Annual report 2012
FOREWORD
‘THERE IS A WILLINGNESS TO CHANGE AND WE HAVE LISTENED CAREFULLY TO OUR MEMBERS’ For Buma/Stemra, 2012 was a year of change. After
2012 was a year of positive change. I am confident that
listening carefully to what our members, music users
rights holders, stakeholders and those in the political
and supervisory bodies had to say, we made improve-
arena will all agree with this. We’ve made a good start
ments in our administrative structure, the transpa-
towards becoming a more responsive service provider
rency of our organisation, our governance and the level
whose doors are always open for constructive
of our members’ participation. We are confident that
dialogue. This notion is underlined by the largely
these improvements are in the best interests of
positive conclusions in the second study of the
copyrights holders, and music users, and that they
Supervisory Authority for Collective Management
reflect our vision, mission, and strategy.
Organisations (of Copyright and Neighbouring Rights).
With the approval of the General Assembly late last
The Board of directors and the employees committed
year, we managed to complete a new governance
themselves fully and with great energy to realise these
structure. Various initiatives were taken to create a
positive changes. It is our firm intention to continue
more transparent organisation and develop accessible
down this road. Songwriters and music publishers
management policies which address the way we deal
have a right to fair remuneration and the protection of
with the collective management of individual authors
their rights. We will again be fully committed to these
rights. The participation of our members has also been
goals in 2013.
increased with the establishment of the Member committees have been set up in which both the
Leo de Wit CHAIRMAN OF THE BOARD
Member Council and the Board are represented. The
Hoofddorp, the Netherlands, 3 April 2013
Council at the end of last year, and several new
new regulations for the Board, the Member Council and the newly formed committees were formally established at the beginning of 2013. In addition, we have implemented a strategy to reinforce the quality and range of services that we provide to our rights holders. Examples include the accelerated distribution process, the improved handling of service requests and complaints, the launch of the completely redesigned Rights Holders’ Portal and the new websites, such as mijnlicentie.nl and airplayclaim.nl. We have also travelled all over the Netherlands for a series of ‘Town Hall Meetings’. The continued decline in de CD/DVD market has put a considerable strain on Stemra’s business model. In its current form, Stemra is not expected to be able to cover its costs in the years to come. Every possible Frans Duijts Photo: Mike Breeuwer
option is being considered to deal with this situation in the best interest of our rights holders.
annual report 2012
2012 Highlights • Significant steps taken in structure, transparency and rights holders’ participation • The number of rights holders increased to 21,937 • Worldwide copyright payments increased to € 154.1 million • The database of works expanded to 6.8 million works • Newly designed portal improves the organisation and rights holders relationship • Research into new Stemra business model
CONTENTS
03
Foreword
02
Table of contents
03
Key figures
04
Five-year overviews
08
Buma/Stemra briefly
10
A world full of music: vision, mission and strategy
11
Board report
12
Director’s report
14
Buma 2012 Financial Statements
22
Stemra 2012 Financial Statements
48
Composition of the Board and the Board of directors
68
Colophon
73
Buma/Stemra
Kraantje Pappie Photo: Mike Breeuwer
Key figures 2012
05
Key figures PERCENTAGE
PERCENTAGE
REVENUE BUMA
REVENUE STEMRA
148.2 million
30.4 million
35.2%
Radio & TV Performing Rights
34.1%
BIEM Phono-Mechanical Rights / Central Licensing
14.1%
Live
21.2%
Special / Work by Work Licensing
Hospitality Industry
18.0%
Radio & TV Mechanical Rights
9.1% 12.0%
Work Places
5.8%
Online Licensing Mechanical Rights
8.5%
Shops and Stores
2.7%
Private copy / Borrowing levy
1.4%
Online Licensing Performing Rights
2.5%
Reprographic Rights
11.3% 8.4%
Cable
15.7%
Foreign Mechanical Rights
Foreign Performing Rights
RESULT
RESULT
results in millions of euros
results in millions of euros
TRENDS BUMA
2008
2009
2010
TRENDS STEMRA
2011
2012
2008
10
4
5
2
0
0
-5
-2
-10
-4
-15
-6
-20
-8
-7.2 -12.7 -19.9
8.8 -13.8 -4.9
8.5 -13.6 -5.1
7.8 -16.9 -9.1
7.3 -16.8 -9.6
-1.0 -5.1 -6.1
2009
4.3 -4.7 -0.4
2010
4.8 -4.5 0.3
2011
2.0 -1.9 -0.1
Financial result
Financial result
Operating result
Operating result
Result from ordinary activities
Result from ordinary activities
2012
2.2 -2.2 -
Buma/Stemra
Key figures
REVENUE
REVENUE
Revenue in millions of euros
Revenue in millions of euros
TRENDS BUMA
TRENDS STEMRA
148.2
30.4
150
50
120
40
90
30
60
20
30
10
0
0 2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
140.0
136.4
140.3
142.9
148.2
45.0
40.7
35.7
32.1
30.4
MEMBERSHIP
DEVELOPMENT BUMA/STEMRA
25,000
20,000
15,000
10,000
5,000
0 2010
2011
2012
768 791 789 990 1,070 1,115 17,950 19,035 20,033
annual report 2012
Beneficiary Publisher Composer / songwriter
07 DISTRIBUTION
DISTRIBUTION
results in millions of euros
results in millions of euros
DEVELOPMENT BUMA
DEVELOPMENT STEMRA
136.3
27.7
150
50
120
40
90
30
60
20
30
10
0
0 2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
11.3 43.6 68.0
10.4 43.3 69.9
10.2 46.5 67.4
9.6 43.8 70.3
9.9 49.1 77.3
0.6 7.4 34.8
0.7 5.6 34.1
0.2 5.0 28.5
0.2 4.5 24.4
3.2 24.4
Payments to the Fund for Social and Cultural Services
9.9
Central licensing
Foreign organisations
49.1
Foreign organisations
3.2
Members and participants
77.3
Rights holders and participants
24.4
-
WORKFORCE
DEVELOPMENT BUMA/STEMRA in FTEs at the end of the financial year 2012
part-time fulltime
2011
part-time fulltime
2010
part-time fulltime
2009
part-time fulltime
2008
part-time fulltime
62 FTE's 117 FTE's 59 FTE's 113 FTE's 57 FTE's 118 FTE's 59 FTE's 115 FTE's 57 FTE's 105 FTE's
Buma/Stemra
FIVE-YEAR OVERVIEW OF BUMA 2008 – 2012
(x € 1,000)
2012
2011
2010*
2009*
Radio & TV Performing Rights
52,088
Live
20,861
Hospitality Industry
13,483
Work Places
17,837
Shops and Stores
12,554
12,827
2008*
51,863
50,228
51,329
52,541
20,363
19,899
21,513
20,799
15,047
17,015
14,663
14,710
17,600
17,799
13,777
15,215
11,940
11,716
11,901
Revenue
2,130
1,471
757
893
946
Cable
16,765
11,886
12,168
12,396
13,035
Foreign Performing Rights
12,433
11,891
10,540
10,153
10,857
148,151
142,948
140,346
136,440
140,004
Rights holders and participants
77,339
70,345
67,440
69,943
68,034
Foreign organisations
49,063
43,799
46,549
43,269
43,645
9,883
9,581
10,212
10,395
11,294
136,285
123,725
124,201
123,607
122,973
1,940
1,838
2,151
1,940
1,769
Rights revenue distributed during the year
138,225
125,563
126,352
125,547
124,742
Available for distribution at year-end
170,873
170,504
162,211
156,536
153,816
Online Licensing Performing Rights
Distribution
Fund for Social and Cultural Services Rights revenue paid out during the year Administrative costs withheld
Operating statement 3,260
3,151
3,357
3,140
3,033
Expenses
-20,088
-20,060
-16,919
-16,908
-15,752
Operating result
-16,828
-16,909
-13,562
-13,768
-12,719
7,271
7,817
8,496
8,849
-7,225
-9,557
-9,092
-5,066
-4,919
-19,944
13.6%
14.0%
12.1%
12.4%
11.3%
7.8%
7.6%
7.5%
7.4%
15.5%
101.8%
93.7%
96.8%
103.0%
96.1%
Income
Financial result Result from ordinary operating activities
Key index figures Operating expenses as % revenue (gross costs %) Result from ordinary operating activities** (excl. administration costs charged) as % revenue (net costs %)
Paid out in current year vs. (preceding year’s revenue -/- preceding year’s appropriation result)
* Adjusted for comparison purposes ** Taking account of the addition to the appropriation reserve for the years 2009 and 2010
annual report 2012
FIVE-YEAR OVERVIEW OF STEMRA 2008 – 2012
09
(x â‚Ź 1,000)
2012
2011*
2010
2009*
2008*
10,370
12,564
16,684
18,229
19,866
6,435
5,931
6,306
5,656
8,860
Radio & TV Mechanical Rights
5,487
5,285
5,138
7,266
6,211
Online Licensing Mechanical Rights
1,755
1,835
515
1,314
1,219
Private copy / Borrowing levy
827
1,594
3,223
3,533
4,184
Reprographic Rights
770
538
-
-
-
4,777
4,391
3,796
4,682
4,701
30,421
32,138
35,662
40,680
45,041
24,432
24,394
28,493
34,128
34,829
3,227
4,459
4,964
5,638
7,378
Revenue BIEM Phono-Mechanical Rights /Central Licensing Special / Work by Work Licensing
Foreign Mechanical Rights
Distribution Rights holders and participants Foreign organisations
-
225
195
671
592
27,659
29,078
33,652
40,437
42,799
3,475
3,133
3,098
3,828
4,099
Rights revenue distributed during the year
31,134
32,211
36,750
44,265
46,898
Available for distribution at year-end
35,594
38,738
38,755
40,863
45,438
4,111
3,801
3,700
4,377
4,728
Expenses
-6,292
-5,696
-8,241
-9,107
-9,865
Operating result
-2,181
-1,896
-4,541
-4,730
-5,137
2,181
1,952
4,821
4,319
-993
-
56
280
-411
-6,130
Operating expenses as % revenue (gross costs %)
20.7%
17.7%
23.1%
22.4%
21.9%
Withheld administration expenses in % of the revenue (withholding %)
11.4%
9.7%
8.7%
9.4%
9.1%
Central Licensing Rights revenue paid out during the year Administrative costs withheld
Operating statement Income
Financial result Result from ordinary operating activities
Key index figures
* Adjusted for comparison purposes.
Buma/Stemra
BUMA/STEMRA BRIEFLY
The Buma Association and Stemra Foundation are collective management organisations (CMOs) that collectively and on behalf of composers, lyricists and publishers collect rights revenues from music users and then pay these rights revenues to the rights holders. These tasks arise from the performance rights for the Buma association and mechanical rights for the Stemra foundation. The members of the association and the participants of the foundation are the rights holders. Buma and Stemra share facilities and resources which creates a single operating company with a single Board of directors. There were 204 employees at the end of 2012. There is close cooperation internationally with umbrella organisations such as CISAC / GESAC / BIEM and with sister organisations in Europe, and other parts of the world, that also manage the performing rights and mechanical rights of songwriters and music publishers.
annual report 2012
A WORLD FULL OF MUSIC
11
Vision: Music plays a valuable role in our lives. The work of the creators is therefore of vital importance.. Songwriters and music publishers are entitled to fair compensation. They contribute to a world full of music.
Mission: Buma/Stemra collectively manages the individual authors rights of its rights holders. We are convinced that collective management is of major importance to the value of copyright. We focus on the best possible collection and distribution of the rights revenue. Innovative and based on 100 years of expertise. Customer satisfaction and cost efficiency are our goals. We contribute to a world full of music by protecting authors rights and creating acceptance of those rights with the wider public.
Strategy: As a not-for-profit organisation, we fight for fair compensation for rights holders and support legislation to protect authors rights. We strive to continuously optimise collection and distribution of rights, also in cooperation with our sister organisations. In a broader sense, we work continuously on improving processes such as distribution, and are committed to strengthening the focus on services and open communication with all stakeholders. We make every effort to remain among the most efficient European Collective Management Organisations (CMOs).
Buma/Stemra
board report After an intensive dialogue and close consultation with rights holders and stakeholders significant reforms have been implemented in the governance and the organisation.
At the start of 2013, new Board committees were set up in which Board members, Member Council representatives, and external experts are represented. The committees, which will focus on areas including governance and audit, distribution, business
Renewal of governance and organisation
operations and the investment policy, will each perform their
With the appointment in early 2011 of the Governance Steering
policy preparation, advisory and monitoring tasks for their own
Committee and the appointment at the end of 2011 of an
areas. The new rules defining the tasks and working relations-
independent Chairman of the Board, Buma/Stemra commenced
hips of and between Board, Member Council and committees
a process of far-reaching renewal. Agreement was reached
were adopted in March 2013. An independent evaluation of the
during the three General Assemblies that took place in the year
effectiveness of the measures implemented will take place at
under review concerning the new governance model and the
the end of 2014.
establishment of a now 12-member Board, with 8 songwriters, 4 publishers, and an independent chairman, and the establish-
Other committees are also active for the rights holders, such as
ment of a Member Council.
the Standing Committee on Plagiarism (SCP) and the disputes
The new governance structure is designed to enhance the
with plagiarism issues between rights holders of Buma and of
effectiveness of the management and to increase support from
Stemra. The SCP consists of six composers and two copyright
Committee. The SCP is an independent committee that deals
the rights holders. This is a major package of measures that will
specialists. The scheme is accessible for direct members of
be introduced during the coming period.
Buma / Stemra, who consider that their musical work has been
While the Board operates without any vested interests, the
One complaint was submitted to the SCP in 2012.
used in another work without them having received the credits. Member Council will work as a platform to represent the rights holders and their interests and partial interests. This creates a ‘bridge’ between the rights holders and the Board. The Board met 11 times in 2012. The topics which were discussed include the principles and the practical implementation of the governance reforms, the profile for the new Board and objective assessments thereof, opportunities for participation of the new Member Council, the introduction of the INK (Institute of Dutch Quality) management model, the formation of new committees, the introduction of town hall meetings, and a number of developments and initiatives in the area of collection and distribution.
Rights holders of Buma/Stemra with complaints about decisions of the Board or Board of directors can invoke the dispute resolution procedure before the Disputes Committee, which has
The Member Council is an advisory body that provides solicited
existed since 2006. The Disputes Committee consists of three
and unsolicited advice to the Board, as well as assisting the
rights holders, appointed by the General Assembly of Buma/
rights holders in preparing for the General Assembly. In 2012
Stemra, an independent chairman and two Buma/Stemra rights
and early 2013, sessions were held to structure the cooperation
holders. The Disputes Committee is accessible to all songwriters
between the Member Council and Board and for Buma/Stemra
and music publishers who are members of Buma/Stemra. This
as a whole to develop new initiatives. In 2012, the Board also
committee is the appeal body for a rights holder with a specific
organised so-called hearings that included discussion of the
complaint about a decision by the Board or Board of directors as
proposed governance reforms. The Member Council will also
a result of which his or her interests are individually and
organise such meetings in 2013, focusing on specific interests of
directly prejudiced. The ruling of the committee provides the
subgroups among the rights holders.
parties with a binding recommendation, unless a court rules otherwise. In 2012, the Disputes Committee ruled on one case.
annual report 2012
13 The Distribution rules were assessed in 2012 by the Board and
The Board, with a statutory responsibility under the Articles of
Board committees. Some examples of these are the procedures
Association and as supervisor of the Directors, notes that a good
whereby set lists used in live performances are logged, merging
start has been made with the necessary improvements in
the distributions of Stemra RTV and Stemra Film, adding the
structure, transparency and rights holders’ participation in 2012.
Folk music category to the Buma distribution, and improved
The Board wishes to thank the Directors and all the Buma/
settlement of dance performances. Under the leadership of the
Stemra employees for the efforts made to date.
Board’s Distribution Flows committee, in which representatives of the Member Council also participate, more attention will be
Approval of financial statements
devoted in 2013, to a more transparent allocation of funds with
After being audited by KPMG, the financial statements were
respect to serious music, multimedia music and popular music.
approved We propose that the 2012 financial statements of Buma and the 2012 financial statements of Stemra be approved
In July 2011, the Board of Buma/Stemra accepted the VOI©E
in accordance with Article 26:7 of the articles of association, and
Guidelines on good governance and integrity and opted for the
that the Board and the Directors be granted discharge.
Board/ Directors model. The guidelines cover both policy principles and the actual working practices - in which the principle of ‘comply or explain’ applies. At Buma/Stemra, this concerns the following exceptions: the manner in which tasks are delegated to the Directors has been laid down in rules defining the relation between the Board and the Directors ; the interim resignation of Board members, when this is called for; the fact that the CMO includes the profile of the Board and the relevant - former - (additional) positions of the members of the Board and the Directors in the annual report. To the extent that members of the Board are appointed on recommendation or with the approval of third parties, this is also stated. Moreover, there are various matters in respect of which the Board, Member Council, or the Directors is not the highest body with the power to adopt/approve, but rather the General Assembly. articles of association, and the appointment or dismissal of the
Leo de Wit CHAIRMAN OF THE BOARD
Directors according to the Articles of Association.
