2018 Copyright Agency Annual Report by Copyright Agency

Annual Report 2017â&#x20AC;&#x201C;18

I love thinking! I love the satisfaction of having an idea that â&#x20AC;&#x2DC;singsâ&#x20AC;&#x2122;, that works as a comprehensive piece of logical extrapolation and exposes an absurdity. Copyright Agency member and award-winning cartoonist, Cathy Wilcox

What We Do

The Copyright Agency is an Australian not-for-profit organisation that has been standing up for creators for more than 40 years. We enable the reuse of copyright-protected words and images in return for fair payment for creators.

Contents Chair’s message

CEO’s message

Highlights of 2017–18

4–7

Serving our members

8–11

Innovation for education

12–13

Licensing at work

14–15

Supporting Australian creativity

16–17

Awards and sponsorship

18–20

Directors’ Report and Financial Report

21–44

Front cover: Four of the six 2018 Miles Franklin Literary Award finalists (left to right) Michelle de Kretser, Felicity Castagna, Kim Scott and Catherine McKinnon Photo: Martin Ollman Jules Faber Photo: Caitlin Hicks

Please be advised that this publication may include the names and images of people who have passed away.

Chair’s message transformation program two and a half years ago to renovate the way the organisation serves members and licensees. There are a number of strands to this program including: investing in new cloud-based finance and distribution systems so that we can continue to pay and provide better services to members; re-configuring licensing arrangements; and developing new digital licensing products for the education sector. Photo supplied

The Copyright Agency delivered satisfactory results for members and licensees in FY18. It slightly surpassed its budget targets, continued to implement its transformation program, decided to provide money back to members from the Future Fund, advocated for sensible modernisation of copyright settings, and completed the merger of Copyright Agency and Viscopy. Last financial year, the Copyright Agency delivered solid financial results. It collected $152m in revenue and distributed $124m to publishers, writers and visual artists. The CEO’s report provides more details on the organisation’s operational performance. While this is a good result, like every organisation in the world, Copyright Agency faces challenges and opportunities driven by the truly transformative power of digital technology, including rapidly emerging technologies like artificial intelligence and blockchain. For companies that produce or license content, these impacts – both positive and negative – are profound. Think of the different fortunes of Kodak and Netflix. With this change front and centre, the Board approved management’s

Needless to say, digital technology also presents real, character forming challenges. One of the most important changes brought by digital technology is that it enhances the ease with which our customers can copy and communicate our members’ content. However, a challenge is that the value of such new forms of copying and sharing has not been agreed between the parties, or considered by the Copyright Tribunal. Moreover, there are, in some cases, unsettled questions of law and disagreements over the most efficient and accurate way of measuring usage. Therefore, we have lodged an action in the Tribunal against Universities Australia in order to settle such profoundly fundamental questions. Much of the debate around copyright policy reform is driven by digital developments and differing views on the best way to balance the interests of rights holders and large technology companies, and some ideological players at large and in education. In Canada, the tech companies and academic ideologues won, and the Government changed the copyright regime. This led to the education sector refusing to pay a fair rate for copyright material, resulting in an 80% collapse in licensing revenue, and severe damage to publishers and writers. In 2013, your Board decided to set aside money for targeted advocacy and/or strategic litigation in the event of the threat of Canadian-style radical changes being made to the

Copyright Act here. This Future Fund grew to $15 million. The Board was clear with members it would review the fund periodically and this year resolved to maintain the fund but reduce the overall cap from $15m to $12m. The return to members will be phased over three years in a manner consistent with our distribution policy. This is not to say that the Copyright Agency has not advocated strongly on behalf of members with policy makers in Canberra. We have been a very active and diligent respondent to recent discussion papers on modernising the regime. It appears that policy makers are open to sensible changes that respect the rights of creators, the importance of the copyright regime to underpinning billions of dollars of investment, and its centrality to supporting and sustaining Australian creators. While the policy signs are encouraging, nothing is ever finalised until a Bill has actually been passed. Finally, last financial year we formalised the merger with our sister rights management organisation for visual artists, Viscopy. Members of both organisations overwhelmingly voted at the AGM to support the significant change, which has driven efficiencies and ensures we can increase distributions to visual artists through a reduction in fees. My thanks to my fellow Board directors, to CEO Adam Suckling and his executive team, and to all the devoted employees of the agency who are deeply committed and knowledgeable. There is much to be proud of and you can read about it in the pages of this report. With every best wish,

Kim Williams AM

CEO’s message Our job is to ensure that we represent the rights of our members while also offering our customers valuable licences that meet their needs by providing access to an enormous amount of copyright material. 2017–18 was a solid to good year. We delivered revenue of $152m while managing costs efficiently. Our ratio of revenue to costs was 13.9% and we distributed $124m to publishers, writers, visual artists and surveyors, up by 5.1% on last year. We sought to meet the needs of our multiple stakeholders by offering innovative licensing solutions, running our operations efficiently, investing in new technology, advocating for an effective copyright regime and constantly improving our services to members. In licensing, we rolled over the schools’ agreement for one year, generated growth in licensing with private colleges and Australian businesses, and developed a new model for licensing media monitoring companies. Regrettably, we have had to take action in the Copyright Tribunal against the NSW Government for their failure to pay for the use of our members’ copyright material for six years. We are also defending our new media monitoring licence model in the Tribunal. The aim of this new model is to ensure that media monitoring companies pay a fair rate to media publishers and journalists. As part of our extensive transformation program, we are also investing in new cloud-based systems to enable us to continue to invoice and collect money, maintain

critically important databases and to distribute money to members. This new system was delivered on time and on budget. The first phase has seen an enterprise resource management system delivered on time and on budget. A key benefit of this system is that it provides a foundation stone to modernise all of the other systems and processes we use to pay members, such as our works databases and member portal. We have consulted extensively with members on how best to meet their needs in updating these critically important systems. We also introduced a new cloudbased Help Centre with a pop-up chat function to enable members to easily receive online responses to their questions, and rank their satisfaction with the level of service. The new system generates rich data on what members are most concerned about, allowing us to constantly improve our service. The Government is currently considering its response to a consultation on modernising the Copyright Act. We, along with key creator representative groups, constantly advocate for sensible and fair changes to the Act which do not erode the rights of creators. Our members are at the centre of all we do and this includes direct award sponsorship for the Educational Publishing Awards and Book Industry Awards, as well as almost $2m in grants through the Cultural Fund to the publishing, writing and visual arts sectors. This year we introduced new, highly-valuable fellowships for non-fiction writing, visual arts and for teaching. We also secured our first copyright licence with the national airline Qantas for a work of one of Australia’s most famous Aboriginal artists, the

Photo: Tim Levy

late Anmatyerre woman Emily Kame Kngwarreye. Emily’s spectacular 1991 painting, Yam Dreaming, was adapted for the fuselage of a new Qantas Dreamliner by leading Indigenous design studio Balarinji. Finally, I should say that while FY18 was a very productive one – next year will be much tougher. We are taking action in the Copyright Tribunal against Universities Australia, as well as the actions I already mentioned. We are therefore facing revenue and cost pressures. These are necessary to defend the rights of our members and confirm licensing arrangements that provide a fair return for the use of content. I would like to thank our members for constantly standing with us. We’re grateful for your endorsement of our actions on your behalf. I’d also like to thank our Board members for their guidance and support, and all of the Copyright Agency’s employees for their expertise, diligence and energy. All the best,

Adam Suckling

Annual Report 2017–18 Copyright Agency

Highlights of 2017–18 When it comes to words and images, we protect our members’ rights, collect and pay royalties, advocate for balanced copyright and provide vital grants to creators.

Financial highlights NET INCOME UP 3.1%

$131m DISTRIBUTION TO MEMBERS UP 5.1%

$124m COST RATIO DOWN 0.2%

13.9% 4

While this is a good result, like every organisation in the world, Copyright Agency faces challenges and opportunities driven by the truly transformative power of digital technology, including rapidly emerging technologies like artificial intelligence and blockchain.” Copyright Agency Chairman, Kim Williams AM

$124m

in copyright royalties paid to authors, publishers, visual artists, journalists and surveyors

Member highlights In an exciting and productive year, we undertook a beneficial merger; action in the Copyright Tribunal; major upgrades to technology; campaigns to support reading and began work on a trial to stop inauthentic Aboriginal art.

Political advocacy on behalf of members to prevent unfair changes to the Copyright Act that would have undermined their rights

Legal action against NSW Government for unpaid copyright royalties and with Media Monitoring organisations to ensure a fair rate for media content

With members’ approval, Copyright Agency and Viscopy merge for unified advocacy, greater efficiencies and lower fees for visual artists

Advocacy for members through submissions to Government’s Copyright Modernisation Consultation and Collecting Societies Code of Conduct review

Strathfield Council in NSW issues public apology for copyright infringement providing a positive example for other councils to purchase a licence

Member consultations held to inform future changes to systems to improve payments to members and online member portal

Sponsorship of Educational

This Book/Song Changed My Life features at major writers’

Publishing Awards, Australian Book Industry Awards and Walkley Arts Journalism Awards

Industry unites to form Parliamentary Friends of Australian Books and Writers

New integrated cloud-based finance and customer relationship management systems introduced on time and on budget as part of major Business Transformation

festivals including Sydney, Perth, Adelaide and Byron Bay Major support for the national books sector campaign, the

Australian Reading Hour

Indigenous art

Annual Report 2017–18 Copyright Agency

Highlights of 2017–18 Innovation for education We further developed our ties to education, providing resources written by teachers for teachers through Reading Australia, and growing with digital tools to support learning.

