrilled Simone Maurer to learn of my selection for this honour, Total funds provided since creating the Stancey Alleaume and deeply appreciative of your generosity Trust have been $2,560,226 (up to 30 Stephanie Li and support” yiyun Gu June 2015). Tsung-Mao Lee Yiyun Gu 2015 PPCA ANNUAL REPORT 14

MOST PLAYED ARTISTS 50 July 2014 – June 2015

1.Ed Sheeran 2.Taylor Swift 3.Sam Smith 4.Calvin Harris 5.Meghan Trainor 6.Katy Perry 7.Ariana Grande 8.David Guetta 9.George Ezra 10.Iggy Azalea 11.Avicii 12.Maroon 5 13.Sia 14.Nico & Vinz 15.INXS 16.Guy Sebastian 17.P!nk 18.5 Seconds Of Summer 19.Jessie J 20.Rihanna 21.Vance Joy 22.Jason Derulo 23.the Veronicas 24.U2 25.Mark Ronson 26.the script 27.James Bay 28.Hozier 29.One Direction 30.Peking Duk 31.Charli XCX 32.Klingande 33.Sheppard 34.Nicki Minaj 35.Coldplay 36.Queen 37.G.R.L. 38.Omi 39.Bon Jovi 40.Alesso 41.Jessica Mauboy 42.Milky Chance 43.Ellie Goulding 44.Sigma 45.Major Lazer 46.Imagine Dragons 47.Ella Henderson 48.Paloma Faith 49.Justice Crew 50.Bruno Mars 2015 PPCA ANNUAL REPORT 15 MOST PLAYED ARTISTS 2012-2014

2012 2013 2014

1.Katy Perry 1.David Guetta 1.P!nk 2.Calvin Harris 2.Avicii 3.Jason Derulo 2.Rihanna 3.Katy Perry 3.Bruno Mars 4.Ed Sheeran 4.OneRepublic 5.P!nk 6.Imagine 4.Coldplay 5.Bruno Mars 6.Flo 5.Maroon 5 6.Taylor Swift Dragons 7.Jessica Mauboy 8.Lorde Rida 7.Maroon 5 8.Foo Fighters 7.Rihanna 8.Guy Sebastian 9.Flo 9.Bruno Mars 10.Calvin Harris 11.MKTO 9.Lady Gaga 10.Calvin Harris 11.Jason Rida 10.David Guetta 11.Rudimental 12.Rihanna 13.Bastille 14.Pharrell Derulo 12.Adele 13.Kell y Clarkson 12.Matchbox 20 13.Kat y Perry 14.Fun. 15.Of Williams 15.Vance Joy 16.Eminem 14.P!nk 15.LMFAO 16.Ed Sheeran 17.Jessie Monsters And Men 16.Macklemore & Ryan 17.Rudimental 18.Zedd 19.Lana Del J 18.Pitbull 19.Jessica Mauboy Lewis 17.Olly Murs 18.Birds Of Tokyo Rey 20.Guy Sebastian 21.Pitbull 20.Nicki Minaj 21.Gym Class Heroes 19.Justice Crew 20.The Script 21.Train 22.Sheppard 23.David Guetta 22.Nickelback 23.Gotye 24.Good 22.will.i.am 23.Pitbull 24.Labrinth 24.Justice Crew 25.Miley Cyrus Charlotte 25.U2 25.Rita Ora 2015 PPCA ANNUAL REPORT 16 SPECIAL FINANCIAL

REPORTFor the financial year ending 30 June 2015

CONTENTS Directors’ report

Auditor’s independence declaration

Annual financial report

- Statement of profit or loss and other comprehensive income

- S tatement of financial position

- Statement of changes in equity

- Statement of cash flows

- Notes to the financial statements

Directors’ declaration

Independent auditor’s report 2015 PPCA ANNUAL REPORT 17 DIRECTORS’ REPORT

The directors of Phonographic Performance Company of Australia Limited submit herewith the annual financial report of the company for the financial year ended 30 June 2015. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

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

Name Particulars George William Ash President, 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 Megan Washington Independent Artist

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 Graham John Connors Resigned 31 December 2014 Megan Washington Appointed 27 February 2015

Company secretary Ms 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 activities The 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. 2015 PPCA ANNUAL REPORT 18 DIRECTORS’ REPORT

Review of operations The 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.