Hoofddorp, the Netherlands, 3 April 2013
These matters include the annual report, amendment to the
Buma/Stemra
Hef Photo: Mike Breeuwer
Director’s report
15
Director’s report MISSION IN PROGRESS After a tumultuous 2011, Buma/Stemra took many initiatives in the year under review to improve structure and transparency, and to raise the services to rights holders to a higher level. The focus has shifted to more clarity, speed, service and trust. Additional steps are at the top of our agenda for 2013.
In December 2011, the Dutch Supervisory Authority for Collective Management Organisations (for Copyright and Neighbouring Rights) (College van Toezicht collectieve beheersorganisaties Auteurs- en naburige rechten - CvTA) announced a second study concerning Buma/Stemra. The findings of this study, conducted by KPMG in the autumn of 2012, had not yet been made public by the CvTA at the time this annual report
The efforts to raise the quality of our services to a higher level
was written. In view of the importance of this study, we have
bore fruit in 2012. The inventory of service requests from rights
already set out KPMG’s main conclusions and recommendations
holders (each request relating to a single title) was almost
below. The full report and CvTA’s response will soon become
reduced by half in 2012 compared to 2011. In addition, the
available at www.cvta.nl
lead-times for service requests were substantially reduced. KPMG’s findings indicate that both our collection and our The distribution process has also been reformed. The distribu-
distribution processes are in order. This also applies to electro-
tion frequency has been increased in a number of cases, and
nic data processing and the management systems used. It was
post-distributions take place more often, usually on a monthly
also noted that following the first CvTA study at the start of
basis. The quality of the distribution has also improved, and
2012, the complaints procedures were adjusted during that
that was the main cause for the above-mentioned reduction in
same year. On the basis of an analysis of the total organisatio-
the lead-time for service requests. Both the adjusted distribu-
nal costs, moreover, it was identified that Buma/Stemra, with
tion process and the increased frequency of the distributions
adjustment for international comparison purposes, has a gross
have been welcomed by the rights holders.
expense rate of 13%, making it one of the most cost-efficient authors rights organisations.
In a broader sense, the traditional orientation towards internal processes was transformed in 2012 into a sharper focus on the
The second study also led to recommendations concerning the
rights holders and a constant attention to the strengthening of
working relationship between the Board and the organisations
customer satisfaction. Employees are given more responsibility
management , a further strengthening of the distribution
for the handling of entire process.
process with formal protocols, and the external communication
Innovations on the digital front have brought the organisation
take these three recommendations to heart, and will be taking
and rights holders closer together and have given the quality of
further steps on these during 2013.
about the process of value creation within Buma/Stemra. We
the services a boost. The launch of the redesigned Rights Holders’ Portal was a milestone, achieved in close cooperation
In addition to various internal organisational changes, we made
with music publishers and composers. The search
particular efforts in 2012 to include the organisation of a number of
options have been expanded, data can be easily exported, both
internationally renowned events to put Dutch copyright in the
the distribution data and the service request information have
spotlight. The Buma Culture foundation, which aims to promote
been renewed, and one of the new elements is the so-called
Dutch music, plays a prominent role in this connection; please see
event picker that can be used to search Dutch live performances.
page 18 for more information about Buma Culture in 2012.
The launch of the new version of the Buma Song Tracker App enables composers, artists and publishers from now on to monitor whether and how often songs are played on the major radio stations. The new airplayclaim.nl website enables stakeholders to claim music that is not immediately recognized after it has been used on radio or TV. The identification of broadcast music has thus been further refined, which moreover has a positive effect on the payments to composers, lyricists and music publishers. In 2012, Bumajr.nl went live: an initiative of Buma/Stemra to advise young composers concerning their copyrights and help them with their musical career. Young performing musicians and composers can become members free of charge, which means that a toolkit and a great deal of tips and advice becomes available to them and they can attend educational information evenings. At the end of 2012, Bumajr.nl had almost 400 members.
Buma/Stemra
Director’s report
Buma/Stemra and the internet Shift to online The online distribution of music has become commonplace. In 2012, a very modest share of the total revenue of € 178.6 million, € 3.9 million of Buma and Stemra combined, came from online services. With the continued shift from offline to online, we expect that the online revenue in the coming years will amount to a larger share of the total revenue. At the same time, we increasingly use online and digital media to improve services and reduce costs.
LEGISLATION AND REGULATIONS Are the interests of rights holders properly protected? At domestic and European level, existing legislation is being revised and new regulations are being prepared. In the Netherlands, the House of Representatives spoke out against the plan to introduce a ban on downloading content from illegal sources at the end of 2012. Buma/Stemra continues to believe that taking measures against the distribution of unlicensed copyright-protected works is important to protect the rights of songwriters and music publishers as well as the
The 2012 Digital Music Report from IFPI, the international sector
creative community as a whole.
association of music companies, has shown that the global digital music market has strongly grown and that in some coun-
The Supervision of Collective Management Organisations (for
tries great progress has been made in the fight against online
Copyright and Neighbouring Rights) Act has applied since 2003.
piracy. However, this is much less the case in the Netherlands, a
A proposal to amend this act, which regulates the supervision of
situation that leads to lower income and limited investment in
CMOs and sets rules and criteria on management and supervi-
new talent and repertoire. The share of revenue from the digital
sion, was presented to the Dutch House of Representatives on 7
market for Dutch companies, which amounts to a total of
November 2008. After the legislative proposal had been debated
approximately 15% according to IFPI, lags significantly behind
in the House of Representatives, it was presented to the Senate
international developments.
on 13 March 2012 for debate.
In anticipation of the rapid development of streaming and
A section of the amended proposal that is consequential for
download services, we have developed suitable licensing
Buma/ Stemra, concerns the proposed restrictions on the
models and many licences have been concluded with music
investment policy of CMOs. The legislative proposal states that
platforms.
CMOs may only invest either in products for which the principal is at least intact at maturity, or in fixed-income securities, or in
In 2012, preparations were made for the introduction in 2013 of
securities that have a solvency ratio of 0%.
large-scale streaming services by Ziggo, Google Play, Microsoft, and Apple iCloud, among others. Furthermore, many new VOD (Video on Demand) services will be offered in 2013, which are expected to increase the revenue opportunities significantly for composers and music publishers. In addition to the direct value that the distribution of music online can provide for the rights holders, the Internet offers many opportunities to intensify communication with and the provision of services to rights holders and other stakeholders. We have also done this with mijnlicentie.nl and airplayclaim.nl,
At the start of 2013, António Vitorino, who had to make
launched in 2012 as internet services in addition to the existing
recommendations on private copying levies at the request of
audio fingerprint system to enable identification of music that
the European Commission, submitted his report. The report
was broadcast on national radio and television.
states, among other things, that private copying of music obtained from licensed services causes no harm and therefore
In order to reduce costs, and to offer a more efficient service to
should not be subject to a private copying levy. The levy should
rights holders, European sister CMOs are increasingly working
no longer be placed with the manufacturer/importer but with
together. ICE is a joint venture of PRS (United Kingdom) and
the retail trade. Clearly, we do not agree with these suggestions
STIM (Sweden) in the field of music works documentation
and will make this clear in our ongoing dialogue with the
through a central database. Buma/Stemra intends to enter into
European Commission.
a service agreement with ICE and will then migrate its works database and documentation to ICE at the end of 2013. Apart from internet and other digital developments, international and domestic legislation and regulation play a significant role in the shaping of policy and strategy at Buma/Stemra.
annual report 2012
17 FINANCIAL RESULTS, MARKET DEVELOPMENTS AND OUTLOOK In this chapter we discuss the financial progress of Buma and Stemra against the background of market developments in the Netherlands and elsewhere. We provide insight into the various market categories, the payments made, the results of Buma and Stemra, our investment policy, and we conclude with an outlook for the coming years.
Revenue in the online segment increased by € 0.7 million to € 2.1 million. Buma aims to increase revenue in this segment and is continuously developing licensing models for this complex arena. The Foreign revenue increased in 2012 by € 0.5 million to € 12.4 million. Revenues were notably higher in Germany, Poland, France and the United Kingdom. The compositions of Dutch DJs, jingle producers and music for television programmes and commercials contributed to this growth. In the global market,
Buma Revenue increased
André Rieu remains successful and Dance music did extremely
The revenue of Buma increased in 2012 by € 5.3 million to
Armin van Buuren, and Giorgio Tuinfort.
well, with compositions from artists such as Afrojack, Tiësto,
€ 148.2 million (2011: € 142.9 million). The increase was largely due to an increase in revenue in the Cable category by € 4.9 million. With the exception of the Hospitality Industry and the category Shops and Stores, the revenue in the other categories also increased slightly. The Radio and TV Performing Rights category increased by € 0.2 million to € 52.1 million. This is the category that provides the largest contribution - more than 35% - to the revenue of Buma. The growth was due to the positive results of a number of commercial broadcasters. The revenue from Cable increased by € 4.9 million to € 16.8 million on the basis of organic growth and
More about the export value of Dutch music (in Dutch):
as a result of an agreement covering multiple years.
www.bumacultuur.nl/activiteiten/exportbevordering
The revenue in the Live category increased by € 0.5 million to €
Payments to members increased
20.9 million, especially due to the increase in revenue in the
Buma distributed € 126.4 million in rights revenue to rights
cinema sector. However, the increase in the VAT rate and the
holders, participants and foreign organisations in 2012 (2011: €
cuts in the cultural sector, which also led to a decline of major
114.1 million.) In addition, € 9.9 million was added to the Fund
live performances in the Netherlands, negatively affected our
for Social and Cultural Services (SoCu). A total of € 136.3 million
revenue.
was paid out in 2012, which is an increase of € 12.6 million compared to 2011. The SoCu fund mentioned above is managed by the Board and intended to look after the idealistic or material interests of the rights holders of Buma-affiliated composers, lyricists and music publishers and to promote the Dutch music scene. Prior to the distribution of rights revenue received and after processing the income and expenses, pursuant to Article 29 paragraph 3 of the articles of association, this fund receives an annual contribution
Due to the continued deteriorating economic conditions in
of up to 10% of the amount of Dutch rights revenue available for
small and medium-sized businesses, the number of bankrupt-
distribution. The Board decided to allocate 8% of the amount of
cies was almost 20% higher than in 2011, the revenue from the
rights revenue available for distribution.
category Shops and Stores and the Hospitality Industry decreased. The decrease in the Shops and Stores category by €
Below we examine Buma Culture in 2012 and the developments
0.2 million to € 12.6 million was mainly due to the growing
surrounding the pension.
vacancy rate in retail premises. Revenue from Work Places increased slightly to € 17.8 million (2011: € 17.6 million).
Buma/Stemra
Director’s report
During Eurosonic Noorderslag, one of Europe’s most important
The government grant for pension contributions for the
music festivals some 300 new and promising acts presented
performing musicians was terminated with effect from 1
themselves to 33,000 visitors and 3,150 professionals from the
January 2013 in the context of the severe cutbacks that the
European music industry. The accompanying conference, with
government has implemented in the cultural sector. This means
more than 150 panel discussions, speeches, awards shows and
that the independent artists will not accrue new pension
presentations across the national and international music
entitlements any longer with effect from 1 January 2013. Since
industry, is the business platform for the European music
the costs of implementing the pension plan must now be borne
market. Buma Culture supports Noorderslag financially and
by considerably fewer participants it will affect the pension
contributes significant to its organisation.
accrual within AENA. The implementation costs will increase
The Amsterdam Dance Event (ADE), organised by Buma Culture,
ons are paid.
significantly for each participant for whom pension contributithe world’s biggest club festival and most important music conference for dance and electronic music, broke all records:
The independent Board of AENA decided at the start of 2013
200,000 music lovers, 3,800 music professionals, performances
that the rights accrued up to the end of 2012 will be placed
by 1,700 artists, 350 events and a record number of 75 stages.
elsewhere. From that date, AENA will no longer receive
A new initiative was the Buma Music Academy, founded in 2012,
Science and Buma. It is currently being investigated within the
which finances and promotes music education in secondary
Buma Board and the Member Council as to how a new pension
schools.
plan can be realised with effect from 1 January 2013.
contributions from the Ministry of Education, Culture and
A new event in 2013 will be Buma Rocks that will take place in
Operating result
Nijmegen in mid-2013. Together with Mojo Promotions and
The operating result of Buma amounted to minus € 16.8 million
Forta Rock, this festival, comparable to the Amsterdam Dance
(2011: minus € 16.9 million). The total operating costs of Buma
Event and Eurosonic, will form a new international platform.
in the 2012 financial year amounted to € 20.1 million (2011: € 20.1 million). The main changes in the operating
More about the Buma Culture foundation: www.bumacultuur.nl
expenses costs are the lower staff costs with € 0.3 million
More about the CMO seal of approval: www.voice-info.nl
reduction and the lower € 0.2 million accommodation costs as a result of the adjusted lease. The other costs increased by a total of € 0.5 million, mainly due to the expenditure for digital music detection. In 2012, the negative result from ordinary operating activities of € 9.6 million was deducted from the rights revenue to be distributed (2011: € 9.1 million. As a percentage, this remained at 6.5% of the rights revenue collected, virtually unchanged from the 6.4 % in 2011.
Pension plans for music writers and music publishers, who are rights holders of Buma, are financed from the SoCu fund. The
The financial result of Buma decreased by € 0.5 million to € 7.3
pension plan itself and its implementation for the benefit of
million in 2012. This decrease was mainly due to the economic
affiliated music writers has been placed with the independent
recession and the low interest rates.
Occupational Pension Fund for Independent Artists (stichting Beroepspensioenfonds voor Zelfstandige Kunstenaars - AENA).
For details of the balance sheets of Buma and Stemra, reference
This plan has replaced the annuity plan of the Buma Social
is made to the 2012 financial statements starting on page 22.
Fund Foundation (Stichting Sociaal Fonds Buma - SFB). In
The key fluctuations are explained in the notes to the balance
addition to the pension plan for independent music writers, the
sheet.
plan for independent artists has also been placed with AENA. Buma pays the contribution for the affiliated songwriters, the Ministry of Social Affairs and Employment looks after performing musicians.
annual report 2012
19 Investments In 2012 Buma/Stemra started with the upgrade of its core IT
Stemra Revenue continues to decrease
application, Dynamics AX (DAX) and the supporting platform
The continuing decline in Stemra’s revenue of recent years has
(SQL). Accenture has been called in to facilitate this upgrade
continued in 2012, with a decrease of € 1.7 million to € 30.4
during the various phases of the project and to customise it to
million. This decrease occurred mainly in the categories of BIEM
satisfy the requirements of the business operations.
Phono-Mechanical Rights/Central Licensing. The largest increase in revenue, by € 0.4 million, was as a result of an
Outlook 2013
increase in the Foreign Mechanical Rights category.
In the notes to the financial statements, we have included the budget for 2013. On the basis of current market conditions, we expect Buma’s revenue to decline by € 6.0 million in 2013. We will explain the key causes of this below. The expected decline in budgeted revenue compared to the 2012 actual revenue at Buma will be a result of the difficult market conditions in the Live performance and Television markets.
In Stemra’s largest revenue category - BIEM Phono-Mechanical Rights/Central Licensing, the revenue decreased by € 2.2 million to 10.4 million. This decrease was due to the continuing decline in sales of physical carriers. Revenue in the Foreign Mechanical Rights category rose to In the Work Place and Shops and Stores categories, we expect
€ 4.8 million. This was related to the growing popularity of
reduced revenue of € 0.8 million, particularly as a result of the
Dutch DJs and songwriters and the successful export of Dutch
higher vacancy rate. We assume a budgeted decrease in the
television TV programmes including their associated musical
revenue from foreign in 2013 by € 0.8 million compared to the
components.
actual revenue in 2012. We expect revenue from Radio & TV Performing Rights to decrease, and estimate it will amount to € 0.2 million.
The revenue from the Private Copy/Lending levy decreased by € 0.8 million to € 0.8 million. With effect from 1 January 2013, a Private Copying Levy was re-instated which we expect will
From the online market segment, we expect an increase of € 0.4
result in an increase in revenue from this category. It is
million, mainly as a result of licensing of new online music and
expected that this new scheme will result in payments in 2014.
Video on Demand services. On the other hand, the volatility of online markets and the withdrawal of online rights by our rights holders have a significant impact on the results. We expect that the costs for Buma in 2013 will increase by € 1.9 million to € 22.0 million. This increase is mainly caused by the budgeted one-time costs associated with the implementation of some projects, including ICE, an increase in staff costs, and an increase in the amortisation costs of the upgraded information system.