Developed cloudbased tool ‘Flex’ to help librarians, teachers and students source copyright-compliant material more easily

$15k new Reading Australia Fellowship announced for teachers

Our digital textbook solution for secondary schools, LearningField,

grows its publishers to over 20, and increases data on student activity for teachers

Photo: Angelique Kurylo

Licensing at work

150

new businesses licensed including Multiplex, City of Sydney Council, NRL and MLC Investments

One of Emily Kame Kngwarreye’s community members at the launch of the Qantas Boeing 787-9 Dreamliner featuring the late artist’s work Photo courtesy of Qantas

appointed to manage Namatjira Legacy Trust’s licensing rights

In a first, we licensed a member’s artwork onto a Qantas Dreamliner. The 1991 work Emily Kame Kngwarreye’s Yam Dreaming, was adapted for the fuselage by Balarinji.

Schools and university licences ensure access to everything published for less than the cost of a textbook

Supporting Australian creativity We support the Australian publishing, writing and visual arts community in multiple ways. With grants, with direct sponsorship and with valuable awards and Fellowships.

$1.8m

in Cultural Fund grants support Australian creativity

550 artists compete for $10k 2018 John Fries Award which was won by Akil Ahamat for So the spaces between us can stay soft Photo: Silversalt Photography, courtesy of UNSW Galleries

Miles Franklin Literary Award and Stella Prize funded

$10,000 Griffin Award for Australian

New $80k Fellowships announced for non-fiction

Sponsorship for Sydney

playwriting to David Finnigan

Contemporary arts festival

writing and visual art

Miles Franklin 2018 shortlisted author Felicity Castagna Photo: Martin Ollman

$1.02m in resale royalties generated for artists, an increase of 7.5%. 181 artists received their first eligible resale in 2017/18. Aboriginal or Torres Strait Islander artists have received 38% of the total resale royalties Artist Elton Wirri

Photo: Guy Louanglath

Annual Report 2017â&#x20AC;&#x201C;18 Copyright Agency

Serving our members Our members are at the core of everything we do and copyright royalties are important to their livelihoods, their creative output and their business bottom lines. We work to protect royalties and ensure respect for creators by advocating to government and reminding the Australian community of the value of creativity.

Achievements In 2017–18, we distributed over $124 million to members as scheduled, developed innovative licensing solutions, invested in new IT systems to offer members better services more efficiently, advocated consistently for an effective and fair copyright regime and supported a wide range of important creative programs through our Cultural Fund. copyright.com.au

Influencing policy We made the views of our members known at the Government’s Copyright Modernisation Consultations in early 2018, which were held in response to the Productivity Commission report of 2016 which recommended radical changes to copyright. Considerable effort has been made to introduce parliamentarians to authors and artists, so they can hear directly from them about the importance of copyright in the face of ongoing uncertainty and considerable theft of creative work online. We have worked consistently to bring the views of the whole creative community to Canberra, through joint campaigns, such as Free Is Not Fair – where key stakeholders from the music, arts, screen and book sectors all contributed. Copyright Agency also made submissions into a government review of the Collecting Societies Code of Conduct, as recommended by the Productivity Commission. The Copyright Agency has accepted in principle each of the recommendations in the draft report of the Bureau of Communications and Arts Research, including providing additional information to members and licensees about licences and distribution of fees.

Gabriella Coslovich (left) was awarded the Walkley Arts Journalism Award in 2018, while Delia Falconer received the Walkley-Pascall Award for Arts Criticism, both sponsored by Copyright Agency Photos: Adam Hollingsworth

Trinity Grammer students (left to right) William Saunders, Eamon Turner and Kobe Harb Photo courtesy of Trinity Grammar

Celebrating books and reading In conjunction with the peak associations for writers, publishers and booksellers, we formed the first ever Parliamentary Friends of Australian Books and Writing in 2017, co-chaired by Senator Linda Reynolds CSC (Liberal) and Graham Perrett MP (Labor). This group kicked off with the announcement of the revamped Australian Reading Hour – endorsed by the whole books sector – and in June 2018, gathered again to honour the 2018 Miles Franklin shortlisted authors. Our campaign about the life-changing effects of books and songs, This Book/Song Changed My Life, leapt from social media to ‘on the road’ this year, with footage from the campaign featured at Sydney Writers Festival, panel discussions held at Byron Writers’ Festival, Perth and Adelaide Writers’ Weeks, and the Walkley Foundation’s Storyology conference in Brisbane. Sydney’s Trinity Grammar School librarians also adopted the concept and rolled it out across the school.

ADELAIDE WRITERS’ WEEK Left to right: Authors Sofie Laguna, Wendy Orr, Rebekah Clarkson and chair Adam Suckling discuss life-changing books Photo: Nick Pickard

changedmylife.com.au

Annual Report 2017–18 Copyright Agency

Serving our members New licensing model We developed a new industry standard licensing model for Media Monitoring Organisations to completely modernise the licence. The model aims to reflect the intrinsic value of media intelligence to businesses and move away from segmented pricing based on method of delivery (hard copy vs online). The three main media monitoring organisations disagree with the new rates set under the industry model licence and are seeking a resolution in the Copyright Tribunal. These organisations make money out of the material produced by publishers and journalists and it is important that they pay what we believe to be a fair rate for the use of this material. Such payments are not only right but help to sustain journalism in Australia.

Operational efficiency At the end of November 2017, Copyright Agency formally merged with Viscopy and a new Visual Artist Director, Oliver Watts, joined the Copyright Agency’s Board. The merger means reduced duplication of processes and a welcome reduction in fees for visual artist members.

Investment in new systems In 2016, we began a multi-year Business Transformation project to modernise and integrate the agency’s numerous technological systems, including finance, customer relationship management (CRM), member interface and data management. Phase 1 of the project to incorporate a new, state of the art cloud-based finance system, and integration with the cloud-based CRM Salesforce, was delivered on time and on budget in early 2018. As the financial year drew to a close, we embarked on Phase 2 with a series of consultations with groups of members to inform future decisions on the way payments are made and communicated, and the technology required. In 2019 and beyond, the Business Transformation will ensure we can continue to distribute money to members using the most advanced cloud-based technology. This includes introducing a simplified payments model; greater transparency on payments and a contemporary self-service member portal. We will do all of this with an eye to working more efficiently to ensure we manage our costs over time.

JULES FABER

The Copyright Agency member and cartoonist was named Children’s Book Illustrator of the Year at the Stanley Awards Photo: Caitlin Hicks

Copyright Agency supports the industry through sponsorship of a number of awards throughout the year. See pages 18 and 19 for a complete list. Miles Franklin shortlist

Launch of the Parliamentary Friends of Australian Books and Writing in Canberra featuring authors Thomas Keneally and Mem Fox Photo courtesy of APA

Copyright Agency is a co-sponsor, with Perpetual, of the Miles Franklin Literary Award, Australia’s most prestigious prize for writing. We provide $5000 for each shortlisted author and shine the spotlight on the authors and their books through media interviews and a prominent celebration announcement. This year, that took place at the Australian Bookseller Association gala dinner in Canberra, with four of the six talented finalists, including the eventual winner, Michelle de Kretser.

Walkley Mid-Year Awards

For the first time in 2017–18, we sponsored the Walkley Foundation’s new Arts Journalism Award and the Walkley-Pascall Award for Arts Criticism, providing $5000 to each of the recipients. Gabriella Coslovich was awarded the Arts Journalism Award for her coverage of the alleged art fraud involving three paintings in the style of Australian artist, Brett Whiteley, while author Delia Falconer received the Walkley-Pascall Award for Arts Criticism for her article, The opposite of glamour, which appeared in the Sydney Review of Books.

Stanley Awards The Australian Cartoonist Association’s annual Stanley Awards celebrate excellence in the field. In 2017, the Copyright Agency sponsored the Children’s Book Illustrator of the Year Award which was won by Jules Faber (known for his Weirdo series with Anh Do among others) from a very competitive field of Rob Feldman, Don Hatcher, Johannes Leak and Simon Schneider.

Annual Report 2017–18 Copyright Agency

Innovation for education In 2018, we started to trial a cloud-based tool called Flex to help librarians, teachers and students source copyright compliant material more easily; established a new $15k Reading Australia Fellowship for teachers; and added improved analytics and interactives to our digital textbook solution for schools, LearningField. Flex

Reading Australia Fellowship

The Copyright Agency has worked with British company Kortext to develop a new online product called Flex, which makes the task of preparing copyright-compliant reading material simpler and faster for librarians and lecturers.

A fellowship for English and literacy teachers, worth $15,000 was announced in 2018, and the first recipient will be named in 2019. The award aims to provide valuable career-enhancing professional skills development to teachers.

