2 2002 highlights - linking business to music makers annual report 200… · 38 ppca performers’...

Credits

Content Stephen PeachMarcella McAdamLynne Small

Copy Co-ordination Marcella McAdam

TypingVeronica TookerRosie O'Donoghue

ProofingRosie O'Donoghue

PhotographyKaye HigginsJason McCormack

DesignFreestyle Design

Thanks toSony Music Entertainment Aust., Roadshow Music, Transistor Music, Warner Music, BMG Australia,Universal Music Australia, Standard Records,EMI Music, Festival Mushroom Records

2 2002 Highlights

3 Chairman's Report

4 The Company

5 PPCA Board Members

7 Management Report 2002

10 PPCA Communications

12 PPCA Performers Trust Foundation

13 2002 Most Broadcast Recordings and Artists

14 PPCA Top 100 Most Broadcast Recordings 2002

15 PPCA Top 50 Most Broadcast Recording Artists 2002

16 PPCA Most Broadcast Artists 1999 - 2002

17 PPCA Most Broadcast Recordings 1999 - 2002

18 Appendix A Code of Practice - Australian Music

20 Special Purpose Financial Report

38 PPCA Performers’ Trust Foundation Balance Sheet

39 Appendix B Sample PPCA Licence

40 Appendix C Tariff Categories

Contents

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2002 Highlights

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PPCA revenues, distributions, licences and registered artists continued toincrease in 2001-2002, maintaining our unbroken succession ofimprovements since 1990.

• Income up 17.55% to $9,897,215• Distribution surplus up 23.4% to $7,215,375• Licences up 3.5% to 34,451

THE PPCA PERFORMERS TRUST FOUNDATION APPROVED 15APPLICATIONS FOR FUNDING:

• 12 related to further education and research• 3 for festivals, live music and local artists

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I am pleased to report on another successful and busy year for the organisation.

The year’s income (1 July to 30 June) stood at the record level of $9.8 million, representing anincrease of 17% over the previous year. The surplus is at another record high - $7.2 milliondollars available to distribute to artists and labels, representing an increase of 23% over the yearending June 2001. This year’s excellent result was assisted by the resolution of the FACTSagreement which accounted for approximately half of the 23% increase, and included a backpayment component.

Public performance licence numbers at the end of the period stood at 34,451, representing anincrease of approximately 3% over the previous year.

Overall, a very encouraging result from a financial perspective, and PPCA’s 13th consecutiveyear of income and surplus growth.

A key highlight for PPCA in 2002 was the relaunching of the website now providing new featuresand an improved and streamlined navigation system, allowing users to easily access relevantinformation on PPCA activities. Areas of direct relevance to registered artists include a news &communications section, material on new policies and legislative issues and the ability to printoff artist and recording registration forms.

This year also saw the introduction of new procedures for artist registration. These wereexecuted as a direct result of the new federal privacy legislation designed to help protectpersonal information and ensure that artist entitlements are correctly reported.

As reported last year, PPCA in association with other Australian collecting societies, developedan industry code of conduct which was successfully implemented this year with PPCA taking allthe necessary steps to ensure compliance with the code.

With regards to international activities, a reciprocal agreement with PPL, PPCA’s sister body inthe UK, covering independent copyright owners for broadcasting and public performance inboth territories was successfully negotiated. Under this arrangement, PPCA will represent UKIndies in Australia for broadcast and public performance rights and PPL will be able to collectand distribute licence fees on behalf of Australian Indies. This is a positive initiative by PPCA forour smaller labels that do not have license arrangements in place with local UK labels or theresources to deal direct with PPL.

PPCA continues its role of raising the awareness of public performance and broadcasting rightsand this includes regular submissions to government to assist in positive law reform. The recentappointment to PPCA of a Manager for Licensing Development will also ensure that new andviable sources of revenue streams from the commercial use of sound recordings are exploredand implemented on behalf of all members.

I would like to take the opportunity to acknowledge the contribution of my fellow Boardmembers during the year and thank them for their support as well as the continued dedicationand hard work of the PPCA secretariat in all their activities.

Peter Bond

Chairman PPCA

November 2002

Chairman’s Report

3Phonographic Performance Company of Australia Ltd. Annual Report 2002

HeadlineSUBHEAD

The Company

DIRECTORS

PETER BOND

ELIZABETH ANN BLAKEY- Appointed 10 September 2001

LOUIS CALLEJA

DENIS ANTHONY HANDLIN

SHAUN JAMES

GREGORY JOHN MACAINSH

MICHAEL MCMARTIN

BELINDA MORRISON

EDWARD ERSKINE ST JOHN- Appointed 3 July 2001

KAREN ANN DON(Alternate for Peter Bond) - Appointed 5 November 2001

MICHAEL WILLIAM GOLDEN(Alternate for Elizabeth Ann Blakey) - Appointed 20 February 2002

GRAHAM DAVID HARRIS(Alternate for Louis Calleja)

DAMIAN PETER RINALDI(Alternate for Denis Anthony Handlin) - Appointed 19 August 2002

MARK NARBOROUGH(Alternate for Shaun James)

DESMOND ARTHUR DUBERY(Alternate for Edward Erskine St John)

JEREMY FABINYI- Resigned 26 July 2001

ADRIAN FITZ-ALAN(Alternate for Denis Anthony Handlin) - Resigned 31 August 2002

TIMOTHY PRESCOTT- Resigned 3 July 2001

AUDITORSDELOITTE TOUCHE TOHMATSU

BANKERSCOMMONWEALTH BANK OF AUSTRALIA

SOLICITORSGILBERT & TOBIN

EXECUTIVE SECRETARIAT

STEPHEN PEACHChief Executive Officer

LYNNE SMALLManager - Finance, Operations & Administration

MAXINE CHISHOLMLicensing Manager

LINDA COURTNEYDistribution Manager

JAMES GRIERSONIT Manager

NICHOLAS LOVELicensing Development Manager

JASON MCLENNANCorporate Counsel

REGISTERED OFFICEPPCA A.C.N. 000 680 704 A.B.N. 43 000 680 704

Level 4, 19 Harris Street, Pyrmont NSW 2009

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Peter Bond - PPCA Chairman

Peter Bond is the current chairman of PPCA and has 38 years music industryexperience in A&R, marketing, label and regional management in the UK,USA, Australia, Asia and Africa. Peter’s career began at PolyGram in 1964,joining Sony Music (CBS Records) in 1978, then starting his own labelTimbuktu Records in 1990. Peter then joined Universal Music (MCA Records)in 1996. Peter is currently the Chairman of Universal Music Australia andPresident of Universal Music International for Australia, New Zealand andAfrica.

Libby Blakey

Libby Blakey is currently Director of Business Affairs for Festival MushroomRecords and has also held a legal position at Polygram Music.

Louis Calleja

Louis Calleja became a member of the PPCA Board in 1999. Louis is Headof Business Affairs and New Business Development for EMI Music Australia.Louis has qualifications in Business Commerce and Finance, along with anextensive career background within EMI Music Australia in senior executivepositions. With 20 years of experience in the music industry, Louis enjoysworking with teams dedicated to the changing needs of the industry.

Denis Handlin

Denis is the Chairman and Chief Executive Officer of Sony MusicEntertainment Australia Limited, having held various senior positions withinthe company during the past 31 years. Denis is also a former chairman of thePPCA. Denis’ deep involvement in the music industry is also reflected in hiscurrent position as Chairman of the Australian Record Industry Association(ARIA), and his previous experience as Chairman of the ARIA ChartCommittee. Denis has also served on the committees of several industryassociations.

