ANNUAL REPORT
2014
The State Photograph: Sander Baks
TABLE OF CONTENTS A VERY PRODUCTIVE YEAR LEO DE WIT
ANNUAL REPORT: BOARD REPORT
4
16
SCALE, ICT AND SERVICE HEIN VAN DER REE
ANNUAL REPORT: DIRECTOR’S REPORT
6
18
KEY FIGURES BUMA
FINANCIAL STATEMENTS: BUMA
8
26
KEY FIGURES STEMRA
FINANCIAL STATEMENTS: STEMRA
10
54
ABOUT BUMA/STEMRA
COMPOSITION OF THE BOARD, COUNCIL OF MEMBERS AND BOARD OF DIRECTORS
12
76
A WORLD FULL OF MUSIC
COLOPHON
13
81
TABLE OF CONTENTS 3
Membership grows BUMA in 2014
+ 1,101
totaal:
23,951
+ 4.8%
4 BUMA/STEMRA - ANNUAL REPORT 2014
“A VERY PRODUCTIVE
YEAR” The Board took a number of
songwriters, composers and music
That we are on the right track is also
important decisions in 2014 and
publishers. In order to continue to
apparent from the growing number of
anticipated the rapidly changing
operate effectively and efficiently, we
members, the higher revenue in 2014
market circumstances, in particular
seek to realign our strategy periodi-
and a lower number of queries from
with regard to the fragmented and
cally. In our 2015-2017 Strategic
our members. Furthermore, after years
increasingly complex European
Plan, converting the growth of online
of uncertainty, an agreement has been
market. A market that is character-
music use into revenue is our main
reached regarding the private copying
ised by a shift in the use of music
area of focus. One of the most
levy, an agreement which also benefits
from offline to online. Together with
important strategic pillars in order to
the members of Stemra.
the management, we have supported
convert this growth into revenue is
important European collaboration
the online multi-territorial licensing
In the past year, we have conducted
initiatives such as ICE and ICE
and processing of music use in
negotiations with the Authority for
Online and we have focused on
cooperation with the strong European
Consumers & Markets which have
improving the services provided to
Collective Management
resulted in a wider range of possibili-
our members. These are important
Organisations (CMOs). Other
ties for flexible management with the
steps for the future in which we
important strategic pillars are
so called ‘opt-out system’. We thus
continue to contribute to a world full
strengthening our relationship with
offer our members a wider choice
of music, with a fair compensation
music users and the cooperation with
regarding the management of their
for songwriters, composers and
Dutch CMOs. Doing so, Buma/Stemra
rights. In short, 2014 has been a
music publishers.
aims to remain attractive for its
productive year in which we have
members and to serve its members
taken important steps towards the
Buma/Stemra collectively manages
efficiently with a broad and flexible
realisation of a sustainable future-
the individual authors rights of
range of services.
oriented strategy.
Leo de Wit, Chairman of the Board
INTERVIEW - LEO DE WIT 5
“SCALE, ICT AND SERVICE” “After a thorough preparation, we
process the data of billions of streams
focal point in our vision of the future
formulated the strategy for the coming
of online services such as YouTube and
of music use. This also enables us to
period. We are now working on
Spotify. Processing this data jointly is
comply with the European Collective
implementing this strategy. It remains
one of the most important solutions.
Rights Management Directive in
our priority that the distribution, i.e.
Therefore, collective management
relation to pan-European licensing.
the payment of rights revenues to our
organisations in North-west Europe
members, is carried out as efficiently
are starting to work together in order
As a medium-sized European CMO,
as possible. To this end, we took
to process these huge amounts of data
we are a strong collective of 24,000
important steps in 2014 to improve
efficiently. Copyright organisations in
affiliated songwriters, composers and
our IT infrastructure. In addition,
Sweden and the UK have initiated a
music publishers in the Netherlands
structuring our organisation in such a
joint data management system, the
and Buma Stemra represents over two
manner that we are ready for the
International Copyright Enterprise
million worldwide. But it is not about
future is of crucial importance.
(ICE). We were the first European
the numbers of course, it is about the
Therefore, we have put a lot of effort
CMO to sign a multi-year agreement
conviction with which we carry out
into strengthening our collaboration
in 2013 to use ICE services. This is
our mission and that there is only one
with European CMOs.
essential to enable multi-territorial
thing that we aim for: serving rights
licensing of repertoire in the future.
holders to the best of our ability in a
Another important development is the
The agreement with ICE is a spear
rapidly changing world.
large operation that is necessary to
point in our strategy and a central
6 BUMA/STEMRA - ANNUAL REPORT 2014
ICE Database
10.4 M Musical works in the ICE database
Hein van der Ree, Chief Executive Officer (CEO)
INTERVIEW - HEIN VAN DER REE  7
KEY FIGURES BUMA (x â‚Ź 1,000)
2014
2013
2012
2011
2010
Radio, TV and Network Providers
71,774
69,098
68,853
63,749
62,396
Live performance
24,130
23,380
20,861
20,363
19,899
Hospitality industry
13,469
13,559
13,483
15,047
17,015
Workplaces
16,828
16,732
17,837
17,600
17,799
Shops and stores
12,317
12,494
12,554
12,827
11,940
5,656
3,092
2,130
1,471
757
144,174
138,355
135,718
131,057
129,806
14,155
13,846
12,433
11,891
10,540
158,329
152,201
148,151
142,948
140,346
Rights holders
75,779
77,503
77,339
70,345
67,440
Foreign CMOs
49,757
50,943
49,063
43,799
46,549
Allocation to the Fund for Social and Cultural Services
10,184
10,098
9,883
9,581
10,212
135,720
138,544
136,285
123,725
124,201
2,413
2,339
1,940
1,838
2,151
138,133
140,883
138,225
125,563
126,352
183,224
173,865
170,873
170,504
162,211
12,376
12,631
14,734
11,726
10,601
5,447
7,639
10,172
15,023
17,168
2,413
2,339
1,940
1,838
2,151
791
862
1,320
1,313
1,206
Amount of administration costs to be withheld in the collection year
10,837
8,326
9,557
9,092
5,066
Total income
14,041
11,527
12,817
12,243
8,423
Operating expenses
-20,878
-20,989
-20,088
-20,060
-16,919
Total expenses
-20,878
-20,989
-20,088
-20,060
-16,919
Balance of total income and expenses
-6,837
-9,462
-7,271
-7,817
-8,496
Financial income and expenses
11,521
10,827
14,964
3,175
9,414
4,684
1,365
7,693
-4,642
918
Online Music usage in the Netherlands Music usage foreign Total
Distribution
Administration costs withheld upon distribution Total
Rights revenues to be distributed Rights revenues to be distributed at the end of the financial year
Fund for Social and Cultural Services Disbursements Funds available at the end of the financial year
Operating statement Administration costs withheld upon distribution Other income
Result (before taxes)
8  BUMA/STEMRA - ANNUAL REPORT 2014
2014
2013
2012
2011
2010
15.0%
15.0%
15.0%
15.0%
15.0%
5.0%
5.0%
5.0%
5.0%
5.0%
10.0%
10.0%
10.0%
10.0%
10.0%
Percentage of actual withheld costs other categories
7.8%
6.2%
7.2%
7.0%
6.4%
Weighted average of actual withheld costs
7.8%
6.2%
7.1%
6.9%
6.4%
Operating expenses (gross) as a percentage of total rights revenues
13.2%
13.8%
13.6%
14.0%
12.1%
Operating expenses (gross) as a percentage of total rights revenues distributed (including withheld administration costs)
14.3%
14.0%
13.6%
15.4%
12.9%
Annual change in operating expenses
-0.5%
4.5%
0.1%
18.6%
0.1%
1.0%
2.5%
2.5%
2.3%
1.3%
Number of members and participants
23,951
22,850
21,841
20,807
19,623
Number of members and participants with distributed rights revenues
23,951
22,850
21,841
20,807
19,623
106,000
114,000
117,000
118,500
105,841
160.3
163.2
169.5
164.3
166.5
Key index figures Percentage of actual withheld costs Online Percentage of actual withheld costs, foreign Percentage of actual withheld costs foreign Network Providers
Derived consumer price index
Number of invoiced users Number of employees in FTEs
DEVELOPMENT OF RIGHTS REVENUE BUMA
DEVELOPMENT DISTRIBUTED RIGHTS REVENUES BUMA
In millions of euros
In millions of euros
158.3
135.7 160
160 140
120
120 100
80
80 60
40
40 20
0
0
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
10.2
9.6
9.9
10.1
10.2
46.5
43.8
49.1
50.9
49.8
10.5
11.9
12.4
13.8
14.2
67.4
70.3
77.3
77.5
75.8
129.8
131.1
135.7
138.4
144.2
124.2
123.7
136.3
138.5
135.7
140.3
142.9
148.2
152.2
158.3
Allocation to the Fund for Social and Cultural Services
10.2
Music usage foreign
Foreign organisations
49.8
Music usage in the Netherlands
Members and participants
75.8
14.2 144.2
KEY FIGURES BUMA  9
KEY FIGURES STEMRA (x â‚Ź 1,000)
2014
2013
2012
2011
2010
6,895
8,119
10,370
12,564
16,684
Rights revenues BIEM Phono-Mechanical Rights & Central Licensing Work by Work & Special Licensing
5,564
5,366
6,435
5,931
6,306
Radio & TV
5,692
5,419
5,487
5,285
5,138
Online
1,755
1,835
515
3,134
2,635
Private Copying & Public Lending Rights
4,631
1,479
827
1,594
3,223
Reprographic Rights
1,006
436
770
538
-
26,922
23,454
25,644
27,747
31,866
4,788
4,870
4,777
4,391
3,796
31,710
28,324
30,421
32,138
35,662
Rights holders
19,526
24,447
24,432
24,394
28,493
Foreign CMOs
2,387
2,989
3,227
4,459
4,964
-
-
-
225
195
21,913
27,436
27,659
29,078
33,652
3,144
3,828
3,475
3,133
3,098
25,057
31,264
31,134
32,211
36,750
39,307
32,654
35,594
38,738
38,755
3,144
3,828
3,475
3,133
3,098
Music usage in the Netherlands Music usage foreign Total
Distribution
Central Licensing
Administration costs Total
Rights revenues to be distributed Rights revenues to be distributed at the end of the financial year
Operating statement Administration costs Other income
690
667
636
668
602
Total income
3,834
4,495
4,111
3,801
3,700
Operating expenses
-6,585
-6,578
-6,292
-5,696
-8,241
Total expenses
-6,585
-6,578
-6,292
-5,696
-8,241
Balance of total income and expenses
-2,751
-2,083
-2,181
-1,895
-4,541
409
531
3,133
781
4,699
-2,342
-1,552
952
-1,114
158
Percentage of actual withheld costs Dutch industry: BIEM
7.3%
7.3%
7.3%
7.3%
7.3%
Percentage of actual withheld costs Foreign Central Licensing
3.7%
3.7%
3.7%
3.7%
3.7%
Percentage of actual withheld costs Background Music / Audio-Visual Educational and Corporate Productions
20.0%
20.0%
20.0%
20.0%
20.0%
Percentage of actual withheld costs Radio & TV
20.0%
20.0%
20.0%
20.0%
20.0%
Percentage of actual withheld costs Audio Visuals TV / Cinema
12.0%
12.0%
12.0%
12.0%
12.0%
Percentage of actual withheld costs Audio Visuals Commercials
6.0%
6.0%
6.0%
6.0%
6.0%
Financial income and expenses Result (before taxes)
Key index figures
10  BUMA/STEMRA - ANNUAL REPORT 2014
2014
2013
2012
2011
2010
Percentage of actual withheld costs Private Copying & Public Lending Rights
15.0%
15.0%
15.0%
15.0%
15.0%
Percentage of actual withheld costs Online
15.0%
15.0%
15.0%
15.0%
15.0%
Percentage of actual withheld costs foreign
5.0%
5.0%
5.0%
5.0%
5.0%
Percentage of actual withheld costs Work by Work licenses / Home video/ Imports / Reprographic rights
25.0%
25.0%
25.0%
25.0%
25.0%
Average percentage of actual withheld costs (administration costs as a percentage of the distribution)
12.5%
12.2%
11.2%
9.7%
8.4%
Operating expenses (gross) as a percentage of total rights revenues
20.8%
23.2%
20.7%
17.7%
23.1%
Operating expenses (gross) as a percentage of total distributed rights revenues
26.3%
21.0%
20.2%
17.7%
22.4%
Annual change in operating expenses
0.1%
4.5%
10.5%
-30.9%
-9.5%
Derived consumer price index
1.0%
2.5%
2.5%
2.3%
1.3%
Number of members and participants
23,012
21,999
21,114
20,186
19,113
Number of members and participants with distributed rights revenues
23,012
21,999
21,114
20,186
19,113
2,600
2,500
2,300
2,200
1,900
16.6
17.3
18.0
18.0
20.0
Number of invoiced users Number of employees in FTEs
DEVELOPMENT OF RIGHTS REVENUE STEMRA
DEVELOPMENT DISTRIBUTED RIGHTS REVENUES STEMRA In millions of euros
In millions of euros
31.7
21.9 60
60
40
40
20
20
0
0
2012
2010
2011
2012
2013
2013
2010
2011
0.2
0.2
-
-
-
5.0
4.4
3.2
3.0
2.4
3.8
4.4
4.8
4.9
4.8
28.5
24.4
24.4
24.4
19.5
31.9
27.7
25.6
23.4
26.9
33.7
29.1
27.7
27.4
21.9
35.7
32.1
30.4
28.3
31.7
2013
Central Licensing
2014
-
Foreign organisations
2.4
Members and participants
19.5
Foreign CMOs
4.8
Music usage in the Netherlands
26.9
KEY FIGURES STEMRA  11
ABOUT BUMA/STEMRA The Buma Association and the Stemra
and GESAC. In addition, royalty
Buma/Stemra operates very efficiently.
Foundation are collective management
organisations with which Buma and
The gross cost percentages of sister
organisations (CMOs) that, jointly and
Stemra have concluded reciprocity
organisations fluctuate between 10%
on behalf of composers, songwriters
agreements are active in nearly every
and 25%; for Buma/Stemra as a whole
and music publishers, grant licenses to
country. In total, this concerns
this gross percentage amounts to
and collect royalties from music users
approximately 75 sister organisations
14.5%. At 8.2 %, the costs that Buma/
and subsequently distribute these
for performing rights and 50 sister
Stemra actually withholds from the
revenues to the rights holders. Buma
organisations for mechanical rights.
rights holders are considerably lower.
manages performing rights, while
With these agreements, the interests of
Stemra manages mechanical rights.
songwriters, composers and music
Each year, Buma/Stemra processes the
The members of the Association and
publishers who are members of Buma
data of around 55,000 live performanc-
the participants in the Foundation
and Stemra are also served abroad. On
es, dozens of radio and television
constitute the rights holders. At
the other hand, Buma and Stemra also
stations and several billion streams
year-end 2014, 21,957 composers and
arrange permission for the music usage
and downloads. Over 60 licenses have
songwriters, 1,203 music publishers
in the Netherlands on behalf of foreign
been granted for streaming and
and 812 legal successors in title were
songwriters, composers and publishers
downloading services. Hundreds of
members or participants. Both CMOs
who are members of the sister
licences have been granted for
work together as one organisation
organisations.
background music on websites and
Awakenings Photograph: Patrick van Beek
under one Board, one Council of
more than 500 for radio and TV. In
Members and one Board of Directors.