Flex means librarians can quickly and confidently:

• quickly assign content to students

Reading Australia is Copyright Agency’s resource-hub for Australian stories. Teachers who receive regular updates have grown to 14,500 a month, accessing more than 150 teacher resources, over 90 essays and a curated booklist of classic and modern Australian stories, from Man Booker prize winner Richard Flanagan to Alexis Wright, Tom Cho to Ruth Park.

• save time and duplication of effort

readingaustralia.com.au

• verify the copyright status of content for course packs • search for scans on the shared Flex central repository • order high quality scans from the British Library (over 80 million documents)

• access Flex through existing library systems Flex is based on a similar system in the UK used by 90 universities. It is currently being trialled in several Australian private colleges. It works with our existing education licence, enabling educational institutions to access an enormous amount of material simple and easily.

LearningField Our e-textbook digital subscription service for high schools expanded to over 20 publishers and 1300 books in 2018, including the major publisher Jacaranda. Extra analytics were also made available via a new dashboard which helps teachers identify the reading behaviour of their students which, combined with other information, can provide an indication of a students’ performance. learningfield.com.au

To create is to recognise that you have been blessed with a talent or gift, and this gives you a sense of achievement in that you can look at something and say, I made that!” Kelly Evans

Educational Publishing Awards The 2018 Educational Publishing Awards Australia celebrate excellence and recognise going above and beyond for the advancement of students. Publishers PLD and Oxford University Press were awarded Primary and Secondary Publisher of the Year respectively, as voted by Australian teachers. The Publisher of the Year Awards were sponsored by the Copyright Agency, which also sponsors the event. Director of PLD, Diana Rigg was thrilled. “We create tools for primary educators to enhance literacy development in young children and we’re so grateful to be recognised by teachers across the country. Daniel Aspinall from OUP said, “What we do is for teachers and students and to better education in Australia overall.”

Teacher, author, member: Kelly Evans Copyright Agency author, member and STEM teacher Kelly Evans was awarded a $15,000, NSW Premier’s Copyright Agency Creativity across the Curriculum Scholarship. Ms Evans, who teaches at Pambula on the NSW far south coast, will investigate traditional textile techniques employed in Cambodia, Laos and Vietnam before exploring recent innovations in the UK and Europe. Ms Evans is the co-author of several textbooks published by Cambridge University Press and Wiley, including Cambridge Hospitality – Recipes for Kitchen Skills. “I have experienced first-hand the deliberate sharing of my work without my permission,” she says. “Copyright ensures that [creators] can decide on how their creative works are to be used.”

EPAA 2018 WINNERS Diana Rigg, Director of PLD, which was named Primary Publisher of the Year (top). While OUP’s Publishing and Editorial Manager Daniel Aspinall accepted the company’s award for Secondary Publisher of the Year Photo: Lindsay Edwards

KELLY EVANS

Annual Report 2017–18 Copyright Agency

Licensing at work Businesses are demonstrating their respect for creators more than ever by taking annual copyright licences. Our copyright licences work in a number of ways. The educational, government and business ‘blanket’ licences mean those sectors have the freedom to copy and share an enormous range of our members’ text and imagery in return for a fair payment. 150 new businesses bought copyright licences in 2018 including Multiplex, City of Sydney Council, MLC Investments, SMSF Association and the NRL. Strathfield Council in Sydney issued a public apology for copyright infringement and purchased a licence, demonstrating benchmark compliance to other councils. Copyright Agency also provides one-off licences. Our RightsPortal allows customers to secure the rights to an enormous number of newspaper and journal articles, while our visual artist members’ works are often licensed to spectacular effect on cars, buses, NBN boxes, hotel exteriors, fashion and even, this year, on a Qantas Boeing 787-9 Dreamliner. Emily Kame Kngwarreye’s Yam Dreaming was adapted for the plane’s fuselage by Balarinji. rightsportal.com.au

Artwork Yam Dreaming, 1991 © Emily Kame Kngwarreye/ Copyright Agency, 2018 Fuselage Design © Balarinji Photo courtesy of Qantas

Uma Wang textile print (left) and The Westin Perth, hotel exterior featuring Lena Nyadbi’s artwork © Lena Nyadbi/ Copyright Agency Photos courtesy of Uma Wang and The Westin Perth

Koda Capital a proud licensee Wealth manager to high-net-worth individuals, families and charitable institutions, Koda Capital knows from experience how important it is to protect intellectual property. “Much of the financial and investment advice we provide to our clients hinges on exclusive availability,” says Founding Partner and Chief Operating Officer Andrew Rutherford. “So the idea of copyright compliance resonates strongly with us.” Articles from print and online newspapers, magazines and journals provide Koda’s advisers and analysts with key insights and fresh ideas. “Having a copyright licence is a catch-all level of protection for us, but over and above that, we take comfort in knowing that we are paying creators for their valuable content, which we can then share.”

Lena Nyadbi’s work licensed Lena Nyadbi is a senior Western Australian Indigenous artist who works from the Warmun Art Centre, 200km south of Kununurra in the east Kimberley region. Although she didn’t start painting until 1998 when she was over 60 years old, Lena’s work has been collected widely and won many awards. In 2018, her work was licensed by Copyright Agency for use at Perth’s Westin Hotel and for the fashion brand Uma Wang.

150

new businesses licensed

Annual Report 2017–18 Copyright Agency

Winner of the 2018 John Fries Award, Akil Ahamat with award benefactor Vivienne Fries (left), the award’s curator Consuelo Cavaniglia and Copyright Agency CEO Adam Suckling Photo: Silversalt Photography courtesy of UNSW Galleries

$1.8m to the creative community

Supporting Australian creativity Just as copyright helps drive the creation of new works, so the Copyright Agency works to support writers, publishers and visual artists at all stages of their careers. Cultural Fund

Resale Royalty scheme

2018 saw the announcement of two new highly valuable Cultural Fund Fellowships, for Non-Fiction Writing and Visual Art, both worth $80,000. These are in addition to the existing Fellowships for an Author ($80k) and for two Publishers ($15k each).

The Resale Royalty scheme for artists has generated $6.3m in royalties for 1600 artists since the scheme began. Aboriginal or Torres Strait Islander artists have received 38% of the total royalties.

The Fellowships provide sustained support to Australian writers and artists to create an important work that will connect with a broad audience.

Sydney Contemporary

Overall, the Cultural Fund provided almost $1.8m in funding, including grants to 88 organisations and 27 individuals. The 2017 Author Fellowship was awarded to Kathryn Heyman to develop her memoir, Words to Live By. The 2016 Author Fellow Melissa Lucashenko’s book, Too Much Lip, was published by University of Queensland Press in July 2018. Ms Lucashenko said, “The Copyright Agency Author Fellowship was a real lifesaver. It allowed me to focus purely on this difficult and ambitious novel and to dedicate myself body and soul to creating a work of real excellence.”

resaleroyalty.org.au

In 2018, Copyright Agency sponsored the talks program at the major art fair, Sydney Contemporary. Audiences heard panel sessions on the emerging technology of blockchain; questions around the ownership of Indigenous cultural and intellectual property; and best practice when developing new markets for work through residency programs.

John Fries Award The ninth John Fries Award saw 550 artists submit entries for the coveted award, which went to Sydney artist Akil Ahamat for his video and installation work, So the spaces between us can stay soft. Ahamat takes his inspiration from online and consumer cultures and how they affect and shape identity in a contemporary context. The judges also highly commend Rachael Mipantjiti Lionel from South Australia for her work Kapi Wankanya. johnfriesaward.com

$80k

awarded via Author Fellowship

Annual Report 2017–18 Copyright Agency

Awards and sponsorship The Copyright Agency sponsors the following awards either directly or through the Cultural Fund. Money given to the recipient as a component of the award is noted.

Dorothy Hewett Award for an unpublished manuscript Julie Watts Legacy

Walkley Awards $5000 each ARTS JOURNALISM

Gabriella Coslovich (Melbourne University Press) WALKLEY-PASCALL AWARD FOR ARTS CRITICISM

Delia Falconer (The Sydney Review of Books)

NAVA Visual Artist Fellowship (2017) $20,000 Sarah Goffman, and collaborators Sonia Leber and David Chesworth Photo: Lindsay Edwards

Educational Publishing Awards PRIMARY PUBLISHER OF THE YEAR

Promoting Literacy Development (PLD)

The Bragg UNSW Press Prizes for Best Australian Science Writing (2017) Sam Jones Year 7, Kedron State High School, Queensland

SECONDARY PUBLISHER OF THE YEAR

Oxford University Press

Miles Franklin Award Shortlist $5000 each Michelle de Kretser (winner) The Life to Come (Allen & Unwin) Felicity Castagna No More Boats (Giramondo Publishing) Eva Hornung The Last Garden (Text Publishing) Catherine McKinnon Storyland (HarperCollins Publishers Australia)

The Carmel Bird Digital Literary Award (Spineless Wonders) Winner $3000 Beth Spencer The Age of Fibs

Gerald Murnane Border Districts (Giramondo Publishing)

Finalists $1000 each

Kim Scott Taboo (Picador Australia (Pan Macmillan Australia))

William Lane Small Forest

Ashley Kalagian Blunt My Name Is Revenge

Australian Book Industry Awards

Queensland Literary Awards

NON-FICTION AWARD

DAVID UNAIPON AWARD FOR AN UNPUBLISHED INDIGENOUS WRITER (2017)

Sarah Krasnostein The Trauma Cleaner (Text Publishing)

Lisa Fuller Mirrored Pieces

John Fries Award Winner $10,000 Akil Ahamat So the spaces between us can stay soft

Highly Commended Rachael Mipantjiti Lionel Kapi Wankanya

Stella Prize longlisted authors: Shokoofeh Azar, Kate Cole-Adams, Claire G Coleman, Paula Keogh, Sofie Laguna, Krissy Kneen and Mirandi Riwoe. Photo courtesy Stella Prize.