Shaun James

Shaun James became a member of the PPCA Board in May 1999. Shaun isalso the Chairman and CEO of Warner Music Australasia, a division of theWarner Music Group, since 1999. Prior to Shaun’s current position withWarner Music Australia, he held positions in the promotions, sales andmarketing divisions after joining the company in 1991. Shaun’s closeassociation with the Australian music industry began in Melbourne withFestival Records. Shaun holds a Bachelor of Business (Marketing) fromMonash University.

PPCA Board Members

5Phonographic Performance Company of Australia Ltd. Annual Report 2002

PPCA Board Members

Greg Macainsh - Artist Representative

Greg Macainsh has been a recording artist, songwriter and musician for over25 years, forming the seminal Australian group Skyhooks in 1973. Skyhooksdisbanded in 1980 and Greg moved into production, management andsongwriting tuition. A keen bass player, he has toured with a number ofartists, notably John Farnham and Dave Warner. Greg is a strong advocatefor the contemporary music industry, holding positions as a Director andChairperson of the Victorian Rock Foundation from 1989 to 1993 and aWriter Director of APRA from 1997 to 2000. He was elected to the PPCAboard as an Artist Representative in 2001.

Michael McMartin - Manager Representative

Michael McMartin started Trafalgar Records in 1975 and went on to developa stable of artists ranging from Radio Birdman to Gyan and 1927. Michaelformed Melody Management Pty. Ltd. in 1984 and has been manager of theHoodoo Gurus since that time. Other clients presently include BrookeMcClymont, Persian Rugs and producers Charles Fisher (SavageGarden,Hoodoo Gurus etc.) and Tim Whitten (Powderfinger etc.) Michaelwas a foundation member of the Music Managers Forum (MMF Aust) andCo-chairman of MMF for four years. Michael is currently the MMF'sProfessional Development /International Manager and Vice Chairman of theWorld Wide Association of Managers' Forums, the IMMF. Michael is also onthe Board of Support Act Limited - the benevolent society for musicians andworkers in the music industry.

Lindy Morrison - Artist Representative

Lindy Morrison has been a member of the PPCA Board, as a representativeof registered Australian recording artists, since 1993. Lindy toured the worldas a drummer, with Zero, The Go-Betweens and Cleopatra Wong, from 1978until 1992. Since then, Lindy has worked around Australia as the musicaldirector or performer in shows, parades and festivals, and has led drum andmusic workshops with many diverse and varied community groups. Lindy isalso a Director on the Music Council of Australia Board, and she is theNational Coordinator for Support Act Ltd - the benevolent society formusicians and workers in the music industry.

Ed St John

Ed St John became a member of the PPCA Board in July 2001. Ed is theManaging Director of BMG Australia, having previously held a number ofsenior positions within the company since joining in 1998. Prior to joiningBMG, Ed held the position of Director of Marketing, Columbia Records - adivision of Sony Music Australia. Ed’s long association with the musicindustry includes work as a television writer and producer specialising inmusic and entertainment-focused programming, and as a freelance musicwriter and contributor to several key books on Australian music.

6 Phonographic Performance Company of Australia Ltd. Annual Report 2002

FINANCIAL PERFORMANCE

It is a pleasure to once again report record achievements in the areas of revenue, distributablesurplus and licence coverage.

Total income for the 2002 financial year increased by 17%, resulting in overall earnings of $9.8million. Increases in the areas of “Public Performance Fees” (up by $541k) and “CommercialTelevision Fees" (up by $722k) were the main contributors to this positive growth. It should benoted that fees from the commercial television sector covered an eighteen month period, as anadjustment for the previous year was received on conclusion of the agreement.

Unfortunately, the demise of the “Music Country” pay television channel reduced the incomefrom the subscription television sector.

Despite the substantial increases in income, operating expenses were closely contained, andincreased by only 2.4%.

The distributable surplus reached a new high with an increase of 23.4% over the previous year,resulting in an amount of just over $7.2 million for distribution to artists and record labels.

The number of general public performance licences continues to grow, and at June 2002 stoodat 34,451. The ongoing growth in licence coverage and public performance income illustratesthe effectiveness of the licensing department and the contribution of the communicationsprogramme.

The simple graphs on page 9 display PPCA’s achievements in the key areas of revenue,distributable surplus and public performance licence coverage.

COMMUNICATIONS

During the year our programme of advertising and communications has continued, as weendeavour to increase awareness of the value that can be derived from using sound recordingsin business, the concept of copyright ownership, and the benefits PPCA can provide in linkingsound recording users with owners. PPCA’s profile has been enhanced by our participation in anumber of industry events and education based programmes around Australia.

The PPCA website (www.ppca.com.au) is a key element of the communications strategy, andwas relaunched in 2002 after extensive redevelopment. Through its simple navigation system,users can quickly access the increased resources for copyright owners, artists, licensees andthe general public.

DISTRIBUTION

During December 2002, PPCA made its annual distribution to registered artists and record labelsfor the financial year ending June 2002. Almost 750 cheques were issued prior to Christmas todistribute the record surplus to artists and labels.

We continue to work to increase awareness of PPCA throughout the artist community, and urgeall artists, managers and associations to spread the word and encourage all eligible Australianrecording artists to register for the Artist Direct Distribution Scheme.

Similarly, we continue to contact emerging labels to explain the role and function of PPCA andthe benefits of allowing PPCA to assist in their licensing activities.

During the year, two distribution related policy decisions were effected. First, the minimumthreshold for an artist payment was increased to $5 (previously $2). This increase was

Management Report 2002

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Management Report 2002 continued

implemented to control administrative overheads, due to the costs involved in processingpayments. This is the first increase in a number of years, and still provides a very low thresholdfor participation in direct artist distributions.

As usual, any amounts allocated to registered artists that do not reach this annual threshold willbe directed to the relevant copyright owner / record company, for distribution in accordance withthe particular contractual arrangements for the various recordings.

Secondly, following a review of the artist registration procedures as a result of new federalprivacy legislation, each artist must now register individually (i.e. “group” / “band” registrationsare no longer accepted) and sign their initial registration form. The revamped PPCA website isa good source of information, and explains the registration process. All forms can bedownloaded from the site, and there are some sample documents to demonstrate how theyshould be completed.

Over the next twelve months PPCA will be contacting those registered as “bands” to convertthem to individual registrations. We encourage all artists to ensure that their details are completeand they keep us up to date on a regular basis with details of their new recordings.

The distribution process, a core function of PPCA, is both complex and time consuming. As inprior years, the process was greatly assisted by the free access granted to PPCA by theAustralian Record Industry Association (ARIA) of its extensive catalogue database. Thisdatabase provides invaluable information, and assists in the matching of artist registrations withthe titles contained in the distribution logs.

SUPPORT ACT LIMITED (SAL)

PPCA has continued its support of SAL - a national benevolent fund established to provideassistance to Australian musicians, composers, and associated workers.

PPCA is represented on the Board of SAL, and supports SAL’s aim to provide financial, legal andmedical assistance to those artists / composers and families in need.

In addition to providing ongoing administrative support, PPCA has provided practical assistancein fund raising activities, with events such as the annual Melbourne Cup Lunch drawing theindustry together to generate much needed funds to aid the organisations ongoing charitableactivities.

HUMAN RESOURCES

Mid 2002 saw the appointment of Nick Love in the newly created role of Manager, LicensingDevelopment. The role focuses on key customer relations and identifying new areas ofbusiness, and is a key element of PPCA's strategy to continue to deliver year on year growth inthe areas of revenue and distributable surpluses.

Alex Malik left PPCA in July 2002, in order to undertake doctoral studies in intellectual propertyat Sydney’s University of Technology. Following Alex’s departure, Jason McLennan wasappointed to the position of Corporate Counsel.