On a global scale, Buma/Stemra ranks
total, Buma/Stemra manages
The number of employees totals 198 at
among the top of the collective
approximately 200,000 user licenses
year-end 2014.
management organisations that realise
for, for example, hotels, restaurants
the highest per capital revenues from
and cafĂŠs, workplaces and shops and
On an international level, we are
rights. A comparison with the average
stores.
working together closely with umbrella
cost percentages of the international
organisations such as CISAC, BIEM
sister organisations shows that
12  BUMA/STEMRA - ANNUAL REPORT 2014
A WORLD FULL OF
MUSIC VISION
satisfaction of songwriters, composers
protect authors rights and continues to
Music plays a valuable role in our
and music publishers are our guiding
battle for a fair compensation for its
lives. The work carried out by
principles. By protecting copyrights
members and participants. We
composers and songwriters is therefore
and by increasing the base of support
endeavour to continuously optimise
of vital importance. Songwriters,
in society, we contribute to a world full
the collection of revenues from music
composers and music publishers are
of music together with our members.
users as well as the distribution of
entitled to a fair compensation. It is
these revenues to rights holders. Our
our aim to contribute to a world full of
STRATEGY
front office provides tailored services to
music.
Buma/Stemra aims to convert the
rights holders and Dutch music users.
growth in online music into revenue
The activities in the back office are
MISSION
for its members by working together
constantly being streamlined through
Buma/Stemra collectively manages the
with the strongest CMOs in Europe. In
further computerisation, the facilitat-
individual authors rights of songwrit-
this manner, Buma/Stemra will be able
ing of ‘self-service’ and cooperation
ers, composers and music publishers.
to license its repertoire at the best
with or outsourcing to international
We are convinced that collective
possible rates for online music use.
and Dutch partners.
management is essential for the value of authors rights. We stand for an
In the Netherlands, Buma/Stemra is
optimal collection and distribution of
an efficient organisation that seeks to
revenues. Customer focus and the
promote laws and regulations to
A WORLD FULL OF MUSIC  13
Paceshifters Photograph: Bart Heemskerk
ANNUAL REPORT 2014
14 BUMA/STEMRA - ANNUAL REPORT 2014
ANNUAL REPORT 2014 15
BOARD REPORT ORGANISATION AND RIGHTS HOLDERS MORE CLOSELY ALIGNED The Board initiated a wide range of activities in 2014 to further prepare Buma/Stemra for the digital and more competitive future. As a result, the efficiency, information provision and transparency have been strengthened and the organisation and the rights holders are now more closely aligned. The Board convened twelve times during the year and focussed on issues such as flexible rights management, the relationship between Buma and Stemra, distribution processes also in the field of multi-media music, financial support for serious music, the future of large-scale events, readjustment of the disbursements within the SoCu fund and intensification of the communication with rights holders. As copyright developments are increasingly unfolding on a European scale, Board members have now also been given the task to promote the interests of Buma/Stemra and the members and participants internationally at the relevant organisations.
A complaint was filed with the Netherlands Authority for Consumers & Markets (ACM) in 2012 with regard to the membership of Buma/Stemra and the transfer of online rights. The Board is of the opinion that excluding, among others, online rights from the other participations has already been possible for some time, for example, via a specific website arrangement based on a Creative Common License or by submitting a request to the Board of Directors. In addition, the opt-out system that was announced in 2014 enables rights holders to have rights managed collectively or individually in five different rights categories.
16  BUMA/STEMRA - ANNUAL REPORT 2014
INVESTMENT POLICY
four board members and is supported by the executive manage-
Since the 1990s, Buma/Stemra has been investing the funds that
ment consisting of the Chief Executive Officer (CEO) and Chief
could not yet be distributed to the rights holders with the
Financial Officer (CFO) of Buma/Stemra and an independent
objective of realising a higher return than by maintaining these
external advisor. The investment committed draws up an
funds in a deposit account. As from 2012, only Buma has invested
investment plan at the beginning of each year in which the
its funds as Stemra decided to sell its investments in 2012 under
investment strategy for the coming year is set out, which is
relatively favourable market conditions. The reason for this is
referred to as the strategic asset allocation. The investment plan
that the continuity issue in the case of Stemra requires that
also specifies the investment categories and products and for
Stemra invests in securities and maintains a high degree of
which percentages investments will be made. An important point
liquidity.
of departure in this asset allocation is spreading the investments
A prudent investment policy has been developed with a strong
are managed by specialised asset managers. Each year, the
focus on risk management and control with the objective that
investment policy including the strategic asset allocation is
over different categories, regions and sectors. The investments
the to be distributed rights revenues maintain their value up to
submitted to the General Assembly for approval along with the
the time of distribution and that the income from investments
financial statements of Buma and Stemra.
partially covers the operating expenses of the Buma Association and the Stemra Foundation. The preconditions for this policy are determined by the Board based on an Asset Liability Manage-
Due to the broad diversification and the only limited strategic
ment (ALM) study. This study was preformed again in 2014 with
allocation in equities, the risk profile of the portfolio as a whole is
the support of a specialised firm whereby the point of departure
relatively low whereas at the same time the expected return is
was to maintain a relatively low risk profile with only a limited
relatively favourable. As a result, the investment policy has led to
downside risk and still realise a relatively attractive return. The
good financial results in the past years without incurring high
ALM study resulted in an asset allocation whereby, under normal
risks. In 2013, an analysis was made of the effectiveness of the
market conditions, between 20 and 30 percent is invested in
investment policy over the past seven years. This analysis
equities and between 70 and 80 percent is invested in fixed-
showed that, over the period 2006-2013, the average return of the
income securities. In the event of more volatile market
investments amounted to 4.54% and that the volatility of these
conditions, the bandwidth for equities lies between 0 and 30
investments (a measure for variance) equalled 3.73%. The average
percent and the bandwidth for fixed-income securities lies
return that would have been achieved on savings during this
between 70 and 100 percent.
same period equalled 2.07% with a volatility of 0.53%. 2014 was also a good investment year for the Buma Association with a
The investment policy is implemented by the invest committee
return of 5.27%.
within the agreed ALM bandwidths. This committee consists of
Strategische Asset Allocatie (SAA) The allocation of the investments can be illustrated as follows: SAA 2015
Low risk
High risk
0%
0% - 10%
0% - 25%
Equities
25%
20% - 30%
0% - 30%
Fixed-income securities
75%
70% - 80%
70% -100%
Cash and cash equivalents
BOARD REPORT  17
DIRECTOR’S REPORT MARKETS ARE IN MOTION
smoothly. In order to limit the risks, the October distribution was
Whereas physical music carrier sales have been decreasing
divided into five parts. Furthermore, measures were taken to
already for years, online music and media use among consumers
improve the whole distribution process operationally.
is growing and the number of subscriptions to streaming music reproduction are becoming increasingly popular; pay-per-view
Investments in information technology and collaboration
and video-on-demand are rapidly becoming more and more
The upgrade of our software was completed in June 2014. In
services is increasing. In addition, new forms of publication and
commonplace and will continue to grow strongly in the coming
addition, the preparations were started in 2014 to transfer part of
years. Parallel to the technological developments and the growing
the works of music from the Buma/Stemra database (this
online use, laws and regulations on a national and a European
concerns around 1.5 million works of music) to the ICE. A
level are also being further developed. Rules are being set for all
large-scale database of works of music has been built up in ICE, a
collective management organisations, not only those for music, in
collaboration between the PRS (Performing Rights Society in the
the field of, for instance, membership, mandates, transparency
UK) and STIM (Svenska Tonsättares Internationella Musikbyrå in
and the participation of rights holders in the decision-making
Sweden). As a result, the affiliated collective management
process. In addition, as part of the Collective Management
organisations no longer have to maintain their copyright
Directive, rules have been laid down for the multi-territorial
databases on a national scale.
licensing of music. International copyright organisations are increasingly working together to realise, for example, economies
Buma/Stemra was one of the first collective management
of scale together. However, competition is intensifying between
organisations to become a customer of ICE in 2014. With this, an
collective management organisations for mandates from
important milestone has been realised in the Buma/Stemra
rightsholders. In this competitive landscape, the collective
strategy.
management organisations are faced with the challenge to work more efficiently and to distinguish themselves.
A second collaboration with ICE, which was further established in 2014, concerned the execution of the online back office activities with NMP (Network of Music Partners A/S). In cooperation with
OUR ACTIVITIES IN 2014 Quality and service
NMP, ICE will process the data for Buma/Stemra of the online use
The Member Services Department set itself the objective in 2014
and nationally. We are thus anticipating the market developments
of all music that Buma/Stemra represents both internationally
to bring the quality and transparency up to a higher level based
that show an increase in music use on various online platforms.
on the Europe Contact Centre Standard (ECCS). The ECCS, which
This collaboration is also in line with the requirements that the
was developed in 2010 at the initiative of the European
European Directive demands of copyright organisations with
Committee in cooperation with 14 European countries, is an
regard to the multi-territorial licensing of online music users.
official European standard (EN 15838) for customer contact
From an operational perspective, we expect to be able to realise
departments and sets out requirements for processes, employees,
an investment efficiency in comparison to the processing of the
technology, organisation and the management of a contact centre.
online data on our own.
The training and certification process evaluated and assessed the written communication, (telephone) customer conversations and all other processes on 279 points. This process required a huge
STRATEGY 2015-2016
effort and a large degree of adaptability on the part of the
Our spear points for the period 2015-2016 are anticipating the
department; however, ultimately, this did lead to a cum laude
online developments, pan-European licensing and processing,
assessment at the end of 2014 by the accreditation institute KIWA
further strengthening of the relationship with music users and a
appointed by the European Committee.
more intensive cooperation with Dutch and European collective management organisations. The underlying principle governing
This has resulted in government institutions and foreign sister
our approach is that we will continue to fight collectively for the
organisations coming to observe the manner in which we provide
value of copyright, that we wish to offer our members the best
services to rights holders and using this as a ‘best practice’ case.
possible services at the lowest possible prices, that the revenues
In addition, Buma/Stemra is the first Dutch CMO that qualifies for
are distributed in as transparent and accurate a manner as
this European standard for optimal customer contact. The
possible, and that the rights holders can participate in the
Buma/Stemra Member Services Department was nominated for
decision-making process through various channels and can thus
the National Contact Centre Award at the end of 2014.
influence Buma/Stemra’s policy and activities.
Following the ICT Upgrade carried out in 2014 and the migration
Of the total rights revenues in 2014 of €190.0 million, €5.7 million
of works of music from the Buma/Stemra database to the ICE
came from the category Online which thus continued the rising
database shortly thereafter, extra attention will be paid to the
trend of the previous year. We will continue to focus strongly on
further development of the member portal in 2015 and 2016
further growth of this category. Buma/Stemra has concluded
which will improve the user interface. Notwithstanding the
agreements with nearly all Netherlands-based online music and
necessary ICT upgrade that had an impact on all processes, the
video services and with a growing number of providers of
distributions to rights holders were processed reasonably
video-on-demand (VOD) services.
18 BUMA/STEMRA - ANNUAL REPORT 2014
In order to further strengthen our position in Online, we continue
Following exploratory consultations with the Dutch Authority for
to put a lot of effort into the independent acquisition of the
Consumers & Markets, Buma/Stemra now offers copyright
management rights among composers and songwriters via
holders more options to choose from for the management of their
mandates. It is extremely important that we are able to clearly
copyrights. With these adjustments, Buma/Stemra is already
distinguish ourselves in this area from other management
anticipating the requirements of the recently adopted European
organisations based on the high quality of our services.
Collective Rights Management Directive. In addition to the existing arrangements, flexible rights management has been
DEVELOPMENTS IN LAWS AND REGULATIONS
made possible by introducing a new ‘opt-out system’, with which new rights holders as from September 2014 and existing rights holders as from the contract years 2015 are given the option to
An essential part of the European Collective Rights Management
excluded the management of their copyrights by Buma/Stemra in
Directive, which was adopted by the European Parliament in the
five different categories, i.e. live performances, online, background
beginning of 2014, is the proposed manner in which the manage-
music, mechanical and radio &TV. More information about the
ment of rights is structured. Composers and songwriters can
new opt-out system is available on the Buma/Stemra website. The
determine themselves which rights they wish to transfer to one
publication of a calculator that informs potential members about
or several management organisations and which rights they wish
the financial consequences of partial or complete transfer of the
to continue to manage themselves. The Directive also contains
management of copyrights to Buma/Stemra is linked to this new
requirements regarding the speed of invoicing, processing and
opt-out system. The calculation method is based on different user
payments as well as strict requirements regarding membership,
profiles that correspond with the various groups of rights holders.
transparency and the governance of management organisations.
The calculator was made available at the end of 2014 as part of
Evidently, Buma/Stemra is following these developments closely
the Buma/Stemra website..
and a number of programmes have been launched in order to be well prepared when the Directive comes into force in the beginning of 2016. The European Court of Justice determined in 2014 that downloading from illegitimate sources is illegal. The Court has thus expressed its opinion on the Dutch situation regarding private copying. National legal regulations that do not make a distinction between making copies for private use originating from legitimate sources and making copies for private use from counterfeit sources are no longer tolerated. As a consequence of this ruling, the private copying levy has been lowered. A new private copying system has come into effect in 2013, in which all sorts of devices are taxed that can be used for private copying, such as MP3 players, hard disk recorders, telephones with an MP3 function, PCs, laptops, tablets and external hard disks. At the end of 2014, the Stichting de Thuiskopie [Private Copying Foundation] arrived at a settlement with the Dutch State with which the dispute regarding the private copying levies in the period 2007-2012 has been resolved.