Buma/Stemra
Director’s report
Payments decreased
Future of Stemra
Stemra distributed € 27.7 million rights revenue to rights
The shift to digital products makes the development of the
holders, participants and foreign organisations in 2012. This
future market for mechanical rights uncertain. It is certain,
decrease of € 1.4 million when compared to 2011 is due to
however, that the revenue in several market segments will
declining revenue as a result of the continuing decline in sales
continue to come under pressure, and that increasing revenue
of physical carriers.
in the digital markets will not compensate the decreasing revenue from physical carriers. The continuously shrinking
Operating statement
market put considerable pressure on the business model and
In 2012, Stemra realised a result from ordinary operating
the future of Stemra. Against this background, all possible steps
activities of zero (2011: plus € 0.1 million). The result from
are being considered to respond in the best possible manner to
ordinary operating activities consists of the operating result and
this development. We conduct analyses to make the Stemra
financial result. The operating result of Stemra amounted to
activities cost-effective again. In this context we examine the
minus € 2.2 million (2011: € 1.9 million). The total operating
shared costs of Buma and Stemra, possible (international) joint
costs of Stemra, at € 6.3 million, were € 0.6 million higher than
ventures, outsourcing, and opportunities to introduce adjust-
in 2011.
ments in procedures, costs and revenue levels.
Stemra’s financial result, which largely consists of the share in
Investment policy
the results of foundations Buma/Stemra fixed income bond
Since the end of the 1990s, Buma/Stemra has been investing the
fund (Buma/Stemra Obligatiefonds - BSO) and Buma/Stemra
funds which await distribution. We have developed a prudent
equity fund (Buma/Stemra Aandelenfonds - BSA), increased in
policy to this end, including a risk management system. In view
2012 to € 2.2 million (2011: € 2.0 million). The individual items of
of this prudent policy, we believe that the investment policy
the financial result are detailed in the financial statements.
proposed by the State Secretary of Security and Justice does not provide any added value for our rights holders. The basic principle is that money is invested in the interests of the rights holders. Equities and fixed income bonds are valued on the balance sheet at market price on the balance sheet date, and the results realised are recognised in the revaluation reserve. In addition to dividends on equities and the interest received on the fixed income portfolio, a standard return can be recognised in the financial results. We have opted for this method to achieve the investment results on equities and fixed-income securities to realise a balanced development in the Operating Statement over several years.
Outlook for Stemra In 2013, we expect a further decline in revenue of Stemra by € 2.2 million to € 28.2 million. This decrease occurs in all categories, except Radio & TV Mechanical Rights and Online. We expect that the costs for Stemra in 2013 will increase by € 0.7 million to € 7.0 million. This increase comes mainly from
.
the budgeted one-time costs associated with the implementation of some projects, an increase in staff costs, and an increase in the amortisation costs.
The investment committee of Buma/Stemra, whose members are appointed by the Board, prepares an annual investment plan, selects the asset managers involved, and monitors and evaluates the results achieved. The investment committee elects a chairman and secretary, who together form the day-to-day management that is responsible for the operational implementation, directing the asset managers, and the transaction instructions. The Board has set the bandwidth for the investment freedom and the Investment Committee can take decisions within this framework. The day-to-day management of the investment committee, assisted by a fiduciary adviser, reports each month on the results and transactions to the committee.
annual report 2012
21 The financial resources for investments are administered by the
Looking Forward
foundations Buma/Stemra fixed income bond fund (Buma/
There was a lot of work done in 2012. We believe we have made
Stemra Obligatiefonds - BSO) and Buma/Stemra equity fund
good progress in the interest of our rights holders. Buma /
(Buma/Stemra Aandelenfonds - BSA). The investment strategy is
Stemra constantly fights for the interests of composers and
designed on the basis of an Asset and Liability Management
music publishers. We are convinced that the interests of our
study and has two goals. On the one hand, to retain the value of
rights holders now and in the future can best be represented on
the collected licence revenue until the time of distribution, for
the basis of collective management.
which purpose the portfolio must be sufficiently liquid and should be invested prudently. On the other hand, we aim to
To serve our rights holders and other stakeholders, we antici-
realise a return that partially covers the operating costs. For this
pate developments in international and domestic legislation,
purpose, the portfolio must yield sufficient return, and proper
technology, and society as much as possible. The transition from
use is made of a predefined risk budget. On the basis of this
offline to online and mobile, and the corresponding shifts in the
goal, an average 65% is invested in fixed-income securities and
revenue model are among the highest priorities. We want to
35% in variable-yield securities.
contribute to the continued development of the digital markets, including the proper licensing models that do justice to the
Each investment product must deliver added value to achieve
interests of songwriters and music publishers.
the investment goals of Buma/Stemra. Therefore Buma/Stemra does not invest in risky securities with the aim of outperfor-
Naturally, we are committed to further improving our services
ming the market. This approach is also reflected in our passive
and the efficiency of our organisation. A lot was achieved in this
investment policy; we have no volatile items in a portfolio that
past year but rest assured that we know there is no room for
requires active management.
complacency, we continue to face many challenges.
The fixed income portfolio consists primarily of government bonds of European countries with Triple A and Double A ratings with a maturity of 3 to 5 years. Currently, these are bonds issued by the Netherlands, Germany, Finland, France and Austria. In mid-September, under relatively favourable market conditions, it was decided to sell the Stemra portfolio with a view to having the liquidity needed in the coming years. The funds released were largely deposited in two savings accounts and are freely available.
Standard for costs of management and organisation In preparing the budget of Buma/Stemra, a standard is set for the costs of management and administration of the Buma/ Stemra organisation as a whole. This standard was set at administration are lower and amounted to € 26.4 million:
Hein van der Ree CHIEF EXECUTIVE OFFICER
Buma € 20.1 million and Stemra € 6.3 million.
Hoofddorp, the Netherlands, 3 April 2013
€ 26.5 million for 2012. The actual costs of management and
Buma/Stemra
Douwe Bob Photo: Bart Heemskerk
Buma 2012 financial statements
23
BUMA BALANCE SHEET Buma Balance Sheet as at 31 December 2012 After appropriation of the result (x â‚Ź 1,000)
31 December 2012
31 December 2011
Assets Fixed assets
2,091
-
Tangible fixed assets (2)
631
501
Financial fixed assets (3)
213,863
Intangible fixed assets (1)
207,262 216,585
207,763
Current assets Accounts receivable (4)
8,447
11,830
Other receivables (5)
1,496
2,732
365
431
Accrued assets (6)
11,995
10,697
Cash and cash equivalents (7)
16,242
28,582
Tax and social security contributions
38,545
54,272
255,131
262,035
31 December 2012
31 December 2011
Total assets
Liabilities Reserves Continuity reserve (8) Revaluation reserve for financial fixed assets (9)
1,855
1,855
13,848
6,154 15,703
8,009
10,426
9,531
10,172
15,023
Provisions Other provisions (10) Long-term debt Fund for Social and Cultural Services (11) Current liabilities Rights revenue available for distribution (12) Accounts payable Other liabilities (13) Tax and social security contributions Accrued liabilities (14)
Total liabilities
170,873
170,504
4,253
4,519
41,389
47,612
366
325
1,949
6,512 218,830
229,472
255,131
262,035
Buma/Stemra
BUMA OPERATING STATEMENT Buma Operating Statement for 2012 (x â‚Ź 1,000)
2012
2011
Income 1,940
1,838
Entrance and annual fees
634
617
Other Income
686
696
Adminstrative costs withheld
3,260
3,151
Expenses Staff costs (16)
9,772
10,085
Accommodation costs
1,303
1,438
306
368
Depreciation/Amortisation Other expenses (17)
Operating result
Financial result (19) Result (net expenses of the Buma organisation)
8,707
8,169 20,088
20,060
-16,828
-16,909
7,271
7,817
-9,557
-9,092
-9,557
-9,092
Result appropriation Result deducted from rights revenue available for distribution
annual report 2012
25
BUMA CASH FLOW STATEMENT Buma Cash Flow Statement for 2012 (x â‚Ź 1,000)
2012
2011
Cash flow from rights revenue and distribution (12) Rights revenue Distribution
148,151
142,948
-138,225
-125,563 9,926
17,385
Cash flow from funds (11) Withheld for funds Payments from funds
9,883
9,581
-14,734
-11,726 -4,851
-2,145
Cash flow from operating activities Administrative costs withheld (12)
1,940
1,838
Other income
1,321
1,312
Interest and dividends
4,862
5,384
8,123
8,534
-20,088
-20,060
Total operating expenses Adjustment Depreciation/Amortisation
Changes in provisions (10) Changes in other receivables Changes in other liabilities
305
368
-19,783
-19,692
895
-1,643
3,781
-1,897
-11,010
-409
-6,334
-3,949 -17,994
-15,107
Cash flow from investing activities (fixed assets) Investments in tangible fixed assets (2) Investments in intangible fixed assets (1)
-425
-365
-2,101
 -2,526
-365
Cash flow from investing activities (3) Purchases of securities Repayments/sales
-56,627
-123,727
59,732
Net cash flow
116,684 3,105
-7,043
-12,340
-7,275
Cash and cash equivalents as at 1 January
28,582
35,857
Cash and cash equivalents as at 31 December
16,242
28,582
Changes in cash and cash equivalents
-12,340
-7,275
Buma/Stemra
NOTES TO THE BALANCE SHEET AND OPERATING STATEMENT OF BUMA GENERAL Buma Association’s objectives
Application of the normative return on investments
Vereniging Buma (Buma Association) has its registered office in
Price gains/losses arising from the valuation of securities at fair
Amstelveen.
value are not recognised directly in the operating statement, but
The Association’s objective is to represent and promote both the
fixed assets, hereinafter: revaluation reserve. If the revaluation
material and intangible interests, without any profit motive, of
reserve is insufficient, price losses are charged directly to the
are initially recognised in the revaluation reserve for financial
music writers and music publishers and other copyright holders.
result. If the position of the revaluation reserve is sufficient at
Vereniging Buma is designated by law to represent the rights
the end of the year, a so-called normative return can be
holders identified above.
recognised in the financial result.
Principles for the valuation of assets and liabilities and determination of the result
According to Guidelines for Annual Reporting, the price gains and losses identified above should be recognised directly in the
The principles adopted for the valuation of assets and liabilities
operating statement. Buma/Stemra applies the methodology to
and determination of the result are based on historical costs
account for a consistent development of the financial results in
unless otherwise stated.
the operating statement and to allow the financial result to reconcile with the long-term objective of the investment policy.
If not stated otherwise, assets and liabilities are stated at nominal value and income and expenses are allocated to the
Consolidation of Buma Cultuur (Buma Culture)
period to which they relate.
Under the statutory requirements and in view of the current governance structure of Buma Culture Foundation (hereinafter:
The VOI©E approval criteria were taken into account in
Buma Culture) it is likely that Buma Culture, including the
preparing the financial statements.
Amsterdam Dance Event and Buma Rotterdam Beats foundations, can be deemed to be part of the scope of consoli-
Principles for the conversion of foreign currencies
dation of Buma Foundation. This would mean that the figures of
Transactions designated in foreign currencies are converted into
Buma Culture should be fully recognised in the financial
euros at the exchange rate applicable on the transaction date.
statements of Buma Foundation. In the current situation,
Monetary assets and liabilities denominated in foreign
consolidation is not applied, but Buma Culture is rather treated
currencies are converted into euros on the balance date at the
as a related party with which the transactions with Buma, and
exchange rate applicable on that date. Exchange rate differen-
more specifically with the Fund for Social and Cultural Services,
ces that arise due to convertion are recognised in the operating
are disclosed. Buma believes that in view of the very different
statement. Non-monetary assets and liabilities that are denomi-
activities of Buma Culture, consolidation of Buma Culture does
nated in foreign currencies and valued on the basis of historical
not contribute to a better insight into the financial statements
costs, are converted at the exchange rate applying on the date
of a Collective Management Organisation such as Buma.
of the transaction. For more information about the Buma Culture Foundation,
Consolidation principles
please refer to the website www.bumacultuur.nl
For transparency purposes, the foundations Buma/Stemra fixed income bond fund (Buma/Stemra Obligatiefonds - BSO) and
Intangible fixed assets
Buma/Stemra equity fund (Buma/Stemra Aandelenfonds - BSA)
The intangible fixed assets concern the expenditure for the new
are included in the Buma financial statements by means of
business information systems to support the primary business
proportional consolidation. In this context, assets and liabilities
processes. These are measured at historical cost less accumula-
as well as income and expenses are recognised in proportion to
ted amortisation.
the participating interest. As regards expenses, a participating interest of 10% to zero means a realistic proportion of the costs
The following expected useful life periods are used for this:
of maintaining the fund and the possibility of participation is
• Business information systems: 3 to 7 years
allocated to the participant. On the basis of the insights provided in the notes to the financial position of BSO and BSA,
Advance payments on intangible assets are measured at
no separate financial statements of Buma are included.
acquisition price or production cost. Advance payments on intangible assets are not amortised.
The Board of BSO/BSA consists of Board members of the Buma Association and the Stemra Foundation.
Deviations from Part 9, Book 2 of the Dutch Civil Code The most significant deviations from Part 9, Book 2 of the Dutch Civil Code, for the valuation of assets and liabilities and determination of results are:
annual report 2012
27 Tangible fixed assets
Continuity reserve
The valuation of tangible fixed assets takes place on the basis of
The continuity reserve is intended, among other things,
historical cost less accumulated depreciation. Depreciation is
to guarantee the continuity of the performance of the activities.
calculated as a percentage of the purchase price according to
It also serves to fulfil obligations to third parties, in particular
the straight-line method on the basis of the expected useful life.
for distribution of the rights revenue available for distribution
The following expected useful life periods are used:
according to the financial statements. This reserve also serves
• Hardware/Computer equipment: 3 years
to even out unwanted fluctuations in the amounts available for
• Other operating assets: 3 to 7 years
distribution, resulting, among other things, from domestic and
Receivables
changes in the distribution of rights.
international pressure on revenue, as well as continuing Receivable are measured at nominal value less a provision for bad debts.
Provisions Provisions are measured at either the nominal value of the
Financial fixed assets
estimated expenditure required to settle liabilities and losses,
The securities recognised under financial fixed assets are listed
or the present value of that expenditure.
equity funds, (convertible) bond funds and (convertible) bonds. Securities are stated at fair value as at the balance sheet date.
A provision is recognised in the balance sheet when there is: • a legally enforceable or constructive obligation that is
Revaluation reserve for financial fixed assets
the result of a past event; and
Price gains/losses arising from the valuation of securities at fair
• for which a reliable estimate can be made;
value are not recognised directly in the operating statement, but
• and it is probable that settlement of this obligation will require
are initially recognised in the revaluation reserve. To the extent
an outflow of funds.
that the revaluation reserve is insufficient, the deficit is charged to the result. Each year, the amount of the revaluation reserve
The long-service awards provision is formed for active
required to absorb price fluctuations is determined by the Board
employees with a permanent employment contract. The
of directors in consultation with its asset management advisers.
provision is formed in connection with long-service awards and
If the revaluation reserve is larger than deemed necessary, this
has a long-term nature. In the provision’s calculation, account is
surplus is eligible for addition via the result to rights revenue
taken of commitments made, retention rate and actuarial
available for distribution.
principles.
Financial result and normative return
The provision for the Social Fund Buma foundation (SFB) annual
Dividends are recognised in the period in which they are made
allowances concerns a provision for the actual obligations of
payable; interest income is recognised in the period to which it
Buma by virtue of the annual allowances paid via SFB to
relates.
(former) songwriters and publishers and their dependants. Although the obligations have been included provisionally, there
To the extent the balance of the revaluation reserve, less the
is a firm intention to meet the obligations. The provision has a
possible appropriation reserve for price gains or losses leaves
long-term nature and an expected remaining term until the
room to do so, a so-called ‘normative return’ can be recognised
year 2022. The provision was formed from the Fund for Social
in the financial result, in addition to any receivable dividend
and Cultural Services; releases are part of the deduction and are
income and interest on bonds.
credited to the Fund. The provision is recognised less the part for which the SFB has already recognised a provision on its own
The normative return is calculated as a percentage of the
balance sheet.
average value of the equities and bonds over the financial year, and comprises the effective return on 5-year euro government bonds at the end of the financial year plus a risk mark-up for equities and bonds respectively. The risk mark-up is evaluated and set by the Board each year. The difference between the normative return and the the dividend income received on equities or interest on bonds is withdrawn from the revaluation reserve, if possible.
Buma/Stemra
NOTES TO THE BALANCE SHEET AND OPERATING STATEMENT OF BUMA
LONG-TERM DEBT Fund for Social and Cultural Services
so-called double claims, reserves are released after a maximum of 3 years in accordance with the seal of certified criteria. In
In accordance with Article 29:4 of the Articles of Association,
some cases, a longer reserve period is used, e.g., for amounts
each year a percentage defined by the Board on the recommen-
that Buma has received from sister organisations, but for which
dation of the Board of directors, with a maximum of 10%, is
insufficient information is available to make a proper distribu-
retained from the Dutch rights revenue, with the exception of
tion, as well as for funds reserved for claims from the past.
the receipts from categories such as Online and Foreign for the benefit of this fund. The amounts thus retained are reserved by
Grant obligations
the Board for expenditure and payments (grants) to institutions
The Board awards grants in the context of the Fund for Social
or organisations whose purpose it is to represent the idealistic
and Cultural Services. Legally enforceable or constructive
or material interests of composers, lyricists and music publis-
obligations exist once the Board has taken decisions on these
hers, or who otherwise promote Dutch music. Additions to the
grants and has announced them to the grant recipients. These
fund are part of the distribution. The item is classified as debt
obligations are recognised as current liabilities in the balance
capital, because the funds are never available to the organisa-
sheet.
tion.