The company’s distribution to its licensors in relation to the current year was $31,047,059 (2014: $32,530,208).

The company’s results for the financial year ended 30 June 2015 was a profit of $nil (2014: $nil).

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

Matters subsequent to the end of the financial year There 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 developments Disclosure 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 regulations The company’s operations are not subject to any particular and significant environmental regulations under any State or Federal laws.

Dividend The 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 2015, the directors do not recommend the payment of dividend for the current year (2014: $nil)

Indemnification of officers and auditors During 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.

Distribution The annual surplus to be distributed in accordance with the Company’s distribution policy is $31,047,059. 2015 PPCA ANNUAL REPORT 19 DIRECTORS’ REPORT

Directors’ meetings The 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, 5 board meetings were held.

Board of Directors Eligible to attend Attended

George William Ash 5 5 Elizabeth Blakey (alternate) 5 4 Emmanuel Candi (alternate) 1 1 Graeme Connors 3 3 David William De Barran Cullen 5 3 Colin Daniels 5 3 Karen Ann Don (alternate) - - Denis Anthony Handlin 5 - Antony Harlow 5 - Belinda Morrison 5 5 Gordon James Pitt (alternate) 5 4 David Vodicka 5 4 Megan Washington 2 -

Proceedings on behalf of the Company No 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 declaration The 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, 30th October 2015 2015 PPCA ANNUAL REPORT 20 INDEPENDENT AUDITORS DECLARATION

DECLARATION 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 2015, 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 Sydney Chartered Accountants

Melissa Alexander Partner Dated in Sydney, this 30th day of October 2015 2015 PPCA ANNUAL REPORT 21 Statement of Profit or Loss and Other Comprehensive Income for the financial year ended 30 June 2015

2015 2014 Note $ $

Revenue 5 45,898,762 42,824,808

Other income 5 - 720,000

Subscription fees paid or payable to the International Federation of Phonographic Industry (288,031) (321,335)

Employee benefits expense (3,738,435) (3,402,119)

Depreciation and amortisation expense (426,803) (428,268)

Occupancy expense (188,586) (194,756)

Distribution to licensors (31,047,059) (32,530,208)

Legal expenses (7,554,875) (4,021,060)

Other expenses (2,654,973) (2,647,062)

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. 2015 PPCA ANNUAL REPORT 22 Statement of financial position AS AT 30 June 2015

2015 2014 NOTE $ $

Current assets Cash and cash equivalents 14(a) 1,859,715 1,302,409 Trade and other receivables 7 8,651,669 10,026,585 Other financial assets 8 32,192,801 31,192,801

Total current assets 42,704,185 42,521,795

Non-current assets Property, plant and equipment 9 1,884,769 2,303,647

Total non-current assets 1,884,769 2,303,647

Total assets 44,588,954 44,825,442

Current liabilities Trade and other payables 10 44,013,027 44,320,050 Provisions 11 491,478 412,017

Total current liabilities 44,504,505 44,732,067

Non-current liabilities Provisions 11 84,440 93,366

Total non-current liabilities 84,440 93,366

Total liabilities 44,588,945 44,825,433

Net assets 9 9

Equity Issued capital 12 9 9

Total equity 9 9

The above statement of financial position should be read in conjunction with the accompanying notes. 2015 PPCA ANNUAL REPORT 23 Statement of CHANGES IN EQUITY for the financial year ended 30 June 2015

Share capital Retained earnings Total $ $ $

Balance as at 1 July 2013 12 - 12

Cancelled shares (3) - (3)

Total comprehensive income for the year - - -

Balance as at 30 June 2014 9 - 9

Total comprehensive income for the year - - -

Balance as at 30 June 2015 9 - 9

The above statement of changes in equity should be read in conjunction with the accompanying notes. 2015 PPCA ANNUAL REPORT 24 Statement of CASH FLOWS for the financial year ended 30 June 2015