DIRECTOR’S REPORT 19
FINANCIAL RESULTS, MARKET DEVELOPMENTS AND PROSPECTS
€33.5 million from the Dutch State in 2014. The Stichting De
Financial year 2014 Buma/Stemra
Thuiskopie started paying out the first part of this settlement
The Stichting De Thuiskopie received a settlement payment of
The rights revenues realised by Buma in 2014 amounted to €158.2
payment, which amounted to a gross amount of €20.0 million, at
million, which is €6.1 higher than the rights revenue in 2013. This
the end of 2014. Stemra received its share of this payment, which
increase concerns both an organic increase of the rights revenues
amounted to €4.3 million, in 2014. In view of legal disputes with
from a number of collection categories and a one-off increase
regard to the private copying levies, the stability of this revenue
due to a number of final settlements over previous years that
source in the longer term is still difficult to estimate.
were realised in 2014. The higher rights revenues were realised in all rights categories with the exception of the Hospitality
In spite of the difficult economic situation and the irreversible
Industry and Shops and Stores.
decrease in mechanical rights revenues at Stemra, all in all, with
Stemra also realised an increase in 2014 compared to 2013. The
Buma/Stemra has succeed in realising a considerable increase in
rights revenues amounted to €31.7 million, which is €3.4 million
the rights revenues.
a total rights revenue of €190.0 million (2013: €180.5 million)
higher than in 2013. However, the increase does not indicate a trend reversal in the ongoing decrease in rights revenues that can be observed within Stemra in recent years. It is actually the result of rights revenue from private copying being reinstated.
BUMA Rights revenues Buma 2014 and prospects for 2015 Rights revenues were received from the following categories: (x € 1,000)
Budget 2015
Actual 2014
Budget 2014
Actual 2013
Hospitality industry
13,498
13,469
13,450
13,559
Workplaces
16,430
16,828
16,200
16,732
Shops and stores
12,567
12,317
12,000
12,494
Total General Licenses Buma
42,495
42,614
41,650
42,785
Radio, TV and Network Providers
71,029
71,774
70,650
69,098
Live performances
23,235
24,130
22,525
23,380
Online Foreign Total Buma Total Stemra Total Buma/Stemra
4,945
5,656
4,100
3,092
13,296
14,155
13,100
13,846
155,000
158,329
152,025
152,201
24,450
31,710
25,675
28,324
179,450
190,039
177,700
180,525
Compared to 2013, the costs of Buma/Stemra increased by €152
Buma’s rights revenue amounted to €158.3 million, which is €6.1
thousand to €27.4 million. These costs will increase more
million higher than in 2013. Rights revenue for 2015 is budgeted
strongly in 2015 as the investments that were made in 2014 in
at €155.0 million, which represents a decrease of €3.3 million
the quality of the organisation will be capitalised (and then
compared to 2014. This decrease is mainly due to the very high
depreciated) as from 2015. More detailed information is provided
rights revenues in 2014 as a result of one-off items. However, the
on the costs of the organisation in the section on operating
budget for 2015 is €3.0 million higher than the budget for 2014
expenses.
from which it can be concluded that, in addition to the one-off increase in 2014, that a small structural increase of the rights revenues has also taken place. The increase in the budget for 2015 compared to the budget for 2014 covers all rights categories.
20 BUMA/STEMRA - ANNUAL REPORT 2014
Financial income and expenses Buma 2014 and prospects for 2015 Buma realised a total income from securities and changes in value (investment income) of €12.2 million in 2014. The balance of other financial income and expenses was €0.7 million negative (compared to €0.6 million negative in 2013), as a result of which a total financial result of €11.5 million was achieved in 2014 (compared to €10.8 million in 2013). The Buma Association uses the investment income to (partially) cover its operating expenses. As the results from investments can fluctuate strongly from year to year, a notional return on the investments is used which is calculated each year in a consistent manner based on the average investment portfolio, a fixed risk mark-up and the 5-year ECB AAA government rate. If the investment income is higher than the notional return, the difference is added to the appropriated reserve; if the investment income is lower than the notional return, the difference is withdrawn from the appropriated reserve, insofar as this reserve is sufficient. As a result of the notional return system, annually a consistently determined amount is used to (partially) cover the operating expenses and in years in which a high investment income is realised, a buffer is built up in the appropriated reserve which can be used in years in which a lower investment income is realised. The table below shows that an amount was added to the appropriated reserve in 2013 and 2014.
Allocation to the appropriated reserve (x € 1,000)
Budget 2015
2014
2013
Income from securities and changes in value*
4,095*
12,231
11,417
Notional return
8,260
7,547
10,052
-4,165
4,684
1,365
Allocation to appropriated reserve
* Changes in value are not taken into account in the budget for income from securities and changes in value.
DIRECTOR’S REPORT 21
Withheld administration costs Buma 2014 and prospects for 2015
Providers revenue (10%), and a variable fee that is withheld at the time of collection on the other rights categories. The variable
Administration costs are the amounts that the Buma Association
administration fee is calculated based on the total costs, the
withholds on the rights revenues in order to cover the operating
fixed administration fees and the other income that the Buma
expenses of the Association. These administration costs consist
Association receives. This calculation is specified in the table
of a fixed administration fee that is withheld on the distribution
below and subsequently explained in the paragraph below the
of Online revenue (15%), Foreign revenue and Foreign Network
table.
Cover of operational expenses (x € 1,000)
Budget 2015
2014
2013
-22,398
-20,878
-20,989
22,398
20,878
20,989
(1) Entrance and annual fees
675
690
664
(2) Other income (3) Fixed administration fees for Online revenue, Foreign revenue and Foreign Network Providers
100
101
198
2,200
2,413
2,339
Cover of expenses from revenues
2,975
3,204
3,201
(4) Notional return
8,260
7,547
10,052
-760
-710
-590
7,500
6,836
9,462
Total cover from revenues and financial result
10,475
10,041
12,663
(6) Variable administration fee on other rights categories
11,923
10,837
8,326
Total cover
22,398
20,878
20,989
Total operating expenses Total cover Explanation of the cover
(5) Balance of financial income and expenses Cover from the financial result
The operating expenses of the Buma Association are covered
and revenue from Foreign Network Providers together with the
from six revenue sources, i.e. the entrance and annual fees paid
variable administration fees for the other rights categories
by rights holders (1), the other revenues (2), the fixed administra-
constitute the total administration costs withheld on the
tion fees on the collection of Online, Foreign and Foreign Network
collection. In total €13.3 million in costs were withheld from the
Providers (3), the notional return on the investments (4), and the
rights holders in 2014, which is €2.6 million more than in 2013.
balance of the financial income and expenses (5). After which the
The difference between the withheld amounts in 2014 and 2013
expenses for which there is still no cover are divided over all
was mainly due to a lower notional return in 2014 than in 2013
rights categories with the exception of Online, Foreign and
due to a very low interest rate and thus lower yields on bonds. In
Foreign Network Providers (6).
spite of this increase, Buma’s actual withholding percentage in 2014, which amounted to 8.2%, is very low compared to compara-
The fixed administration fee for Online revenue, Foreign revenue
ble CMOs in other countries.
Total administration costs (x € 1,000)
Budget 2015
2014
2013
2,200
2,413
2,339
(5) Variable administration fees
11,923
10,837
8,326
Total amount withheld on rights revenues
14,123
13,250
10,665
(3) Fixed administration fees
22 BUMA/STEMRA - ANNUAL REPORT 2014
It is expected that the cost of administration of rights revenues in
Distributions Buma 2014
2015 will be higher than in 2014. This is mainly due to the fact
Buma distributed €125.6 million to foreign members, participants
that the operating expenses will increase compared to 2014. This
and organisations in 2014, which is €2.9 lower than in 2013. The
increase is discussed in more detail in the explanation to the
reason for this decrease is that an extra distribution took place in
operating expenses of Buma/Stemra.
connection with double claims in particular in 2013. Furthermore, part of the distribution to foreign organisations was shifted to 2015. In addition to the distribution to members, participants and foreign organisations, €10.2 million was added to the Fund for Social and Cultural Services (the SoCu Fund). This amount is €0.1 million higher than last year.
STEMRA Rights revenues Stemra 2014 and prospects for 2015 Rights revenues were received from the following categories: (x € 1,000)
Budget 2015
Actual 2014
Budget 2014
Actual 2013
BIEM Phono-Mechanical Rights & Central Licensing
5,400
6,895
6,500
8,119
Work by Work & Special Licensing
4,100
5,564
4,750
5,366
Radio & TV
5,370
5,692
5,650
5,419
Online
2,450
3,134
2,450
2,635
Private Copying & Public Lending Rights
2,280
4,631
1,775
1,479
600
1,006
550
436
4,250
4,788
4,000
4,870
24,450
31,710
25,675
28,324
Total Buma
155,000
158,329
152,025
152,201
Total Buma/Stemra
179,450
190,039
177,700
180,525
Reprographic Rights Mechanical Rights Foreign Total Stemra
Stemra’s rights revenues amounted to €31.7 million, which is €3.4 million higher than in 2013.
DIRECTOR’S REPORT 23
Financial income and expenses Stemra 2014 and prospects for 2015 Stemra booked a total of financial income and expenses of €0.4 million in 2014, which is € 0.1 million lower than in 2013. The reason for this decrease in comparison to 2013 is that the interest was lower in 2014 than in 2013. A total of financial income and expenses of €0.4 million is also budgeted for 2015. The budget for 2015 is based on the interest rate as at the end of October 2014.
Distributions Stemra 2014 Stemra distributed €21.9 million to members, participants and foreign organisations in 2014, which is €5.5 less than in 2013. The reason for this decrease is that an extra distribution took place in connection with double claims in particular in 2013. Furthermore, the decrease in rights revenues in the past years (with 2014 as an exception) implies that there are also less and less revenues to distribute. As the increase in the rights revenues in 2014 can mainly be attributed to the distribution paid to Stemra by the Stichting de Thuiskopie {Private Copying Foundation] which only took place at the end of 2014, this increase is not yet visible in a higher distribution.
Stemra’s future Given the shift from physical carriers to digital products, it is uncertain how the future market for mechanical rights will develop. Nevertheless, it is obvious that the rights revenues in a number of market segments will be increasingly negatively impacted. The decrease was still compensated in previous years by the increase in Online rights revenues. However, as downloads are becoming less popular than streaming services and a large part of the online repertoire has been withdrawn by rights holders this is not a structural solution. The payment received from the Stichting de Thuiskopie in connection with the settlement with the Dutch State will offset part of the decrease in the other rights categories in 2015; however, in view of current legal proceedings, the future of the Private Copying levy arrangement is still uncertain. This situation puts considerable pressure on the business model and future of Stemra. Against this background, all possible options are being considered in order to deal with these developments. Shortfalls are expected in Stemra’s business operations in the coming years. In order to cover these future shortfalls, an appropriated reserve was formed in 2012 from the income out of investments. This appropriated reserve amounted to €6.2 million at the end of 2014. In accordance with the objective of the appropriated reserve, the Board proposes to the General Assembly to deduct the negative result over 2014 of €2.3 million from the appropriated reserve. The budget for 2015 indicates an expected deduction of €3.0 million, which implies that the appropriated reserve will still be adequate in 2015. The Board and the Board of Directors are carrying out analyses to ensure the continuity of Stemra and thus the continuity of the management of the mechanical rights in the future as well.
24 BUMA/STEMRA - ANNUAL REPORT 2014
BUMA/STEMRA Operating expenses Buma/Stemra 2014 Buma/Stemra’s operating expenses can be specified as follows: (x € 1,000) Personnel costs
Budget 2015
Actual 2014
Budget 2014
Actual 2013
13,475
13,092
13,380
14,121
Accommodation expenses
1,260
1,454
1,460
1,513
Amortisation and depreciation
2,270
1,050
1,540
709
Other expenses
12,375
11,867
11,965
11,224
Total expenses
29,380
27,463
28,345
27,567
The operating expenses of the management organisation
The costs of Buma/Stemra combined amount to 14.5% of the
Buma/Stemra amount to €27.5 million, which is marginally
collection. Due to the allocation of the financial result (Buma)
higher than the operating expenses in 2013. The budget for 2015
and fixed withholding percentages (Stemra), the actual withhold-
shows total operating expenses of €29.4 million, an increase
ing from the rights holders amounts to 8.6% of the collection.
of €1.9 million compared to 2014 and a budget increase of €1.0 million. This increase can mainly be attributed to the
Outlook
depreciation charges for the business information system and
In the rapidly changing world, maintaining our service level
the outsourcing of copyright and online to ICE. In addition to the
requires large investments in IT systems. The investments in ICE
depreciation charges, service costs will also be paid to ICE as
for the management of copyrights and the processing of online
from 2015 for the processing of online usage data and the
usage have already been discussed; however, this is only a small
management of the works database. Therefore, the increase in
part of the necessary IT-related modifications in the organisation.
operating expenses concerns necessary investments; however,
In the strategy that has been adopted by the Board it is also clear
these investments do not result in an increase in rights revenues.
that the services provided to rights holders must be expanded by
In the allocation of costs between Buma and Stemra, direct costs
dashboard and implementing quarterly distributions. A self-
setting up a self-service portal, offering a digital information are allocated directly to Buma or Stemra. Management and
service portal also has to be set up for music users to facilitate
association costs are divided equally 50% for Buma and 50% for
applying for licences. The above modifications are necessary in
Stemra. With regard to the remaining ‘joint’ costs, a division of
order to ensure that the services offered by Buma/Stemra remain
75% for Buma and 25% for Stemra is applied, whereby Stemra
up to standard and they will entail the necessary costs. However,
will not be allocated more than 25% of the total costs of the
inaction would lead to decline.
Buma/Stemra organisation.
COSTS NORM 2014 AND PROSPECTS FOR 2015 The costs of the Buma Association amount to 13.2% of the
APPROVAL OF THE FINANCIAL STATEMENTS KPMG Accountants N.V. have audited and approved the financial statements. We propose the approval of the Buma financial
collection. As part of the costs are covered by the financial result,
statements 2014 and the Stemra financial statements 2014
an amount of only 8.2% of the collection is withheld from the
pursuant to Article 26 paragraph 7 of the Articles of Association
rights holders.
and we propose that the Board and the Board of Directors be granted discharge.
The costs of the Stemra Foundation amount to 20.8% of the collection. Due to the system of fixed withholding percentages, the actual withholding from the rights holders amounts to 12.6% of the collection.