Determination of the result CURRENT LIABILITIES Reserves of rights revenue available for distribution
Income and expenses are recognised in the year to which they relate. The result is determined by calculating the difference
The rights revenue distribution rules contain stipulations
between the balance of realised income and expenditure and
concerning the manner in which the distribution and payment
the financial result for the year. The balance of the operating
to participants and other stakeholders of the money received by
statement is allocated or deducted from the rights revenue
Buma on the basis of music rights is regulated. The rights
available for distribution and/or the reserves by means of profit
revenue distribution rules are observed when distributing funds
appropriation.
to the rights holders. The currentness and usability of the rights Board. The right revenue available for distribution consist partly
Pension plans Employees
of funds yet to be distributed from current year’s rights revenue
The Buma Association has arranged a pension plan for its
revenue distribution rules are assessed every three years by the
available for distribution as well as from other reserves.
employees in which the pension benefits are based on average wage. This pension plan has been placed with the PNO Sector
In the process of the distribution three types of reserves are
pension fund for the Media foundation. The contributions
formed. First of all reserves are formed for the event that
payable for the financial year are recognised as expenses.
insufficient information is available in order to enable distribu-
Contributions that have not yet been paid as at the balance
tion. For example, the lack of data of the rights holders,
sheet date are recognised as a liability. As these obligations
copyright information and the missing of so-called cue sheets
have a short-term nature, they are stated at their nominal value.
for films, series or commercials. Secondly, reserves are formed
The risks of salary developments, price indexation, investment
for works in which the accumulated earnings for each work
returns on the fund assets could lead to future changes in the
have not yet reached the lower limit for distribution. These
annual contributions to the pension fund. These risks are not
funds are segregated until this information is available or the
reflected in a balance sheet provision. In the event of a deficit in
lower limit has been reached and the money can be distributed
the sector pension fund, Buma has no obligation to pay
in the post-distribution.
additional contributions other than higher future contributions. The funding ratio of the PNO Sector pension fund for the Media
Finally, a reserve is formed for comments relating to the
foundation as at 31 December 2012 amounted to 95.6%
distribution. This reserve is created with a view to the indemni-
(end of 2011: 90.7%).
fication that Buma provides to the paying users of music. This reserve is determined by a percentage of the funds for each distribution on the basis of the historical development of the amount paid on complaints for each distribution category. The percentage of this reserve for comments averages between 0% and 2%. These three reserves are recognised under copyright reserves. In addition, as regards works for which so-called double claims exist, i.e. two rights holders claim the same work, the reserve is maintained until this situation has been resolved between the parties. These amounts are also recognised as double claims reserves in the rights revenue available for distribution. Except for the
annual report 2012
29 Music writers and publishers
Taxes
Pension plans for music writers and music publishers, who are
With respect to Buma, the Dutch Tax and Customs Administra-
rights holders of Buma, are financed from the Fund for Social
tion stipulated in a settlement agreement dated 6 November
and Cultural Services. The basis for the funds made available for
2001 that the Buma Association is liable to pay corporation tax.
music writers is 10% of their received rights via Buma. The
This agreement was renewed in May 2012 for a period of five
publisher’s pension amounts to 50% of the maximum pension
years, and is valid until 31 December 2016. Pursuant to this
amount available for the songwriters. For both the songwriter’s
settlement agreement, foreign withholding tax available for
pension and the publisher’s pension, an annual income limit of
offsetting and Dutch dividend tax can be deducted from the tax
€ 1,000 is assumed.
liability. A tax item is only recognised in the financial state-
The pension plan itself and its implementation for the benefit
ments if corporation tax is still liable after deduction of the
of affiliated music writers has been placed with the indepen-
foreign withholding tax available for offsetting.
dent AENA Occupational Pension Fund for Independent Artists foundation. This plan has replaced the SFB annuity plan.
Principles for cash flow statement The cash flow statement is drawn up according to the indirect method. Exchange rate differences, like all other changes, are
The pension plan of AENA is a contribution agreement in which
eliminated to the extent that they did not lead to a cash flow.
the contribution is paid to AENA based on a percentage of the
The term cash and cash equivalents is used in the balance sheet
rights received via Buma with a minimum of € 1,000.
in the same manner as in the cash flow statement.
This contribution is converted into pension. From the time the contribution has been converted, the pension fund bears the
Use of estimates
investment risk and the risk that the life expectancy increases.
The preparation of the financial statements requires the
The total of the annual pension entitlements determines the
management to make judgements, estimates and assumptions
amount of the pension at retirement. The funding ratio of AENA
that can affect the application of accounting principles and the
as at 31 December 2012 amounted to 121% (at year-end 2011:
reported value of assets, obligations and of income and
114%).
expenses. The estimates and the associated assumptions are
For further details please refer to page 42 of the financial
deemed to be reasonable in view of the circumstances. The
statements.
outcomes of these constitute the basis for an opinion on the
The pension plan for publishers is paid annually directly to the
apparent from other sources. The actual results may differ from
publishers concerned.
these estimates.
based on past experience and various other factors that are
carrying amounts of assets and obligations that are not readily
Revenue In the financial statements, right revenue is added to the rights revenue available for distribution. Buma includes the revenue from the management of performing rights in this rights revenue, if this revenue relates to the financial year, can be reliably determined, and there is reasonable certainty that the revenue is collectible.
Buma/Stemra
NOTES TO THE BUMA BALANCE SHEET AS AT 31 DECEMBER 2012 (1) Intangible fixed assets The changes in the intangible fixed assets can be specified as follows: ( x € 1,000) Business
Advance payment
information systems
on intangible fixed assets
Total
6,958
-
6,958
-6,958
-
-6,958
-
-
-
Investments
736
1,365
2,101
Amortisation
-10
-
-10
Acquisition cost as at 1 January 2012 Accumulated amortisation Carrying amount as at 1 January 2012 Changes during financial year:
Acquisition cost as at 31 December 2012 Accumulated amortisation
726
1,365
2,091
7,694
1,365
9,059
-6,968
-
-6,968
726
1,365
2,091
Carrying amount as at 31 December 2012 Averaged amortisation in number of years 3 - 7
The investment in business information systems in 2012
ERP business information system (Axapta).
concerns the Rights Holders’ Portal of € 0.7 million.
The completion of Axapta is expected to take place towards the
The advance payment on business information systems of
middle of 2013.
€ 1.4 million concerns the expenditure for the upgrade of the
(2) Tangible fixed assets The changes in the tangible fixed assets can be specified as follows: ( x € 1,000) Hardware/Computer equipment
Acquisition cost as at 1 January 2012 Accumulated depreciation Carrying amount as at 1 January 2012
Other operating assets
Total
3,504
5,376
8,880
-3,136
-5,243
-8,379
368
133
501
348
77
425
-
-
-
-253
-42
-295
-
-
-
Changes during financial year: Investments Divestments Depreciation Writing off divestments
Acquisition cost as at 31 December 2012 Accumulated depreciation Carrying amount as at 31 December 2012 Depreciation in number of years on average: 3 - 7
annual report 2012
95
35
130
3,852
5,453
9,305
-3,389
-5,285
-8,674
463
168
631
31 (3) Financial fixed assets The fair value of the portfolio at the 2012 year-end amounted to € 213.9 million and can be specified as follows (x € 1,000):
2012 Fixed income securities
2011
169,672
79%
160,867
78%
44,191
21%
46,395
22%
213,863
100%
207,262
100%
Equity funds
The developments of the individual items can be shown as follows (x € 1,000): Fixed income securities
Equity funds
Total
160,867
46,395
207,262
56,447
180
56,627
-53,756
-5,976
-59,732
6,114
3,592
9,706
169,672
44,191
213,863
Balance as at 1 January 2012 Purchases Repayments/sales proceeds Price gains/losses result Balance as at 31 December 2012
Buma’s securities have been placed respectively with founda-
therefore the proportional share of the total amount as shown
tion Buma/Stemra fixed income bond fund (Buma/Stemra
in the combined balance sheet of BSO and BSA. The decrease in
Obligatiefonds - BSO) and foundation Buma/Stemra equity fund
the percentage of Stemra is the result of the sale by Stemra of
(Buma/Stemra Aandelenfonds - BSA). The foundations are
its entire securities portfolio in BSO / BSA in the middle of
proportionally consolidated in the financial statements of Buma
September 2012. The Board resolved to sell the securities
and Stemra at an average percentage of respectively 100% and
portfolio with a view to the future of Stemra.
0% (2011: 79.9% and 20.1%). The amounts identified above are
Buma/Stemra
NOTES TO THE BUMA BALANCE SHEET AS AT 31 DECEMBER 2012
Below is the combined balance sheet of Stichting Buma/Stemra Obligatiefonds (BSO) and Stichting Buma/Stemra Aandelenfonds (BSA), which can be represented in condensed form as follows: ( x € 1,000)
31 December 2012
31 December 2011
Assets Fixed assets Financial fixed assets
213,863
259,535
17,047
2,143
3,371
11,748
234,281
273,426
233,917
273,018
364
408
234,281
273,426
Current assets Receivables Cash and cash equivalents
Liabilities Participants’ account Current liabilities Accounts payable
The return (including price changes and excluding the nominative return) in 2012 from the invested funds within BSO and BSA amounted to 7.1% (2011: 1.3%).
(4) Receivables The receivables balance at the financial year-end consists of
Auteurs- en Naburige rechten (Service centre for copyrights and
receivables that have been collected by Buma and receivables
neighbouring rights - referred to as Service Centre). The
for which the collection is performed by the Service Centrum
decrease in the receivable balance is primarily caused by a difference in timing of the invoicing.
(5) Other receivables (x € 1,000)
31 December 2012 Buma rights holders and participants Stemra current accounts Service Centre Other
annual report 2012
31 December 2011
1,191
1,015
-
389
47
853
258
475
1,496
2,732
33 (6) Accrued assets (x € 1,000)
31 December 2012
31 December 2011
Cable fees due
4,575
2,966
Interest due
1,973
1,578
Other
5,447
6,153
11,995
10,697
The Cable Collective was discontinued with effect from 30 June
up until the end of the third quarter. The 4th quarter had not
2012. During the third quarter joint invoicing did still take place
yet been invoiced at the end of 2012 due to the ongoing
as well as final payments to the various CMOs of funds received
negotiations with NL Kabel.
(7) Cash and cash equivalents (x € 1,000)
31 December 2012
31 December 2011
945
12,832
15,297
15,750
16,242
28,582
2012
2011
1,855
1,855
Additions
-
-
Withdrawals
-
-
1,855
1,855
Deposit accounts Other cash and cash equivalents
A bank guarantee of € 0.5 million has been issued for the lease of the office building. The other cash and cash equivalents are freely available.
(8) Continuity reserve The development of the continuity reserve can be shown as follows: ( x € 1,000)
Balance as at 1 January
Balance as at 31 December
Buma/Stemra
NOTES TO THE BUMA BALANCE SHEET AS AT 31 DECEMBER 2012
(9) Revaluation reserve for financial fixed assets The changes in the revaluation reserve for financial fixed assets can be specified as follows: ( x € 1,000)
2012
2011
6,154
Balance as at 1 January (Un)realised price change gains/losses result Withdrawals to the benefit of the financial result to normative return Balance as at 31 December
The (un)realised price gains in securities amounted to € 9.7
10,796
9,708
-2,627
-2,014
-2,015
13,848
6,154
The percentage for 2012 amounted to 5.6% (2011: 5.6%) for
million (2011: minus € 2.6 million) and are recognised directly in
equities and 3.1% for fixed-income securities (2011: 3.1%). The
the revaluation reserve for financial fixed assets. The results on
withdrawal for the benefit of the financial result to a normative
equities, (convertible) bond funds and (convertible) bonds are
return amounted to € 2.0 million (2011: € 2.0 million).
recognised at a normative return.
(10) Provisions The changes in the provisions can be specified as follows: ( x € 1,000) Balance as at
Additions
Withdrawals
Balance as at
1 January 2012
in 2012
in 2012
31 December 2012
Long-service awards SFB annual allowances plan Indemnification obligation
526
199
-76
649
8,552
1,717
-492
9,777
453
27
-480
-
9,531
1,943
-1,048
10,426
Provision for long-service awards
Provision for indemnification obligation
The change in the discount rate (2012: 2.89% / 2011: 5.14%) as a
As a party to the agreements concluded with cable operators
result of the lower interest rates led to a change in the provision
concerning copyright arrangements for transmission of
for long-service awards of € 0.1 million.
programmes from broadcasting companies, Buma has assumed obligations with regard to copyright claims that could be
Provision for SFB annual benefits plan
enforced against cable operators by third parties not represen-
The change in the discount rate (2012: 2.32% / 2011: 4.55%) as a
ted by Buma in the cases.
result of the lower interest rates is the main cause of the addition to the provision of € 1.7 million. The withdrawals relate
Due to the discontinuation of the cable agreement with Cisac/
to the actuarial result on the provision.
Agicoa/Sekam as of the end of 2012, there is no idemnification obligation pursuant to the cable collections.
The total provision required for the SFB annual allowances plan as at 31 December 2012 amounted to € 11.0 million, of which € 1.2 million had already been recognised as a provision at the SFB and is therefore not recognised under Buma.
annual report 2012
35 (11) Fund for Social and Cultural Services The changes can be specified as follows: ( x â‚Ź 1,000)
Balance as at 1 January Additions Expenditure Balance as at 31 December
2012
2011
15,023
17,168
9,883
9,581
-14,734
-11,726
10,172
15,023
2012
2011*
1,444
1,335
-116
-208
4,000
2,221
The expenditure of the Fund for Social and Cultural Services was: ( x â‚Ź 1,000)
Social Buma Social Fund commitments for 2013 and 2012 respectively SFB preceding year settlement Pension plan for songwriters and publishers Other
52
8
5,380
3,356
6,096
6,141
259
-749
2,150
2,100
-
200
Cultural Buma Culture commitment for 2013 and 2012 respectively Buma Culture settlement for 2011 and 2010 respectively Supplement Serious/Online Geneco 100 years Brein 2012 Direct funding for cultural projects Professional associations Other
Total expenditure
240
-
22
131
254
214
333
333
9,354
8,370
14,734
11,726
* Adjusted for comparison purposes
Buma/Stemra
NOTES TO THE BUMA BALANCE SHEET AS AT 31 DECEMBER 2012
The pension plan for both independent music writers and
The Buma Social Fund Foundation is the social institution for
independent artists has been placed with the independent
composers, lyricists and music publishers who are affiliated to
AENA Occupational Pension Fund, which was subsidised by the
Buma. The Buma Social Fund aims to support eligible rights
government until the end of 2012. The government subsidy for
holders with help and assistance in the broadest sense in
the pension contributions of the performing musicians was
material and intangible ways and to promote pension provision
stopped with effect from 1 January 2013 as a result of the severe
for Buma rights holders.
cutbacks that the government has implemented in the cultural sector. This means that independent artists will no longer
The professional associations that received grants from Buma
accrue any new pension entitlements as of 1 January 2013. The
in 2012 include PALM Association, the Dutch Composers Society,
fact that the costs of implementing the pension plan must now
Dutch Music Publishers Association, and the Association of
be borne by considerably fewer participants will affect pension
Writers and Translators.
accrual within AENA. Implementation costs will increase significantly for each participant for whom pension contributi-
In 2012, the Buma Board decided to grant a budget from the
ons are paid. The independent Board of AENA decided at the
SoCu fund up to an amount of € 1.2 million in connection with
start of 2013 that the rights accrued up to the end of 2012 will
Buma’s 100-year anniversary. The expenditure will be accounted
be placed elsewhere. From that date, AENA will no longer
for in 2013 and recognised as such in the 2013 financial
receive contributions from the Ministry of Education, Culture
statements.
and Science, and Buma. It is currently being investigated within the Buma Board and the Member Council how a new pension
The Serious/Online supplement is a withdrawal from the fund
plan can be realised with effect from 1 January 2013.
for the distribution to the rights holders in the Serious music and Online categories. The Serious and Online supplement will
The larger part, € 1.7 million, of the increase in the pension
be paid out in the first quarter of 2013. The Other item under
plans for songwriters and publishers of € 2.2 million to € 4.0
Cultural expenditure specifically concerns expenditure in the
million is mainly due to the change in the discount rate (2012:
context of the protection of copyright.
2.32% / 2011: 4.55%).