Stella Prize Longlist $1000 each

Alexis Wright (winner) Tracker (Giramondo Publishing) Shokoofeh Azar The Enlightenment of the Greengage Tree (Wild Dingo Press) Bernadette Brennan A Writing Life: Helen Garner and Her Work (Text Publishing) Kate Cole-Adams Anaesthesia: The Gift of Oblivion and the Mystery of Consciousness (Text Publishing) Claire G. Coleman Terra Nullius (Hachette Australia) Michelle de Kretser The Life to Come (Allen & Unwin) Beverley Farmer This Water: Five Tales (Giramondo Publishing) Paula Keogh The Green Bell: A Memoir of Love, Madness and Poetry (Affirm Press) Krissy Kneen An Uncertain Grace (Text Publishing) Sofie Laguna The Choke (Allen & Unwin) Joyce Morgan Martin Sharp: His Life and Times (Allen & Unwin)

Queensland Poetry Festival Indigenous Poetry Prize (2017) Joint winners Jeanine Leane and Sachem Parkin-Parkins

The Lifted Brow Prize for Experimental Non-Fiction Winner $5000 Stephanie Guest and Kate Riggs An Architecture of Early Motherhood (and Independence)

Runners up $500 each Lei Wang The Essentials Holly Childs New World Cache – mathematically resolved Science Theory Fiction with Feeling and Politics coded in Deep

NT Writers Centre Territory Read CHILDREN’S LITERATURE/ YOUNG ADULT FICTION AWARD

Johanna Bell, illustrated by Dion Beasly Go Home, Cheeky Animals (Allen & Unwin) NON-FICTION BOOK OF THE YEAR AWARD

Frank Byrne, Franny Coughlan and Gerard Waterford Living in Hope (Ptilotus Press)

Griffin Award (Australian playwriting) Winner $10,000 David Finnigan Kill Climate Deniers

Mirandi Riwoe The Fish Girl (Seizure)

Shortlist $1000 each

Stanley Awards

Ang Collins Blueberry Play

Kit Brookman The Bees Are All Dead

CHILDREN’S BOOK ILLUSTRATOR OF THE YEAR AWARD

Emme Hoy Extinction of the Learned Response

Jules Faber

Brooke Robinson Good Cook. Friendly. Clean

Annual Report 2017–18 Copyright Agency

Michelle de Kretser and Christos Tsiolkas speaking at a writers-on-writers session, supported by the Cultural Fund, during the Sydney Writersâ&#x20AC;&#x2122; Festival in 2018 Photo: Prudence Upton

20 Copyright Agency Annual Report 2017â&#x20AC;&#x201C;18

Directors’ Report and Financial Report Contents Directors’ Report

22–27

Auditor’s Independence Declaration

Financial Report

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Accumulated Funds

Statement of Cash Flows

Notes to Financial Statements

32–41

Directors’ Declaration

Independent Auditor’s Report

43–44

Annual Report 2017–18 Copyright Agency

Directors’ Report The directors present their report together with the financial report of Copyright Agency Limited for the year ended 30 June 2018 and auditor’s report thereon. This financial report has been prepared in accordance with Australian Accounting Standards. Directors’ names The names of the directors in office at any time during or since the end of the year are: • Bronwyn Bancroft (director until 30 November 2017) • David Barnett • Anthony Bertini • Jane Curry • Jason Eades** (director since 1 December 2017) • Adele Ferguson • Kate Harrison*** (director since 1 March 2018) • Helen O’Neill • Christopher Pash • Lucrezia Russell • Dr Oliver Watts**** (director since 1 November 2017) • Kimberley Williams AM The directors have been in office since the start of the year to the date of this report unless otherwise stated.

Results and review of operations Financial results The company collected and accrued royalties for the year from Australian schools, universities, colleges, government bodies, corporations and overseas collection societies totalling $150,112,766 (2017: $144,857,910). With the addition of interest income on funds invested and other minor sources of income, revenues for the year totalled $152,098,001 (2017: $147,446,848). After deducting the costs of running the Copyright Agency, including employee, occupancy and other relevant expenses, the company allocated $128,588,281 (2017: $124,036,502) to distribution pools made available for rightsholders who are members of the company, including Australian writers, publishers, surveyors and visual artists. The surplus of the company for the year of $113,023 (2017: $15,950) represents monies retained by the company for potential future expenses and allocated to the future fund and indemnity fund for that purpose. The company continued its commitment to pay distributions to members on a more timely basis, subject to its underlying principles and policies on equity and during the year distributed cash amounts totalling $123,914,887 (2017: $ 117,827,405).

22 Copyright Agency Annual Report 2017–18

Principal activities The principal activity of the company during the year was that of a copyright collecting society. During the year, the company facilitated an amalgamation with Viscopy Limited, a rights management organisation for visual arts in Australia. The company was established in 1974 to act as agent for its member authors and publishers to collectively administer the copying of their works in educational institutions and other organisations. The company is based in Sydney. The company: • Has been declared by the Commonwealth Attorney General to be the collecting society to administer the statutory licence created under Part VB of the Copyright Act 1968, for the copying and communication of copyright material by educational institutions, institutions assisting handicapped readers and institutions assisting intellectually handicapped persons. • Has been declared by the Copyright Tribunal as the collecting society to administer the statutory licence in Division 2 of Part VII of the Copyright Act 1968 in relation to government copies of works and published editions of works, other than works included in a sound recording, cinematograph film or a television or sound broadcast. • Has been appointed by the Australian Government as the collecting society under the Resale Royalty Right for Visual Artists Act 2009 for collection of resale royalties payable in respect of artworks of eligible artists. • Merged with Viscopy Limited by way of scheme of arrangement from 30 November 2017 with the effect that Viscopy Limited ceased to exist and the members of Viscopy Limited automatically became members of the company. Copyright Agency assumed Viscopy’s contractual obligations and continues to manage visual arts licensing and related activities on behalf of former Viscopy members.

Significant changes in state of affairs There were no significant changes in the company’s state of affairs that occurred during the financial year, other than those referred to elsewhere in this report.

Short-term and long-term objectives and strategies The company’s mission is to provide simple ways for people to reproduce, store and share creative content, including words and images, in return for equitable payment to copyright owners. To implement this mission, the company has adopted the following objectives in its current three year plan: • Serve our members • Influence policy and advocate for copyright • Ensure fair remuneration of members for use of their work • Optimise operations These objectives are to ensure that the Copyright Act continues to protect the rights of Australian creators and the company meets the needs of its members at all times.

Company performance The company has adopted a strategic plan which details the strategies for achieving these objectives and for measuring the company’s performance. These objectives include: • Legislative outcomes which continue to protect the rights of creators • Update distribution policies to accord with data received • Secure statutory licensing revenue and increase corporate licensing • Improved business systems and reduced operating costs

After balance date events No matters or circumstances have arisen since the end of the financial year which 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.

Likely developments The company expects to maintain the present status and level of operations. MMO litigation Copyright Agency’s licensees, media monitoring organisations Isentia Pty Ltd, Meltwater Pty Ltd and Streem Pty Ltd, have each commenced proceedings in the Copyright Tribunal (the Tribunal) in order to seek a licence for their media monitoring activities. Each of these parties has previously been licensed by Copyright Agency, however all have rejected Copyright Agency’s proposed new industry model licence and made application to the Tribunal on the basis that, there is no licence scheme currently in operation, they require a licence and Copyright Agency proposes a licence on unreasonable terms. The Tribunal has ordered that Meltwater and Streem remain on their previous licence agreements during the proceedings and until the final determination of the matter, with a retrospective adjustment. Isentia’s application for an interim licence was heard on 10 August 2018 and the Tribunal has reserved its decision.

Future Fund The Future Fund was established in 2013 in response to such issues as the Australian Law Reform Commission recommendation for radical changes affecting licensing arrangements. In Canada comparable changes to Copyright Law saw a catastrophic collapse in some licensing revenues. The Future Fund was built up over several years from interest on licence fees and allocations that were unpaid for four years. As noted in the 2016 Directors’ Report, the purpose of the Fund is to “…safeguard and manage the rights of members including but not confined to taking such necessary actions in communications, research and advocacy… to the extent required consistent with the Board’s prudent judgment”. Further, the Board noted in the 2017 Directors’ Report that “The Fund may also be called upon to conduct litigation which is necessary to protect the rights of creators, for example, to clarify the role of exceptions in the Copyright Act 1968”. In 2017, the Board reported that it had determined to maintain the Fund but that it would periodically review the need for it and any amounts no longer required for safeguarding members’ interests will be returned to members. The Board has reviewed the operation of the Fund and has determined to reduce the cap on its quantum by $3 million. This amount will be returned to members over a three year period ($1m per year) by way of an offset against operating costs in accordance with the Copyright Agency Distribution Policy, which is available on the Copyright Agency website. Potential litigation against Universities Australia The remuneration agreement between the Company and Universities Australia (on behalf of 39 participating institutions) expires on 31 December 2018. The Company has acted in good faith and used its best efforts to negotiate a commercial agreement addressing the remuneration payable by the universities sector for the copying and communication of copyright material and the appropriate method of sampling to monitor this use. Unfortunately, there is a significant risk that the parties will not have reached an agreement by 31 December 2018 and the Company may be required to initiate proceedings in the Tribunal, requesting that the Tribunal determine the applicable rate and sampling method. Copyright Agency would seek interim orders from the Tribunal at the same time to ensure that its members continue to be paid while the matter is before the Tribunal. It is expected that such litigation would have an impact on the operating expenses of the Company during the next two financial years.