2015 2014 Note $ $

Cash flows from operating activities Receipts from customers 50,007,572 44,736,035 Payments to suppliers and employees (17,037,898) (13,378,783) Distributions to licensors (32,547,771) (33,191,741)

Net cash provided by/(used in) operating activities 14(b) 421,903 (1,834,489)

Cash flows from investing activities Interest received 1,143,328 1,267,047 Payments for plant and equipment (7,925) (314,692) Net (payments for)/proceeds from term deposits (1,000,000) 400,000

Net cash provided by investing activities 135,403 1,352,355

Net increase/(decrease) in cash and cash equivalents 557,306 (482,134)

Cash and cash equivalents at the beginning of the financial year 1,302,409 1,784,543

Cash and cash equivalents at the end of the financial year 14(a) 1,859,715 1,302,409

The above statement of cash flows should be read in conjunction with the accompanying notes. 2015 PPCA ANNUAL REPORT 25 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

1. General information The estimates and underlying assumptions are reviewed Phonographic Performance Company of Australia Limited on an ongoing basis. Revisions to accounting estimates are (the company) is an unlisted public company limited by shares, recognised in the period in which the estimate is revised if the incorporated and operating in Australia. The financial statements revision affects only that period, or in the period of the revision are presented in Australian dollars. and future periods if the revision affects both current and future periods. The financial statements were authorised for issue by the directors on 30th October 2015. The following judgements have been applied:

Net current asset deficiency 2. Basis of preparation As at 30 June 2015 the company has a net current asset Phonographic Performance Company of Australia Limited deficiency of $1,800,320 (2014: $2,210,272). Included in the applies Australian Accounting Standards – Reduced Disclosure company’s current liabilities are aggregate amounts representing Requirements as set out in AASB 1053: Application of Tiers the licence fees received in advance of $7,728,308 (2014: of Australian Accounting Standards and AASB 2010-2: $8,311,731) and amounts payable to licensors of $31,146,433 Amendments to Australian Accounting Standards arising (2014: $32,647,145). While the amount payable to the licensors from the Reduced Disclosure Requirements will be settled in December 2015, the licence fees received in advance will be used to support the operations of the company The financial statements are general purpose financial in the next financial year with only the surplus forming part of statements that have been prepared in accordance with the amount which will be distributed to the licensors in relation Australian Accounting Standards – Reduced Disclosure to the financial year ending 30 June 2015. Requirements of the Australian Accounting Standards Board (AASB), other authoritative pronouncements of the Australian Consequently, the net current asset deficiency position at the Accounting Standards Board and the Corporations Act 2001. 30 June 2015 is due to the nature of the business and does not The company has adopted all of the new, revised or amending highlight an issue relating to the going concern assumption of Accounting Standards and Interpretations issued by the AASB the company. that are mandatory for the current reporting period.

Australian Accounting Standards set out accounting policies 4. Summary significant accounting policies that the AASB has concluded would result in financial The following significant accounting policies have been adopted statements containing relevant and reliable information about in the preparation and presentation of the financial report: transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements (a) Goods and services tax are presented below and have been consistently applied unless Revenues, expenses and assets are recognised net of the stated otherwise. amount of goods and services tax (GST), except:

The financial report, except for the cash flow information, has i. where the amount of GST incurred is not recoverable from been prepared on an accruals basis and is based on historical the taxation authority, it is recognised as part of the cost of cost. Cost is based on the fair values of the consideration given acquisition of an asset or as part of an item of expense; or in exchange for assets. ii. for receivables and payables which are recognised inclusive of GST. 3. Critical accounting judgements and key sources of estimation uncertainty The net amount of GST recoverable from, or payable to, In the application of the company’s accounting policies, the taxation authority is included as part of receivables or management is required to make judgements, estimates and payables. assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and Cash flows are included in the statement cash flows on a associated assumptions are based on historical experience and gross basis. The GST component of cash flows arising from other factors that are considered to be relevant. Actual results investing and financing activities which is recoverable from, may differ from these estimates. or payable to, the taxation authority is classified as operating cash flows. 2015 PPCA ANNUAL REPORT 26 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