The balance as at 31 December 2012 can be specified as follows: ( x € 1,000)
10,172
14,859
2009
-
164
2010
-
-
2011
-
-
2012
-
-
10,172
15,023
2008 and prior years
In 2010, 2011, and 2012, the withdrawals from the Fund for
years 2009, 2010, 2011 and 2012 are therefore zero. The withhol-
Social and Cultural Services were higher than the additions to
ding from the amount of Dutch rights revenue and therefore the
the Fund. Therefore the balance of these years has been
addition to the fund for 2012 was determined by the Board and
deducted from the balance of the year 2008 and prior years. The
set at 8% (2011: 8.0%).
annual report 2012
37 (12) Rights revenue available for distribution (x € 1,000)
2012
2011*
Rights revenue available for distribution as at 1 January
170,504
162,211
Rights revenue for the year
148,151
142,948
9,557
-9,092
309,098
296,067
Rights holders and participants
77,339
70,345
Foreign organisations
49,063
43,799
Changes in rights revenue available for distribution Available for distribution
Distributed in the reporting year:
Paid to Fund for Social and Cultural Services Rights revenue paid out during the year
9,883
9,581
136,285
123,725
1,940
1,838
Rights revenue distributed during the year
138,225
125,563
Rights revenue available for distribution at year-end
170,873
170,504
Administrative costs withheld
* Adjusted for comparison purposes
The amount of rights revenue available for distribution at the
but also due to higher payments to rights holders and partici-
end of 2012 is approximately € 0.4 million higher than in 2011.
pants (€ 7.0 million) and foreign organisations (€ 5.3 million).
This change is due in part to higher revenue in 2012 (€ 5.2 million),
The current composition of this item, at the time of the financial statements were drawn up, is: (x € 1,000)
Reserve for rights revenue Reserve for double claims Current year’s rights revenue still to be distributed
2012
2011
34,764
38,094
5,323
6,235
130,786
126,175
170,873
170,504
Buma/Stemra
NOTES TO THE BUMA BALANCE SHEET AS AT 31 DECEMBER 2012
Breakdown for each year of collection:
2012 5,388
Years older than 2009 2009
10,715
2010
13,183
2011
13,445
2012
128,142 170,873
In addition to the reserve for double claims of € 3.5 million, the
the information for a correct distribution is not yet available
reserve for collection years older than 2009 also consists of
(€ 0.9 million) and Digitenne plus packages. The distribution of
funds received from sister organisations for which
the Digitenne plus packages will take place in 2013.
Available for distribution by Buma (x € 1,000)
2012
2011*
Rights revenue
148,151
142,948
Release reserve
6,596
4,327
Changes in rights revenue available for distribution
-9,557
-9,092
Became available for distribution during the year
145,190
138,183
Rights revenue available for distribution at the beginning of the year
170,504
162,211
Available**
138,594
133,856
Distributed
-136,285
-123,725
-1,940
-1,838
170,873
170,504
Administrative costs withheld Rights revenue available for distribution at year-end * Adjusted for comparison purposes ** Excluding release from reserve that has already been recognised in the opening balance sheet
A release reserve in the amount of € 6.6 million will be added to
The negative result for 2012 amounts to € 9.6 million (2011: € 9.1
the amount available for distribution, which is to be recognised
million). This negative amount was deducted from rights
in 2013 and subsequent years (2011: € 4.3 million, recognised in
revenue available for distribution (2011: € 9.1 million).
the 2012 distribution).
annual report 2012
39 Breakdown of Buma’s revenue (x € 1,000)
2012
2011
Radio & TV Performing Rights
52,088
51,863
Live
20,861
20,363
Hospitality Industry
13,483
15,047
Work Places
17,837
17,600
Shops and Stores
12,554
12,827
2,130
1,471
Cable
16,765
11,886
Performing Rights Foreign
12,433
11,891
148,151
142,948
Online Licensing Performing Rights
The amount available for distribution, including release from reserve, is allocated to the different categories as follows: ( x € 1,000)
2012
2011
Live entertainment
15,550
15,845
Mechanical entertainment
38,644
38,090
5,800
5,761
Television
7,641
7,572
Film
3,488
3,134
Radio
2,983
2,991
Cable
15,147
10,562
Satellite
33,622
32,755
Foreign
12,432
11,892
9,883
9,581
145,190
138,183
Serious categories
Fund for Social and Cultural Services
Buma/Stemra
NOTES TO THE BUMA BALANCE SHEET AS AT 31 DECEMBER 2012
(13) Other liabilities (x € 1,000)
31 December 2012
31 December 2011
65
26,169
Obligations arising from social and cultural goals
18,517
17,791
Stemra Loan
19,000
-
Buma rights holders and participants
486
250
Stemra current account
430
-
2,891
3,402
41,389
47,612
Foreign sister organisations
Other
As of 2012, the settlement with foreign sister organisations
The obligations arising from social and cultural goals consist of:
takes place at almost the same time as the distribution to Dutch
(amounts x € 1,000)
rights holders for the purpose of making earlier payment of funds to foreign rights holders. This means the obligation to
• Buma Culture € 7,831 (31 December 2011: € 6.281)
sister organisations abroad decreased significantly compared to
• Pension plan for songwriters and publishers € 4,626
2011. The temporary financing of these funds has taken place
(31 December 2011: € 5,404)
mainly through a loan from Stemra to Buma of € 19 million. The
• Buma Social Fund € 3,928 (31 December 2011: € 3,955)
interest rate charged on this loan is the EURIBOR 3-month rate
• Serious and Online Supplement € 2,132
as at the end of the quarter. The loan was repaid in March 2013.
(31 December 2011: € 2,151)
(14) Accrued liabilities (x € 1,000)
31 December 2012 Third-party cable rights holders
505
31 December 2011 5,183
Holiday allowance annual leave payable
781
796
Other
663
533
1,949
6,512
The Third-party cable rights holders item concerns the funds
2012. Therefore, no more cable rights will be collected for the
still to be distributed to the participants in the Cable Collective.
4th quarter of 2012 for the participants of the Cable Collective
The Cable Collective was discontinued with effect from 30 June
and this results in only a limited balance as at the end of 2012.
annual report 2012
41 OFF–BALANCE SHEET COMMITMENTS AND CONTINGENT LIABILITIES Long-term financial commitments
Related parties
The financial commitments for the accommodation in Hoofd-
Related parties of Buma Association can be distinguished as:
dorp were extended until 31 December 2017. The rental
Stemra foundation, Buma Culture foundation (and accordingly
obligation is assumed by Buma. The combined annual rental for
Amsterdam Dance Events foundation and Buma Rotterdam
the year 2013 for Buma/Stemra amounts to € 0.9 million, 40% of
Beats foundation), Buma Social Fund foundation, the Service
which is charged to third parties. The rest is divided between
Centre, and the members of the Management according to the
Buma and Stemra on the basis of 75%/25% respectively.
Articles of Association and Board of the Buma Association and Stemra Foundation.
In the current composition, the annual amount for the leasing of the fleet of cars by Buma/Stemra is € 0.1 million. The
Reference is made to note 16 for more information about the
obligation for terms longer than one year is € 0.2 million.
remuneration paid to the members of the Board and the Board
The financial obligation for the rental of the printers was
transactions pursuant to the exploitation of copyrights of Board
contracted until 1 December 2013. The annual instalment for
members or to parties related to Board members are not
of directors according to the Articles of Association. Regular
this amounts to € 0.1 million. The obligations with respect to
explicitly disclosed in the financial statements. The payments
the car fleet lease and the printers were assumed by Buma. The
to Board members or to parties related to Board members are
lease costs and printer rental will be paid in the proportions of
calculated in the same manner as the payments to all rights
75% by Buma and 25% by Stemra.
holders and are paid in accordance with the normal procedures within Buma. As a result of the solidarity within the sector,
The Buma Association and Stemra Foundation are contractually
Board members are also related to customers of Buma. On the
obliged from 2007 until 31 March 2017 to have a large part of the
one hand, on the basis of performing music-related services or
back office activities performed by Accenture. The resulting
as an employee. Transactions with these parties are carried out
financial obligation for the remaining term of the contract
at arm’s length and subject to conditions similar to those that
amounts to € 12.4 million provided volumes remain the same.
would have been stipulated from independent third parties.
The costs of back office activities performed by Accenture are divided proportionately 75% and 25% respectively for Buma and
Both the Buma Culture foundation and the Buma Social Fund
Stemra.
foundation receive funds to realise their goals from the Fund for
The off-balance sheet commitments of € 16.2 million can be
more information in this connection. The Buma Association
Social and Cultural Services. Reference is made to note 12 for summarised as follows:
charges on costs for staff, accommodation and overhead to the
• less than 1 year: € 4.0 million
Stemra Foundation, Buma Culture Foundation, Buma Social
• between 1 and 5 years € 12.2 million
Fund Foundation and the Service Centre. The costs charged-on for 2012 amount to:
As at 31 December, there was a residual investment commit-
• Stemra Foundation € 4,696,000
ment of € 1.5 million for the upgrade of the ERP business
• Buma Culture Foundation € 177,000
information system (Axapta).
• Buma Social Fund Foundation € 38,298 • the Service Centre € 670,000
Joint and several liability The Buma Association is jointly and severally liable for the
The charges are based on cost price. In addition, the Service
debts resulting from the legal acts of Stichting Service Centrum
Centre charges Buma € 1,748,000 for the performance of its
Auteurs- en Naburige Rechten (Service centre for copyrights and
duties. The Service Centre is responsible for the invoicing and
neighbouring rights foundation - referred to as the Service
collection on behalf of Buma and Sena.
Centre) and guarantees the fulfilment of the obligations of the foundation to a maximum of € 1.0 million.
Buma/Stemra
NOTES TO BUMA’S 2012 OPERATING STATEMENT (15) Budget (x € 1,000)
2013 Budget
2012 Actual
2012 Budget*
Income 1,625
1,940
1,700
Entrance and annual fees
600
634
600
Other Income
200
Administrative costs withheld
686 2,425
600 3,260
2,900
Expenses Staff costs Accommodation costs Depreciation/Amortisation Other expenses
10,220
9,772
9,833
1,090
1,303
1,350
730
306
450
9,940
Operating result Interest and dividends Normative return** Financial result Result from ordinary operating activities
8,707
8,590
21,980
20,088
20,223
-19,555
-16,828
-17,323
5,500
5,257
-
5,428
2,014
-
5,500
7,271
5,428
-14,055
-9,557
-11,895
* This concerns the budget that was revised during the Board meeting of April 2012 ** The normative return depends on the result from price gains/losses. Exchange rate results are not accounted for in the budget
Breakdown of Buma revenue (x € 1,000)
2013 Budget
2012 Actual
2012 Budget
Radio & TV Performing Rights
51,850
52,088
51,650
Live
19,800
20,861
20,850
Hospitality Industry
13,350
13,483
15,750
Work Places
17,300
17,837
17,250
Shops and Stores
12,250
12,554
13,600
2,500
2,130
2,300
Online Licensing Performing Rights Cable
13,500
16,765
13,500
Foreign Performing Rights
11,600
12,433
11,100
142,150
148,151
146,000
annual report 2012
43 The budget for 2013 was approved at the meeting of the Joint
The budgets for both 2012 and 2013 are shown on the previous
Buma/Stemra Boards of 12 December 2012. The total 2013 cost
page. The actual figures for 2012 are included for comparison
budget for Buma and Stemra combined amounts to
purposes. The normative return was not taken into account
€ 29 million. The total cost budget applies as the standard for
when the budgets for 2013 and 2012 were drawn up.
the amount of the costs of management and administration. In 2013, a negative result from ordinary operating activities of As a result of several Board resolutions, the 2012 cost budget for
€ 14.1 million was budgeted when compared to € 11.9 million in
the entire organization was increased in April by an amount of
2012. This budgeted decrease is attributable to the budgeted
€ 0.6 million to € 26.5 million. The actual result realised for 2012
one-time costs of € 1.5 million associated with the implementa-
was € 26.4 million.
tion of several projects. The budgeted revenue breakdowns for 2013 and 2012 are shown as well, including the actual revenue of 2012 for comparison purposes. Decreases are expected in almost all categories, except for Online.
(16) Staff costs (x € 1,000)
2012
2011
Salaries
8,690
9,121
Social security charges
1,195
1,129
Pension contributions Other staff costs
Charged/compensated to third and related parties
843
832
2,637
2,539
13,365
13,621
-3,593
-3,536
9,772
10,085
The average number of employees during the reporting year was 183 (2011: 176 employees), which corresponds to an average of 169.5 FTEs (2011: 164.3 FTEs). This includes: • 4 employees (2011: 5 employees) who are fully charged-on to the Service Centre, which corresponds with 1.3 FTEs (2011: 4.6 FTEs).
The decrease in the average number of FTEs in 2011 from 4.6 FTEs to 1.3 FTEs in 2012 is caused by the transfer of staff from Buma to the Service Centre in the second quarter. • Employees who work partly for Stemra, and for whom part of the costs are charged on to Stemra • 1.0 FTE who is charged on to other affiliated foundations
Buma/Stemra
NOTES TO BUMA’S 2012 OPERATING STATEMENT
The workforce (average number of FTEs) can be divided into various categories of staff as follows:
2012 Board of directors and board (of directors) secretarial support staff
2011*
6.8
5.4
7.9
6.1
General Affairs
40,0
41.7
Front Office
77.9
72.8
Back Office
36.9
38.3
169.5
164.3
Legal Affairs
* Adjusted for comparison purposes
2012 Remuneration of Buma Board and Buma/Stemra Board of directors according to the Articles of Association (x € 1,000) Buma Board
Remuneration for 13 Buma Board members, Including expenses allowance
164
The remuneration relates to the former Board of Buma. A new
The new Board contains not only new members, but also several
Board was elected during the General Assembly on 13 December
re-elected members. The newly elected members did not
2012.
receive remuneration for 2012.
Buma/Stemra Board of directors according to articles of association
H.G. van der Ree Chief Executive Officer
Position
100%
Full time equivalent
Indefinite duration
Contract form
1/1 - 31/12
Employment
311
Fixed remuneration and allowances
67.5
Variable remuneration and allowances
3
Expense allowance
54
Pension costs
9
Social security charges
33
Crisis levy
* The remuneration above is the total remuneration for the
The crisis levy is a one-off additional tax by means of an
Buma/Stemra Board of directors according to the Articles of
employer levy of 16% on earnings from current employment
Association. This remuneration is recognised for 75% in the
that is paid to an employee in 2012 to the extent that wages are
financial statements of the Buma Association, and for 25% in
higher than € 150,000 (Section 32bd of the 1964 Wages and
the Stemra Foundation.
Salaries Tax Act).
annual report 2012
*
45 (17) Other expenses (x € 1,000)
2012
2011
Rent, Lease & Maintenance
643
620
Office supplies
371
344
453
324
Outsourcing
1,475
1,316
Outsourcing IT
1,791
1,715
966
1,383
Advisory fees
1,445
1,719
Service agencies
2,903
2,222
Commercial expenses
Other IT expenses
Other general overheads
Costs charged on *
827
880
10,874
10,523
-2,167
-2,354
8,707
8,169
* The costs charged on are charged on to third and related parties
The increase in Service Agencies’ costs is specifically attributa-
incurred by the Service Centre. In addition, more costs were
ble to increased activities of the Service Centre. This increase is
incurred for digital music detection broadcast on the radio,
caused by costs of file matching and extra marketing costs
television and internet.
(18) Auditor’s fee The following fees of KPMG Accountants have been charged to Buma, as referred to in Section 2:382a of the Dutch Civil Code (x € 1,000).
2012 KPMG
Other
Accountants N.V.
KPMG network
Total KPMG network
Audit of the financial statements
93
-
93
Other audit engagements
23
-
23
Advisory services on tax matters
-
58
58
Other non-audit services
-
49
49
116
108
223
2011
Audit of the financial statements
KPMG
Other
Accountants N.V.
KPMG network
Total KPMG network
-
106
106 24
6
30
Advisory services on tax matters
-
58
58
Other non-audit services
-
23
23
130
87
217
Other audit engagements
Buma/Stemra
NOTES TO BUMA’S 2012 OPERATING STATEMENT
(19) Financial result (x € 1,000)
2012
2011
3,072
2,628
Interest income and other income Fixed-income securities Interest received on bonds Equities Dividend income received
2,690
3,304
5,762
5,932
2,014
2,015
Changes in revaluation reserve Withdrawal from revaluation reserve for supplementing the financial result to normative return Other interest income and similar income Total income from investments Interest expenses and other expenses
The financial result of Buma decreased by € 0.5 million to € 7.3 million (2011: € 7.8 million).
117
427
7,893
8,374
-622
-557
7,271
7,817
The withdrawal for the benefit of the financial result to normative return amounted to € 2.0 million (2011: € 2.0 million). The BSO/BSA sharing ratio between Buma and Stemra was
BSO/BSA received less interest and dividend in 2012. Buma still
changed in 2012. The key change is the result of the sale of
realised an increase in interest received on bonds in 2012.
participation units by Stemra in mid-September 2012.
This increase was caused by a partial sale of equities and the reinvestment of the proceeds in fixed-income securities.