NSW Litigation In November 2017, the company started proceedings in the Tribunal against the State of New South Wales. There has not been a remuneration agreement in place between the company and the State of NSW since 1 July 2012. The issues in dispute before the Tribunal are the rate that should be payable by the State for the use of copyright material under the statutory licence Environmental regulation for Governments and the method to estimate usage of that The company’s operations are not regulated by any significant material. After Tribunal-ordered mediation failed, the parties are environmental regulation under a law of the Commonwealth or awaiting orders from the Tribunal as to the management of the of a State or Territory. case, including protocols for dealing with evidence and timing.

Dividends paid, recommended and declared The company is limited by guarantee. No dividends are permitted to be paid under the constitution of the company.

Annual Report 2017–18 Copyright Agency 23

Directors’ Report continued Bronwyn Bancroft

Director until 30 November 2017

Qualifications

Dip. VComms, Master of Studio Practice, MVA (Painting)

Experience

Australian Artist who has served on the Boards of Viscopy, the National Indigenous Arts Advocacy Association and the National Gallery of Australia. Currently a director of Boomali Aboriginal Artists Co-operative, Designer Aboriginals Pty Ltd and the Australian Indigenous Mentoring Experience.

Special responsibilities

Independent Director since 20 November 2008. Member of Copyright Agency’s Stakeholder Engagement and Cultural Fund committees and also an observer member of the Art Market Professionals Advisory Panel for the Resale Royalty Scheme managed by Copyright Agency.

David Barnett Director Qualifications

BA, P Grad Dip HRM, FAICD

Experience

MD Pearson Asia Pacific, and 30 years in publishing. Other directorships include Pearson Australia Group. Former Chair of Robert Menzies College.

Special responsibilities

Australian Publishers Association appointed Director from 2011. Convenor of Copyright Agency’s Education Portal committee and member of its Audit and Finance and Nomination and Governance committees.

Anthony Bertini Director Qualifications

Experience

Chair of Thumper One Pty Ltd, an investment and advisory firm with interests in data mining and processing, blockchain technologies, social media platforms, electronic payment gateways, cleantech and biometric security. Co-founder and Chair of Organic Technology Holdings Pty Ltd, a global producer of alternative proteins and pharmaceutical oils. Chair of TBXx3 Pty Ltd, a blockchain solution for securing the global supply chain. Non-executive director of Nano Cellulose Pty Limited. Former Australian deal maker UKTI (Global Entrepreneur Program) and CEO and founder of BMC Media, publisher of IPC Magazines Australia; former Group Sales Director of The Bulletin and Australian Business Magazines and co-founder of 350.org Australia.

Special responsibilities

Independent director since May 2010. Convenor of Copyright Agency’s International Development committee until it was dissolved in 2015. Member of Copyright Agency’s Audit and Finance and Cultural Fund committees.

Jane Curry Director Qualifications

BSc (Hons)

Experience

Jane has been Managing Director of Weldon Publishing, Macquarie Library, National Book Distributors, Quarto Australia, and published her own list at Pan Macmillan Australia. Jane founded the trade-publishing house Ventura Press in 2002. Jane is a Director of the Australian Publishers Association and convenor of the APA’s Independent Publishers Committee.

Special responsibilities

Member of the Cultural Fund Committee and the Education Portal Committee. Publisher elected Director since 2015.

Jason Eades

Director from December 2017

Qualifications

Associate Diploma of Arts – Koorie Studies (Monash University College Gippsland)

Experience

Born and raised on Gunnai country in eastern Victoria. More than 25 years’ experience in leadership roles within the Indigenous for purpose sector. Currently holds the position of Director, Consulting with Social Ventures Australia. Non-executive Director at Australian Indigenous Mentoring Experience (AIME), and a member of the Australia Council’s Aboriginal and Torres Strait Islander Arts Strategy Panel.

Special responsibilities

Independent director since December 2017. Member of the Cultural Fund Committee.

Adele Ferguson Director Qualifications

BEcon, BA (Hons)

Experience

Journalist and author with a wide range of experience, including as a business commentator and an investigative reporter for The Sydney Morning Herald, The Age and The Financial Review. Awards include The Gold Walkley, two Gold Quills, two Gold Kennedys, the Graham Perkin Journalist of the Year and a Logie. Author of best-selling unauthorised biography Gina Rinehart: The Richest Woman in the World. On the board of the Melbourne Press Club.

Special responsibilities

Author elected Director since 2015. Member of the Audit and Finance Committee, Nominations and Governance Committee and the Cultural Fund Committee.

Kate Harrison

Director from March 2018

Qualifications

LLB (Hons), Masters of Law (Columbia), PhD (Uni of Syd)

Experience

Partner with Gilbert + Tobin law firm. Experience encompasses corporate and commercial litigation, intellectual property advice, commercial licensing and commercialisation across technology industries, media and communications, the music industry, advertising and consumer goods. Also worked on a number of high-profile public inquiries and Royal Commissions. Public policy experience having worked as a senior advisor in Canberra between 2008–2011.

Special responsibilities

Independent director since March 2018. Member of the Cultural Fund and Audit and Finance Committees.

24 Copyright Agency Annual Report 2017–18

Helen O’Neill Director Qualifications

BA (Hons)

Experience

Journalist with the Sydney Morning Herald, The Australian and Vogue Australia. Author, whose recent books include biographies of Harry Seidler, Florence Broadhurst and the department store David Jones. Co-founder of Curly Swirls Productions. ASA Board director, serving on its Executive Committee.

Special responsibilities

Australian Society of Authors appointed Director since 2014. Member of Copyright Agency’s Cultural Fund committee.

Christopher Pash Director Qualifications

BA, GAICD

Experience

Author, working journalist and media executive. A former Director of Content Strategy at Dow Jones Asia Pacific, CEO of Asia Pulse, a joint venture of Asia news companies, Editor in Charge, Correspondent and Bureau Chief at Australian Associated Press. Chris is a former Director of the Pacific Area Newspaper Publishers’ Association and member of the Australian Institute of Company Directors. Chair of the Australian Society of Authors. Author of The Last Whale (Fremantle Press, 2008), a narrative non-fiction book about the final days of whaling in Australia.

Special responsibilities

ASA appointed director since November 2016. Member of the Cultural Fund and Education Portal Committees.

Lucrezia Russell Director Qualifications

BA (commerce), CPA

Experience

Former General Manager of John Wiley & Sons Higher Education Division and former Convenor of the APA Tertiary and Professional Committee. Over 20 years in Higher Education publishing. Currently Senior Commissioning Editor for Law and Business Titles at Cambridge University Press.

Special responsibilities

APA appointed Director since 1 July 2010. Convenor of Copyright Agency’s Audit and Finance committee and member of its Cultural Fund, Education Portal, and Remuneration Committees.

Dr Oliver Watts Director Qualifications

Ba LLB MFA PhD (Syd)

Experience

Artist, curator, Academic. Head Curator of Artbank. Previously Senior Lecturer at the National Institute of Dramatic Art (NIDA) and Lecturer at Sydney College of the Arts (University of Sydney). Has shown internationally and nationally and is currently represented by Chalk Horse gallery and This is No Fantatsy (Melbourne). Watt’s research centres on the nexus between art and law and has published widely in this area.

Special responsibilities

Artist director since December 2017 under transitional arrangements post-merger with Viscopy. Member of the Cultural Fund Committee.

Kimberley Lynton Williams AM Chair Qualifications

B.Mus, Hon DLitt

Experience

Media executive, composer and professional executive; former CEO of News Limited, Foxtel, Southern Star, the Australian Film Commission and Musica Viva. Kim Williams has also served as a member and chair of other boards including as Chair of the Sydney Opera House Trust, Musica Viva Australia, Sydney Symphony Orchestra and of the Australian Film Finance Corporation. Currently the Chair of the Thomson Reuters Board of Trustees, the Cranlana Program, the State Library of NSW Foundation (Co-Chair), Mojo Power and VidCorp. Also on the Board of the Myer Foundation, the University of Western Sydney Foundation, Myer Family Investments and, serving as a Commissioner of the Australian Football League.

Special responsibilities

Independent director since January 2015 and Chair since June 2015; Convenor of Copyright Agency’s Cultural Fund, Remuneration and Nominations and Governance committees and member of its Audit and Finance committee.

Josephine Johnston

Company Secretary

Qualifications

Llb (Hons)

Experience

General Counsel and Company Secretary. Also responsible for the International Team. A corporate lawyer with experience in top tier law firms, senior in-house positions and advising the Crown both as a barrister and solicitor.