4. Summary significant accounting policies (continued) (e) Financial assets (b) Revenue Other financial assets are classified into the following Revenue is measured at the fair value of the consideration specified categories: ‘loans and receivables’. received or receivable. The classification depends on the nature and purpose of the financial assets and is determined at the time of Revenue is brought to account over the terms of the licences initial recognition. issued on the following basis: (f) Property, plant and equipment • Public performance licence fees are normally issued Property, plant and equipment are stated at cost less for a period of one year, although shorter periods are accumulated depreciation and impairment. Cost includes accommodated. In all cases licence fees are payable expenditure that is directly attributable to the acquisition or in advance. Income is brought to account on a monthly construction of the item. In the event that settlement of all basis over the life of the contract. or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future • Broadcast licences are issued for various terms - income to their present value as at the date of acquisition. is brought to account on a monthly basis over the life of the contract. Depreciation is provided on property, plant and equipment.

• Revenue from the disposal of other assets is recognised Depreciation is calculated on a straight-line basis so as to when the entity has passed control of the other assets write off the net cost or other revalued amount of each asset to the buyer. over its expected useful life to its estimated residual value.

Interest revenue Leasehold improvements are depreciated over the period of Interest revenue is accrued on a time basis, by reference the lease or estimated useful life, whichever is the shorter, to the principal outstanding and at the effective interest rate using the straight-line method. The estimated useful lives, applicable, which is the rate that exactly discounts estimated residual values and depreciation method are reviewed at the future cash receipts through the expected life of the financial end of each annual reporting period, with the effect of any asset to that asset’s net carrying amount. changes recognised on a prospective basis. The gain or loss arising on disposal or retirement of an item of property, plant (c) Income tax and equipment is determined as the difference between the The company prepares its income tax returns on the sales proceeds and the carrying amount of the asset and is basis that it acts as agent for the copyright holders that it recognised in profit or loss. represents. As such, it does not derive income on its own account. Rather, it is entitled under its constituent document The following useful lives are used in the calculation of to be reimbursed for expenditure incurred in the course of its depreciation: activities. The basis of assessment has been agreed with the Australian Taxation Office. • Office furniture 5 to 10 years

The net effect of temporary and permanent differences • Office equipment 3 to 7 years arising from expenditure incurred by the company is passed on to the recipients of the royalties collected. • Computer equipment 3 to 7 years

(d) Cash and cash equivalents • Leasehold improvements 7 years Cash comprises cash on hand and demand deposits. Cash • Software 3 to 10 years equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are (g) Intangibles subject to an insignificant risk of changes in value and have IT development and software a maturity of three months or less at the date of acquisition. Costs incurred in developing products or systems and costs Deposits with a maturity of greater than three months from in acquiring software and licenses that will contribute to the date of acquisition are classified as other financial assets. future period financial benefits through revenue generation and/or cost reduction are capitalised to software. Costs

2015 PPCA ANNUAL REPORT 27 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

capitalised included external direct costs of materials The amount recognised as a provision is the best estimate of and service and direct payroll and payroll rated costs of the consideration required to settle the present obligation at employees’ time spent on the project. Amortisation is reporting date, taking into account the risks and uncertainties calculated on a straight-line basis from the date the asset surrounding the obligation. Where a provision is measured using is brought into use over periods generally ranging from the cash flows estimated to settle the present obligation, its three to ten years. carrying amount is the present value of those cash flows.

IT development costs include only those costs directly When some or all of the economic benefits required to settle attributable to the development phase and are only a provision are expected to be recovered from a third party, recognised following completion of technical feasibility the receivable is recognised as an asset if it is virtually certain and where the Company has an intention and ability to that reimbursement will be received and the amount of the use the asset. receivable can be measured reliably.

IT development and software are included in property, (k) Financial instruments issued by the company plant and equipment. Other financial liabilities Other financial liabilities are initially measured at fair value, (h) Leased assets net of transaction costs. Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where Other financial liabilities are subsequently measured at another systematic basis is more representative of the time amortised cost using the effective interest method, with interest pattern in which economic benefits from the leased asset are expense recognised on an effective yield basis. consumed. The effective interest method is a method of calculating the (i) Employee benefits amortised cost of a financial liability and of allocating interest A liability is recognised for benefits accruing to employees in expense over the relevant period. The effective interest rate is respect of wages and salaries, annual leave and long service the rate that exactly discounts estimated future cash payments leave when it is probable that settlement will be required and through the expected life of the financial liability, or, where they are capable of being measured reliably. appropriate, a shorter period.