THE COMING YEAR

As always, the year ahead is expected to be another challenging one for the organisation andits staff. Negotiations are currently underway with cable subscription telecasters andcommercial radio broadcasters in relation to the appropriate level of licence fees, and we hopeto conclude these agreements within the next few months.

We are also in the process of finalising arrangements with the ABC for a new long termagreement in relation to fees for the use of sound recordings and music video clips in its radioand television services.

We plan to maintain and improve our record for steady public performance licence growth. Ourestablished public relations and communications programme supports this goal and dovetailsneatly with our obligations under the Code of Conduct for Collecting Societies.

PPCA has and will continue to engage in ongoing dialogue with government, to ensure that theparticular needs of artists and sound recording copyright owners are not overlooked as thecommunity embraces new technologies and ways of conducting business.

In relation to broadcast rights, PPCA continues to seek the removal of the artificial limit on radiobroadcast fees contained in the Copyright Act. For many years, the owners of copyright insound recordings have been effectively subsidising the Australian commercial radiobroadcasting industry. Since theintroduction of the Copyright Act(1968) commenced, broadcastershave benefited from the “pricecapping” on the licence fees thatcan be charged for the broadcastof sound recordings.

The limits are significantly lowerthan market rates for suchlicences in other comparablecountries. This is a vital issue forPPCA. It continues to remain highon our list of priorities for thebenefit of our constituents as ithas a significant impact on currentand future income levels.

On this, and all issues, PPCAremains committed to ensuringthat all registered artists andrecord labels obtain fairremuneration for the use of theirsound recordings and music videoclips.

Management Report 2002 continued

GRAPH 1 DISTRIBUTION (Millions)

GRAPH 2 NUMBER OF LICENCES (Thousands)

GRAPH 3 GROSS REVENUE (Millions)

Stephen PeachChief Executive Officer

Lynne SmallManager - Finance,Operations & Administration

9

PPCA Communications


PPCA Communications

PPCA Most Broadcast Australian Country Music Recording Artist for 2001awarded to Gina Jeffreys - pictured with Rod Cameron (UMA), Peter Bond(Chairman, PPCA) and Clive Hodson (ABC Contemporary Music).

Nick Love (Licensing Development Manager, PPCA centre) attended theRestaurant & Catering Awards for Victoria.

Restaurant and Catering NSWs Executive Director, Robert Goldman(centre) pictured with Peter Bond (Chairman, PPCA) and Stephen Peach(CEO, PPCA) shortly after their annual Awards for Excellence.

PPCA were pleased to be a sponsor of both the Fitness ACT Expo and theirinaugural Sports Awards in 2002. Pictured with PPCAs CommunicationsManager, Marcella McAdam (centre) is Dr Dion Klein (Fitness ACTPresident) and Alison Dart (Executive Director, Fitness ACT) at the Expoheld in Canberra.

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PPCA Performers’ Trust Foundation

Since its inception, PPCA has funded and co-administered with the Musicians’ Union and theMedia Entertainment and Arts Alliance (formerly Actor’s Equity) the PPCA Performers’ TrustFoundation (The Trust). The Trustees during the period 1 July 2001 - 30 June 2002 were PeterBond, Emmanuel Candi (resigned January 2002), Stephen Peach (from February 2002), PatriciaAmphlett and Denis Shelverton.

In exercising their powers pursuant to the provisions of the Trust, the Trustees have the powerto pay or to apply the Trust Fund to or for the benefit of such beneficiaries as the Trustees intheir absolute discretion from time to time determine in respect of one or more of the followingpurposes:

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 $1,460,806 (up to 30 June 2002).

In the 2001-2002 year, three Trust meetings were held and 19 applications were put to theTrustees. Of these, 15 were approved totaling $74,437. Of the successful applications 12related to further education and research; and 3 to festivals, live music and local artists.

The names of the recipients are as follows:

• Mike Bevan • Willow Neilson Quartet

• Flinders Street School of Music • Sam Riley

• Musicians’ Union of Australia • 15th Annual ARIA Awards

• Claire Stirling • Gary Wain

• Media Entertainment & Arts Alliance • Teresa Beck-Swindale

The Trust Balance Sheet can be found on page 39 of this report.Feedback from many of thegrants recipients has been welcome and useful. Here are some examples:

Thank you for your assistance with the Willow Neilson Quartetstrip to Belgium to attend the Jazz Hoelaart InternationalCompetition in Belgium. Each member of the group has benefitedfrom the experience in many ways. I think we created interest inAustralian jazz amongst all the musicians and organisers that wemet. I attained a contact in each major city in central Europe andthink we succeeded in all of our objectives and more.What I think was most important, outside of the contacts wemade for further touring, recording and arrangement work, wasthe musical interaction between other young musicians of highcalibre from so many countries.

Thank you once again,

Willow Neilson

I am writing on behalf of the Flinders Street School of Music toexpress our sincere thanks for the grant the Trust has providedfor the Festival of Australian Music held in Adelaide in August/September 2000. The Festival was a resounding success, andreceived a very positive response in both the local and nationalmedia as well as providing strong opportunities for students fromthe School.

Once again, please accept our thanks for your generosity.

Diana J HarrisPrincipal LecturerDirector - Festival of Australian Music


As with previous years, PPCA continues to acknowledge the most broadcast recordings andartists in Australia. The extensive play lists used as the basis for PPCA’s distribution surpluspayments determine these results.

The MOST BROADCAST RECORDINGS lists the 100 most broadcast recordings of the year asplayed by radio and television stations across Australia. The MOST BROADCAST ARTIST list ismeasured by collating all titles performed by each of the artists listed in the PPCA radio/TVbroadcast logs taken during the relevant period (i.e. July 2001 to June 2002).

MOST BROADCAST RECORDINGS

The most Broadcast Recording over all for 2002 was Drops of Jupiter by Train taking the #1position; this was followed by Lifehouse with Hanging by a Moment at #2 and then Gabrielle’shit single Out of Reach from the movie soundtrack Bridget Jones’ Diary at #3. Local talent hitthe list with Alex Lloyd’s award winning Amazing reaching #5 making it the most broadcastAustralian recording on radio for the period.

Australian music continued to have a strong presence in the PPCA list for the given period withmany artists achieving multiple entries including Kylie Minogue, Powderfinger, Paul Mac aswell as Alex Lloyd. Credit must be given to the record companies for their dedicated marketingand investment efforts towards these artists and their recordings throughout the year.

Many Australian artists covering diverse genres made their debut onto the PPCA list during 2002and this included Paul Mac, Aneiki, Kasey Chambers, Grinspoon, Shakaya, Selwyn, Bardotand a solo Darren Hayes.

Overall, twenty-one (21) positions in the Top 100 Most Broadcast Recordings for 2002 were byfifteen (15) Australian artists.

MOST BROADCAST ARTISTS

The Top 50 MOST BROADCAST ARTISTS saw an outstanding result for local music withinternational pop sensation Kylie Minogue taking the #1 position. This position was mainlyachieved by having four (4) of her recordings ‘airplayed’ into the Top 100 – Can’t Get You Out ofMy Head, In Your Eyes, Love at First Sight and On a Night Like This - pushing Kylie ahead ofinternational artists U2 at #2 and Madonna at #4 and last year’s #1 on the list, Savage Garden.

In the history of compiling the PPCA broadcast charts, this is the third year running anAustralian act has achieved the top position indicating the popularity of Australian music acrossa wide range of broadcasting station formats. This, combined with her continuing catalogue ofhits, has resulted in Kylie Minogue receiving the PPCA Award as the Most Broadcast AustralianRecording Artist (2002).