Hoofddorp, 8 april 2015 The Board L.A.J.M. de Wit, Chairman
L.A. Dikker, Board Member
M.H. Swemle, Board Member
H.O. Westbroek, Deputy Chairman
J.N. Hamburg, Board Member
R.D. van Vliet, Board Member
A.A.L. de Raaff, Secretary
A.B. Molema, Board Member
N.M. Walboomers, Board Member
P.M. van Brugge, Board Member
P.L. Perquin, Board Member
Board of Directors
L.J. Deuss, Board Member
M. Schimmer, Board Member
H.G. van der Ree, Director under the Articles of Association
DIRECTOR’S REPORT 25
Indila Photograph: Mike Breeuwer
FINANCIAL STATEMENTS BUMA 2014
26 BUMA/STEMRA - ANNUAL REPORT 2014
BUMA BALANCE SHEET
AS AT 31 DECEMBER
Before appropriation of the result (x € 1,000)
2014
2013
6,447
5,310
635
763
11,730
11,892
1,671
1,708
838
837
Assets Fixed Assets Intangible fixed assets (1) Tangible fixed assets (2)
Current assets Trade debtors (3) Other receivables (4) Taxes and social security contributions Prepayments and accrued income (5)
Securities (6) Cash and cash equivalents (7)
Total assets
(x € 1,000)
6,756
7,428
20,995
21,865
242,063
221,242
9,044
9,428
279,184
258,608
2014
2013
1,855
1,855
15,212
13,847
4,684
1,365
21,751
17,067
11,164
11,602
5,447
7,639
183,224
173,865
4,044
4,655
Liabilities Reserves (8) Continuity reserve Appropriated reserve Unappropriated result
Provisions (9)
Long-term liabilities (10)
Current liabilities Rights revenues to be distributed (11) Trade creditors Taxes and social security contributions Other liabilities (12) Accrued liabilities (13)
Total liabilities
347
361
45,602
36,693
7,605
6,726
240,822
222,300
279,184
258,608
FINANCIAL STATEMENTS BUMA 27
BUMA OPERATING STATEMENT (x â‚Ź 1,000)
2014
Budget
2013
Income Administration costs withheld upon distribution (17,11) Entrance and annual fees
2,413
1,900
2,339
690
650
664
101
160
198
3,204
2,710
3,201
Balance of to be withheld administration costs in the collection year (17,11)*
10,837
15,020
8,326
Total income
14,041
17,730
11,527
Personnel costs (18,19)
9,634
9,770
10,399
Accommodation expenses
1,091
1,095
1,134
Other income
Expenses
802
1,155
524
9,351
9,440
8,932
20,878
21,460
20,989
-6,837
-3,730
-9,462
Income from securities (21)*
3,808
3,730
4,522
Changes in value (21)*
8,423
6,895
136
165
Amortisation and depreciation Other expenses (20) Total expenses
Balance of income and expenses
Financial income and expenses
Other interest income and similar income* Interest expenses and similar expenses*
-846
-755
11,521
3,730
10,827
4,684
-
1,365
Taxes (22)
-
-
-
Net result
4,684
-
1,365
Allocation to appropriated reserve (8)
4,684
-
1,365
Total financial income and expenses (21) Result before taxes
* The balance of to be withheld administration costs in the collection year and the financial income and expenses are approached in a different manner in the budget than in the actual realisation. See explanatory notes 17 and 21 for more information.
28  BUMA/STEMRA - ANNUAL REPORT 2014
BUMA CASH FLOW STATEMENT (x € 1,000)
Balance of income and expenses
2014
2013
-6,837
-9,462
802
524
-438
-70
Adjustments for: Amortisation and depreciation Changes in provisions (9) Changes in working capital
18,222
5,246
Cash flow from operations
11,749
-3,762
Purchases of securities (6)
-96,957
-62,076
89,614
59,786
Repayments and/or sale of securities (6) Interest received Interest and dividend received on securities
74
84
3,466
4,497
-783
-741
Paid in connection with forward exchange contract
-3,544
1,806
SoCu fund
-2,192
-2,533
1,427
-2,939
-1,572
-3,375
Interest paid
Cash flow from operating activities Investments in intangible fixed assets (1)
-239
-500
-1,811
-3,875
-384
-6,814
2014
2013
Cash and cash equivalents as at 1 January
9,428
16,242
Cash and cash equivalents as at 31 December (7)
9,044
9,428
-384
-6,814
Investments in tangible fixed assets (2)
Cash flow from investment activities
Net cash flow
(x € 1,000)
Changes in cash and cash equivalents
FINANCIAL STATEMENTS BUMA 29
BUMA STATEMENT OF CHANGES IN TO BE DISTRIBUTED RIGHTS REVENUES 2014
2013
Balance as at 1 January
173,865
170,873
Music usage in the Netherlands
144,174
138,355
(x € 1,000)
14,155
13,846
Rights revenues to be distributed (11)
158,329
152,201
Directly affiliated rights holders
-75,779
-77,503
Foreign CMOs
-49,757
-50,943
Foreign CMOs
Allocation to the Fund for Social and Cultural Services Distributions (10, 11)
Administration costs withheld upon distribution
-10,184
-10,098
-135,720
-138,544
-2,413
-2,339
Administration costs withheld in the collection year
-10,837
-8,326
Withholdings (17, 11)
-13,250
-10,665
Balance as at 31 December
183,224
173,865
30 BUMA/STEMRA - ANNUAL REPORT 2014
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS Objective in accordance with the Articles of Association, registered office and business address
converted into euros at the exchange rate prevailing on the trans-
The objective of the Buma Association (the Association or Buma)
action date. Exchange rate differences upon conversion are
is to promote both the tangible and the intangible interests of
recognised in the operating statement.
in foreign currencies that are recognised at historical cost are
songwriters and composers and their successors in title, and of publishers and publishing companies as a non-profit institution.
Consolidation
By law, Buma has been appointed by Royal Decree to represent
The investments of the Buma Association and the Stemra
the above-mentioned rights holders in a great number of
Foundation are held in Foundations, i.e. investment funds. The
operating areas. Buma stands for Bureau Muziek Auteursrechten
Board of these foundations is the same as the Board of the Buma
[Music Copyright Bureau]. The registered offices of the Buma
Association and the Stemra Foundation. The foundations invest
Association are located in Amstelveen, and its main office is
for the account and risk of the Buma Association and the Stemra
located on the Siriusdreef 22-28 in Hoofddorp.
Foundation, the legal ownership of the securities lies with the Foundations themselves in order to be able to carry out the
Accounting principles used in the preparation of the financial statements
necessary management tasks.
The financial statements have been prepared in accordance with
During 2013 and 2014, only the Buma Association held invest-
Title 9, Book 2 of the Dutch Civil Code, as required by Article 2,
ments. Until mid-2014, the investment funds concerned the
paragraph 2 under a(i) of the Supervisory and Disputes Settle-
jointly with the Stemra Foundation held: Stichting Buma Stemra
ment Act for collective management organisations for copyright
Obligatiefonds [Bond Fund] (BSO) and Stichting Buma Stemra
or related rights (Supervisory Act). In addition, the applicable
Aandelenfonds [Equity Fund] (BSA). As the Buma Association is
quality mark criteria of VOIŠE (the association of organisations
the only entity holding investments, these investment funds
that collectively manage intellectual property). These financial
have been included in full in the financial statements of the
statements have been prepared based on the going concern
Buma Association. The structure of the joint investment funds
principle.
was simplified mid-2014 in such a manner that the Buma Association and the Stemra Foundation both have their own
General
investment fund. In this case, BSO was renamed Stichting Buma
The accounting principles that are applied for the valuation of
Beleggingsfonds (BBF) [Buma Investment Fund Foundation] for
assets and liabilities and the determination of the result are
the investments of the Buma Association and BSA was renamed
based on historical costs, with the exception of investments and
Stichting Stemra Beleggingsfonds (SBF) [Stemra Investment Fund
derivative financial instruments, which are measured at fair
Foundation] for the investments of the Stemra Foundation. After
value. Income and expenses are allocated to the year to which
due consideration, the Board came to the conclusion in 2014 that,
they relate. All amounts are in thousands of euros, unless stated
taking into account the fact that BBF invests for the account and
otherwise. The financial figures for 2013 have been reclassified in
risk of the Buma Association, the securities must be accounted
order to enable a comparison with 2014. This does not have any
for in the Buma Association instead of in BBF. As the financial
consequences for the result and the reserves.
statements of BBF, in view of the aforementioned accounting method based on this economic reality, are of negligible
The original financial statements were drafted in Dutch. This
significance, the Board has decided not to prepare consolidated
document is an English translation of the original. In the case of
financial statements. The adjustment as of 2014 has also been
any discrepancies between the English and the Dutch text, the
processed in the comparable financial figures for 2013 and does
latter will prevail.
not have any effect on the capital or the result of Buma in the financial years concerned.
Estimates and assumptions In the preparation of the financial statements, the management makes use of estimates and assumptions when applying the accounting principles and determining the reported amounts for assets, liabilities, income and expenses. The estimates and underlying assumptions are based on past experience and various other factors which are considered to be reasonable given the circumstances and which are assessed periodically. Actual results may differ from these estimates and assumptions.
Foreign currencies Transactions denominated in foreign currencies are converted into euros at the exchange rate prevailing on the transaction date. Monetary assets and liabilities in foreign currencies are converted into euros on the balance sheet date at the applicable exchange rate on this date. Non-monetary assets and liabilities
FINANCIAL STATEMENTS BUMA  31
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS Financial instruments
The expected useful life is as follows
Financial instruments comprise both primary instruments
• information systems 3 - 7 years
(receivables, securities, cash and cash equivalents and liabilities)
• hardware/computer equipment 3 years
and derivative instruments (including forward contracts).
• other operating fixed assets 3 - 7 years
Financial instruments are initially recognised at fair value whereby directly attributable transaction costs are taken into
Appropriated reserve
account on initial recognition. If however financial instruments
The aim of the appropriated reserve is to distribute the return on
are recognised at fair value after the initial recognition with the
investment to the rights holders in a well-balanced manner. To
processing of the change in value in the operating statement, the
this end, the income from and changes in value of securities
directly attributable transaction costs are processed directly in
recognised in the operating statement are allocated to the
the operating statement.
appropriated reserve via the appropriation of the result. Each
After initial recognition, financial instruments are recognised as
Association, the Board determines the amount from the
follows:
appropriated reserves that is available for distribution to the
• Receivables are carried at amortised cost. Provisions deemed
rights holders. This is also based on the realised return on
year, in accordance with Article 18 paragraph 3 of the Articles of
necessary for the risk of uncollectability are withheld. These
investments, the expected return and advice obtained from asset
provisions are determined on the basis of individual assessments of
managers. In the operating statement, this amount is deducted
the receivables; • Securities (government bonds, bond funds, (convertible) corporate
bonds and equity funds) are carried at fair value. Changes in the fair
from the administration costs charged to rights holders and withdrawn from the appropriated reserves via the appropriation of the result, provided that this reserve is sufficient.
value are recognised in the operating statement. The fair value is the stock market price. The legal ownership of the securities lies with
Provisions
Stichting Buma Beleggingsfonds;
A provision is recognised in the balance sheet for a legal or
• Cash and cash equivalents are carried at fair value, which is almost
always equal to the nominal value;
constructive obligation arising from a past event, when it is probable that an outflow of economic benefits will be required to
• Liabilities are measured at amortised cost;
settle the obligation, and for which the amount can be estimated
• Derivative financial instruments (used for the hedging of the foreign
reliably. Provisions are valued at the present value of the expenses
currency component of securities, and for the hedging of foreign
that are expected to be necessary in order to settle the obligation.
currency liabilities) are measured at fair value with recognition of all
The long-service provision concerns the actuarial value of future
changes in value in the operating statement.
long-service awards payments for active employees with permanent contracts. The provision known as the Social Fund
Intangible and tangible fixed assets
Buma (SFB) annual allowances plan concerns a provision for the
Intangible and tangible fixed assets are stated at cost of acquisi-
actual obligation of the Buma Association arising from the annual
tion or manufacture less accumulated amortisation, depreciation
allowances paid to (former) songwriters and composers and
and impairments. Depreciation charges are calculated as a
music publishers and their successors in title through the Social
percentage of the acquisition costs in accordance with the
Fund Buma Foundation. These obligations are conditional;
straight-line method based on the estimated useful life.
however, based on agreements entered into and the resulting
Prepayments on fixed assets are not amortised or depreciated.
expectations this is recognised as an actual obligation. The
For tangible and intangible fixed assets, it is assessed on each
provision has been charged to the Fund for Social and Cultural
balance date whether there are indications that these assets are
Services (SoCu Fund). A possible release from the provision will
subject to impairment. If such indications are present, the
therefore be allocated to the SoCu fund. The provision is recog-
realisable value of the asset is estimated. The realisable value is
nised for the actuarial value of the promises that have been made.
the higher of the fair value less costs to sell and its value in use.
The expenses for the settlement of the provision are incurred via
When the carrying amount of an asset is higher than the
SFB.
realisable value, an impairment is recognised for the difference between the carrying amount and the realisable value. Departing
Pension plan for employees
from the above, on each balance sheet date, the realisable value
The Buma Association offers its employees an average wage
is determined for intangible assets that have not yet been taken
pension plan. This pension plan is administrated by the Stichting
into use.
Bedrijfstakpensioenfonds voor de Media, PNO [Foundation for the Industry Sector Pension Fund for the Media, PNO]. The pension contributions that are payable for the financial year are recognised as costs. A liability is recognised for unpaid pension contributions on the balance sheet date. As pension liabilities are of a short-term nature, these are measured at nominal value. The risks in connection with wage developments, price indexation and investment returns on the capital of the fund could possibly lead to future adjustments in the annual contributions to the
32 BUMA/STEMRA - ANNUAL REPORT 2014
pension fund. These risks are not reflected in a provision
Works that are claimed by several rights holders (double claims)
included in the balance sheet. In the event of a shortfall at the
are not paid out until it is clear who the rights holder is. A longer
industry sector pension fund, the Buma Association is not
reserve term can be used for rights revenue received from sister
obliged to pay additional contributions other than higher future
organisations with insufficient information for distribution.
pension contributions.
Administration costs Fund for Social and Cultural Services
The administration costs are recognised as income in the
The Fund for Social and Cultural Services (SoCu Fund) serves to
operating statement. For the greater part of the rights revenue
advance the non-material or material interests of composers,
collected in the financial year, the rules for distribution determine
songwriters and music publishers and to promote the Dutch
that income and expenses in the relevant financial year may be
music scene. The contribution to the fund consists of the
fully offset against rights revenues. These offset administration
deduction of a percentage of the rights revenue that is available
costs are subsequently recognised as income in the operating
for distribution. Based on Article 29, paragraph 4 of the Article of
statement in the year of collection as ‘Amount of administration
Association, the percentage is determined annually by the Board,
costs to be withheld in the collection year’. For a number of
at the proposal of the Board of Directors, with a maximum of 10%.
categories of rights revenues (this mainly concerns revenues
The deduction forms part of the distribution. The Board of Buma
received from abroad, cable fees paid to sister organisations
decides on disbursements and payments that are charged to the
abroad and the Online rights revenues), a fixed percentage of the
fund. The SoCu fund has a long-term character, as it cannot be
collected rights revenues is withheld as administration costs
claimed within 12 months of the balance sheet date.
upon the distribution to rights holders. These administration
Rights revenue
‘Administration costs withheld upon distribution’.
costs are recognised as income in the year of distribution as Buma recognises a rights revenue receivable when it can be determined in a reliable manner, and it is probable that it will
Financial income and expenses
accrue to Buma, and it is enforceable on the balance sheet date.