Annual Report 2017–18 Copyright Agency 25

Directors’ Report continued Meetings of Directors Directors’ meetings

Audit and Finance committee meetings

Cultural Fund committee meetings

Education Portal committee meetings

Number eligible to attend

Number attended

Number eligible to attend

Number attended

Number eligible to attend

Number attended

Number eligible to attend

Number attended

Bronwyn Bancroft

–

David Barnett

–

Anthony Bertini

Directors

Jane Curry

–

Jason Eades

–

Adele Ferguson

–

Kate Harrison

–

Helen O’Neill

–

Christopher Pash

–

Lucrezia Russell

Dr Oliver Watts

–

Kimberley Williams AM

–

* The Remuneration Committee and the Nominations and Governance Committees have considered matters throughout the year by email correspondence and telephone conference calls as required.

Members guarantee The company is incorporated under the Corporations Act 2001 and is a company limited by guarantee. If the company is wound up, the Constitution states that each member is required to contribute to a maximum of $20 each towards meeting any outstanding and obligations of the group. At 30 June 2018 the number of members was 37,386.

Indemnification and insurance of officers The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001.

Indemnification of auditors No indemnities have been given or insurance premiums paid, during or since the end of the year, for any person who is or has been an auditor of the company.

Auditor’s independence declaration A copy of the auditor’s independence declaration under section 307C of the Corporations Act 2001 in relation to the audit for the financial year is provided with this report.

Proceedings on behalf of the company No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

26 Copyright Agency Annual Report 2017–18

Directors’ remuneration Under Article 38 of the Copyright Agency’s Constitution, Directors’ remuneration is determined by the company in general meeting. Details of the nature and amount of each element of the emoluments of each director of the company are as follows:

Base Remuneration $

Superannuation Contributions $

Total $

Bronwyn Bancroft

13,354

–

13,354

David Barnett

29,611

2,813

32,424

Anthony Bertini

32,424

–

32,424

Jane Curry

32,424

–

32,424

Jason Eades

17,416

1,654

19,070

Adele Ferguson

29,611

2,813

32,424

Kate Harrison

10,073

957

11,030

Helen O’Neill

29,611

2,813

32,424

Christopher Pash

29,611

2,813

32,424

Lucrezia Russell

29,611

2,813

32,424

Oliver Watts

17,416

1,654

19,070

Kimberley Williams AM

59,218

5,626

64,843

Signed on behalf of the board of directors.

Director: _________________________________________________

Kimberley Williams AM

Director:_________________________________________________

Lucrezia Russell

Dated this 26th day of September 2018

Annual Report 2017–18 Copyright Agency 27

Auditorâ&#x20AC;&#x2122;s Independence Declaration

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2018, there have been:

i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Chris Allenby

Partner Sydney

28 Copyright Agency Annual Report 2017â&#x20AC;&#x201C;18

26 September 2018

Statement of Comprehensive Income FOR THE YEAR ENDED 30 JUNE 2018

Note Revenue

2018 $

2017 $

152,098,001

147,446,848

Employee benefits expense

3(b)

(13,299,797)

(12,808,632)

Depreciation and amortisation expense

3(c)

(906,800)

(574,191)

(639,731)

(578,028)

Less: expenses

Occupancy expense Consultancy costs Sampling costs Legal costs IT costs Marketing and communications Office running costs

(959,631)

(1,455,813)

(1,176,696)

(1,304,084)

(404,700)

(340,283)

(1,651,033)

(1,170,935)

(455,616)

(616,924)

(342,777)

(287,182)

(1,358,442)

(1,550,398)

(21,195,223)

(20,686,470)

Future Fund Reserve

(35,411)

(160,510)

Indemnity Fund Reserve

(40,823)

(500,956)

(76,234)

(661,466)

130,826,544

126,098,912

(128,588,281)

(124,036,502)

(2,125,240)

(2,046,460)

113,023

15,950

–

113,023

15,950

Other expenses

Payments made from Reserves

Net surplus available for distribution Less: distributions Distribution paid and payable to members

Transfer to Cultural Fund Surplus for the year Other comprehensive income for the year Total comprehensive income before allocations to reserves

3(a)

The accompanying notes form part of these financial statements.

Annual Report 2017–18 Copyright Agency 29

Statement of Financial Position AS AT 30 JUNE 2018

2018 $

2017 $

1,764,533

7,930,917

Note Current assets Cash and cash equivalents Cash on deposit

53,534,972

52,112,658

Trade and other receivables

4,011,203

5,225,145

Other assets

16,760,041

15,688,364

76,070,748

80,957,084

Total current assets Non-current assets Property, plant and equipment

2,851,473

2,477,344

Intangible assets

1,766,914

–

4,618,386

2,477,344

80,689,134

83,434,428

3,333,272

10,549,227

Total non-current assets Total assets Current liabilities Payables

Provisions

1,211,843

846,425

Distributions payable

15,315,190

12,462,021

Deferred income

40,571,287

40,029,713

60,431,592

63,887,386

Total current liabilities Non-current liabilities Payables

633,117

827,922

Provisions

282,313

297,108

915,430

1,125,030

Total liabilities

61,347,022

65,012,416

Net assets

19,342,112

18,422,012

–

19,342,112

18,422,012

19,342,112

18,422,012

Total non-current liabilities

Equity Retained earnings

Reserves

Total equity

The accompanying notes form part of these financial statements.

30 Copyright Agency Annual Report 2017–18

Statement of Changes in Accumulated Funds FOR THE YEAR ENDED 30 JUNE 2018

Retained earnings $ Balance at 1 July 2016 Surplus for the year Payments made from reserves

Future Fund reserve $

Indemnity Fund reserve $

Amalgamation reserve $

Other reserves $

Total equity $

–

15,461,816

2,944,246

–

18,406,062

15,950

–

15,950

661,466

(160,510)

(500,956)

–

Transfer surplus to reserves

(125,732)

124,107

1,625

–

Transfer from/(to) Distributions Rollover

(551,684)

(316,362)

500,956

–

367,090

–

15,109,051

2,945,871

–

367,090

18,422,012

Balance at 30 June 2017 Balance at 1 July 2017

–

15,109,051

2,945,871

–

367,090

18,422,012

113,023

–

113,023

76,234

(35,411)

(40,823)

–

(146,315)

–

146,315

–

(42,942)

–

42,942

–

Amalgamation with Viscopy Limited (net of transfer)

–

326,498

480,579

–

807,077

Balance at 30 June 2018

–

15,073,640

3,377,861

480,579

410,032

19,342,112

Surplus for the year Payments made from reserves Transfer surplus to reserves Transfer from/(to) Distributions Rollover

Statement of Cash Flows FOR THE YEAR ENDED 30 JUNE 2018

Note

2018 $

2017 $

Cash flow from operating activities Cash receipts from customers

149,956,899

144,696,305

(154,912,796)

(134,550,768)

(4,955,897)

10,145,537

2,006,714

1,778,063

1,196,070

–

Payment for property, plant and equipment

(1,064,667)

(848,406)

Payment for intangible assets

(1,926,290)

–

(1,422,314)

(7,550,410)

(1,210,487)

(6,620,753)

Cash distributed to members and payments to suppliers and employees Net cash from/(used in) operating activities

15(b)

Cash flow from investing activities Interest received Net cash acquired on amalgamation

Increase in cash on deposit

Net cash used in investing activities Net increase / (decrease) in cash held

(6,166,384)

3,524,785

Cash at the beginning of the financial year

15(a)

7,930,917

4,406,132

Cash at the end of the financial year

15(a)

1,764,533

7,930,917

The accompanying notes form part of these financial statements.

Annual Report 2017–18 Copyright Agency

Notes to Financial Statements FOR THE YEAR ENDED 30 JUNE 2018

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report is for the entity Copyright Agency Limited as an individual entity. Copyright Agency Limited is a company limited by guarantee, incorporated and domiciled in Australia. Copyright Agency Limited is a not-for-profit entity for the purpose of preparing the financial statements. The registered office and principal place of business of the company is Level 11, 66 Goulburn Street, Sydney NSW 2000. A description of the nature of the company’s operations and its principal activities is included in the directors’ report on page 2, which is not part of this financial report.

AASB 9 Financial Instruments (2014) AASB 9 (2014), published in December 2014, replaces the existing guidance AASB 9 (2009), AASB 9 (2010) and AASB 139 Financial Instruments: Recognition and Measurement and is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. The key changes introduced in AASB 9 (2014) are: (i) requirements for impairment of financial assets based on a three-stage ‘expected loss’ approach;

(ii) limited amendments to classification and measurement of financial assets to add a third measurement category for debt instruments. The new category of fair value through The financial report was approved by the directors as at the date other comprehensive income is added to the existing of the directors’ report. categories for debt instruments, i.e. amortised cost and fair value through profit or loss; and The following is a summary of the material accounting policies adopted by the company in the preparation and presentation (iii) amendments to AASB 7 Financial Instruments: Disclosures of the financial report. The accounting policies have been that significantly expand the disclosures required in relation consistently applied, unless otherwise stated. to credit risk.