Other Australian performers in the Top 50 Most Broadcast Artists list included Paul Mac (10),Powderfinger (13), Alex Lloyd (16), John Farnham (19), Natalie Imbruglia (29), INXS (35)Vanessa Amorosi (36), many still proving the dominance of their music catalogue on radio.PPCA has once again compiled the list of the Most Broadcast Recording and Artists for 1999,2000, 2001 and 2002 on the following pages. Being hard factual data, these results are alwayskeenly observed by artists and record companies, radio stations and music enthusiasts.

2002 Most BroadcastRecordings and Artists

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1 Drops of Jupiter Train

2 Hanging by a Moment Lifehouse

3 Out of Reach Gabrielle

4 Follow Me Uncle Kracker

5 Amazing Alex Lloyd

6 Pleased to Meet You Aneiki

7 Can’t Get You Out Of My Head Kylie Minogue

8 How you remind me Nickelback

9 Don’t Stop Movin’ S Club 7

10 Starlight (original version) The Superman Lovers

11 Lovin’ each day Ronan Keating

12 In Your Eyes Kylie Minogue

13 Cherry Lips (Go Baby, Go!) Garbage

14 Just The Thing Paul Mac

15 Dancing in the Moonlight Toploader

16 With Arms Wide Open Creed

17 Turn off the Light Nelly Furtado

18 What Took You So Long? Emma Bunton

19 I’m a Believer Smash Mouth

20 Better Man Robbie Williams

21 Sing Travis

22 When it’s Over (album version) Sugar Ray

23 Rapture Iio

24 Can’t Fight the Moonlight Leann Rimes

25 Not Pretty Enough Kasey Chambers

26 Hey Baby (feat. Bounty Killer) No Doubt

27 Walking Away Craig David

28 Drive Incubus

29 Hands Clean Alanis Morisette

30 Superman (It’s Not Easy) Five for Fighting

31 I’m Like a Bird Nelly Furtado

32 Smooth Criminal Alien Ant Farm

33 The Sound of Breaking Up Paul Mac

34 Family Affair Mary J. Blige

35 Elevation U2

36 Thank You Dido

37 It’s Been a While Staind

38 Gotta get Thru This (radio edit) Daniel Bedingfield

39 My Sacrifice (album version) Creed

40 Heavensent Killing Heidi

41 Whole Again Atomic Kitten

42 Ride Wit Me (feat. City Spud) Nelly

43 Androgyny Garbage

44 Don’t Let Me Get Me Pink

45 Let me Blow Ya Mind Eve

46 The Greatest View Silverchair

47 You give me Something Jamiroquai

48 Love at First Sight Kylie Minogue

49 Miss California Dante Thomas

50 Kryptonite 3 Doors Down

51 Wrong Impression Natalie Imbruglia

52 Wherever you will Be The Calling

53 Beautiful Day U2

54 Insatiable Darren Hayes

55 Don’t Mess with the Radio Nivea

56 Crying at the Discotheque Alcazar

(radio edit)

57 You get What You Give New Radicals

58 My Happiness Powderfinger

59 Free Mya

60 Another Chance Roger Sanchez

61 In the End Linkin Park

62 Luv Me, Luv Me Shaggy

(feat. Samantha Cole)

63 I Need Somebody Bardot

64 One Day in Your Life Anastacia

65 Short Skirt / Long Jacket Cake

66 Angel Shaggy

67 If You’re Gone Matchbox 20

68 Chemical Heart Grinspoon

69 Murder on the Dancefloor Sophie Ellis Bextor

70 Smooth Santana

71 Lady (Hear Me Tonight) Modjo

72 Let’s Dance (radio edit) Five

73 Buggin’ Me Selwyn

74 Too Close (radio edit) Blue

75 Do You Love Me? (radio edit) Mademoiselle

76 U Got it Bad Usher

77 Stop Callin’ Me (radio edit) Shakaya

78 Hit ‘em up Style (Oops!) Blu Cantrell

79 I’m outta Love Anastacia

80 Everywhere Michelle Branch

81 25 Miles 2001 - radio mix Three Amigos

82 Ain’t It Funny Jennifer Lopez

83 It’s Raining Men (album version) Geri Halliwell

84 Fallin’ (album version) Alicia Keys

85 Hide U (album version) Kosheen

86 Whenever, Wherever Shakira

87 Shine Vanessa Amorosi

88 The Metre Powderfinger

89 Butterfly Crazy Town

90 Love Foolosophy Jamiroquai

91 Who Do You Love Now? Riva

(radio version)

92 Rockin’ the Suburbs Ben Folds

93 Get the Party Started Pink

94 Hero Enrique Iglesias

95 Escape Enrique Iglesias

96 Green Alex Lloyd

97 Sick Sick Carousel Lifehouse

98 On a Night Like This Kylie Minogue

99 Someone to call my Lover Janet Jackson

100 Dance With Me 112

Chart is measured by collating all titles that appear in the PPCA radio broadcast logs during the period July to June each year.Bold denotes Australian Artist.


PPCA Top 100 Most BroadcastRecordings 2002

1 Kylie Minogue

2 U2

3 Savage Garden

4 Madonna

5 Garbage

6 Elton John

7 Jennifer Lopez

8 Creed

9 The Beatles

10 Paul Mac

11 Ronan Keating

12 Lifehouse

13 Powderfinger

14 Matchbox 20

15 No Doubt

16 Alex Lloyd

17 Nelly Furtado

18 Train

19 John Farnham

20 Robbie Williams

21 Smash Mouth

22 Shaggy

23 Gabrielle

24 Jamiroquai

25 Green Day

26 The Corrs

27 Blink 182

28 Nickelback

29 Natalie Imbruglia

30 Fleetwood Mac

31 Sugar Ray

32 Red Hot Chili Peppers

33 Alanis Morissette

34 Pink

35 INXS

36 Vanessa Amorosi

37 Aneiki

38 The Offspring

39 Killing Heidi

40 Crowded House

41 Anastacia

42 R.E.M

43 Cold Chisel

44 Uncle Kracker

45 Billy Joel

46 Silverchair

47 The Eagles

48 Bryan Adams

49 Craig David

50 Rolling Stones

Chart is measured by collating all titles that appear in the PPCA radio broadcast logs during the period July to June each year.Bold denotes Australian Artist.

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PPCA Top 50 Most Broadcast Artists 2002

PPCA Most Broadcast Artists 1999 - 2002

1999

1 Shania Twain

2 The Beatles

3 Madonna

4 Elton John

5 Bachelor Girl

6 Natalie Imbruglia

7 John Farnham

8 Goo Goo Dolls

9 Alanis Morissette

10 Elvis Presley

11 Savage Garden

12 U2

13 Phil Collins

14 Billy Joel

15 Spice Girls

16 Human Nature

17 Mariah Carey

18 John Mellencamp

19 Lighthouse Family

20 Cher

21 All Saints

22 Bryan Adams

23 Jewel

24 Sheryl Crow

25 Neil Diamond

2000

1 Savage Garden

2 The Beatles

3 Madonna

4 Elton John

5 Taxiride

6 Vanessa Amorosi

7 Bryan Adams

8 Shania Twain

9 Killing Heidi

10 U2

11 Backstreet Boys

12 Smash Mouth

13 Bachelor Girl

14 Santana

15 Crowded House

16 The Beach Boys

17 Fleetwood Mac

18 Red Hot Chili Peppers

19 INXS

20 Billy Joel

21 Human Nature

22 The Eagles

23 Rolling Stones

24 John Mellencamp

25 Jennifer Lopez

2001

1 Savage Garden

2 Matchbox 20

3 U2

4 The Corrs

5 Vanessa Amorosi

6 Ronan Keating

7 Kylie Minogue

8 Backstreet Boys

9 Madonna

10 The Beatles

11 John Farnham

12 Elton John

13 PowderFinger

14 Human Nature

15 Bryan Adams

16 Shania Twain

17 Cold Chisel

18 Killing Heidi

19 Bon Jovi

20 Jennifer Lopez

21 INXS

22 Anastacia

23 Bachelor Girl

24 Madison Avenue

25 Billy Joel

2002

1 Kylie Minogue

2 U2

3 Savage Garden

4 Madonna

5 Garbage

6 Elton John

7 Jennifer Lopez

8 Creed

9 The Beatles

10 Paul Mac

11 Ronan Keating

12 Lifehouse

13 Powderfinger

14 Matchbox 20

15 No Doubt

16 Alex Lloyd

17 Nelly Furtado

18 Train

19 John Farnham

20 Robbie Williams

21 Smash Mouth

22 Shaggy

23 Gabrielle

24 Jamiroquai

25 Green Day

Bold denotes Australian Artist.