Buma Association Board Mr L.A.J.M. de Wit LL.M.
chairman
Mr H.O. Westbroek
deputy chairman
Mr A.A.L. de Raaff
secretary
Mr P.M. van Brugge
Board Member
Mr Drs. L.J. Deuss
Board Member
Mr L.A. Dikker
Board Member
Mr J.N. Hamburg
Board Member
Mr A.B. Molema
Board Member
Mr P.L. Perquin
Board Member
Mr M. Schimmer
Board Member
Mr R.D. van Vliet
Board Member
Mr N.M. Walboomers
Board Member
Vacancy
Board Member
Board of directors Mr H.G. van der Ree
annual report 2012
Chief Executive Officer
47
OTHER INFORMATION
To: the Board and the General Assembly of Vereniging Buma
Opinion In our opinion, the financial statements 2012 are prepared, in all
Independent auditor’s report
material respects, in accordance with the accounting policies
We have audited the accompanying financial statements 2012
selected and disclosed by the Association, as set out in the
set out on pages on pages 22 to 46 of Vereniging Buma, Amstel-
notes to the financial statements.
veen, which comprise the balance sheet as at 31 December 2012 notes, comprising a summary of the accounting policies and
Basis of accounting and restriction on distribution and use
other explanatory information.
We draw attention to the notes to the financial statements,
and the operating statement for the year then ended and the
which describes the basis of accounting. The accounting
The Board’s responsibility
policies used are selected and disclosed by the Association. Our
The Board of the Association is responsible for the preparation
opinion is not qualified in this respect.
of the financial statements in accordance with the accounting policies selected and disclosed by the Association, as set out in the notes to the financial statements. Furthermore, the Board is
Amstelveen, 3 april 2013
responsible for such internal control as it determines is necessary to enable the preparation of financial statements that
KPMG Accountants N.V.
are free from material misstatement, whether due to fraud or error.
R.J. Groot RA
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from An audit involves performing procedures to obtain audit
EVENTS AFTER THE REPORTING PERIOD Result appropriation
evidence about the amounts and disclosures in the financial
For Buma, the result for 2012 will be deducted from rights
statements. The procedures selected depend on the auditor’s
revenue available for distribution. It will then be decided on the
material misstatement.
judgment, including the assessment of the risks of material
basis of the assessment of the reserves, to what extent funds
misstatement of the financial statements, whether due to fraud
must be added to or deducted from the reserves. This change
or error. In making those risk assessments, the auditor consi-
will also be credited or charged to rights revenue available for
ders internal control relevant to the entity’s preparation of the
distribution.
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
Proposal of the Board of directors
expressing an opinion on the effectiveness of the entity’s
As shown in the financial statements, which were prepared in
internal control. An audit also includes evaluating the appropri-
accordance with Article 26, paragraph 2, of the Articles of
ateness of accounting policies used and the reasonableness of
Association, the Board of directors proposes to deduct the
accounting estimates made by the Board, as well as evaluating
negative result of € 9.6 million from rights revenue available for
the overall presentation of the financial statements.
distribution.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
The proposal has already been recognised in the 2012 financial
opinion.
statements.
Buma/Stemra
Glennis Grace Photo: Sander Baks
Stemra 2012 financial statements
49
STEMRA BALANCE SHEET Stemra balance sheet as at 31 December 2012 After appropriation of the result (x â‚Ź 1,000)
31 December 2012
31 December 2011
Assets Fixed assets Tangible fixed assets (1) Financial fixed assets (2)
280
250
-
52,273 280
52,523
Current assets
2,571
1,629
21,374
4,357
Tax and social security contributions
282
815
Accrued assets(4)
107
741
36,062
3,674
Receivables Other receivables (3)
Cash and cash equivalents (5)
Total assets
60,396
11,216
60,676
63,739
31 December 2012
31 December 2011
Liabilities Reserves
1
1
Continuity reserve (6)
5,760
5,760
Appropriation reserve (7)
7,773
-
-
4,390
Foundation capital
Revaluation reserve for financial fixed assets (8)
13,534
10,151
113
64
Provisions Provisions (9) Current liabilities
35,594
38,738
Accounts payable
1,000
1,088
Other liabilities (11)
2,396
4,400
60
55
7,979
9,243
Rights revenue available for distribution
Tax and social security contributions Accrued liabilities (12)
Total liabilities
47,029
53,524
60,676
63,739
Buma/Stemra
STEMRA OPERATING STATEMENT Stemra Operating Statement for 2012 (x â‚Ź 1,000)
2012
2011
Income Administrative costs withheld Entrance and annual fees Other Income
3,475
3,134
635
617
1
50 4,111
3,801
Expenses 3,525
3,251
Accommodation costs
434
479
Depreciation/Amortisation
166
134
Staff costs (14)
Other expenses (15)
Operating result
Financial result (17) Result (net expenses of the Stemra organisation
2,167
1,833 6,292
5,697
-2,181
-1,896
2,181
1,952
-
56
-
56
Result appropriation Changes in rights revenue available for distribution
annual report 2012
51
STEMRA CASH FLOW STATEMENT Stemra Cash Flow Statement for 2012 (x â‚Ź 1,000)
2012
2011
Cash flow from rights revenue and distribution (10) Rights revenue Distribution
30,421
32,138
-31,134
-32,211 -713
-73
Cash flow from operating activities Administrative costs withheld (10) Other income Interest and dividends
Total operating expenses Adjustment Depreciation/Amortisation
Changes in provisions Changes in other receivables Changes in other liabilities
3,475
3,134
636
667
1,263
1,336
5,374
5,137
-6,292
-5,697
166
134
-6,126
-5,563
49
-149
-18,513
2,898
-1,955
-2,931
-20,419
-182 -21,171
-608
Cash flow from investing activities (fixed assets) Investments in tangible fixed assets (1)
-196
-174 -196
-174
Cash flow from investing activities (2) Purchases of securities Repayments/sales proceeds
-10,364
-31,205
64,832
29,429 54,468 32,388
Net cash flow Cash and cash equivalents as at 1 January Cash and cash equivalents as at 31 December Changes in cash and cash equivalents
-1,776 -2,631
3,674
6,305
36,062
3,674 32,388
-2,631
Buma/Stemra
NOTES TO STEMRA’S BALANCE SHEET AND OPERATING STATEMENT GENERAL Stemra Foundation’s objectives
more so in view of the fact that it is expected that during the
Stichting Stemra (Stemra foundation) has its registered office in
coming years Stemra in its present form will not be able cover
Amstelveen.
realisation of the revaluation reserve in this manner. All the
its costs. The Board therefore decided to place the revaluation reserve in an appropriation reserve from which future deficits
The Foundation’s objective is to represent and promote both the
will be covered as much as possible. In this context, an item of
material and intangible interests, without any profit motive, of
accumulated positive results from the time that Stemra still had
music writers and music publishers and other copyright holders,
major central licensing contracts, was also transferred to the
in particular with regard to mechanical reproduction rights. The
appropriation reserve from the rights revenue available for
Foundation’s other goals are exercising and enforcing mechani-
distribution.
cal reproduction rights for participating songwriters, participating publishers, as well as other songwriters and copyright
By taking these measures, as well as taking into account the
owners. The Foundation participates in the implementation and
existing continuity reserve, the Board of directors and the Board
promotion of various activities to achieve its objective.
believe that Stemra has sufficient financial resources to meet its financial obligations in the coming years and the financial state-
Principles for the valuation of assets and liabilities and determination of the result
ments have been prepared in accordance with the going-concern principle.
The principles applied for the valuation of assets and liabilities and determination of the result are based on historical costs
Principles for the conversion of foreign currencies
unless stated otherwise.
Transactions designated in foreign currencies are converted into
If not stated otherwise, assets and liabilities are stated at
Monetary assets and liabilities denominated in foreign
euros at the exchange rate applicable on the transaction date. nominal value and income and expenses are allocated to the
currencies are converted into euros on the balance sheet date at
period to which they relate.
the exchange rate applicable on that date. Exchange rate differences that arise due to convertion are recognised in the
The VOI©E approval criteria were taken into account when
operating statement. Non-monetary assets and obligations that
preparing the financial statements.
are denominated in foreign currencies and valued on the basis of historical costs, are converted at the exchange rate applying
As stated in the Report of the Management Board, the shift to
on the date of the transaction.
digital products makes the development of the future market for mechanical rights uncertain. The continuously shrinking
Consolidation principles
market imposes considerable pressure on the business model
For transparency purposes, the foundations Buma/Stemra fixed
and the future of Stemra; all possible steps should be conside-
income bond fund (Buma/Stemra Obligatiefonds - BSO) and
red to respond in the best possible way to this development.
Buma/Stemra equity fund (Buma/Stemra Aandelenfonds - BSA)
The Board and the Board of directors of Stemra conduct
are included in the Stemra financial statements by means of
in-depth analyses in order to make the Stemra activities
proportional consolidation. In this context, assets and liabilities
cost-effective again in the joint Buma/Stemra organisation. This
as well as income and expenses are recognised in proportion to
involves an examination of the shared costs of Buma and
the participating interest. As regards expenses, a participating
Stemra, possible domestic or international joint ventures,
interest of 10% to zero means a realistic proportion of the costs
outsourcing and opportunities to change procedures, costs and
of maintaining the fund and the possibility of participation is
revenue levels, and efforts are also made to simplify the
allocated to the participant. On the basis of the insights
provision of services for rights owners. It is expected, however,
provided in the notes to the financial position of BSO and BSA,
that during the coming years Stemra in its present form will not
no separate financial statements of Buma are included.
be cost-efficient. The Board of BSO/BSA consists of Board members of the Buma Against this background, Stemra left the joint investment policy with Buma in September 2012 , and for the time being it maintains its fund entirely in cash, avoiding risk even more than before. This means the existing revaluation reserve has been realised and, according to the accounting principles, this, would then be eligible to be added via the result to the rights revenue available for distribution. As the objective of the revaluation reserve originally had a long-term risk-limiting nature, the Board deems it not opportune to initiate the
annual report 2012
Association and the Stemra Foundation.
53 Deviations from Part 9, Book 2 of the Dutch Civil Code
In 2012, the revaluation reserve was realised by liquidating Stemra’s securities. Since the objective of the revaluation
The most significant deviation from Part 9, Book 2 of the Dutch
reserve originally had a long-term risk-limiting nature, the
Civil Code, for the valuation of assets and liabilities and
Board deemed it inappropriate to initiate the realisation of the
determination of results is: Application of the normative return
revaluation reserve in this manner. All the more so in view of
on investments
the fact that it is expected that during the coming years Stemra
Price gains/losses arising from the valuation of securities at fair
therefore decided to place the revaluation reserve in an
value are not recognised directly in the operating statement, but
appropriation reserve from which future deficits will be covered
are initially recognised in the revaluation reserve for financial
as much as possible.
in its present form will not be able cover its costs. The Board
fixed assets, hereinafter: revaluation reserve. If the revaluation reserve is insufficient, price losses are charged directly to the
Financial result and normative return
result. If the position of the revaluation reserve is sufficient at
Dividends are recognised in the period in which they are made
the end of the year, a so-called normative return can be
payable; interest income is recognised in the period to which it
recognised in the financial result.
relates.
According to Guidelines for Annual Reporting, the price gains
To the extent the balance of the revaluation reserve, less the
and losses identified above should be recognised directly in the
possible appropriation reserve for price gains or losses leaves
operating statement. Buma/Stemra applies the methodology to
room to do so, a so-called ‘normative return’ can be recognised
account for a consistent development of the financial results in
in the financial result, in addition to any receivable dividend
the operating statement and to allow the financial result to
income and interest on bonds.
reconcile with the long-term objective of the investment policy. The normative return is calculated as a percentage of the
Tangible fixed assets
average value of the equity and bond funds over the financial
The valuation of tangible fixed assets takes place on the basis of
year, and comprises the effective return on 5-year euro
historical cost less cumulative depreciation. Depreciation is
government bonds at the end of the financial year plus a risk
calculated as a percentage of the purchase price according to
mark-up for equities or bonds. The risk mark-up is evaluated
the straight-line method on the basis of the expected useful life.
and set by the Board each year. The difference between the
The following expected useful life terms are used:
normative return and the dividend income received on equities
• Computer equipment 3 years
or interest on bonds is withdrawn from the revaluation reserve, if possible.
Receivables Receivable are measured at nominal value less a provision for
Continuity reserve
bad debts.
The continuity reserve is intended, among other things, to guarantee the continuity of the performance of the activities. It
Financial fixed assets
also serves to fulfil obligations to third parties, in particular as
The securities included under financial fixed assets are listed
regards distribution of the rights revenue available for distribu-
equity funds, (convertible) bond funds and (convertible) bonds.
tion according to the financial statements. This reserve also
Securities are measured at fair value as at the balance sheet
serves to even out unwanted fluctuations in the amounts
date.
available for distribution, resulting, among other things, from domestic and international pressure on revenue, as well as
Revaluation reserve for financial fixed assets
continuing changes in the distribution of rights.
Price gains/losses arising from the valuation of securities at fair value are not recognised directly in the operating statement, but
Appropriation reserve
are initially recognised in the revaluation reserve. To the extent
Appropriation reserves are parts of reserves that the Board has
that the revaluation reserve is insufficient, the deficit is charged
set aside for a special purpose. In 2012, an appropriation reserve
to the result. Each year, the amount of the revaluation reserve
was formed to cover expected future deficits. For more detailed
required to absorb price fluctuations is determined by the Board
information on this appropriated reserve, please refer to the
of directors in consultation with its asset management advisers.
notes to the balance sheet.
If the revaluation reserve is larger than deemed necessary, this surplus is eligible for addition via the result to the rights revenue available for distribution.
Buma/Stemra
NOTES TO STEMRA’S BALANCE SHEET AND OPERATING STATEMENT
Provisions
funds are segregated until this information is available or the
Provisions are measured at either the nominal value of the
lower limit has been reached and the money can be distributed
estimated expenditure required to settle liabilities and losses, or
in the post-distribution. Finally, a reserve is formed for com-
the present value of that expenditure.
ments relating to the distribution. This reserve is created with a view to the indemnification that Stemra provides to the paying
A provision is mentioned in the balance sheet when there is:
users of music. This reserve is determined by a percentage of
• a legally enforceable or constructive obligation that is the result
the funds for each distribution on the basis of the historical
of a past event; and
development of the amount paid on complaints for each
• for which a reliable estimate can be made; and
distribution category. The percentage of this reserve for
• it is probable that settlement of this obligation will require an
comments averages between 0% and 2%. These three reserves
outflow of funds.
are recognised under copyright reserves. In addition, as regards works for which so-called double claims exist, i.e. two rights
The long-service awards provision is formed for active
holders claim the same work, the reserve is maintained until
employees with a permanent employment contract. The
this situation has been resolved between the parties. These
provision is formed in connection with long-service awards and
amounts are also recognised as double claims reserves in the
has a long-term nature. In the provision’s calculation, account is
rights revenue available for distribution. Except for the so-called
taken of commitments made, retention rate and actuarial
double claims, reserves are released after a maximum of 3 years
principles.
in accordance with the seal of certified criteria. In some cases, a longer reserve period is used, e.g., for amounts that Stemra has
CURRENT LIABILITIES Reserves of rights revenue available for distribution
received from sister organisations but for which insufficient
The rights revenue distribution rules contain stipulations
as for funds reserved for claims from the past.
information is available to make a proper distribution, as well
concerning the manner in which the distribution and payment to participants and other stakeholders of the money received by
Determination of the result
Stemra on the basis of music rights is regulated. The rights
Income and expenses are recognised in the year to which they
revenue distribution rules are observed when distributing funds
relate.
to the rights holders. The currentness and usability of the rights revenue distribution rules are assessed every three years by the
The result is determined by calculating the difference between
Board. The rights revenue available for distribution consist
the balance of realised income and expenditure and the
partly of funds yet to be distributed from current year’s rights
financial result for the year.
revenue available for distribution, as well as from other reserves.
The balance of the operating statement is allocated to or deducted from the rights revenue available for distribution
In the process of the distribution three types of reserves are formed. First of all reserves are formed for the event that insufficient information is available in order to enable distribution. For example, the lack of data of the rights holders, copyright information and the missing of so-called cue sheets for films, series or commercials. Secondly, reserves are formed for works in which the accumulated earnings for each work have not yet reached the lower limit for distribution. These
annual report 2012
and/or the reserves by means of profit appropriation.
55 Pension plans
Use of estimates
The Stemra foundation has arranged a pension plan for its
The preparation of the financial statements requires the
employees in which the pension benefits are based on average
management to make judgements, estimates and assumptions
pay. This pension plan has been placed with the PNO Sector
that affect the application of accounting principles and the
pension fund for the Media foundation. The contributions
reported value of assets, obligations and of income and
payable for the financial year are recognised as expenses.
expenses. The estimates and the associated assumptions are
Contributions that have not yet been paid as at the balance
based on past experience and various other factors that are
sheet date are recognised as a liability. As these obligations
deemed to be reasonable in view of the circumstances. The
have a short-term nature, they are stated at their nominal value.
outcomes of these constitute the basis for an opinion on the
The risks of salary developments, price indexation, investment
carrying amounts of assets and obligations that are not readily
returns on the fund assets could lead to future changes in the
apparent from other sources. The actual results may differ from
annual contributions to the pension fund. These risks are not
these estimates.
reflected in a balance sheet provision. In the event of a deficit in the sector pension fund, the Stemra foundation has no obligation to pay additional contributions other than higher future contributions. The funding ratio of the PNO Sector pension fund for the Media foundation as at 31 December 2012 amounted to 95.6% (end of 2011: 90.7%).