(a) Basis of preparation of the financial report Statement of compliance The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements, Interpretations and other applicable authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Historical cost convention The financial report is presented in Australian Dollars and has been prepared under the historical cost convention, as modified by revaluations to fair value for certain classes of assets as described in the accounting policies. Critical accounting estimates and judgements The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Accounting Standards issued but not operative at 30 June 2018 A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2018, and have not been applied in preparing these financial statements. The Company does not plan to adopt these standards early.

32 Copyright Agency Annual Report 2017–18

The Company is assessing the potential impact on its financial statements resulting from the application of AASB 9 (2014). AASB 15 Revenue from Contracts with Customers AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised, including in respect of multiple element arrangements. It replaces existing revenue recognition guidance, AASB 111 Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions. AASB 15 is effective from annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. The Company is assessing the potential impact on its financial statements resulting from the application of AASB 15. AASB 16 Leases AASB 16 removes the classification of leases as either operating leases or finance leases – for the lessee – effectively treating all leases as finance leases. Short-term leases (less than 12 months) and leases of low-value assets (such as personal computers) are exempt from the lease accounting requirements. There are also changes in accounting over the life of the lease. In particular, companies will not recognise a front-loaded pattern of expenses for most leases, even when they pay constant rentals. Lessor accounting remains similar to current practice i.e. lessors continue to classify leases as finance and operating leases. AASB 16 is effective from annual reporting periods beginning on or after 1 January 2019, with early adoption permitted for entities that also adopt AASB 15. The Company is assessing the potential impact on its financial statements resulting from the application of AASB 16.

(b) Revenue

(f) Cash and cash equivalents

Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST) payable to the taxation authority.

Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three months or less held at call with financial institutions, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

Revenue from rendering services The company acts as the ‘principal’ in the collection of licence fees from licensees (customers) as it has the primary responsibility (g) Property, plant and equipment for providing the services and latitude in establishing prices. Revenue from licence fees is recognised on a monthly basis over Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and any the time period for which the copying licence has been granted. accumulated impairment losses. Revenue is accrued and recorded when the amount can Plant and equipment be measured or estimated reliably (based on the previously Plant and equipment is measured on the cost basis. executed licence) and is probable of collection. Where the assumptions regarding reliable estimation no longer apply a Depreciation provision is recorded against the amount of accrued revenue. The depreciable amount of all property, plant and equipment is Licence fees invoiced but applicable to future periods are recorded depreciated over their estimated useful lives commencing from the as deferred revenue and transferred to revenue in the statement of time the asset is held ready for use. Land and the land component comprehensive income over the relevant future period. of any class of property, plant and equipment is not depreciated. Interest income Interest revenue is recognised when it becomes receivable on a proportional basis taking in to account the interest rates applicable to the financial assets.

(c) Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

(d) Income tax Current income tax expense or revenue is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities. Specific provisions of the Income Tax Assessment Act 1997 (as amended), applicable to copyright collecting societies ensure: (a) copyright income collected and held on behalf of the members, pending allocation to the member; and (b) non copyright income that falls within certain limits; are not subject to income tax.

(e) Goods and services tax (GST) Revenues, expenses and purchased assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Class of fixed asset

Depreciation Depreciation rates basis

Leasehold improvements at cost

14–19%

Straight line

Office equipment at cost

7–33%

Straight line

Furniture, fixtures and fittings at cost

1–13%

Straight line

10–40%

Straight line

Computer equipment at cost

(h) Impairment of non-financial assets Intangible assets that have an indefinite useful life are not subject to amortisation and are therefore tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and value in use. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to present values in determining recoverable amounts.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Annual Report 2017–18 Copyright Agency 33

Notes to Financial Statements continued FOR THE YEAR ENDED 30 JUNE 2018

(i) Intangibles

(l) Financial instruments

Internally developed software Internally developed software is initially recorded at the purchase price and amortised on a straight line basis over the period of 5 years. The balances are reviewed annually and any balance representing future benefits, the realisation of which is considered to be no longer probable are written off.

Classification The company classifies its financial assets into the following categories: financial assets at fair value through profit and loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the instruments were acquired. Management determines the classification of its financial instruments at initial recognition.

Internally developed software has been tested for impairment by determining the recoverable amount of the asset. The recoverable amount of assets is based on value-in-use calculations. These calculations are based on current financial forecasts and projected cash flows approved by management covering a period not exceeding five years. Management’s determination of cash flow projections are based on past performance and its expectation for the future.

( j) Employee benefits (i) Short-term employee benefit obligations Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. The expected cost of short-term employee benefits in the form of compensated absences such as annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables. (ii) Long-term employee benefit obligations Liabilities arising in respect of long service leave and annual leave which is not expected to be settled within twelve months of the reporting date are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. Employee benefit obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.

(k) Leases Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership. Operating leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as an expense on a straight-line basis over the term of the lease. Lease incentives received under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

34 Copyright Agency Annual Report 2017–18

Loans and receivables Loans and receivables are measured at fair value at inception and subsequently at amortised cost using the effective interest rate method. Financial liabilities Financial liabilities include trade payables, other creditors and loans from third parties including inter-company balances and loans from or other amounts due to director-related entities. Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. Financial liabilities are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

(m) Distributions payable The company holds the net distributable amount for each year in trust for rightsholders of the copyright material. These rightsholders are eligible to receive allocations held on their behalf upon completing necessary documentation regarding entitlement to receive the allocation. Payments are made as and when the required documentation is completed. Until this stage is reached, all funds are held in trust for the rightsholders up to a period of four years. The Board of Directors may decide that special circumstances exist and continue to hold an allocation in trust for a maximum of two further years. At the expiry of the trust period, allocations that have not been paid are ‘rolled over’ and applied in accordance with the direction of the Board. These amounts are currently used to offset operating cost deductions from licence fees before distribution. In administering the licences, the company collects and distributes remuneration payable by various licensees, using a variety of data sources. The distributable amount is the total amount received from licensees for the distribution period after deducting operating expenses (offset by bank interest and unpaid allocations that have been rolled over), providing for taxation if applicable.

(n) Amalgamation reserve The amalgamation reserve is utilised for amalgamations with other entities. The amount presented is equal to the accumulated fair values of the net assets of the entities acquired. The individual assets and liabilities acquired are presented in the statement of financial position.

2018 $

2017 $

NOTE 2: REVENUE Revenue from rendering of services Interest income Other income

150,112,766

144,857,910

1,821,689

1,902,140

163,546

686,798

152,098,001

147,446,848

–

124,107

Other income is primarily made up of recoveries of expenditure outlays.

NOTE 3: SURPLUS FOR THE YEAR (a) Undistributed surplus transferred to reserves The undistributed surplus for the year represents funds retained by the company for future expenses as shown in the statement of changes in equity: Transfer to Future Fund reserve Transfer to Indemnity Fund reserve

146,315

502,581

Payments made from reserves

(76,234)

(661,466)

42,942

50,728

113,023

15,950

10,906,711

10,998,608

Directors fees and expenses

398,392

375,699

Contributions to superannuation funds

937,845

932,764

Increase/(decrease) in liability for employee benefits

190,621

(282,391)

Employment taxes and costs

866,228

783,952

13,299,797

12,808,632

Depreciation expenses

492,018

379,520

Amortisation expenses

414,782

194,671

906,800

574,191

600

1,500

1,763,933

7,929,417

1,764,533

7,930,917

53,534,972

52,112,658

53,534,972

52,112,658

Transfer from Distributions Rollover

(b) Employee benefits expense Wages and salaries

NOTE 4: CASH AND CASH EQUIVALENTS Cash on hand Cash at bank

Cash on deposit Cash on deposit represents funds invested in term deposits with maturity dates ranging between 3 to 36 months. As these deposits are considered part of the company’s investing activities these balances are not cash equivalents for the purposes of the statement of cash flows.

Notes to Financial Statements continued FOR THE YEAR ENDED 30 JUNE 2018

2018 $

2017 $

4,011,203

5,225,145

4,011,203

5,225,145

NOTE 5: RECEIVABLES Trade receivables

NOTE 6: OTHER ASSETS Prepayments Accrued revenue Bank security deposit Accrued revenue represents the estimate of revenue receivable from licensees in respect of the relevant financial period but not yet invoiced as well as investment income yet to be credited. The bank security deposit is a separate bank account containing funds set aside as security for the companyâ&#x20AC;&#x2122;s future office lease and other administrative commitments

36 Copyright Agency Annual Report 2017â&#x20AC;&#x201C;18

531,837

719,372

14,422,748

12,347,822

1,805,456

2,621,170

16,760,041

15,688,364

2018 $

2017 $

1,378,062

(538,171)

(339,651)

839,891

1,038,411

4,015,160

4,035,804

(2,003,578)

(1,213,105)

2,011,582

1,438,933

2,851,473

2,477,344

1,038,411

1,211,917

NOTE 7: PROPERTY, PLANT AND EQUIPMENT Leasehold improvements At cost Accumulated amortisation

Office equipment, furniture and computer equipment At cost Accumulated depreciation

Total property, plant and equipment (a) Reconciliations Reconciliation of the carrying amounts of property, plant and equipment at the beginning and end of the current financial year Leasehold improvements Opening carrying amount Additions

–

21,164

(198,520)

(194,670)