1999

1 High Lighthouse Family

2 CrushJennifer Paige

3 SlideGoo Goo Dolls

4 Buses And TrainsBachelor Girl

5 BelieveCher

6 One WeekBarenaked Ladies

7 The WayFastball

8 Save TonightEagle Eye Cherry

9 When You're GoneBryan Adams

10 From This MomentOnShania Twain

11 Thank UAlanis Morissette

12 Wishing I Was ThereNatalie Imbruglia

13 Sweetest ThingU2

14 SwayBic Runga

15 LullabyShawn Mullins

16 I Don't Want To MissA ThingAerosmith

17 When the Lights GoOutFive

18 That Don't ImpressMe MuchShania Twain

19 Time Of Your Life(Good Riddance)Green Day

20 HandsJewel

21 Can't Get Enough OfYou BabySmash Mouth

22 The Day You ComePowderfinger

23 This KissFaith Hill

24 Music Sounds BetterWith You (radio edit)Stardust

25 IrisGoo Goo Dolls

2000

1 SmoothSantana

2 Everywhere you goTaxiride

3 She's So HighTal Bachman

4 I TryMacy Gray

5 All StarSmash Mouth

6 I Knew I Loved YouSavage Garden

7 AffirmationSavage Garden

8 When You SayNothing At AllRonan Keating

9 Hey Leonardo(She Likes Me For Me)Blessid Union of Souls

10 WeirKilling Heidi

11 Steal My SunshineLen

12 Have A LookVanessa Amorosi

13 AbsolutelyEverybodyVanessa Amorosi

14 MascaraKilling Heidi

15 Last KissPearl Jam

16 Scar TissueRed Hot ChiliPeppers

17 Get SetTaxiride

18 Baby Did A Bad BadThingChris Isaak

19 Beautiful StrangerMadonna

20 Kiss MeSixpence None TheRicher

21 Burning Down theHouseTom Jones

22 Pure ShoresAll Saints

23 If You Had My LoveJennifer Lopez

24 Permission to ShineBachelor Girl

25 Larger Than LifeBackstreet Boys

2001

1 BreathlessThe Corrs

2 Life is a RollercoasterRonan Keating

3 ShineVanessa Amorosi

4 Sunshine on aRainy Day Christine Anu

5 I’m Outta LoveAnastacia

6 If You’re GoneMatchbox 20

7 Crash & BurnSavage Garden

8 My HappinessPowderfinger

9 BentMatchbox 20

10 Shackles (Praise You)Mary Mary

11 Rome Wasn’t Built inA DayMorcheeba

12 Spinning AroundKylie Minogue

13 It’s My LifeBon Jovi

14 Beautiful DayU2

15 On A Night Like ThisKylie Minogue

16 Teenage DirtbagWheatus

17 Cruisin’Gywneth Paltrow

18 Let’s Get LoudJennifer Lopez

19 Permission To ShineBachelor Girl

20 Chained To YouSavage Garden

21 Groove JetSpiller

22 Don’t You WorryMadasun

23 Gotta Tell YouSamantha Mumba

24 YellowColdplay

25 Can’t Fight TheMoonlight(Theme From “CoyoteUgly”)Leann Rimes

2002

1 Drops of JupiterTrain

2 Hanging by aMomentLifehouse

3 Out of ReachGabrielle

4 Follow MeUncle Cracker

5 AmazingAlex Lloyd

6 Pleased to Meet YouAneiki

7 Can’t get you out ofmy HeadKylie Minogue

8 How you remind meNickelback

9 Don’t Stop Movin’S Club 7

10 Starlight (originalversion)The Superman Lovers

11 Lovin’ Each DayRonan Keating

12 In Your EyesKylie Minogue

13 Cherry Lips (GoBaby, Go!)Garbage

14 Just The ThingPaul Mac

15 Dancing in theMoonlightToploader

16 With Arms Wide OpenCreed

17 Turn off the LightNelly Furtado

18 What Took You SoLong? Emma Bunton

19 I’m a BelieverSmash Mouth

20 Better ManRobbie Williams

21 SingTravis

22 When it’s Over(album version)Sugar Ray

23 RaptureIio

24 Can’t Fight theMoonlightLeann Rimes

25 Not Pretty EnoughKasey Chambers

PPCA Most Broadcast Recordings1999 - 2002

Bold denotes Australian Artist.

ALEX

LLO

YD |

EMI

17

Appendix ACODE OF PRACTICE - AUSTRALIAN MUSIC

The purpose of the Code is to implement the object, set forth in the Broadcasting Services Act1992, of promoting the role of broadcasting services in developing and reflecting a sense ofAustralian identity, character and cultural diversity, by prescribing minimum content levels ofAustralian Music.

Category Format Proportions

A CHR/Mainstream Rock/Album oriented Not less than 25%Alternative

B Mainstream adult contemporary, country, Not less than 20%Classic rock

C Soft adult contemporary, Hits & Memories Not less than 15%Gold, news talk

D Easy listening - oldies, gold Not less than 10%

E Niche formats - jazz, big band Not less than 5%

All formats - other than niche not less than 10%

Metropolitan and Regional Stations

SAVAGE GARDEN | ROADSHOW JOHN FARNHAM | BMG SILVERCHAIR | EMI

HUMAN NATURE | SONY MUSIC BROOKE MCCLYMONT| UNIVERSAL

MAGIC DIRT | WARNER MUSIC


Phonographic Performance Company of Australia Limited

Special PurposeFinancial Report

21 Directors’ Report

24 Independent Audit Report

25 Directors’ Declaration

26 Statement of Financial Performance

27 Statement of Financial Position

28 Statement of Cash Flow

29 Notes to the Financial Statements

19

The Directors of Phonographic Performance Company of Australia Limited, submit herewith theannual financial year ended June 2002. In accordance with the provisions of the CorporationsAct 2001 the Directors report as follows:

The Directors of the company in office during or since the end of the financial year are:

PETER BOND

ELIZABETH ANN BLAKEYAppointed 10 September 2001

LOUIS CALLEJA

DENIS ANTHONY HANDLIN

SHAUN JAMES

GREGORY JOHN MACAINSH

MICHAEL MCMARTIN

BELINDA MORRISON

EDWARD ERSKINE ST JOHNAppointed 3 July 2001

KAREN ANN DON(Alternate for Peter Bond) Appointed 5 November 2001

MICHAEL WILLIAM GOLDEN(Alternate for Elizabeth Ann Blakey) Appointed 20 February 2002

GRAHAM DAVID HARRIS(Alternate for Louis Calleja)

MARK NARBOROUGH(Alternate for Shaun James)

DESMOND ARTHUR DUBERY(Alternate for Edward Erskine St John)

JEREMY FABINYIResigned 26 July 2001

ADRIAN FITZ-ALAN(Alternate for Denis Anthony Handlin)

TIMOTHY PRESCOTTResigned 3 July 2001

Directors’ Report


Directors’ Report

DIRECTORS’ MEETINGS

The following table sets out the number of Directors’ meetings held during the financial year andthe number of meetings attended by each director (while they were directors). During thefinancial year, 5 board meetings were held.