Revenue In the financial statements, right revenue is added to the right revenue available for distribution. Stemra includes the revenue from the management of mechanical rights in this rights revenue, if this revenue relates to the financial year, can be reliably determined, and there is reasonable certainty that the revenue is collectible.
Taxes With regard to Stemra, the Dutch Tax and Customs Administration stipulated in a settlement agreement dated 6 November 2001, that Stichting Stemra is liable to pay corporation tax. This agreement was extended in May 2012 for a period of five years, and is valid until 31 December 2016. Pursuant to this settlement agreement, foreign withholding tax available to be offset and Dutch dividend tax can be deducted from the tax liability. A tax item is only recognised in the financial statements if corporation tax is still liable after deduction of the foreign withholding tax available for offsetting.
Principles for cash flow statement The cash flow statement is drawn up according to the indirect method. Exchange rate differences, like all other changes, are eliminated to the extent that they did not lead to a cash flow. The term cash and cash equivalents is used in the balance sheet in the same manner as in the cash flow statement.
Buma/Stemra
NOTES TO THE STEMRA BALANCE SHEET AS AT 31 DECEMBER 2012 (1) Tangible fixed assets The changes in the tangible fixed assets can be specified as follows: ( x € 1,000)
Computer equipment 1,685
Purchase price as at 1 January 2005
-1,435
Accumulated depreciation
250
Carrying amount as at 1 January 2012 Changes during financial year: Investments
196
Depreciation
-166 30 1,881
Acquisition cost as at 31 December 2012
-1,601
Accumulated depreciation
280
Carrying amount as at 31 December 2012 Averaged depreciation in number of years 3
(2) Financial fixed assets The fair value of the portfolio at the 2011 year-end amounted to € 52.3 million and can be specified as follows (x € 1,000):
2011
2012 Fixed-income securities
-
40,572
78%
Equity funds
-
11,701
22%
52,273
100%
The development of the individual items can be shown as follows (x € 1,000):
Fixed-income securities
Equity funds
Total
Balance as at 1 January 2012
40,572
11,701
52,273
Purchases
10,242
122
10,364
-52,097
-12,735
-64,832
1,283
912
2,195
-
-
-
Repayments/sales proceeds Price result Balance as at 31 December 2012
With a view to the investigation into the future of Stemra,
Aandelenfonds - BSA). The foundations are proportionally
Stemra left the joint investment policy with Buma and is
consolidated in the financial statements of Buma and Stemra at
provisionally holding all its funds in liquid form. In mid-Sep-
an average percentage of respectively 0% and 100% (2011: 20.1%
tember 2012, it sold all its securities.
and 79.9%). The amounts identified above are therefore the proportional share of the total amount as shown in the
Stemra’s securities have been placed with the foundations
combined balance sheet of Stichting Buma/Stemra Obligatie-
Buma/Stemra fixed income bond fund (Buma/Stemra Obligatie-
fonds (BSO) and Stichting Buma/Stemra Aandelenfonds (BSA).
fonds - BSO) and Buma/Stemra equity fund (Buma/Stemra
annual report 2012
57 The combined balance sheet of Stichting Buma/Stemra Obligatiefonds (BSO) and Stichting Buma/Stemra Aandelenfonds (BSA) can be shown in condensed form as follows: ( x € 1,000)
31 December 2012
31 December 2011
Assets Fixed assets
213,863
Financial fixed assets
259,535
Current assets Receivables Cash and cash equivalents
17,047
2,143
3,371
11,748
234,281
273,426
233,917
273,018
364
408
234,281
273,426
Liabilities Participants’ account Current liabilities Accounts payable
The return (including price changes and excluding the nominative return) in 2012 from the invested funds within BSO and BSA amounted to 7.1% (2011: 1.3%).
(3) Other receivables (x € 1,000)
31 December 2012
31 December 2011
1,944
Stemra rights holders and participants Buma Loan Buma current account Other
4,337
19,000
-
430
-
-
20
21,374
4,357
As of 2012, the settlement with sister organisations abroad
million from Stemra to Buma. The interest rate charged on this
takes place at almost the same time as the distribution to Dutch
loan is the EURIBOR 3-month rate as at the end of the quarter.
rights holders for the purpose of making earlier payment of
Buma repaid the loan in March 2013.
funds to foreign rights holders. The temporary financing of these funds has taken place mainly through a loan of € 19
(4) Accrued assets (x € 1,000)
31 December 2012
31 December 2011
Interest due
71
395
Other
36
346
107
741
Buma/Stemra
NOTES TO THE STEMRA BALANCE SHEET AS AT 31 DECEMBER 2012
(5) Cash and cash equivalents (x € 1,000)
31 December 2012 Deposit accounts Other cash and cash equivalents
31 December 2011
30,000
1,738
6,062
1,936
36,062
3,674
2012
2011
5,760
5,760
All the cash and cash equivalents are freely available
(6) Continuity reserve The development of the continuity reserve can be shown as follows: ( x € 1,000)
Balance as at 1 January Additions
-
-
Withdrawals
-
-
5,760
5,760
2012
2011
Balance as at 31 December
(7) Appropriation reserve The changes can be specified as follows: ( x € 1,000)
-
-
Withdrawal from revaluation reserve
5,342
-
Withdrawal from rights revenue available for distribution
2,431
-
Balance as at 31 December
7,773
-
Balance as at 1 January
It is expected that during the coming years Stemra will not
In this context, an item of accumulated positive results from
cover its costs in its present form. The Board therefore decided
the time that Stemra still had major central licensing contracts
to place the revaluation reserve in an appropriation reserve
was also transferred to the appropriation reserve from the
from which future deficits will be covered as much as possible.
rights revenue available for distribution
annual report 2012
59 (8) Revaluation reserve for financial fixed assets The changes in the revaluation reserve for financial fixed assets can be specified as follows: ( x € 1,000)
2012
2011
Balance as at 1 January
4,390
5,561
(Un)realised gains/losses arising from price changes
2,194
-663
Withdrawals to the benefit of the financial result to normative return
-642
-508
Withdrawal to credit of the financial result
-600
-
5,342
4,390
-5,342
-
-
4,390
Withdrawal to credit of the appropriation reserve Balance as at 31 December
The (un)realised price gains in securities amounted to
In order to allow the operation of Stemra for 2012 to cover its
€ 2.2 million (2011: € 0.7 million) and are recognised directly in
costs, the Board decided on an additional withdrawal in favour
the revaluation reserve for financial fixed assets. The results on
of the financial result of € 0.6 (2011: € 0). The sale of the
equities, (convertible) bond funds and (convertible) bonds are
securities portfolio meant that the revaluation reserve was
recognised at a normative return. The percentage for 2012
realised. The Board decided to add the remaining balance as at
amounted to 5.6% (2011: 5.6%) for equities and for fixed-income
31 December 2012 of € 5.3 million to an appropriation reserve.
securities 3.1% (2011: 3.1%). The withdrawal for the benefit of the financial result to normative return amounted to € 0.6 million (2011: € 0.5 million). The normative return was only calculated over the period prior to Stemra’s sale of all its securities.
(9) Provisions The changes in the provisions can be specified as follows: ( x € 1,000) Balance as
2012 Withdrawals
at 31 December 2012
64
56
-7
113
64
56
-7
113
at 1 January 2012
Long-service awards
Balance as 2012 Additions
Provision for Long-service awards The change in the discount rate (2012: 2.89% / 2011: 5.14%) as a result of the lower interest rates led to an addition into the provision for long-service awards of € 24,000.
Buma/Stemra
NOTES TO THE STEMRA BALANCE SHEET AS AT 31 DECEMBER 2012
(10) Rights revenue available for distribution (x € 1,000)
2012
2011*
Rights revenue available for distribution as at 1 january
38,738
38,755
Rights revenue
30,421
32,138
-
56
-2,431
-
66,728
70,949
24,432
24,394
3,227
4,459
-
225
27,659
29,078
3,252
2,955
223
178
Rights revenue distributed during the year
31,134
32,211
Rights revenue available for distribution at year-end
35,594
38,738
Changes in rights revenue available for distribution Withdrawal to appropriation reserve Available for distribution
Distributed in the reporting year: Associates and participants Foreign organisations Central Licensing Rights revenue paid out during the year
Administrative costs withheld in the Netherlands Foreign administrative costs withheld
* Adjusted for comparison purposes
An amount of € 1.8 million in release reserve will be added to
The amount of rights revenue available for distribution is
the amount available for distribution to be recognised in 2013
approximately € 3.1 million lower than in 2011. This decrease is
and subsequent years (2011: € 1.3 million, recognised in the
a reflection of the declining trend in revenue. In addition, the
2012 distribution). The negative result for 2012 amounts to
item of accumulated positive results from the time when
minus € 0.1 million (2011: € 56,000). This will be added to the
Stemra still had major central licensing contracts was transfer-
rights revenue available for distribution.
red to the appropriation reserve.
The current composition of this item, at the time of the financial statements were drawn up, is: (x € 1,000)
2012 Reserve for for rights revenue Reserve for double claims Current year’s rights revenue still to be distributed
7,991
2011 10,056
4,885
5,383
22,718
23,299
35,594
38,738
Breakdown for each year of collection:
2012 Years older than 2009
6,166
2009
2,218
2010
2,367
2011
1,944
2012
22,899 35,594
annual report 2012
61 Available for distribution by Stemra (x € 1,000)
2012
2011*
Rights revenue
30,421
32,138
Release reserve
1,799
1,294
-
56
Withdrawal to credit of the appropriation reserve
-2,431
-
Became available for distribution during the year
29,789
33,488
To be distributed at the beginning of the year
38,738
38,755
Changes in rights revenue available for distribution
Available **
27,990
32,194
Distributed
-27,659
-29,078
Administrative costs withheld
-3,475
-3,133
Rights revenue available for distribution at year-end
35,594
38,738
* Adjusted for comparison purposes ** Excluding release from reserve that has already been recognised in the opening balance sheet
Breakdown of Stemra’s revenue (x € 1,000)
2012
2011*
10,370
12,564
6,435
5,931
Radio & TV Mechanical Rights
5,487
5,285
Online Licensing Mechanical Rights
1,755
1,835
Private copy / Borrowing levy
827
1,594
Reprographic Rights
770
538
4,777
4,391
30,421
32,138
BIEM Phono-Mechanical Rights/Central Licensing Special / Work by Work Licensing
Foreign Mechanical Rights
* Adjusted presentation of revenue breakdown
(11) Other liabilities (x € 1,000)
31 December 2012 Foreign sister organisations Stemra affiliates and participants Buma current account Other
31 December 2011
112
2,603
1,575
1,103
-
389
709
305
2,396
4,400
As of 2012, the settlement with foreign sister organisations
2011. The temporary financing of these funds has taken place
takes place at almost the same time as the distribution to Dutch
mainly through a loan from Stemra to Buma of € 19 million. The
rights holders for the purpose of making earlier payment of
interest rate charged on this loan is the EURIBOR 3-month rate
funds to foreign rights holders. This means the obligation to
as at the end of the quarter. The loan was repaid in March 2013.
sister organisations abroad decreased significantly compared to
Buma/Stemra
NOTES TO THE STEMRA BALANCE SHEET AS AT 31 DECEMBER 2012
(12) Accrued liabilities (x € 1,000)
31 December 2012 Dutch industry advance payments
31 December 2011
7,513
8,913
262
234
To be offset with industry and private labels
92
94
112
2
7,979
9,243
Holiday allowance/annual leave payable Other
Dutch industry advance payments include the invoiced
industry for periods up to the end of 2013. Advances are offset
advances on reproduction rights yet to be settled by the Dutch
against the final settlement.
Off –balance sheet commitments and contingent liabilities
• less than 1 year: € 4.0 million • between 1 and 5 years € 12.2 million
The off-balance sheet commitments are commitments that are undertaken by Buma. Because the organisation costs are partly
As at 31 December, there was a residual investment commit-
shared by Buma and Stemra, these commitments are also
ment of € 1.5 million for the upgrade of the ERP business
disclosed in the financial statements of Stemra.
information system (Axapta).
Long-term financial commitments
Related parties
The financial commitments for the accommodation in Hoofd-
The following parties can be distinguished as related parties of
dorp were extended until 31 December 2017. The rental
the Stemra Foundation: Buma Association and members of the
obligation is assumed by Buma. The combined annual rent for
Board of the Buma Association and the Stemra Foundation and
the year 2013 for Buma/Stemra amounts to € 0.9 million, 40% of
the Board of directors according to the Articles of Association.
which is charged on to third parties. The rest is divided between Buma and Stemra on the basis of 75% / 25%.
Please refer to note 14 for more information about the remune-
In the current composition, the annual amount for the leasing
according to the Articles of Association. Regular transactions
of cars by Buma/Stemra is € 0.1 million. The liability for terms
pursuant to the management of copyrights of Board members
ration paid to the members of the Board and the Management
longer than one year is € 0.2 million.
or to parties related to Board members are not explicitly disclosed in the financial statements.
The financial obligation for the rent of the printers was contracted until 1 December 2013. The annual instalment for
The payments to Board members or to parties related to Board
this amounts to € 0.1 million. The obligations with respect to
members are calculated in the same manner as the payments
the car fleet lease and the printers are assumed by Buma. The
to all rights holders and are paid in accordance with the normal
lease costs and rental of printers are paid in the proportions of
procedures within Buma. As a result of the solidarity within the
75% by Buma and 25% by Stemra.
sector, Board members are also related to customers of Buma. On the one hand, by performing music-related services or as an
The Buma Association and Stemra Foundation are contractually
employee. Transactions subject to these terms and conditions
obliged from 2007 until 31 March 2017to have a large part of the
are carried against market conditions and prices that are no
back office activities performed by Accenture. The resulting
different from those which would be stipulated from indepen-
financial obligation ensuing from this for the remaining term of
dent third parties.
the contract amounts to € 12.4 million. The costs of the back office activities performed by Accenture are divided in the
Buma Association charges on costs of staff, accommodation and
proportions of 75% and 25% respectively for Buma and Stemra.
overhead to the Stemra Foundation. The charged-on costs for
The off-balance sheet commitments of € 16.2 million can be
2012 amount to € 4,696,000. The costs are charged on on the
summarised as follows:
basis of cost price.
annual report 2012
63
NOTES TO STEMRA’S 2012 OPERATING STATEMENT (13) Budget (x € 1,000)
2013 Budget
2012 Actual
2012 Budget*
Income Administrative costs withheld
3,025
3,475
3,000
600
635
600
-
1
-
Entrance and annual fees Other Income
3,625
4,111
3,600
Expenses Staff costs
3,780
3,525
3,458
370
434
450
Accommodation costs
245
166
150
2,640
2,167
2,190
Depreciation/Amortisation costs Other expenses
Operating result Interest and dividends
7,035
6,292
6,248
-3,410
-2,181
-2,648
610
1,538
1,372
-
643
-
Normative return** Financial result Result from ordinary operating activities
610
2,181
1,372
-2,800
-
-1,276
* This concerns the budget that was revised during the Board meeting of April 2012 ** The normative return depends on the result from price gains/losses. Exchange rate results are not budgeted
Breakdown of Stemra’s revenue (x € 1,000)
2013 Budget
2012 Actual
2012 Budget*
BIEM Phono-Mechanical Rights/Central Licensing
9,650
10,370
10,500
Special / Work by Work Licensing
4,925
6,435
5,750
Radio & TV Mechanical Rights
5,650
5,487
4,800
Online Licensing Mechanical Rights
1,500
1,755
1,700
Private copy / Borrowing levy
1,275
827
250
Reprographic Rights
1,000
770
1,000
Foreign Mechanical Rights
4,150
4,777
3,500
28,150
30,421
27,500
* Adjusted presentation of the budget
The budget for 2013 was approved at the meeting of the Joint
Both the budgets for 2013 and 2012 are presented above. The
Buma/Stemra Boards of 12 December 2012. The total 2013 cost
actual figures for 2012 are incorporated for comparison. The
budget for Buma and Stemra combined amounts to € 29.0
so-called normative return was not taken into account when
million. The total cost budget applies as the standard for the
the 2013 and 2012 budgets were drawn up. The normative
amount of the costs of management and administration.
return consists of results of price gains or losses, which are not budgeted.
As a result of several Board resolutions, the 2012 cost budget for the entire organisation was increased in April by an amount of
In 2013, a negative result from ordinary operating activities was
€ 0.6 million to € 26.5 million. The actual result realised for 2012
budgeted at € 2.8 million compared to € 1.3 million in 2012. This
was € 26.4 million.
budgeted decrease is attributable in particular to lower expected administrative costs withheld and non-recurring costs in connection with several projects to be implemented.
Buma/Stemra
NOTES TO STEMRA’S 2012 OPERATING STATEMENT
Both the 2013 and 2012 budgeted revenue breakdowns are
expected increase in the BIEM Phono-Mechanical Rights/Central
shown as well, and the actual revenue of 2012 is shown for
Licensing category, which is in line with the trend of recent
comparison. The decrease in the 2013 budget compared to the
years. Decreases are expected in almost all the other categories,
2012 budget and actual figures, is particularly attributable to an
except for Radio & TV Mechanical Rights.