839,891

1,038,411

Opening carrying amount

1,438,933

818,915

Additions

1,064,667

999,539

Disposals

–

(492,018)

(379,521)

2,011,582

1,438,933

Opening carrying amount

2,477,344

2,030,832

Additions

1,064,667

1,020,703

Amortisation expense Closing carrying amount Office equipment, furniture and computer equipment

Depreciation expense Closing carrying amount Total

Disposals Depreciation and amortisation expense Closing carrying amount

–

(690,538)

(574,191)

2,851,473

2,477,344

Notes to Financial Statements continued FOR THE YEAR ENDED 30 JUNE 2018

2018 $

2017 $

NOTE 8: INTANGIBLE ASSETS Software At cost

1,983,177

–

(216,262)

–

1,766,914

–

776,644

7,962,443

1,895,547

1,570,251

Cultural Fund*

466,275

821,728

Lease incentive

194,806

194,805

3,333,272

10,549,227

633,117

827,922

633,117

827,922

1,051,843

846,425

160,000

–

1,211,843

846,425

282,313

297,108

282,313

297,108

15,315,190

12,462,021

15,315,190

12,462,021

Accumulated amortisation

NOTE 9: PAYABLES CURRENT Trade creditors Accrued expenses

NON-CURRENT Lease incentive * Refer description in Note 14

NOTE 10: PROVISIONS CURRENT Employee benefits Restructuring

NON CURRENT Employee benefits

NOTE 11: DISTRIBUTIONS PAYABLE CURRENT Distributions payable to members

(a) Reconciliations Reconciliation of the distribution payable to members at the beginning and end of the current financial year Distributions payable to members Opening carrying amount

12,462,021

8,094,527

128,588,281

124,036,502

(123,914,887)

(117,827,405)

Payments in transit and GST

(1,820,225)

(1,841,603)

Closing carrying amount

15,315,190

12,462,021

Distribution paid and payable Payments to members

38 Copyright Agency Annual Report 2017–18

2018 $

2017 $

NOTE 12: DEFERRED INCOME CURRENT Deferred revenue

40,571,287

40,029,713

40,571,287

40,029,713

Deferred revenue represents licence fees invoiced but applicable to future periods. Deferred revenue is transferred to the statement of comprehensive income over the relevant future period.

NOTE 13: CAPITAL AND LEASING COMMITMENTS (a) Operating lease commitments Non-cancellable operating leases (in respect of leased premises and office equipment) contracted for but not capitalised in the financial statements: Payable – not later than one year – later than one year and not later than five years

930,630

888,443

3,314,909

3,972,416

–

267,383

4,245,539

5,128,242

– later than five years

NOTE 14: EQUITY Retained earnings

–

Future Fund reserve Indemnity Fund reserve Amalgamation reserve

15,109,051

3,377,861

2,945,871

480,579

Other reserve

–

15,073,640

–

410,032

367,090

19,342,112

18,422,012

Retained earnings Funds held as retained earnings are used for the benefit of members at the discretion of the Board. This includes funds set aside and transferred to the Future Fund and the Indemnity Fund as described below. Future Fund Reserve In June 2013, the Board considered the issues which would arise in the event of a sudden and material decrease of revenue following a substantial change to the legislative structure or the unremunerated exceptions in the Copyright Act 1968. It was resolved that in order to safeguard and manage the rights of members including but not confined to taking such necessary actions in litigation, communications, research and advocacy, it would establish a Future Fund to provide adequate reserves to resource such activity to the extent required consistent with its prudent judgement. In accordance with Article 74(b)(ii) of the company’s Constitution, the Board resolved that amounts equal to the following be paid to the Future Fund, in the order as listed, until the Future Fund reached its target balance: a) interest income received after 1 July 2013, after deduction of up to 1.5% for the Cultural Fund; b) after 1 July 2013, all unpaid allocations at the end of the relevant trust period of 4 years; and c) such other percentage of the company’s revenue as the Board at that time considers appropriate. Indemnity Fund Reserve The company has established an Indemnity Fund to compensate rightsholders for use of their content in connection with licences managed by Copyright Agency.

Notes to Financial Statements continued FOR THE YEAR ENDED 30 JUNE 2018

NOTE 14: EQUITY (CONTINUED) Cultural Fund Following changes to the company’s constitution passed at the 2010 AGM, the Board has agreed to apply an amount not exceeding 1.5% (increased from 1%) of monies received by the company during the financial year from licence and other copying fees (excluding Resale Royalty, LearningField and Screenrights) for: a) cultural or benevolent purposes in accordance with regulation 23JM (1) (d) of the Copyright Regulations and Articles 74(b)(iii) and 83(a)(iv) of the company’s Constitution and Rules – in the case of equitable remuneration received by the company under the Copyright Act 1968; and b) special purpose (including cultural and/or charitable purposes) in accordance with Article 73(b) of the company’s Constitution and Rules in the case of monies received by the company on behalf of members under its voluntary licence agreements and all other revenue. The Cultural Fund is shown within the company’s payables in the statement of financial position.

2018 $

2017 $

NOTE 15: CASH FLOW INFORMATION (a) Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position is as follows: Cash on hand Cash at bank

600

1,500

1,763,933

7,929,417

1,764,533

7,930,917

113,023

15,950

906,800

574,191

(2,006,714)

(1,778,063)

(986,891)

(1,187,922)

(b) Reconciliation of cash flows from operating activities Surplus for the year Adjustments and non-cash items Depreciation and amortisation expense Interest received

Changes in assets and liabilities 1,213,945

(2,110,772)

Change in other assets

Change in trade and other receivables

(1,071,765)

556,724

Change in trade and other payables

(7,856,551)

7,795,661

Change in provisions

350,623

(282,390)

Change in deferred revenue

541,574

1,006,742

Change in distributions payable Cash flows from operating activities

40 Copyright Agency Annual Report 2017–18

2,853,168

4,367,494

(4,955,897)

10,145,537

2018 $

2017 $

NOTE 16: RELATED PARTY TRANSACTIONS (a) Key management personnel compensation Compensation received by key management personnel of the company – short-term employee benefits

889,290

– post-employment benefits

818,835

48,957

67,510

938,247

886,345

1,196,070

–

72,280

–

Trade and other payables

(116,602)

–

Distributions payable

(344,671)

–

807,077

–

50,000

– Technology related services

421,774

26,490

– Other advisory services

397,446

374,854

5,000

824,220

406,344

874,220

456,344

(b) Transactions with other related parties Transactions with related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The only transactions with related parties during the year were distributions to directors as copyright holders made in accordance with the constitution from declared distribution pools.

NOTE 17: BUSINESS COMBINATION On 30 November 2017, Copyright Agency Limited (the acquirer) facilitated an amalgamation with Viscopy Limited, a rights management organisation for Visual Arts in Australia. There was no consideration transferred from Copyright Agency Limited to Viscopy Limited. Identifiable assets acquired and liabilities assumed (at fair value) Cash and cash equivalents Trade and other receivables

NOTE 18: AUDITORS REMUNERATION KPMG Audit and assurance services – Audit of the financial report

Other non-audit services

– Taxation services

NOTE 19: EVENTS SUBSEQUENT TO REPORTING DATE There has been no matter or circumstance, which has arisen since 30 June 2018 that has significantly affected or may significantly affect: (a) the operations, in financial years subsequent to 30 June 2018, of the company, or (b) the results of those operations, or (c) the state of affairs, in financial years subsequent to 30 June 2018, of the company.

Directors’ Declaration The directors of the company declare that: 1.

The financial statements and notes, as set out on pages 9–21, 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 financial postion as at 30 June 2018 and performance for the year ended on that date of the company.

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.

Director: _________________________________________________

Kimberley Williams AM

Director:_________________________________________________

Lucrezia Russell

Dated this 26th day of September 2018

42 Copyright Agency Annual Report 2017–18

Independent Auditor’s Report

Independent Auditor’s Report To the shareholders of Copyright Agency Limited Opinion We have audited the Financial Report of Copyright Agency Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including:

•

giving a true and fair view of the Company's financial position as at 30 June 2018 and of its financial performance for the year ended on that date; and complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations 2001.

The Financial Report comprises:

•

Statement of financial position as at 30 June 2018

•

Statement of comprehensive income, Statement of changes in accumulated funds, and Statement of cash flows for the year then ended

•

Notes including a summary of significant accounting policies

•

Directors' Declaration.

Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Company in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Other Information Other Information is financial and non-financial information in Copyright Agency Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor’s Report was the Directors Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express any form of assurance conclusion thereon. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. 33 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Independent Auditor’s Report continued

Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error • assessing the Company's ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar4.pdf. This description forms part of our Auditor’s Report.

Chris Allenby

KPMG

Partner Sydney 26 September 2018 KPM_INI_01 PAR_SIG_01

PAR_NAM_01

PAR_POS_01

PAR_DAT_01

PAR_CIT_01

44 Copyright Agency Annual Report 2017–18

Being able to breathe life into something is right up there as one of the best things about being a creator â&#x20AC;&#x201C; to take something that exists in the intangible essence of your mind, and translate it into something others can experience or enjoy.â&#x20AC;? Copyright Agency member and award-winning illustrator, Jules Faber

t: 02 9394 7600 f: 02 9394 7601