Dividends are recognised in the period in which they are
Rights revenues received from other Collective Management
declared. Interest income and expenses in connection with
Organisations (CMOs) are generally recognised on a cash basis, as
investments are recognised in the period to which they relate.
the amount cannot be determined reliably at an earlier moment.
Transaction results are recognised in the period in which the
Rights revenues are recognised in the balance sheet in the item
transaction has taken place. Changes in the fair value of
to be distributed rights revenue.
securities and derivative financial instruments are recognised in the operating statement.
The rules for distribution determine the distribution and payment of rights revenues, received by Buma pursuant to music
Cash Flow Statement
copyright, to the participants and other stakeholders. The rules
The cash flow statement has been prepared using the indirect
for distribution are assessed by the Board every three years.
method. Cash flows in foreign currencies are converted at an estimated average exchange rate. Exchange rate differences in
In the distribution process, reserves are also formed for:
connection with cash balances are shown separately in the cash
• Works for which Buma possesses insufficient information for
flow statement. The purchase and sale of investments, interest
distribution, for example, because of missing information on rights
and dividends received and interest and costs paid in connection
holders, copyright details or cue sheets of films, series or commercials;
with investments are regarded as cash flows arising from
• Works with a cumulative rights revenue that is lower than the
investments.
threshold for distribution (bagatelle); • Claims pertaining to distribution (also in connection with the
indemnification that Buma provides to the paying music user*). The
Taxes The Dutch Tax and Customs Administration has determined in a
reserve is based on past empirical data with regard to the claims per
settlement agreement that the Buma Association is subject to
distribution category that were deemed to be justified and were paid
corporation tax. Deductible foreign withholding tax and Dutch
out, and lies between 0 and 2 percent.
dividend tax may be deducted from the tax due based on this
* In the agreements that Buma concludes with the music user, Buma indemnifies
settlement agreement. The tax item recognised in the financial
the music user against claims of rights holders that are affiliated directly or via
statements concerns corporation tax after the deduction of the
sister organisations. Furthermore, we refer to Article 26 a-c of the Copyright Act in
deductible foreign withholding tax.
which obligatory collective management is laid down
Reserves are assessed periodically and paid out when the necessary information is supplied or, in the event of a bagatelle, the threshold for distribution has been attained. Reserves that have not been paid out within three years after the year of collection, are divided proportionally over the various distribution categories and paid out in the fourth year after collection (in accordance with the Supervisory Act) via the regular distribution.
FINANCIAL STATEMENTS BUMA 33
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS (1) Intangible fixed assets The changes in the separate items are as follows: (x € 1,000) Acquisition cost Cumulative amortisation and depreciation Carrying amount as at 1 January 2014
Investments Assets taken into use Amortisation and depreciation
Information systems
Prepayments on assets in progress
Total
6,897
4,711
11,608
-6,298
-
-6,298
599
4,711
5,310
-
1,572
1,572
2,948
-2,948
-
-435
-
-435
-4,235
-
-4,235
Depreciation on divestments
4,235
-
4,235
Changes in carrying amount
2,513
-1,376
1,137
Divestments
Acquisition cost Cumulative amortisation and depreciation Carrying amount as at 31 December 2014
5,610
3,335
8,945
-2,498
-
-2,498
3,112
3,335
6,447
The carrying amount of the prepayments on assets in progress as at 1 January 2014 concerned the prepayment on the business information system (ERP system) of €2.4 million and the prepayment on the ICE music works database (International Copyright Enterprise Services AB) of €2.3 million. The ERP system was taken into use on 1 June 2014 and will be depreciated in 6.5 years. The prepayment at year-end 2014 of €3.3 million concerns the investment in the ICE works database and ICE-Online. The investment in ICE-Online concerns the outsourcing of the processing of online use, the investment in the ICE works database concerns the outsourcing of the processing of copyrights.
(2) Tangible fixed assets The changes in the separate items are as follows: (x € 1,000)
Hardware / computer equipment
Other operating assets
Total
Acquisition cost
2,418
4,630
7,048
Cumulative amortisation and depreciation
-2,037
-4,248
-6,285
Carrying amount as at 1 January 2014
381
382
763
Investments
194
45
239
Amortisation and depreciation
-268
-99
-367
Changes in carrying amount
-74
-54
-128
2,612
4,675
7,287
-2,305
-4,347
-6,652
307
328
635
Acquisition cost Cumulative amortisation and depreciation Carrying amount as at 31 December 2014
34 BUMA/STEMRA - ANNUAL REPORT 2014
(3) Trade debtors Trade debtors at the end of the financial years consist of receivables from debtors that are collected directly by Buma and receivables from debtors that are collected by the Foundation Service Centre Copyright and Related Rights (Service Centre). Trade debtors have increased compared to the previous financial year as the invoicing of a number of new licenses took place towards the end of the year.
(4) Other receivables (x € 1,000) Buma members and participants
2014
2013
1,417
1,130
39
-
215
578
1,671
1,708
2014
2013
Interest to be received
1,676
2,081
Prepaid pension contributions
1,613
1,767
Prepaid expenses
3,317
3,207
150
373
6,756
7,428
Current account Stemra Other receivables Total
Other receivables are due within one year.
(5) Prepayments and accrued income (x € 1,000)
Other prepayments and accrued income Total
Prepaid expenses mainly concern outsourcing, pension contributions for 2015 and the lease of the office building for the month of January. The to be received interest concerns interest to be received on government bonds. The decrease compared to 2013 was mainly caused by the decrease of the to be received interest due directly to the strong decrease in the interest rate in 2014. Other prepayments and accrued income are due within one year.
FINANCIAL STATEMENTS BUMA 35
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS (6) Securities (x € 1,000) Fixed-income securities Equity funds Total
2014
2013
174,712
169,584
67,351
51,658
242,063
221,242
The changes in the separate items are as follows: (x € 1,000)
Fixed-income
Balance as at 01 January 2014 Purchases
Equity funds
Total
169,583
51,659
221,242
91,857
5,100
96,957
securities
-89,614
-
-89,614
Changes in value
2,886
10,592
13,478
Total changes
5,129
15,692
20,821
174,712
67,351
242,063
Repayments/disposals
Balance as at 31 December 2014
Average invested capital including cash and cash equivalents amounted to €237,364 in 2014 (2013: €224,719). The return on the invested capital amounted to 5.27% in 2014 (2013: 5.11%). The purchase and selling of fixed-income securities concerned, in addition to the regular transactions to maintain the duration of the portfolio, also a shift from government bonds in the AA+ portfolio to government bonds in emerging markets. The purchase of €5.1 million in equity funds concerns the increase of the equity portfolio up to the norm determined by the investment committee within the framework laid down by the Board. Thus the underweight position in comparison to the norm, which was maintained within the bandwidth determined by the Board in connection with the volatile equity markets, was terminated. The securities are held in custody either at our custodian (up to 2014 Northern Trust, as from 2015 Kasbank) or at the custodian of the fund managers. A strict division between custody and management is maintained so that the securities owned by the Buma Association will remain unaffected by a possible bankruptcy of a third party.
(7) Cash and cash equivalents (x € 1,000)
2014
2013
Deposits
936
947
Other cash and cash equivalents
8,108
8,481
Total
9,044
9,428
Both the deposits and other cash and cash equivalents are freely available with the proviso that a bank guarantee of €0.5 million has been issued for the lease of the office building (2013: €0.5 million). The cash and cash equivalents are mainly deposited with Dutch banks and with the custodian that has a S&P A-1+ rating for the short-term credit risk and a S&P AA- rating for the long-term credit risk.
36 BUMA/STEMRA - ANNUAL REPORT 2014
(8) Reserves (x € 1,000)
Continuity reserve
Appropriate reserve investments
Unappropriated result
Total 2014
Total 2013
1,855
13,847
1,365
17,067
15,702
Appropriation of the result of the previous financial year
-
1,365
-1,365
-
-
Result for the financial year
-
-
4,684
4,684
1,365
Total changes
-
1,365
3,319
4,684
1,365
1,855
15,212
4,684
21,751
17,067
Balance as at 1 January
Balance as at 31 December
Continuity reserve One of the objectives of the continuity reserve is to guarantee the continuity of the execution of the activities and it also serves to fulfil the obligations to third parties, in particular with regard to the distribution of the to be distributed rights revenues according to the financial statements. In addition, this reserve serves to level out undesired fluctuations in the amounts available for distribution.
Appropriated reserve Of the financial income and expenses over 2014 of €11,521 (2013: €10,827) an amount of €6,836 (2013: €9,462) has been offset against the administration costs charged to the rights holders. The remaining amount of €4,684 (2013: €1,365) will be allocated to the appropriated reserve at the time of the appropriation of the result. After the appropriation of the result, the balance in the appropriated reserve will amount to €19,896 (2013: €15,212).
(9) Provisions The provisions concern the provision for the SFB annual allowances and the provision for long-service awards.
2014
2013
10,866
10,979
298
623
11,164
11,602
2014
2013
10,979
11,023
Interest
158
241
Mortality result
215
277
81
258
584
-108
23
498
-1,174
-1,210
-113
-44
10,866
10,979
(x € 1,000) SFB annual allowances Long-service awards Total
The changes in the provision for SFB annual allowances were as follows: (x € 1,000) Balance as at 1 January
Indexation annual allowances Change in the interest rate Change in life expectancy Payments Total changes Balance as at 31 December
FINANCIAL STATEMENTS BUMA 37
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS The changes in the provision for long-service awards were as follows: (x € 1,000) Balance as at 1 January
2014
2013
623
649
12
19
-331
25
-30
-60
24
-11
Changes: Interest Changes due to new long-service awards plan and the group of beneficiaries Payments Change in the interest rate Change in life expectancy Total changes Balance as at 31 December
-
1
-325
-27
298
623
SFB annual allowances plan In the past, Stichting Social Funds Buma (SFB) entered into the obligation to pay annual allowances to participants in the annual allowances plan and, after their death, to their surviving partner. This obligation is a conditional obligation and is executed under the management of SFB. The conditional annual allowances are indexed annually based on the Dutch CBS price index. The annual allowances plan was closed for new participants as of 1 July 1997. The decision was taken to continue the pay the allowances to the existing group of recipients on 1 July 1997. The Buma Association has formed a provision for the total obligation as it has the firm intention to continue to carry out the annual allowances plan (with SFB as the administrator) in as far as possible. The provision was formed out of the SoCu fund. Therefore, changes are either debited or credited to this fund. The payments to the participants in the annual allowances plan from the provision take place via the Buma Social Fund. As of 31 December the provision for the annual allowances plan has been set based on a discount rate of 1.52% compared to 2.57% in 2013. As a result, the interest payment has decreased compared to the previous year; however, a higher provision has to be made for the interest rate. The indexation of the annual allowances is also lower than in 2013 due to the lower interest rate. Due to a lower mortality than the actual mortality table, i.e. the Actuarial Table AG 2012-20162, the provision was adjusted for a negative mortality result of €215. As the Actuarial Table has not be changed for the provision for the life expectancy only a small change has been made.
Provision for long-service awards The long-service awards scheme was changed as of 1 July 2014 with the introduction of the new employment conditions. As a result, a long-service award is no longer paid out every ten years, instead long-service awards are paid out when the employee reaches 25 and 40 years of service. Due to this change in the long-service award scheme, the provision for long-service awards decreased by €325.
38 BUMA/STEMRA - ANNUAL REPORT 2014
(10) Long-term liabilities The long-term liabilities concern the Fund for Social and Cultural Services. The changes in the obligations with regard to the Fund for Social and Cultural Services is as follows: (x € 1,000) Balance as at 1 January
2014
2013
7,639
10,172
10,184
10,098
- 12,376
- 12,631
-2,192
- 2,533
5,447
7,639
2014
2013
Pension plan music authors and publishers
- 4,350
- 4,050
Foundation Social Fund Buma commitments 2015 and 2014
- 1,300
- 1,415
249
379
Allocation from to be distributed rights revenues Withdrawals Total changes Balance as at 31 December
The withdrawals from the Fund for Social and Cultural Services can be specified as follows: (x € 1,000) Social
Foundation Social Fund Buma settlement previous years Other Withdrawals Social
- 95
- 99
- 5,496
- 5,185
- 4,327
- 5,511
Cultural Foundation Buma Culture commitments for 2015 and 2014 Foundation Buma Culture settlement previous years Supplement Serious Music
527
2,556
- 2,000
- 2,000
Supplement Online
-
- 300
Buma Centennial
-
- 1,265
Brein Foundation
- 539
- 240
Professional Associations
- 230
- 268
Other Withdrawals Cultural Total withdrawals
- 311
- 418
- 6,880
- 7,446
- 12,376
- 12,631
Since 2009, the annual expenditures of the Fund for Social and Cultural Services have been higher than the annual contributions to the Fund. Therefore, the balance of these annual tranches has been withheld from the annual tranches of the year 2008 and previous years. The annual tranches as from 2009 are therefore zero. The withholding on the for distribution available amount of rights revenue for the Netherlands, and thus the allocation to the fund, has been determined by the Board at 8.0% for 2014 (2013: 8.0%). The balance of the obligation regarding the Fund for Social and Cultural Services as of 31 December consists of the following annual tranches:
2014
2013
2008 and previous years
5,447
7,639
Total
5,447
7,639
(x € 1,000)
FINANCIAL STATEMENTS BUMA 39
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS Pension plan music authors and music publishers The Fund for Social and Cultural Services provides the funding for a pension plan for music authors and music publishers who are members of Buma. The base for the amounts made available for music authors in 2014 is 10% of the rights revenue received through Buma. The music publishers’ pension amounts to 50% of the maximum available pension amount for music authors. For both the authors’ and the publishers’ pension, an income threshold of €1,090 applies on an annual basis (2013: €1,080). Until 2012, the pension plan itself and the execution of the plan for the benefit of its member music authors were delegated to the independent foundation AENA Occupational Pension Fund Foundation for Independent Artists (AENA). Until the end of 2012, AENA also received a subsidy from the government for various independent artists. The AENA pension plan was already the successor of the former SFB annual allowances plan. The government subsidy for the pension contributions of various independent artists was terminated as of 1 January 2013 as a result of the considerable cutbacks that the government implemented in the cultural sector. As a result, independent artists no longer build up any additional pension as from 1 January 2013. The fact that, as a result of this, the costs of the administration of the pension plan had to be borne by far fewer participants than previously (only the Buma members), has had consequences for the pension accrual within AENA. The administration costs per participant for which pension contributions were still paid would have risen very strongly as a result. The independent AENA Board decided at the beginning of 2013 to place the accrued entitlements up to and including 2012 with another party. As from that moment, AENA no longer received any contributions from the Ministry of Education, Culture and Science and from Buma. Because of the complexity of the issue, a new pension plan has still not yet been realised as of the balance sheet date. In accordance with the intention to realise a new pension plan, Buma has recognised a liability for the to be paid pension contributions 2013 and 2014. An amount has been reserved for pension accrual in the financial year that is comparable to the amount reserved for the previous financial year as specified in explanatory note (12).