PRINCIPAL ACTIVITY

The principal activity of the company in the course of the financial year was acting for thecopyright owners in the licensing throughout Australia of the broadcast and public performanceof sound recordings and music video clips.

During the year there was no significant change in the nature of this activity.

CHANGES IN STATE OF AFFAIRS

During the financial year there was no significant change in the state of affairs of the companyother than that referred to in the financial statements or notes thereto.

REVIEW OF OPERATIONS

The company distributes the licence fees it collects to the Copyright owners and artists afterdeducting operating expenses. As a result of this, no profit or loss is reported and the Directorsdo not recommend that a dividend will be payable in the current year or was payable in the prioryear.

Elizabeth Ann Blakey 5 4Peter Bond 5 4Louis Calleja 5 2Karen Ann Don (Alternate) 1 1Desmond Arthur Dubery (Alternate) 5 4Jeremy Fabinyi - -Adrian Fitz-Alan (Alternate) 5 4Michael William Golden (Alternate) - -Denis Anthony Handlin 5 -Graham David Harris (Alternate) 3 2Shaun James 5 3Gregory John Macainsh 5 4Michael McMartin 5 4Belinda Morrison 5 5Mark Narborough (Alternate) 2 1Timothy Prescott - -Edward Erskine St John 5 -

DIRECTORS BOARD OF DIRECTORSHeld Attended

21

Directors’ Report

The company's results have again shown a substantial increase in the amount to be distributed to Copyright owners as compared with the previous year. The results of the operations of thecompany during the year were not, in the opinion of the Directors substantially affected by anyitem, transaction or event of a material and unusual nature.

SUBSEQUENT EVENTS

There has not been any matter or circumstance, other than that referred to in the financialstatements or notes thereto, that has arisen since the end of the financial year, that hassignificantly affected, or may significantly affect the operations of the company, the results of thoseoperations, or the state of affairs of the company in financial years.

FUTURE DEVELOPMENTS

Disclosure of information regarding likely developments in the operations of the company in futurefinancial years and the expected results of those operations is likely to result in unreasonableprejudice to the company. Accordingly, this information has not been disclosed in this report.

INDEMNIFICATION OF OFFICERS AND AUDITORS

During or since the financial year the company has not indemnified or made a relevant agreementto indemnify an officer or auditor of the company or of any related body corporate against a liabilityincurred as such an officer or auditor. In addition, the company has not paid, or agreed to pay, apremium in respect of a contract insuring against a liability incurred by an officer or auditor.

Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.

On behalf of the Directors

P. BondDirector

S. JamesDirector

Sydney, 2002


Independent Audit ReportTO THE MEMBERS OF PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED

Scope

We have audited the attached financial report, being a special purpose financial report, ofPhonographic Performance Company of Australia Limited for the financial year ended 30 June2002 as set out on pages 26 to 38. The company's directors are responsible for the financial reportand have determined that the accounting policies used and described in Note 1 to the financialstatements which form part of the financial report are appropriate to meet the requirements of the

Corporations Act 2001 and are appropriate to meet the needs of the members. We haveconducted an independent audit of the financial report in order to express an opinion on it to themembers of Phonographic Performance Company of Australia Limited. No opinion is expressedas to whether the accounting policies used, and described in Note 1, are appropriate to the needsof the members.

The financial report has been prepared for distribution to members for the purpose of fulfilling thedirectors' financial reporting requirements under the Corporations Act 2001. We disclaim anyassumption of responsibility for any reliance on this report or on the financial report to which itrelates to any person other than the members, or for any purpose other than that for which it wasprepared.

Our audit has been conducted in accordance with Australian Auditing Standards. Our proceduresincluded examination, on a test basis, of evidence supporting the amounts and other disclosuresin the financial report and the evaluation of significant accounting estimates. These procedureshave been undertaken to form an opinion whether, in all material respects, the financial report ispresented fairly in accordance with the accounting policies described in Note 1, so as to presenta view which is consistent with our understanding of the company’s financial position andperformance as represented by the results of its operations and its cash flows. These policies donot require the application of all Accounting Standards and other mandatory professional reportingrequirements in Australia.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of Phonographic Performance Company of Australia Limited isin accordance with:

(a) the Corporations Act 2001, including:(i) giving a true and fair view of the company’s financial position as at 30

June 2002 and of its performance for the year ended on that date inaccordance with the accounting policies described in Note 1; and

(ii) complying with Accounting Standards in Australia to the extent describedin Note 1 and the Corporations Regulations 2001; and

(b) other mandatory professional reporting requirements in Australia to the extent described in Note 1.

DELOITTE TOUCHE TOHMATSUJulia BickerstaffPartnerChartered AccountantsSydney, 2002

23

As detailed in Note 1 to the financial statements, the company is not a reporting entity because inthe opinion of the Directors there are unlikely to exist users of the financial report who are unableto command the preparation of reports tailored so as to satisfy specifically all of their informationneeds. Accordingly, this "special purpose financial report" has been prepared to satisfy theDirectors’ reporting requirements under the Corporations Act 2001.

The Directors declare that:

(a) The attached financial statements and notes thereto comply with Accounting Standards;

(b) The attached financial statements and notes thereto give a true and fair view of thefinancial position and performance of the company;

(c) In the Directors’ opinion, the attached financial statements and notes thereto are inaccordance with the Corporations Act 2001; and

(d) In the Directors’ opinion, there are reasonable grounds to believe that the company will beable to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the directors made pursuant to s.295(5) of theCorporations Act 2001.

On behalf of the Directors’

P. BondDirector

S. JamesDirector

Sydney, 2002

Directors’ DeclarationPHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA LIMITED


$ $

Revenue from ordinary activities 9,897,215 8,419,395

Employee benefits expense (1,330,097) (1,211,738)

Depreciation and amortisation expense (58,545) (73,945)

Borrowing costs (11,067) (7,457)

Other expenses from ordinary activities (1,282,131) (1,280,037)

Distribution to licensors (7,215,375) (5,846,218)

RESULT FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE 2 - -

Income tax expense relating to ordinary activities 1(b) - -

Net Result - -

Total Changes in Equity other than those Resulting from Transactions with Members as Members - -

Statement of Financial PerformanceFOR THE FINANCIAL YEAR ENDED 30 JUNE 2002

Note 2002 2001

Notes to the financial statements are included on pages 29 to 38.

25

Statement of Financial PositionAS AT 30 JUNE 2002

$ $

CURRENT ASSETS

Cash assets 898,818 1,105,813

Receivables 6 1,648,764 2,241,552

Other financial assets 7 8,255,000 5,614,619

TOTAL CURRENT ASSETS 10,802,582 8,961,984

NON-CURRENT ASSETS

Plant and equipment 8 96,717 110,524

TOTAL NON-CURRENT ASSETS 96,717 110,524

TOTAL ASSETS 10,899,299 9,072,508

CURRENT LIABILITIES

Payables 9 10,796,062 8,880,045

Interest-bearing liabilities 10 - 10,711

Provisions 11 85,398 117,759

TOTAL CURRENT LIABILITIES 10,881,460 9,008,515

NON-CURRENT LIABILITIES

Interest-bearing liabilities 12 - 56,264

Provisions 13 17,821 7,711

TOTAL NON-CURRENT LIABILITIES 17,821 63,975

TOTAL LIABILITIES 10,899,281 9,072,490

NET ASSETS 18 18

EQUITY

Contributed equity 14 18 18

Retained profits 19 - -

TOTAL EQUITY 18 18

Note 2002 2001



Statement of Cash FlowFOR THE FINANCIAL YEAR ENDED 30 JUNE 2002

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from operating activities 10,942,921 8,194,736