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) Provisions Provisions 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. 2015 PPCA ANNUAL REPORT 28 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

5. Revenue and other income 2015 2014 $ $

Revenue Licence fees 44,860,438 41,662,765 Interest revenue – other parties 1,038,324 1,162,043

Total Revenue 45,898,762 42,824,808

Other income Litigation settlement - 720,000

6.Profit for the year Other specific disclosures Profit for the year before income tax includes the following expenses: 2015 2014 $ $

Post employment benefits - defined contribution plans 340,834 308,160 Provision for doubtful debts 266,303 362,496

7. Trade and other receivables 2015 2014 $ $

Trade receivables 8,563,273 7,626,832 Allowance for doubtful debts (720,000) (793,835) 7,843,273 6,832,997

Prepaid expenses 109,818 135,217 Other licence receivables 238,795 2,715,010 Other receivables 459,783 343,361 8,651,669 10,026,585

8. Other financial assets 2015 2014 $ $

Held-to-maturity financial assets Cash on deposit 32,192,801 31,192,801 2015 PPCA ANNUAL REPORT 29 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

9. Property, plant and equipment Office OFFICE Computer Leasehold furniture eqUIPMENT EqUIPMENT IMPROvements at COST AT cost SoftwARE AT COST AT cost Total $ $ $ $ S

Cost Balance at 1 July 2013 201,864 114,557 2,234,469 422,555 611,702 3,585,147 Additions - - 306,460 8,232 - 314,692 Disposals ------

Balance at 30 June 2014 201,864 114,557 2,540,929 430,787 611,702 3,899,839 Additions - - - 7,925 - 7,925 Disposals ------

Balance at 30 June 2015 201,864 114,557 2,540,929 438,712 611,702 3,907,764

Accumulated depreciation Balance at 1 July 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 as at 30 June 2014 (114,954) (81,044) (768,076) (369,960) (262,158) (1,596,192) Depreciation expense (21,801) (9,508) (265,146) (42,962) (87,386) (426,803) Disposals ------

Balance at 30 June 2015 (136,755) (90,552) (1,033,222) (412,922) (349,544) (2.022,995)

Net book value As at 30 June 2014 86,910 33,513 1,772,853 60,827 349,544 2,303,647

As at 30 June 2015 65,109 24,005 1.507,707 25,790 262,158 1.884,769

10. Trade and other payables 2015 2014 $ $

Trade payables 4,418,959 2,274,674 Lease equalisation provisions 224,934 274,934 Goods and services tax payable 494,393 811,566 Licence fees received in advance 7,728,308 8,311,731 Amounts payable to licensors 31,146,433 32,647,145

44,013,027 44,320,050 2015 PPCA ANNUAL REPORT 30 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

11. Provisions 2015 2014 $ $

Current Employee benefits 491,478 368,427

Non-current Employee benefits 84,440 69,601

12. Issued capital 2015 2014 $ $

9 fully paid ordinary shares (2014: 9) 9 9

2015 2014 NO. $ NO. $

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

Fully paid ordinary shares carry one vote per share. In accordance with the constitution of the company, no dividends are to be distributed to shareholders. Three shares were cancelled in the year following a merger of two shareholders, in line with the company’s constitution.