Social Fund Buma Foundation The Social Fund Buma Foundation aims to provide support and assistance in the broadest sense to composers, songwriters and music publishers who are members of Buma. The amount included regarding the Social Fund Buma concerns the committed subsidy for 2015 of €1,155 (in 2013: €1,222 regarding the committed subsidy for 2014) and other costs for the Social Fund Buma Foundation amounting to €146 (2013: €193). In addition, a final settlement took place regarding previous financial years of -/- €249 (2013: -/- €379).
Buma Culture Foundation Buma Culture Foundation supports and promotes Dutch music copyright both in the Netherlands and in the most important export markets for Dutch (not necessarily Dutch language) music. The aim is to increase the share of Dutch music on the Dutch market and to generate higher revenue by stimulating the use of Dutch music rights in foreign markets. The amount reported regarding Buma Culture Foundation concerns the balance of the committed budget for 2015 of €4,327 (in 2013 €5,511 for the commitment for 2014) and the settlement with regard to previous financial years -/- €527 (2013: -/- €2,556).
Other The Serious Music and Online Supplement relates to withdrawals from the Fund for the benefit of the distribution to rights holders in the category Serious Music and Online. The Serious Music supplement was paid out in the first quarter of 2015. The Online supplement concerned a temporary provision which was paid out for the last time in 2014. The item ‘other’ under cultural expenditure mainly concerns expenditure in connection with the protection of copyright. The increase in the expenditure for the subsidy provided to the Brein Foundation can be explained by the fact that subsidy was granted in the financial year 2014 for both 2014 and 2015. In 2013, this concerned the subsidy granted for 2013.
40 BUMA/STEMRA - ANNUAL REPORT 2014
(11) Rights revenue to be distributed The breakdown of the rights revenue to be distributed as of the balance sheet date is as follows:
2014
2013
36,284
38,898
To be distributed rights revenue from the financial year
141,062
129,988
To be distributed rights revenue excluding double claims reserve
177,346
168,886
5,878
4,979
183,224
173,865
(x € 1,000) Rights revenue reserve
Double claims reserve Total
On balance, the to be distributed rights revenue is €9.3 million higher than last year. This increase is largely the result of higher rights revenue in 2014 causing the to be distributed rights revenue that has accrued in the financial year to be €5.7 million higher. Furthermore, as a result of the implementation of the new ERP system, a number of distributions have been shifted to 2015. The to be distributed rights revenues are partially of a long-term nature. The specification below according to annual tranche provides insight into the development of the to be distributed rights revenues and the accrual in annual tranches. The breakdown of the to be distributed rights revenue per annual tranche is as follows: (x € 1,000) Previous years 2011
Distributed in the financial year
Released in the financial year
15,103
-1,098
-8,924
9,780
-1,321
Balance as at 1 January
Accrued in the financial year including release
Balance as at 31 December
5,081 8,459
2012
18,994
-6,891
12,103
2013
129,988
-113,469
16,519
156,416
-15,354
141,062
156,416
-138,133
2014 Total (including withheld administration costs upon distribution)
173,865
Withheld administration costs upon distribution Total rights revenue distributed to members and participants
-8,924
183,224
2,413 -135,720
In addition to the reserve for double claims of €2.6 million, the reserve for collection for the years before 2011 consists mainly of amounts received from sister organisation for which the information for a correct distribution was not yet available. An amount of €8.9 million released from rights revenue reserves was added to the amount available for distribution. The organisation will still have to incur expenses in 2015 for the distribution of the to be distributed rights revenues.
The composition of the rights revenue that has become available for distribution during the financial year is as follows:
2014
2013
Rights revenue
158,329
152,201
Withheld administration costs in the collection year
-10,837
-8,326
8,924
6,885
156,416
150,760
(x € 1,000)
Addition from release rights revenue reserve Rights revenue that has become available for distribution during the year
The withheld administration costs of €10.8 million concerns the fee that Buma charges to rights holders for the services provided by Buma for which no fixed administration fee has been set. After which an amount of € 8.9 million released from the rights revenue reserves (2013: €6.9 million) is added to the amount available for distribution in connection with the release from reserves at the end of the (statutory) reserve period.
FINANCIAL STATEMENTS BUMA 41
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS The rights revenues were received from the following categories:
2014
2013
Radio, TV and Network Providers
71,774
69,098
Live performances
24,130
23,380
Hospitality industry
13,469
13,559
Workplaces
16,828
16,732
Shops and stores
12,317
12,494
5,656
3,092
14,155
13,846
158,329
152,201
(x € 1,000)
Online Foreign Totaal
In spite of the increase in rights revenues, it is clear from the key figures at the beginning of the annual report that the number of invoiced users has decreased. This is related to the shift from individual contracts to group contracts.
Rights revenues received in 2014 can be specified as follows:
Rights revenue
Withheld administration costs upon Collection
3,243
-254
2,989
19,246
-1,510
Amusement Mechanical*
40,587
Radio
12,615
Television
Distribution categories
Addition from release rights revenue reserve
Net amount available for distribution
-239
210
2,960
17,736
-1,419
1,242
17,559
-3,184
37,403
-2,992
2,622
37,033
-990
11,625
-930
815
11,510
39,066
-3,065
36,001
-2,880
2,524
35,645
3,291
-258
3,033
-243
213
3,003
20,092
-1,576
18,516
-1,481
1,298
18,333
138,140
-10,837
127,303
-10,184
8,924
126,043
(x € 1,000) Serious Music Categories Amusement live (excluding Mega live Acts)
Film Cable
Mega Live Acts Foreign Online
379
-
379
-
-
379
14,154
-
14,154
-
-
14,154
5,656
-
5,656
-
-
5,656
-
-
-
10,184
-
10,184
158,329
-10,837
147,492
-
8,924
156,416
Fund for Social and Cultural Services Total
Gross amount 8% withholding available for Fund for Social and distribution Cultural Services
* Amusement mechanical mainly concerns background music in shops and stores, workplaces and the hospitality industry
42 BUMA/STEMRA - ANNUAL REPORT 2014
(12) Other liabilities 2014
2013
Loan Stemra
25,000
18,000
Obligations arising from social and cultural services
14,327
12,374
(x € 1,000)
Buma Culture Foundation current account Social Fund Buma Foundation current account
478
585
2,263
2,263
-
666
693
496
Current account Stemra Buma members and participants
864
2,066
1,512
-
Other
465
243
Total
45,602
36,693
Third-party cable rights holders Forward exchange contracts
In the event of short-term cash requirements related to distribution planning, Buma and Stemra may borrow funds from each other. The interest rate that is charged for lending between Buma and Stemra up to September was the Euribor three-month rate at the end of the quarter. As from September, this interest rate was revised to the Euribor one-month rate + 1% at the end of the month. As at the balance sheet date, the loan from Stemra to Buma amounted to €25 million (2013:€18.0 million).
Obligations arising from social and cultural services can be specified as follows: (x € 1,000) Subsidy obligations to Buma Culture Foundation for 2015 and 2014
2014
2013
4,327
5,511
Pension plan music authors and publishers
7,483
4,432
Supplement Serious Music
2,071
1,916
-
322
Subsidy obligation to the Brein Foundation for the financial year 2015
299
-
Subsidy obligations to the Foundation Social Fund Buma for the financial years 2015 and 2014
147
193
14,327
12,374
Supplement Online
Total
The reason that the obligation regarding the pension plan for music authors and publishers is larger than in 2013 is because AENA has stopped and another pension plan has not yet been found. As a result, no benefit payments for music authors have been able to take place over 2013 and 2014. An amount of €7,483 (2013: €4,432) with a term of more than one year is included in other liabilities.
FINANCIAL STATEMENTS BUMA 43
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS (13) Accrued liabilities (x € 1,000) To be paid invoices To be credited amounts Annual contributions invoiced in advance Holiday allowances and annual leave payable
2014
2013
3,242
2,939
280
484
1,590
1,254
841
790
1,053
764
Other
599
495
Total
7.605
6.726
Lease payments in coming years
A rent-free period was included in the lease contract in 2013 and the first half of 2014. The amount of the rent-free period has been divided equally over the whole term of the lease contract in accordance with the applicable accounting rules. The increase in pre-paid invoiced annual contributions is mainly due to the increase in the number of members, the increase in the to be paid invoices is related to the early closing of the year. An amount of €702 (2013: €573) with a term of more than one year is included in accrued liabilities.
(14) Financial instruments Buma’s most important financial instruments concern securities (87% of the balance sheet total; 2013: 86%). Securities are used in the execution of the investment policy, according to which revenues that could not yet be distributed to rights holders are invested. Securities are measured at market value. More information is provided on Buma’s investment policy in the Board Report. The interest rate risk on the fixed-income portfolio is discounted in the stock market price of the bonds and bond funds. Investments in equity funds are not subject to a direct interest risk. An increase or decrease in the interest rate by 1% would lead to a decrease respectively an increase of the value of the total portfolio on the balance sheet date by approximately 2.6%. An increase or decrease of the stock market price of equities by 5% would result in an increase respectively a decrease of the value of the total portfolio on the balance sheet date by approximately 1.4%. Due to the investment in an equity fund that is listed in euros but which contains shares with a non-hedged listing in foreign currencies, Buma runs a foreign currency risk. This foreign currency risk has been hedged with forward exchange contracts for the main foreign currencies. These forward exchange contracts are concluded periodically for the share of the foreign currencies in the equity fund. The most important currencies are USD, GBP, AUD, CAD, JPY and CHF. If the euro appreciates or depreciates in relation to the most important currencies on 31 December 2014, this results in a higher or lower change in value of the equity fund; however, due to the hedging of the foreign currency risk this also results in an approximately equal opposite change in the value of the concluded forward exchange contracts. The credit risk can be deemed low in view of the large allocation of government bonds with a high rating and the solid rating of the other (government) bond funds. Cash and cash equivalents are mainly deposited with Dutch banks and with the custodian that has an A rating. Other financial instruments under the assets are receivables and cash (8% and 3% of the balance sheet total; 2013: 8% and 4%), which are measured at amortised cost. Receivables are generally non-interest bearing. The interest on cash is marginal. The maximum credit risk with regard to receivables and cash equals the carrying amount. There are no concentrations of credit risks. The financial obligations represent 88% of the balance sheet total (2013: 89%). The two most important components are to be distributed rights revenues and social-cultural obligations, which account for 66% and 2% of the balance sheet total (2013: 67% and 3%). Both obligations are measured at amortised cost. Financial obligations are non-interest bearing, with the exception of a loan from Stemra amounting to €25 million at year-end 2014 (2013: €18 million), with a variable interest rate of one-month Euribor +1%. It is the case for all of the financial instruments that the fair value is close to the carrying amount. There are no financial instruments with a carrying amount that is higher than the fair value. Buma does not apply hedge accounting.
44 BUMA/STEMRA - ANNUAL REPORT 2014
(15) Off-balance sheet assets and liabilities The Buma Association and the Stemra Foundation work together within one organisation under one Board, one Council of Members and one Board of Directors. Off-balance sheet assets and liabilities have been entered into by Buma and Stemra jointly in connection with outsourcing and are disclosed in full both for the Buma Association and the Stemra Foundation. The explanatory notes specify the division of costs between Buma and Stemra for each liability. The liabilities in connection with the rent and leasing have been entered into by Buma; as a result, costs are subsequently charged to Stemra. The amount of costs charges is specified in the explanatory notes.
Long-term liabilities The included off-balance sheet assets and liabilities have the following periods to maturity as at 31 December: (x € 1,000) Less than 1 year
4,703
Between 1 and 5 years
8,292 -
Longer than 5 years
12,995
Total
The long-term liabilities specified in the table above concern lease expenses, rent expenses and expenses for outsourcing activities.
Leasing Operational lease agreements for coffee machines, printers and leased cars have been entered into by Buma and these costs are divided over Buma and Stemra based on 75% / 25%. The costs are recognised in the operating statement over the lease period in accordance with the straight-line method. The liabilities less than one year amount to €184 (2013: €172) and the liabilities between 1 year and 5 years amount to € =359 (2013: €328).
Rent The financial obligations regarding the office in Hoofddorp run until 31 December 2017. Buma has entered into the lease obligation. The rent for 2015 for Buma and Stemra together amounts to € 0.9 million and is divided over Buma and Stemra based on 75% / 25%. The expense recognised in the financial statements is lower than the cash flow obligation due to amortisation of the rent-free period and the rent incentive received. Outsourcing of activities - Accenture The Buma Association and the Stemra Foundation have jointly entered into the contractual obligation as from 2007 up to and including 31 March 2017 to have a large part of the back-office activities carried out by Accenture. The resulting financial obligation for the remaining period of the contract amounts to €6.6 million given unchanged volumes. These costs are divided over Buma and Stemra according to the ratio 75% / 25%
Outsourcing of activities – ICE Copyright The Buma Association and the Stemra Foundation have jointly entered into the obligation for a period of five years (as from March 2015) to outsource their works database to ICE. The financial obligation resulting from this amounts to €3.3 million (SEK 29.7 million). The costs of ICE are divided over Buma and Stemra according to the ratio 75% / 25%.
Outsourcing of activities – ICE Online The Buma Association and the Stemra Foundation have jointly entered into the obligation for a period of five years (as from March 2015) to outsource the processing of online usage to ICE. The financial obligation resulting from this amounts to €0.8 million. The costs are divided over Buma and Stemra according to the ratio 75% / 25%.
Investment obligations As at 31 December 2014, an investment obligation for the outsourcing of online to ICE exists amounting to €0.8 million. This obligation will be paid in the beginning of 2015 and will be divided over Buma and Stemra on the basis of 75% / 25%.
FINANCIAL STATEMENTS BUMA 45
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS Claims A number of claims have been lodged against the organisation which the organisation disputes as well as a number of claims for which an outflow of funds is expected. A reserve has been formed for the claims where an outflow of funds is expected. Although the outcome of these disputes cannot be predicted with certainty, it is assumed - also based on legal advice - that these disputes will not have a significant negative effect on the reported financial position of Buma.
Joint and several liability The Buma Association is jointly and severally liable for the liabilities resulting from legal acts of the Foundation Service Centre Copyright and Related Rights (Service Centre) and guarantees the fulfilment of obligations by the Foundation up to a maximum of €1.0 million.