Payments for operating activities (2,878,241) (3,305,441)

Interest received 324,935 400,357

Interest paid (11,067) (7,457)

Distribution to licensors (5,846,218) (4,215,189)

Net cash provided by operating activities 17(b) 2,532,330 1,067,006

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for plant and equipment (90,647) (18,419)

Proceeds from sale of plant and equipment 58,678 200

Net cash used in investing activities (31,969) (18,219)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of borrowings (66,975) (8,948)

Net cash used in financing activities (66,975) (8,948)

NET INCREASE IN CASH HELD 2,433,386 1,039,839

Cash at beginning of financial year 6,720,432 5,680,593

Cash at the end of the financial year 17(a) 9,153,818 6,720,432

Note 2002 2001


27

Notes to the Financial StatementsFOR THE FINANCIAL YEAR ENDED 30 JUNE 2002

FINANCIAL REPORTING FRAMEWORK

The company is not a reporting entity because in the opinion of the directors there are unlikelyto exist users of the financial report who are unable to command the preparation of reportstailored so as to satisfy specifically all of their information needs. Accordingly, this “specialpurpose financial report” has been prepared to satisfy the Directors’ reporting requirementsunder the Corporations Act 2001.

The financial report has been prepared on the basis of historical cost and except where stated,does not take into account changing money values or current valuations of non-current assets.Cost is based on the fair values of the consideration given in exchange for assets.

The financial report has been prepared in accordance with the Corporations Act 2001, the basisof accounting specified by all applicable Accounting Standards and UIG Consensus Views andthe disclosure requirements of Accounting Standards AASB 1001 “Accounting Policies”, AASB1018 “Statement of Financial Performance”, AASB 1034 “Financial Report Presentation andDisclosures” and AASB 1040 “Statement of Financial Position” and UIG Abstract 35 “Disclosureof Contingent Liabilities”, except the disclosure requirements of AASB 1017 “Related PartyDisclosures” and AASB 1033 “Presentation and Disclosure of Financial Instruments”.

SIGNIFICANT ACCOUNTING POLICIES

Accounting policies are selected and applied in a manner which ensures that the resultingfinancial information satisfies the concepts of relevance and reliability, thereby ensuring that thesubstance of the underlying transactions and other events is reported.

The following significant accounting policies have been adopted in the preparation andpresentation of the financial report:

a) Depreciation

Depreciation is provided on plant and equipment. Depreciation is calculated on astraight-line basis so as to write off the net cost or other revalued amount of each assetover its expected useful life. Leasehold improvements are depreciated over the period ofthe lease or estimated useful life, whichever is shorter, using the straight line method.

The following estimated useful lives are used in the calculation of depreciation.

Office Furniture 10–11 yearsOffice Equipment 9 yearsComputer Equipment 3 yearsMotor Vehicles 5 years

b) Income Tax

The company prepares its income tax returns on the basis that it acts as agent for therecord companies 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 forexpenditure incurred in the course of its activities. The basis of assessment has beenagreed with the Australian Taxation Office.

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

1. SUMMARY OF ACCOUNTING POLICIES


c) Revenue Recognition

Unearned revenue is brought to account over the terms of the licences issued on thefollowing basis:

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

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

d) Leased Assets

Leased assets classified as finance leases are recognised as assets. The amount initiallybrought to account is the present value of minimum lease payments.

A finance lease is one which effectively transfers from the lessor to the lesseesubstantially all the risks and benefits incidental to ownership of the leased property.

Finance leased assets are amortised on a straight-line basis over the estimated usefullife of the asset.

Finance lease payments are allocated between interest expense and reduction of leaseliability over the term of the lease. The interest expense is determined by applying theinterest rate implicit in the lease to the outstanding lease liability at the beginning of eachlease payment period.

Operating lease payments are recognised as an expense on a basis which reflects thepattern in which economic benefits from the leased asset are consumed.

e) Recoverable Amount of Non-Current Assets

Non-current assets are written down to recoverable amount where the carrying value ofany non-current asset exceeds recoverable amount. In determining the recoverableamount of non-current assets, the expected net cash flows have not been discounted totheir present value.

f) Employee Entitlements

Provision is made 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 requiredand are capable of being measured reliably.

Provisions made in respect of wages and salaries and annual leave expected to besettled within 12 months, are measured at their nominal values.

Provisions made in respect of long service leave which are not expected to be settledwithin 12 months are measured as the present value of the estimated future cashoutflows to be made by the company in respect of services provided by employees upto reporting date.

Notes to the Financial StatementsFOR THE FINANCIAL YEAR ENDED 30 JUNE 2002 continued

29


g) Receivables

Trade receivables and other receivables are recorded at amounts due less any allowancefor doubtful debts.

h) Accounts Payable

Trade payables and other accounts payable are recognised when the company becomesobliged to make future payments resulting from the purchase of goods and services.

i) Investments

Investments are recorded at cost. Interest revenue is recognised on an accruals basis.

j) Acquisition of Assets

Assets acquired are recorded at the cost of acquisition, being the purchaseconsideration determined as at the date of acquisition plus costs incidental to theacquisition.

In the event that settlement of all or part of the cash consideration given in theacquisition of an asset is deferred, the fair value of the purchase consideration isdetermined by discounting the amounts payable in the future to their present value as atthe date of acquisition.

k) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and servicestax (GST), except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it isrecognised as part of the cost of acquisition of an asset or as part of an item ofexpense; 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 isincluded as part of receivables or payables.

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


Note 2002 2001

$ $

2. AGENCY REVENUE AND EXPENDITURE

AGENCY REVENUES

Licence fees 9,498,589 7,586,829

Licence fees – prior year claim - 454,462

OTHER AGENCY REVENUES

Interest – other persons 339,948 377,904

Proceeds on disposals of plant and equipment 58,678 200

TOTAL AGENCY REVENUE 9,897,215 8,419,395

Less:

AGENCY EXPENSES

Provision for doubtful debts (note 4) - 7,695

Depreciation of plant and equipment 44,517 52,257

TRANSFER TO PROVISIONS

Long service leave 12,684 12,023

Annual leave 30,296 20,208

FINANCE LEASES

Amortisation of leased assets 14,028 21,688

Finance lease charges 11,067 7,457

AUDITORS’ REMUNERATION

Auditing the financial report 14,000 20,034

Other services 27,579 26,400

OTHER

Operating lease payments 213,936 207,456

Other agency expenses 2,313,733 2,197,959

TOTAL AGENCY EXPENSE 2,681,840 2,573,177

DISTRIBUTION TO LICENSORS 7,215,375 5,846,218

3. SALES OF ASSETS

Sales of assets in the ordinary course of business have been given rise to the following profits:

Plant and equipment 12,769 200


31


$ $

4. BAD AND DOUBTFUL DEBTS

a) Bad debts written off against provision for doubtful debts – trade receivables 28,480 11,152

b) Amount set aside to provision for doubtful debts – trade receivables - 7,695

5. DIRECTORS’ REMUNERATION

Payments to artist representative directors 3,832 1,552

(Member company representatives are ineligible for fees)

6. CURRENT RECEIVABLES

Trade receivables 1,508,409 770,461

Allowance for doubtful debts (36,327) (64,807)

1,472,082 705,654

Prepaid expenses 1,205 22,087

Other licence receivables 76,604 1,421,635

Other receivables 98,873 92,176

1,648,764 2,241,552

7. OTHER CURRENT FINANCIAL ASSETS

Cash on deposit 8,255,000 5,614,619

Note 2002 2001



$ $

8. PLANT ANDEQUIPMENT

Office Office Computer MotorFurniture Equipment Equipment Vehicles Total

GROSS CARRYINGAMOUNT

Balance at 30 June 2001 123,026 70,085 212,340 111,336 516,787

Additions 367 2,856 87,424 - 90,647

Disposals - - (104,748) (111,336) (216,084)

Balance at 30 June 2002 123,393 72,941 195,016 - 391,350

ACCUMULATEDDEPRECIATION

Balance at 30 June 2001 (94,587) (65,299) (194,978) (51,399) (406,263)

Disposals - - 104,748 65,427 170,175

Depreciation expense (8,780) (4,821) (30,916) (14,028) (58,545)

Balance at 30 June 2002 (103,367) (70,120) (121,146) - (294,633)

NET BOOK VALUE

As at 30 June 2001 28,439 4,786 17,362 59,937 110,524

As at 30 June 2002 20,026 2,821 73,870 - 96,717

Note 2002 2001

33


$ $

8. PLANT AND EQUIPMENT CONTINUED

AGGREGATE DEPRECIATION RECOGNISED AS ANEXPENSE DURING THE YEAR.