13. Capital and leasing commitments

Operating leases Non-cancellable operating lease commitments 2015 2014 $ $

Not longer than 1 year 369,038 354,843 Longer than 1 year and not longer than 5 years 748,471 1,117,509 Longer than 5 year and not longer than 10 years - - 1,117,509 1,472,352

The company has no capital commitments at reporting date (2014: nil). 2015 PPCA ANNUAL REPORT 31 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

14. Notes to the statement of cash flows

(a) Reconciliation of cash and cash equivalents For 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:

2015 2014 $ $

Cash and cash equivalents 1,859,715 1,302,409

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

2015 2014 $ $

Profit for the year - -

Depreciation and amortisation 426,803 428,268 Interest income received and receivable (1,143,328) (1,267,050)

Changes in assets and liabilities (Increase)/decrease in assets: Trade and other receivables 1,374,916 (1,268,377) Increase/(decrease) in liabilities: Trade and other payables (307,023) 205,315 Provisions 70,535 67,355

Net cash provided by/(used in) operating activities 421,903 (1,834,489)

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: 2015 2014 $ $

Short-term employee benefits 1,169,995 1,084,427 Post-employment benefits 111,149 100,309

1,281,144 1,184,736 2015 PPCA ANNUAL REPORT 32 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 30 June 2015

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

(b) Transactions with other related parties Other 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 are repayable at call.

Rental expense of $85,090 (2014: $91,742) was charged to Australian Recording Industry Association Limited. The rental cost is deemed to be under normal terms and conditions.

Clerical services expense of $829,313 (2014: $820,806) was charged to Australian Recording Industry Association Limited and Music Rights Australia Pty Limited.

No grant was paid to PPCA Performers’ Trust Foundation (2014: $35,749)

17. Subsequent events There 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.

18. Company details The registered office and principal place of business of the company is:

Level 4, 11-17 Buckingham Street, Surry Hills, NSW 2010 2015 PPCA ANNUAL REPORT 33 DIRECTORS’ DECLARATION

The 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 2015 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 Ash Director

Sydney, 30th October 2015 2015 PPCA ANNUAL REPORT 34 INDEPENDENT AUDITORS REPORT

Independent 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.

Independence In 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.

Opinion In 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 Alexander Partner Dated in Sydney, this 30th day of October 2015 2015 PPCA ANNUAL REPORT 35 PPCA performers’ trust foundation STATEMENT OF FINANCIAL POSITION AS AT 30 June 2015

2015 2014 $ $

Current assets Cash and cash equivalents 100,484 94,875 Trade and other receivables 294 3,355 Term deposits 300,000 350,000

Total current assets 400,778 448,230

Total assets 400,778 448,230

Current liabilities Trade and other payables 3,000 2,600 Grants allocated and unexpended at the end of the financial year held by trustees for beneficiaries 375,311 423,836

Total current liabilities 378,311 426,436

Total liabilities 378,311 426,436

Net assets 22,467 21,794

Funds Funds retained in the Trust 22,467 21,794

Total funds 22,467 21,794

The above statement of financial position should be read in conjunction with the accompanying notes. 2015 PPCA ANNUAL REPORT 36 TARIFF CATEGORIES

A GENERAL 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)

B 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.

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

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

E1 NIGHTCLUBS For the playing of protected sound recordings in a licensed venue for the purpose of dancing

E2 dANCES AND DANCE PARTIES For the playing of protected sound recordings for the purpose of dancing at Dances or Dance Parties

E3 bARS FOREGROUND MUSIC For the playing of protected sound recordings at a bar or similar venue as a predominant means of entertaining patrons

E4 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 solely for underage participants

F 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

FW 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

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

HM 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”

I 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

J AUDIO JUKEBOXES For the playing of protected sound recordings through an audio jukebox 2015 PPCA ANNUAL REPORT 37 TARIFF CATEGORIES

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

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

K 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.

M 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.

MW 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

N 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

P 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)

R1 RESTAURANTS, CAFES For the playing of protected sound recordings in Restaurants/Cafes and similar establishments

R2 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).

S 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

SS 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.

U 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.

V 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). 2015 PPCA ANNUAL REPORT 38 TARIFF CATEGORIES

W MUSIC VIDEOS - GENERAL For the public exhibition of music videos

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

WP 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.

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

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

Y 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.

Z 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). PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LTD

ACN 000 680 704 ABN 43 000 680 704 level 4, 11 BUCKINGHAM st, SURRY HILLS nsw 2010 po box q20, Queen victoria building nsw 1230 t. 02 8569 1100 f. 02 8569 1183 [email protected] www.ppca.com.au Real Music • Real Artists • Real Impact