(16) Affiliated parties The following parties are considered to be affiliated parties of the Buma Association: The Stemra Foundation, the Buma Culture Foundation (and thus also the Amsterdam Dance Event Foundation), the Buma Social Fund Foundation, the Foundation Service Centre Copyright and Related Rights (Service Centre) and the Directors under the Articles of Association and the Council of Members, the Buma Association and the Stemra Foundation. For more information on the remuneration of the Board members and members of the Council of Members reference is made to explanatory note (19). Regular transactions resulting from the management of copyrights of Board members and members of the Council of Members or parties affiliated to Board members and members of the Council of Members have not been disclosed explicitly in the financial statements. The distributions to Board members and members of the Council of Members or to parties affiliated to Board members and members of the Council of Members have been calculated in the same manner as the distributions to all members and have been paid out in accordance with the normal procedures within Buma. Due to the affiliations within the sector, Board members and members of the Council of Members can also be connected to Buma as customers, for example, via a music-related service that Buma makes use of. Transactions with these parties are carried out at arm’s length and the conditions are no different from the conditions that would be demanded in transactions with other parties. For the realisation of its objectives, funds are made available to both the Buma Culture Foundation and the Buma Social Fund Foundation from the Fund for Social and Cultural Services. Reference is made to explanatory note number 10 for more information. The Buma Association charges costs to the Stemra Foundation, Buma Culture Foundation, Buma Social Fund Foundation and the Service Centre for personnel, accommodation and overhead. Costs are charged based on cost. In addition, the Service Centre charges an amount of €1,732 (2013: €1,714) to Buma for the execution of its tasks. The Service Centre is responsible for part of the invoicing and collection on behalf of Buma and Stemra.
The costs charged amount to: (x € 1,000) Stemra Foundation Buma Culture Foundation Social Fund Buma Foundation Service Centre Total
46 BUMA/STEMRA - ANNUAL REPORT 2014
2014
2013
4,678
5,050
153
177
63
40
374
503
5,268
5,770
(17) Withheld administration costs We refer to the accounting principles on page 49 for an explanation of the administration costs. For the administration costs that are withheld upon distribution, this concerns a percentage of the collected rights revenue. The composition of the administration costs withheld in the collection year is specified below. The balance of the to be withheld administration costs in the collection year can be specified as follows: (x â‚Ź 1,000) Administration costs withheld upon distribution Entrance and annual fees
2014
Budget 2014
2013
2,413
1,900
2,339
690
650
664
101
160
198
Cover of operating expenses from revenues
3,204
2,710
3,201
Notional return
7,547
-
10,052
-
3,730
-
Other income
Financial result excluding notional return Balance of other financial income and expenses Cover of operating expenses from the financial result Total cover of the operating expenses from revenues and the financial result Total costs Amount of administration costs to be withheld in the collection year
-710
-
-590
6,837
3,370
9,462
10,041
6,440
12,663
-20,878
-21,460
-20,989
10,837
15,020
8,326
Up to 2014, when budgeting the administration costs in the year of collection, only the income from securities was taken into account as cover. As the notional return serves as the point of departure when the administration costs are ultimately determined in the year of collection, insofar as the appropriated reserve is sufficient, the ultimately charged administration cost in the collection year are much lower and therefore more favourable. As from the budget for 2015, this method of budgeting had been revise and the notional return is used to determine the budgeted administration costs in the collection year. As stated in the accounting principles, each year, in accordance with Article 18 paragraph 3 of the Articles of Association, the Board determines the notional return which is used every year to cover the costs of the Association. The notional return is calculated annually as a percentage of the average value of the equities and bonds over the financial year and consists of the effective return on 5-year euro government bonds at the end of the financial year and a risk mark-up for equities and bonds. The difference between the notional return and the income from and changes in value of securities is allocated or deducted from the appropriated reserve each year via the appropriation of the result insofar as the appropriated reserves are sufficient.
The allocation to / withdrawal from the appropriated reserve is determined as follows:
2014
2013
12,231
11,417
Notional return
7,547
10,052
Allocation to appropriated reserve
4,684
1,365
(x â‚Ź 1,000) Income from securities and changes in value
FINANCIAL STATEMENTS BUMA  47
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS (18) Personnel costs (x € 1,000)
2014
2013
Salaries
8.926
8.901
Social security contributions
1.286
1.233
Pension costs
1.081
886
Hiring of temporary personnel
449
421
Remunerations of the Board
278
254
Compensation for travelling expenses
581
548
454
1.837
13.055
14.080
-3.421
-3.681
9.634
10.399
Other personnel costs
Charged to third parties Total
The decrease in other personnel costs is related to the reorganisation costs what were incurred in 2013 in connection with the transition to the ICE works database as well as the release of the long-service awards provision in connection with changes in the employment conditions (see also explanatory note 9). The cover ratio of the pension plan administrator Stichting Bedrijfstakpensioenfonds voor de Media PNO amounted to 104.8 % on 31 December 2014 (31 December 2013: 105.2 %). Due to the financial situation, PNO Media must submit a recovery plan to the Dutch Central Bank before 1 July 2015. This plan will contain measures that the fund will take to bring the cover ratio up to the prescribed level in no more than 12 years. The average workforce, converted into full-time equivalents (FTEs), in the financial year 2014 amounted to 160.4 (2013: 163.2 FTE). The workforce can be divided into various personnel categories in accordance with the table below. This includes: • Employees who work partially for Stemra by virtue of which part of the costs are charged to Stemra; • 1.0 FTE (2013 1.0 FTE) charged to other affiliated foundations.
2014
2013
Board of Directors and Secretariat of the Board of Directors
7.5
7.4
Secretariat of the Board
3.3
2.6
7.2
7.6
General Affairs
34.4
35.8
Front office
75.8
74.6
Back office
32.2
35.2
160.4
163.2
Legal Affairs & Lobby
Total
(19) Remuneration of the Board, Council of Members and Directors under the Articles of Association Based on the Supervisory Act, a number of provisions of the Standards for Remuneration of Senior Officials in the Public and Semi-Public Sector Act (the WNT) also apply to collective management organisations (CMOs). The Buma Association and Stemra Foundation work together as one organisation under one Board, one Council of Members and one Board of Directors. The agreements with the Directors under the Articles of Association, the Board and the Council of Members have been entered into by Buma and Stemra jointly. The total remuneration of the Directors, the Board and the Council of Members is specified in the tables below in accordance with Article 4.1 of the WNT. The costs for the Board and the Council of Members are recognised in the financial statements for 50% by Buma and for 50% by Stemra. The remuneration of the Directors is reported in the financial statements of Buma and Stemra respectively based on a 75% / 25% division. In accordance with Article 4.2 of the WNT, the total remuneration of the CFO is also included, this is reported based on a 75% / 25 division in the financial statements of Buma and Stemra respectively.
48 BUMA/STEMRA - ANNUAL REPORT 2014
The Association has applied the Policy Rules for the application of the WNT as a reference framework preparing these financial statements as well as the Policy Framework Collective Management of the CvTA. Based on Article 4.1 of the WNT, the information on the ‘senior officials’ of the Buma Association, i.e. the daily management (CEO/ Director under the Articles of Association), the Board and the Council of Members is disclosed below. Based on Article 4.2 of the WNT, information is also included regarding the CFO as the CFO’s remuneration is higher than the maximum remuneration as referred to in Article 2.3, first paragraph of the WNT. The remuneration packages of the CEO and the CFO were agreed before the WNT came into effect. In accordance with the statutory transitional scheme, which now applies for the remuneration of the CEO, Buma will respect the CEO’s existing remuneration package for a period of four years after the coming into effect of the WNT, after which the remuneration will be reduced in a period of three years to the applicable WNT maximum. The WNT maximum in 2014 was 130% of the salary of a Minister, which amounts to € 230,474, including tax-exempt expense allowances and pension contributions.
The remuneration per individual over 2014 - as defined in the Supervisory Act - can be specified as follows (in €)*: Name
Position
Employment contract Remuneration Name
Position
Employment contract Remuneration
L.A.J.M. de Wit
Chairman of the Board
1 Jan - 31 Dec 40%
46,076
Chairman of W. Henselmans the Council of Members
1 Jan - 31 Dec
8,000
H.O. Westbroek
DeputyChairman of the Board
1 Jan - 31 Dec 25%
15,000
B.B. Dessaur
DeputyChairman of the Council of Members
1 Jan - 31 Dec
6,500
P.M. van Brugge
Board Member
1 Jan - 31 Dec 20%
12,560
M.A. Bremer
Member of the Council of Members
1 Jan - 31 Dec
5,000
L.J. Deuss
Board Member
1 Jan - 31 Dec 20%
12,000
I.M. Chronis
Member of the Council of Members
21 Mei - 31 Dec
3,049
L.A. Dikker
Board Member
1 Jan - 31 Dec 20%
12,280
A.H.M. van Dongen
Member of the Council of Members
1 Jan - 21 Mei
1,951
J.N. Hamburg
Board Member
1 Jan - 31 Dec 20%
12,000
J.M.F. Everling
Member of the Council of Members
1 Jan - 31 Dec
5,000
A.B. Molema
Board Member
1 Jan - 31 Dec 20%
12,840
M.T. Felis
Member of the Council of Members
1 Jan - 31 Dec
5,000
P.L. Perquin
Board Member
1 Jan - 31 Dec 20%
12,000
H. Kosterman
Member of the Council of Members
1 Jan - 21 Mei
1,951
A.A.L. de Raaff
Board Member
1 Jan - 31 Dec 20%
12,000
T. Kalksma
Member of the Council of Members
21 Mei - 31 Dec
3,049
M. Schimmer
Board Member
1 Jan - 31 Dec 20%
12,000
W.J. Kwakman
Member of the Council of Members
1 Nov - 31 Dec
833
M.H. Swemle
Board Member
1 Jan - 31 Dec 20%
12,000
M.H. van Norden
Member of the Council of Members
1 Jan - 31 Dec
5,000
R.D. van Vliet
Board Member
1 Jan - 31 Dec 20%
12,000
D.L. van Peursen
Member of the Council of Members
29 Jan - 31 Dec
4,611
N.M. Walboomers
Board Member
1 Jan - 31 Dec 20%
12,000
B.N.A.D. van der Poel
Member of the Council of Members
1 Jan - 31 Dec
5,000
G.J.M. Reinders
Member of the Council of Members
1 Jan - 31 Dec
5,000
R.M. Visser
Member of the Council of Members
1 Jan - 31 Dec
4,167
* This concerns the total remuneration received from Buma/Stemra
FINANCIAL STATEMENTS BUMA 49
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS The remuneration per individual over 2013 - as defined in the Supervisory Act - can be specified as follows (in €)*: Name
Position
Employment contract Remuneration Name
Position
Employment contract Remuneration
L.A.J.M. de Wit
Chairman of the Board
1 Jan - 31 Dec 40%
45,665
Chairman of W. Henselmans the Council of Members
1 Jan - 31 Dec
7,077
H.O. Westbroek
DeputyChairman of the Board
1 Jan - 31 Dec 25%
15,000
B.B. Dessaur
DeputyChairman of the Council of Members
1 Jan - 31 Dec
6,039
P.M. van Brugge
Board Member
1 Jan - 31 Dec 20%
13,120
M.A. Bremer
Member of the Council of Members
1 Jan - 31 Dec
5,000
L.J. Deuss
Board Member
1 Jan - 31 Dec 20%
12,000
A.H.M. van Dongen
Member of the Council of Members
1 Jan - 21 Mei
5,000
L.A. Dikker
Board Member
1 Jan - 31 Dec 20%
12,000
J.M.F. Everling
Member of the Council of Members
1 Jan - 31 Dec
5,000
J.N. Hamburg
Board Member
1 Jan - 31 Dec 20%
12,395
M.T. Felis
Member of the Council of Members
1 Jan - 31 Dec
5,000
A.B. Molema
Board Member
1 Jan - 31 Dec 20%
12,000
H. Kosterman
Member of the Council of Members
1 Jan - 21 Mei
5,923
P.L. Perquin
Board Member
1 Jan - 31 Dec 20%
12,000
M.H. van Norden
Member of the Council of Members
1 Jan - 31 Dec
5,000
A.A.L. de Raaff
Board Member
1 Jan - 31 Dec 20%
12,000
B.N.A.D. van der Poel
Member of the Council of Members
1 Jan - 31 Dec
5,000
M. Schimmer
Board Member
1 Jan - 31 Dec 20%
12,000
G.J.M. Reinders
Member of the Council of Members
1 Jan - 31 Dec
3,750
M.H. Swemle
Board Member
1 Apr - 31 Dec 20%
9,000
J. Tiemersma
Member of the Council of Members
1 Jan - 31 Dec
5,000
R.D. van Vliet
Board Member
1 Jan - 31 Dec 20%
12,000
R.M. Visser
Member of the Council of Members
1 Jan - 31 Dec
5,000
N.M. Walboomers
Board Member
1 Jan - 31 Dec 20%
12,000
* This concerns the total remuneration received from Buma/Stemra
The other WNT components that are subject to obligatory disclosure are nil for the Board and the Council of Members. The remuneration per individual over 2014 - as defined in the Supervisory Act - can be specified as follows (in €)*: Employment contract
Fixed and variable remuneration
Name
Position
H.G. van der Ree
CEO
1 Jan - 31 Dec 100%
395,232
W.J. Ketellapper
CFO
1 Jan - 31 Dec 100%
280,108
* This concerns the total remuneration received from Buma/Stemra
50 BUMA/STEMRA - ANNUAL REPORT 2014
Supplement/tax addition company car
Total remuneration
Taxable fixed and Social security variable expense contributions allowance
Provisions payable in the future
-
395,232
9,532
-
65,251
15,600
295,708
9,532
5,082
39,084
The remuneration per individual over 2013 - as defined in the Supervisory Act - can be specified as follows (in €)*: Employment contract
Name
Position
H.G. van der Ree
CEO
1 Jan - 31 Dec 100%
W.J. Ketellapper
CFO
1 Jan - 31 Dec 100%
Fixed and variable remuneration
384,864
277,849
Supplement/tax addition company car
Total remuneration
Taxable fixed and Social security variable expense contributions allowance
Provisions payable in the future
-
384,864
8,902
-
67,094
15,600
293,449
8,902
6,685
40,458
* This concerns the total remuneration received from Buma/Stemra
** 2013 was the first year in which Buma/Stemra, in accordance with the rules of the WNT, was obliged to disclose the details of the remuneration in the financial statements. In this first year of the obligatory disclosure, a small part of the provision payable in the future was mistakenly not reported over 2013. The amounts under ‘provisions payable in the future’ have been adjusted for 2013 for the sake of comparison. However, this does not have any consequences for the application of the WNT provisions.
(20) Other expenses 2014
2013
Service agencies
2,943
2,977
Outsourcing
3,527
3,244
Advisory costs
1,353
1,268
Other IT expenses
1,530
964
(x € 1,000)
Lease and maintenance of IT equipment
780
739
Commercial expenses
216
400
Office supplies Other expenses
Charged to third parties Total
330
376
1,164
1,303
11,843
11,271
-2,492
-2,339
9,351
8,932
The expenses of Service Agencies mainly concern the expenses for the Service Centre (SCAN) and the expenses for the registration of music use. In addition, the costs for the invoicing by NMP (temporary outsourcing partner for online invoicing pending the outsourcing to ICE) regarding Online are included in these expenses. The increase in the other IT expenses concern mainly expenses for additional IT projects. The outsourcing expenses concern the costs for the outsourcing of ICT management and Back Office activities in India. The increase in 2014 is due to an increase in the to be processed number of set lists and the often new processing of Video-on-Demand. There are no research and development costs.