Office furniture 8,780 11,397

Office equipment 4,821 7,491

Computer equipment 30,916 33,369

Motor vehicles 14,028 21,688

58,545 73,945

9. CURRENT PAYABLES

Trade payables 500,349 515,941

Goods and Services Tax (GST) payable 268,308 182,066

Licence fees received in advance 2,812,030 2,335,820

Amounts payable to licensors 7,215,375 5,846,218

10,796,062 8,880,045

10. CURRENT INTEREST-BEARING LIABILITIES

Secured: Finance lease liability (note 15) - 10,711

11. CURRENT PROVISIONS

Employee entitlements (note 18) 85,398 117,759

12. NON-CURRENT INTEREST-BEARING LIABILITIES

Finance lease liabilities (note 15) - 56,264

13. NON-CURRENT PROVISIONS

Employee entitlements (note 18) 17,821 7,711

14. CONTRIBUTED EQUITY

18 fully paid ordinary shares 18 18

Fully paid ordinary shares carry one vote per share.

Note 2002 2001



$ $

15. LEASES

FINANCE LEASE COMMITMENTS

Not later than one year - 16,392

Later than one year and not later than five years - 60,603

Minimum finance lease payments - 76,995

Less: Future finance charges - (10,020)

Finance lease liability - 66,975

Included in financial statements as:

Current Interest-bearing liabilities (note 10) - 10,711

Non-current Interest-bearing liabilities (note 12) - 56,264

- 66,975

NON-CANCELLABLE OPERATION LEASES

Phonographic Performance Company of Australia Limitedhas an operating lease for its office premises. The leaseexpires 30 April 2003 with an option to renew. Leasecommitments are as follows:

No longer than 1 year 185,468 215,239

Longer than 1 year and not longer than 5 years - 184,770

185,468 400,009

16. FINANCIAL REPORTING BY SEGMENT

The company operates in one industry being the derivationof revenue from licensing the broadcast and publicperformance of sound recordings and music video clipswholly within Australia.

Note 2002 2001

35


$ $

17. NOTES TO THE STATEMENT OF CASH FLOWS

a) Reconciliation of Cash

For the purposes of the statement of cash flows, cashincludes cash on hand and in banks and investments inmoney market instruments, net of outstanding bankoverdrafts. Cash at the end of the financial year as shownin the statement of cash flows is reconciled to the relateditems in the statement of financial position as follows:

Cash assets 898,818 1,105,813

Cash on term deposit 8,255,000 5,614,619

9,153,818 6,720,432

b) Reconciliation of result from ordinary activities to net cash flows from operating activities

PROFIT FROM ORDINARY ACTIVITIES - -

Profit on sale of non-current assets (12,769) (200)

Depreciation and amortisation of non-current assets 58,545 73,945

Changes in net assets and liabilities:

(Increase)/decrease in assets:

Current receivables 592,788 (977,272)

Increase/(decrease) in liabilities

Current payables 1,916,017 368,139

Current provisions (32,361) 1,661,204

Non-current provisions 10 ,110 (58,810)

Net cash provided by operating activities 2,532,330 1,067,006

18. EMPLOYEE ENTITLEMENTS

The aggregate employee entitlement liability recognised and included in the financial statements is as follows:

Provision for Employee Entitlements

Current (note 11) 85,398 117,759

Non-current (note 13) 17,821 7,711

103,219 125,470

No. No.

Number of employees at end of financial year 26 27

Note 2002 2001



$ $

19. RETAINED PROFITS

Balance at beginning of financial year - -

Net result - -

Balance at end of financial year - -

20. ADDITIONAL COMPANY INFORMATION

Phonographic Performance Company of Australia Limited isa limited company, incorporated and operating in Australia.

Principal Registered Office and Place of Business

Level 9, 263 Clarence Street

Sydney NSW 2000

Note 2002 2001

37

PPCA Performers’ Trust FoundationBALANCE SHEET AS AT 30 JUNE 2002

$ $

FUNDS RETAINED IN THE TRUST 328,142 328,755

Represented by:

CURRENT ASSETS

Cash assets 61,467 77,223

Accrued income 4,813 4,562

Deposits – at call 77,607 12,072

Term deposits 400,000 450,119

GST – tax input receivable - 470

TOTAL CURRENT ASSETS 543,887 544,446

TOTAL ASSETS 543,887 544,446

Less:

CURRENT LIABILITIES

Payables and accrued charges 2,350 2,400

Grants allocated and unexpended at year end held by trustees for beneficiaries of:

Professional Musicians’ Union of Australia 171,973 146,086

Media Entertainment & Arts Alliance 41,422 67,205

TOTAL CURRENT LIABILITIES 215,745 215,691

TOTAL LIABILITIES 215,745 215,691

NET ASSETS 328,142 328,755

Note 2002 2001


Appendix BSAMPLE PPCA LICENCE

39

Appendix CTARIFF CATEGORIES

A General Licences - open air events; school, dance academy or church concerts; motivational

speakers.(Single event licences are available).

B Arts, film, music events and similar festivals

C Cinemas and theatres

D Dance studios, dance instructors, line dance instructors

DD Live performance groups, dance companies, performance promoters

E Nightclubs, discotheques, discotheque promoters, foreground music in bars

F Mobile discotheque operators/DJ’s

FW Mobile video discotheque operators

H Halls

HM Music on hold

I Factories, industrial premises and offices.

J Jukeboxes

JO Jukebox operators

JW Video jukebox operators

K Amusement centres, pool rooms, squash courts, swimming pools, ten pin

bowling centres

M Commercial or professional premises - including art galleries, bars, clubs,

elevators, foyers, function rooms, funeral parlours, hairdressers, health/medical

offices (eg doctors, dentists, chiropractors, massage therapists, osteopaths,

physiotherapists), hotels, libraries, lounges, massage parlours, motels,

museums, reception areas, retail stores, taverns, zoos, and/or similar establishments

MW Electrical and hi-fi stores

N Shopping centres, plazas, concourses

P Public vehicles (eg aircraft, buses, charter boats, coaches, ferries, hire cars, light

rail, monorail, ships, taxis, trains, trams)

R Restaurants, cafes, coffee lounges, road houses

S Sports arenas, race tracks, showgrounds, outdoor amusement parks

SS Community service recreational areas (beaches, parks)

U Skating rinks

V Fitness centres, gymnasiums, health clubs

W Music video clips

W-E Music video clips in nightclubs, fixed discotheques and discotheque operators

X Concert venues

Y Conference rooms

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

DISC

OM

ONTE

GO |

WAR

NER

MUS

IC

LEE

KERN

AGHA

N | A

BC C

ONTE

MPO

RARY

MUS

IC

40

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