(14) Staff costs (x € 1,000)
2012
2011
Salaries
827
836
Social security charges
133
125
78
79
Pension contributions Other staff costs
Charged /compensated to third parties
96
117
1,134
1,157
2,391
2,094
3,525
3,251
The average number of employees during the reporting year was 21 (2011: 22 employees), which corresponds to an average of 18.0 FTEs (2011: 18.3 FTEs) This number does not include employees who were charged on via Buma. The work force (average number of FTEs) can be divided into various categories of staff:
2012
2011*
3.7
4.0
Front Office
10.1
10.1
Back Office
4.2
4.2
18.0
18.3
General Affairs
* Adjusted for comparison purposes.
2012 Remuneration of Stemra Board and Buma/Stemra Board of directors according to the Articles of Association (x € 1,000) Stemra Board
140
Remuneration for 11 Stemra Board members, Including expense allowances
The remuneration relates to the former Board of Stemra. A new
but also a number of re-elected members. The newly elected
Board was elected at the General Assembly on 13 December
members received no remuneration in 2012.
2012. The new Board contains not only new members,
Buma/Stemra Board of directors according to articles of association Position Full time equivalent Contract form Employment Fixed remuneration and allowances Variable remuneration and allowances
H.G. van der Ree Chief Executive Officer 100% Indefinite duration 1/1 - 31/12 311 67.5
Expense allowance
3
Pension expenses
54
Social security charges Crisis levy * See notes on the following page
annual report 2012
9 33
*
65 * The remuneration above is the total remuneration for the
The crisis levy is a one-off additional tax by means of an
Buma/Stemra Management according to the articles of
employer levy of 16% on earnings from current employment
association. This remuneration is recognised for 75% in the
that is paid to an employee in 2012 to the extent that wages are
financial statements of the Buma Association, and for 25% with
higher than € 150,000 (Section 32bd of the 1964 Wages and
the Stemra Foundation.
Salaries Tax Act).
(15) Other expenses (x € 1,000)
2012 Rent, Lease & Maintenance Contributions Advisory fees Other General Overheads
Buma costs charged on
2011
-
2
144
160
87
1
188
4
419
167
1,748
1,666
2,167
1,833
The increase in advisory fees and general overheads are caused
previously 100% was charged to Stemra via the charge-on, and
by some specific costs that relate entirely to Stemra,
which are recognised directly in its costs.
(16) Auditor’s fees The following KPMG Accountants’ fees have been charged to Stemra, all as referred to in Section 2:382a of Dutch Civil Code (x € 1,000),
2012 KPMG
Other
Accountants N.V.
KPMG network
Total KPMG network
Audit of the financial statements
58
-
58
Other audit engagements
10
-
10
Advisory services on tax matters
-
19
19
Other non-audit services
-
14
14
68
43
101
2011 KPMG
Other
Accountants N.V.
KPMG network
Total KPMG network
61
-
61
Other audit engagements
-
2
2
Advisory services on tax matters
-
19
19
Other non-audit services
-
8
8
61
29
90
Audit of the financial statements
Buma/Stemra
NOTES TO STEMRA’S 2012 OPERATING STATEMENT
(17) Financial result (x € 1,000)
2012
2011
Interest income and other income Fixed-income securities
526
Interest received on bonds
663
Equities
370
833
896
1,496
Withdrawal from revaluation reserve for supplementing the financial result to normative return
642
508
Withdrawals from revaluation reserve for benefit of the financial result
600
-
Other interest income and similar income
162
100
2,300
2,104
-119
-152
2,181
1,952
Dividend income received
Changes in revaluation reserve
Total income from investments Interest expenses and other expenses
Stemra’s financial result shows a slight increase of € 0.2 million.
The normative return was only calculated over the period prior
The economic recession, low interest rates, and cashing in
to Stemra’s sale of all its securities.
securities in September 2012 led to a decrease in interest and dividend received by € 0.1 million and € 0.5 million respectively.
The withdrawal for the benefit of the financial result was
The withdrawal for the benefit of the financial result to a
€ 0.6 million (2011: no withdrawal).
normative return amounted to € 0.6 million (2011: € 0.5 million).
Stemra Board Mr L.A.J.M. de Wit LL.M.
chairman
Mr H.O. Westbroek
deputy chairman
Mr A.A.L. de Raaff
secretary
Mr P.M. van Brugge
Board Member
Mr drs.L.]. Deuss
Board Member
Mr L.A. Dikker
Board Member
Mr J.N. Hamburg
Board Member
Mr A.B. Molema
Board Member
Mr P.L. Perquin
Board Member
Mr M. Schimmer
Board Member
Mr R.D. van Vliet
Board Member
Mr N.M. Walboomers
Board Member
Vacancy
Board Member
Board of directors Mr H.G. van der Ree
annual report 2012
Chief Executive Officer
67
OTHER INFORMATION
To: the Board of Stichting Stemra
Opinion In our opinion, the financial statements 2012 are prepared, in all
Independent auditor’s report
material respects, in accordance with the accounting policies
We have audited the accompanying financial statements 2012
selected and disclosed by the Foundation, as set out in the
set out on pages on pages 48 to 66 of Stichting Stemra, Amstel-
notes to the financial statements.
veen, which comprise the balance sheet as at 31 December 2012 notes, comprising a summary of the accounting policies and
Basis of accounting and restriction on distribution and use
other explanatory information.
We draw attention to the notes to the financial statements,
and the operating statement for the year then ended and the
which describes the basis of accounting. The accounting
The Board’s responsibility
policies used are selected and disclosed by the Foundation. Our
The Board of the Foundation is responsible for the preparation
opinion is not qualified in this respect.
of the financial statements in accordance with the accounting policies selected and disclosed by the Foundation, as set out in the notes to the financial statements. Furthermore, the Board is
Amstelveen, 3 april 2013
responsible for such internal control as it determines is necessary to enable the preparation of financial statements that
KPMG Accountants N.V.
are free from material misstatement, whether due to fraud or error.
R.J. Groot RA
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from An audit involves performing procedures to obtain audit
EVENTS AFTER THE REPORTING PERIOD Result appropriation
evidence about the amounts and disclosures in the financial
For Stemra, the result for 2012 will be deducted from the right
statements. The procedures selected depend on the auditor’s
revenue available for distribution. It will then be decided on the
material misstatement.
judgment, including the assessment of the risks of material
basis of the assessment of the reserves, to what extent funds
misstatement of the financial statements, whether due to fraud
must be added to or deducted from the reserves. This change
or error. In making those risk assessments, the auditor consi-
will also be credited or charged to the rights revenue available
ders internal control relevant to the entity’s preparation of the
for distribution.
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
Proposal of the Board of directors
expressing an opinion on the effectiveness of the entity’s
As shown in the financial statements, which we have prepared
internal control. An audit also includes evaluating the appropri-
in accordance with Article 26, paragraph2, of the Articles of
ateness of accounting policies used and the reasonableness of
Association, the Board of directors proposes not to incorporate
accounting estimates made by the Board, as well as evaluating
any of the zero result in the rights revenue available for
the overall presentation of the financial statements.
distribution.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
The proposal has already been incorporated in the 2012
opinion.
financial statements.
Buma/Stemra
Dj Quintino Photo: Koen Peters
Composition of the Board and Board of directors
69
Composition of the Board and Board of directors board of directors buma/stemra
H.G. van der Ree
W.J. Ketellapper
Chief Executive Officer (according to the Articles of Association)
Chief Financial Officer
Other positions:
• CEO of the Stichting Buma/Stemra Aandelenfonds (BSA)
• CEO of the Stichting Buma/Stemra Obligatiefonds (BSO)
• Board member of Stichting Buma/Stemra
J.G.M. van de Kamer
Deelneming
Chief Operating Officer
• Secretary/treasurer of Stichting Service Centrum Auteurs- en Naburige rechten
• Member of the Board of Stichting Brein • Treasurer/secretary of Stichting Buma Cultuur • Deputy chairman of VOI©E association • Chairman of Stichting Beheer Rechten Fingerprinting Database (Finger-print rights database management foundation)
J.G.M. Kroeze LL.M.
• Treasurer of Stichting Amsterdam Dance
General Counsel
Event
As at 01 April 2013
BOARD OF ASSOCIATION BUMA AND FOUNDATION STEMRA
L.A.J.M. de Wit LL.M.
H.O. Westbroek
A.L.L. de Raaff
Chairman of Buma/Stemra Board
Deputy chairman
Secretary
Composer/lyricist light music
Publisher
Other positions/profession:
Other positions/profession:
Other positions/profession:
• Deputy judge criminal law, Rotterdam District
Copywriter
• Managing director and majority shareholder
Performing artist
of entertainment company CTM B.V.,
Columnist
including the Music publisher CP Masters B.V.
Chairman of BV POP
and Imagem CV
Protection of Juveniles(RSJ)
• • • • •
Radio and TV presenter with radio Veronica,
• Chairman Nederlandse Muziek Uitgevers
• Bureau Gateway Review (Ministry of the
or RTV Utrecht
Vereniging (Dutch Music Publishers
Interior and Kingdom Relations)
• Assistant manager of café restaurant
Association)
• Board member BSA (Stichting Buma/Stemra
“Stairway to heaven”
• Board member of Stichting Platform Creatieve
Aandelenfonds)
• Board member BSA (Stichting Buma/Stemra
Media Industrie
• Board member BSO (Stichting Buma/Stemra
Aandelenfonds)
• Council member of Stichting Federatie
Obligatiefonds)
• Board member BSO (Stichting Buma/Stemra
Auteursrechtbelangen (Copyright interest’s
Obligatiefonds)
federation)
Court
• Chairman of the Council for the Administration of Criminal Justice and
• Board member BSA (Stichting Buma/Stemra Aandelenfonds)
• Board member BSO (Stichting Buma/Stemra Obligatiefonds)
Buma/Stemra
Composition of the Board and Board of directors
BOARD OF THE BUMAASSOCIATION AND THE STEMRAFOUNDATION
P.M. van Brugge
L.J. Deuss LL.M.
L.A. Dikker
Composer media music
Publisher
Composer media music
Other positions/profession:
Other positions/profession:
Other positions/profession:
• Freelance composer • Director of Paul M. van Brugge BV • Senior lecturer in composition at Codarts
• Director/owner of Deuss Holding BV and Albersen verhuur BV, in The Hague
• Composer • Chairman of MiMM, Muziekinstituut
• Vice-chairman/secretary on the Board of VMN
Mulitimedia
Hogeschool voor de Kunsten Rotterdam
(Association of Music Traders and Publishers
• Board member of FFACE, Federation of Film-
• Freelance performing musician and conductor • Board member of Dutchfilmcomposers.nl
in the Netherlands)
and Audiovisual Composers of Europe
• Board member of Alsbach Stichting, training
• Board member BSA (Stichting Buma/Stemra
professional association
for music publishers
Aandelenfonds)
• Member of the Board of Quercus Music
• Member of Serious Music Bureau of
• Board member BSO (Stichting Buma/Stemra
Foundation
International Confederation of Music Publishers
Obligatiefonds)
• Board member BSA (Stichting Buma/Stemra
• Chairman of the Board of Leo Smit Stichting,
Aandelenfonds)
Amsterdam
• Board member BSO (Stichting Buma/Stemra
• Board member of Stichting Nederland Muziek
Obligatiefonds)
Instituut, The Hague
• Cultural Adviser to the Municipality of The Hague
• Board member BSA (Stichting Buma/Stemra Aandelenfonds)
• Board member BSO (Stichting Buma/Stemra Obligatiefonds)
J.N. Hamburg
A.B. Molema
P.L. Perquin
Composer serious music
Composer
Composer
Other positions/profession:
Other positions/profession:
Other positions/profession:
• Owner of Hamburg Music and
Philosophy Student
• General Manager of Perquisite • Artist/songwriter/producer • Founder and owner of record label
Founder of Webshop GreenMill Tea
‘Unexpected Records 2001’
• Chairman of Paula Salomon-Lindberg
• • • • •
Board member BSA (Stichting Buma/Stemra
• General Manager of Pete Philly & Perquisite
Stichting
Aandelenfonds)
2004-2009
• Board member BSA (Stichting Buma/Stemra
• Board member BSO (Stichting Buma/Stemra
• Composer for film, documentaries,
Aandelenfonds)
Obligatiefonds)
commercials and theatre
FutureClassicsMusic (publisher)
• Chairman of Genootschap Nederlandse Componisten (Dutch Composers Society)
Business manager of Room Eleven Freelance composer
• Board member BSO (Stichting Buma/Stemra
• Other half of music/cartoon duo ‘Spur Of The
Obligatiefonds)
Moment’
• Guest lecturer at Codarts Rotterdam • Board member of Stichting St. Casa Tierre • Board member BSA (Stichting Buma/Stemra Aandelenfonds)
• Board member BSO (Stichting Buma/Stemra Obligatiefonds)
annual report 2012
71
M. Schimmer
R.D. van Vliet
drs. N.M. Walboomers
Lyricist
Publisher
Publisher
Other positions/profession:
Other positions/profession:
Other positions/profession:
• • • • • •
• Managing director Cloud 9 Music Holding • Vice chairman Nederlandse Muziek Uitgevers
• Managing director Sony/ATV Music
Schimmer Music Productions PilotPost BV
Vereniging (NMUV - Dutch Music Publishers
• Managing director Universal Music
Scripted Music BV
Association)
Publishing Benelux
Track Media Music Publishing
• Board member BSA (Stichting Buma/Stemra
• Managing director and majority shareholder
Board member BSA (Stichting Buma/Stemra
Aandelenfonds)
of Walboomers Publishing B.V.
Aandelenfonds)
• Board member BSO (Stichting Buma/Stemra
• Board member of Nederlandse Muziek
• Board member BSO (Stichting Buma/Stemra
Obligatiefonds)
Uitgevers Vereniging (NMUV - Dutch Music
TFS Media Group
Obligatiefonds)
Publishing Benelux
Publishers Association)
• Board member BSA (Stichting Buma/Stemra Aandelenfonds)
• Board member BSO (Stichting Buma/Stemra Obligatiefonds)
Vacancy
H.J.W. Eijkelenboom LL.M.
Composer media music
Board secretary
Buma/Stemra
PROVISIONS IN THE ARTICLES OF ASSOCIATION PERTAINING TO THE BOARD AND BOARD OF DIRECTORS
Provisions in the articles of association provisions pertaining to the Board and Board of directors
The Board consists of:
The full provisions concerning the Board
A Eight songwriters who are participants
Articles of Association of Buma and
are contained in Articles 13 to 20 of the or who are songwriters of a participa -
The current provisions in the articles of
ting company, who are elected by the
association pertaining to the Board and
songwriters rights holders/affiliates, of
Board of directors are as follows:
whom:
Stemra. The full provisions concerning the Board of directors are contained in Articles 21
• one is a composer of serious music
to 23 of the Articles of Association of
The Board of the Buma Association and
• three are composers/lyricists of light
Buma and Stemra.
the Stemra Foundation consists of 13
music; • one lyricist and three composers of media music
The profile of the Board is based on
people. Twelve of them are appointed in the manner referred to in paragraph 2, sub a and b. A thirteenth independent person will be appointed by the rights
Board profile “what the Board needs to function well”,
B. four people who are a participating
considering and taking into account
holders/affiliates in accordance with
publisher or who fulfil a management
aspects such as:
paragraph 2 of Article 17.
position at a participating publishing
• the type of organisation
company (Article 9 paragraph 1), and
• the development phase of the
One Board member of the Buma
who are elected by the publishing
organisation
Association must also be a Board
members/affiliates.
• the restructuring of governance goals
member of the Stemra foundation. C. one independent person, as referred to
The composition of the Board should be
In Article 13 paragraph 1, as
generally in line with the contemporary
independent chairman.
governance standards and codes of
The Board of directors of Buma and
please refer to the Buma/Stemra website.
conduct. For the full profile of the Board, Stemra consists of one or more natural people, who are not a member/affiliate or participant of the Association or the
Board of directors Photo: Mike Breeuwer
Foundation.
annual report 2012
Colophon
73
BUMA ASSOCIATION AND STEMRA FOUNDATION
Address
Editor in chief
Siriusdreef 22-28 2132 WT Hoofddorp T +31(0)23 799 79 99 F +31(0)23 799 77 77
Frank Helmink, Buma/Stemra
info@bumastemra.nl www.bumastemra.nl
Text en interviews
Office in The Hague Lange Voorhout 86-12 2514 EJ The Hague T +31(0)70 310 91 09 F +31(0)70 310 91 00
Design
Design and realisation De Merkelijkheid
De Merkelijkheid & The Bitter End
Brigitte Olivier Ontwerp
Cover photo
denhaag@buma.nl The original financial statements were drafted in Dutch. This document is an English translation of the original. In the case of any discrepancies between the English and the Dutch text, the latter will prevail.
Buma/Stemra
Hef Photo: Mike Breeuwer
Awakenings ADE 2012 Photos: Johan ViviĂŠ
annual report 2012