FINANCIAL STATEMENTS BUMA 51
EXPLANATORY NOTES TO THE BUMA FINANCIAL STATEMENTS (21) Financial income and expenses 2014
2013
2,885
-2,643
Changes in the value of equity funds
10,593
7,731
Changes in the value of forward exchange contracts
(x € 1,000) Changes in the value of fixed-income securities
-5,055
1,807
Total changes in value
8,423
6,895
Income from securities
3,808
4,522
Other interest income and similar income Interest expenses and similar expenses Total financial income and expenses
136
165
-846
-755
11,521
10,827
The changes in value of the fixed-income securities are related to the lower interest rates. As a result, the value of the already held fixed-income securities with a higher coupon interest rate increases. The lower interest rate also means that the coupon interest rate on newly purchased fixed-income securities is lower, which explains the decrease in the income from securities. The increase of the equity funds concerns partially a net asset value increase of the equity funds and partially the increase in connection with exchange rates. These currency risks are hedged in accordance with the investment policy by means of forward exchange contracts. In particular the higher US dollar in relation to the euro resulted in a price rise in 2014 of the equities listed in US dollars in the equity fund held by Buma. The currency risk (which in this case was an advantage) is hedged however, so that the forward exchange contracts show an almost equal change (in this case thus a loss). The interest expenses and similar expenses include the interest expense in connection with the loan provided by Stemra €79 (2013: €18).
(22) Taxes The settlement agreement with the Dutch Tax and Customs Administration dates from 6 November 2001 and was extended in May 2012 for a period of five years, up to and including 31 December 2016.
Hoofddorp, 8 April 2015
The Board L.A.J.M. de Wit
Chairman
H.O. Westbroek
Deputy Chairman
A.A.L. de Raaff
Secretary
P.M. van Brugge
Board Member
L.J. Deuss
Board Member
L.A. Dikker
Board Member
J.N. Hamburg
Board Member
A.B. Molema
Board Member
P.L. Perquin
Board Member
M. Schimmer
Board Member
M.H. Swemle
Board Member
R.D. van Vliet
Board Member
N.M. Walboomers
Board Member
Board of Directors H.G. van der Ree
52 BUMA/STEMRA - ANNUAL REPORT 2014
Director under the Articles of Association
OTHER INFORMATION INDEPENDENT AUDITOR’S REPORT
We believe that the audit evidence we have obtained is sufficient
To: The General Assembly of Vereniging Buma
and appropriate to provide a basis for our audit opinion.
Report on the financial statements
Opinion
We have audited the accompanying financial statements 2014,
In our opinion, the financial statements give a true and fair view
set out on pages 26 to 52, of Vereniging Buma, Amstelveen, which
of the financial position of Vereniging Buma as at 31 December
comprise the balance sheet as at 31 December 2014, the
2014 and of its result for the year then ended in accordance with
operating statement for the year then ended and the notes,
Part 9 of Book 2 of the Netherlands Civil Code and the require-
comprising a summary of the accounting policies and other
ments of WNT.
explanatory information.
Report on other legal and regulatory requirements The Board of Directors’ responsibility
Pursuant to the legal requirements under Section 2:393 sub 5 at e
The Board of Directors is responsible for the preparation and fair
and f of the Netherlands Civil Code, we have no deficiencies to
presentation of these financial statements and for the prepara-
report as a result of our examination whether the director’s
tion of the director’s report, both in accordance with Part 9 of
report, to the extent we can assess, has been prepared in
Book 2 of the Netherlands Civil Code and the requirements of the
accordance with Part 9 of Book 2 of this Code, and whether the
“Wet normering bezoldiging topfunctionarissen publieke en
information as required under Section 2:392 sub 1 at b - h has
semipublieke sector (WNT)”. Furthermore, the Board of Directors
been annexed. Further, we report that the director’s report, to the
is responsible for such internal control as it determines is
extent we can assess, is consistent with the financial statements
necessary to enable the preparation of the financial statements
as required by Section 2:391 sub 4 of the Netherlands Civil Code.
that are free from material misstatement, whether due to fraud or error. Utrecht, 10 April 2015
Auditor’s responsibility
KPMG Accountants N.V.
Our responsibility is to express an opinion on these financial
R.P. van der Brugge RA
statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing and the “Controleprotocol WNT”. 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 material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Association’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements.
EVENTS AFTER THE BALANCE SHEET DATE
formation of, allocation to or withdrawal from one or more general or special (appropriated) reserves.
No events occurred after the balance sheet date which would have a material impact on the presentation of the financial
Result appropriation proposal
statements
The financial statements are prepared in accordance with Article 26 paragraph 2 of the Articles of Association. The Board proposes
Result appropriation
to allocate the positive result of € 4,684 to the appropriated
Pursuant to Article 18 paragraph 3 of the Articles of Association,
reserve.
the Board decides on the appropriation of the result. The Board does this by full or partial appropriation of the result for the
FINANCIAL STATEMENTS BUMA 53
Minyeshu Photograph: Mike Breeuwer
FINANCIAL STATEMENTS STEMRA 2014 54 BUMA/STEMRA - ANNUAL REPORT 2014
STEMRA BALANCE SHEET AS AT 31 DECEMBER
(x € 1,000)
2014
2013
244
273
1,906
1,696
26,611
19,877
834
1,042
Assets Fixed assets Tangible fixed assets (1)
Current assets Receivables Trade debtors Other receivables (2) Taxes and social security contributions
327
417
29,678
23,032
Cash and cash equivalents (4)
27,512
31,187
Total assets
57,434
54,492
2014
2013
Prepayments and accrued income (3)
(x € 1,000)
Liabilities Reserves (5) Foundation capital
1
1
Continuity reserve
5,760
5,760
6,221
7,773
-2,342
-1,552
9,640
11,982
738
815
39,307
32,654
513
912
24
28
Other liabilities (8)
1,383
1,746
Accrued liabilities (9)
5,829
6,355
47,056
41,695
57,434
54,492
Appropriated reserve Unappropriated result
Provisions (6)
Current liabilities Rights revenues to be distributed (7) Trade creditors Taxes and social security contributions
Total liabilities
FINANCIAL STATEMENTS STEMRA 55
STEMRA OPERATING STATEMENT (x â‚Ź 1,000)
2014
Budget 2014
2013
3,144
3,000
3,828
Income Administration costs withheld upon distribution (7)
690
650
664
Other income
-
-
3
Total income
3,834
3,650
4,495
3,457
3,610
3,723
Accommodation expenses
365
365
378
Amortisation and depreciation
186
385
185
Entrance and annual fees
Expenses Personnel costs (13,14)
Other expenses (15)
2,577
2,525
2,292
Total expenses
6,585
6,885
6,578
-2,751
-3,235
-2,083
Interest income and similar income
409
465
531
Financial income and expenses (16)
409
465
531
-2,342
-2,770
-1,552
-
-
-
Net result
-2,342
-2,770
-1,552
Withdrawal from the appropriated reserve (5)
-2,342
-2,770
-1,552
Balance of income and expenses
Result before taxes
Taxes
56  BUMA/STEMRA - ANNUAL REPORT 2014
CASH FLOW STATEMENT STEMRA 2014
2013
-2,751
-2,083
Amortisation and depreciation (1)
186
185
Changes in provisions (6)
-77
702
Changes in working capital
-1,223
-4,019
Cash flow from operations
-3,865
-5,215
(x € 1,000)
Balance of income and expenses Adjustments for:
347
518
-3,518
-4,697
Investments in tangible fixed assets (1)
-157
-178
Cash flow from investment activities
-157
-178
-3,675
-4,875
2014
2013
Cash and cash equivalents as at 1 January
31,187
36,062
Cash and cash equivalents as at 31 December (4)
27,512
31,187
Changes in cash and cash equivalents
-3,675
-4,875
Interest received
Cash flow from operating activities
Net cash flow
(x € 1,000)
FINANCIAL STATEMENTS STEMRA 57
STEMRA STATEMENT OF CHANGES IN TO BE DISTRIBUTED RIGHTS REVENUES 2014
2013
Balance as at 1 January
32,654
35,594
Music usage in the Netherlands
26,922
23,454
4,788
4,870
31,710
28,324
(x € 1,000)
Foreign CMOs Rights revenues to be distributed (7)
-19,526
-24,447
Foreign CMOs
-2,387
-2,989
Distributions
-21,913
-27,436
Withheld administration costs
-3,144
-3,828
Withholdings
-3,144
-3,828
Balance as at 31 December
39,307
32,654
Directly affiliated rights holders
58 BUMA/STEMRA - ANNUAL REPORT 2014
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS Objective in accordance with the Articles of Association, registered office and business address
other factors which are deemed reasonable in view of the
The objective of the Stemra Foundation (the Foundation or
results may differ from these estimates.
circumstances and which are assessed periodically. Actual
Stemra) is to promote both the tangible and the intangible interests of songwriters and composers, and their successors in
Foreign currency
title, and of publishers and publishing companies as a non-profit
Transactions denominated in foreign currencies are converted
institution. Stemra stands for Stichting tot Exploitatie van
into euros at the exchange rate prevailing on the transaction date.
Mechanische Reproductierechten voor Auteurs [Foundation for
Monetary assets and liabilities in foreign currencies are convert-
Exploitation of Mechancial Reproduction Rights for Authors]. The
ed into euros on the balance sheet date at the applicable
registered offices of the Stemra Foundation are located in
exchange rate on this date. Non-monetary assets and liabilities
Amstelveen, and its main office is located on the Siriusdreef
in foreign currencies that are recognised at historical cost are
22-28 in Hoofddorp.
converted into euros at the exchange rate prevailing on the transaction date. Exchange rate differences upon conversion are
Accounting principles used in the preparation of the financial statements
recognised in the operating statement.
The financial statements have been prepared in accordance with
Consolidation
Title 9, Book 2 of the Dutch Civil Code, as required by Article 2
The investments of the Buma Association and the Stemra
paragraph 2 a (i) of the Supervisory and Disputes Settlement Act
Foundation are held in Foundations, i.e. investment funds. The
for collective management organisations for copyright or related
board of these foundations is the same as the board of the Buma
rights (Supervisory Act). In addition, the applicable quality mark
Association and the Stemra Foundation. The foundations invest
criteria of VOIŠE (the association of organisations that collective-
for the account and risk of the Buma Association and the Stemra
ly manage intellectual property) have been taken into account.
Foundation, the legal ownership of the securities lies with the Foundations themselves in order to be able to carry out the
Continuity
necessary management tasks. During 2013 and 2014, the Stemra
These financial statements have been prepared based on the
Foundation did not hold any investments.
going concern principle. The appropriated reserve, including the unappropriated result, is sufficient to cover the budgeted result
Until mid-2014, the investment funds concerned the following
2015 as well as part of the result of 2016. In addition, Stemra has
investment funds jointly held with the Buma Association: The
a continuity reserve that can be used to cover shortfalls in the
bond fund Stichting Buma Stemra Obligatiefonds (BSO) and the
result. In this manner, the continuity of Stemra is ensured, based
equity fund Stichting Buma Stemra Aandelenfonds (BSA). As only
on the current estimates, at least until 2017.
the Buma Association holds investments these funds were fully recognised in the Buma Association financial statements.
General The accounting principles that are used for the valuation of
The structure of the joint investment funds was simplified in
assets and liabilities and the determination of the result are
2014 in such a manner that the Buma Association and the
based on historical cost, with the exception of investments and
Stemra Foundation now both have their own investment fund.
derivative financial instruments, which are valued at fair value.
The BSO was renamed Stichting Buma Beleggingsfonds (BBF)
Income and expenses are allocated to the year to which they
[Buma Investment Fund Foundation] for the investments of the
relate. All amounts are in thousands of euros, unless specified
Buma Association and the BSA was renamed Stichting Stemra
otherwise. The financial figures for 2013 have been reclassified in
Beleggingsfonds (SBF) [Stemra Investment Fund Foundation] for
order to enable a comparison with 2014. This reclassification does
the investments of the Stemra Foundation. The participations of
not have any consequences for the result and the reserves. The
the Stemra Foundation in the investment funds in both 2013 and
most important reclassification concerns an adjustment of
in 2014 were nil.
current liabilities to provisions.
Financial instruments The original financial statements were drafted in Dutch. This
Financial instruments comprise only primary instruments
document is an English translation of the original. In the case of
(receivables, cash and cash equivalents and debts). Financial
any discrepancies between the English and the Dutch text, the
instruments are initially recognised at fair value whereby directly
latter will prevail.
attributable transaction costs are taken into account upon initial recognition. If, however, after the initial recognition, financial
Estimates and assumptions
instruments are subsequently valued at fair value with the
In the preparation of the financial statements, the management
recognition of changes in value in the operating statement,
makes use of estimates and assumptions when applying the
directly attributable costs are recognised directly in the operating
accounting principles and determining the reported amounts for
statement.
assets, liabilities, income and expenses. The estimates and underlying assumptions are based on past experience and
FINANCIAL STATEMENTS STEMRA   59
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS After initial recognition, financial instruments are recognised as
risks in connection with wage developments, price indexation
follows:
and investment returns on the capital of the fund could possibly
• Receivables are carried at amortised cost.
lead to future adjustments in the annual contributions to the
• Provisions deemed necessary for the risk of uncollectability are
pension fund. These risks are not reflected in a provision
withheld. These provisions are determined based on individual assessments of the receivables; • Cash and cash equivalents are carried at fair value, which is almost
always equal to the nominal value;
included in the balance sheet. In the event of a shortfall at the industry sector pension fund, the Stemra Foundation is not obliged to pay additional contributions other than higher future pension contributions.
• Liabilities are measured at amortised cost.
Rights revenue Tangible fixed assets
Stemra recognises a rights revenue receivable when it can be
Tangible fixed assets are stated at cost of acquisition or manufac-
determined in a reliable manner, and it is probable that it will
ture less accumulated amortisation, depreciation and impair-
accrue to Stemra, and it is enforceable on the balance sheet date.
ments. Amortisation and depreciation charges are calculated as a
Rights revenues received from other Collective Management
percentage of the acquisition costs in accordance with the
Organisations (CMOs) are generally recognised on a cash basis, as
straight-line method based on the estimated useful life. Prepay-
the amount cannot be determined reliably at an earlier moment.
ments on fixed assets are not amortised or depreciated. For
Rights revenues are not reported in the operating statement.
tangible fixed assets, it is assessed on each balance date whether
Rights revenues are recognised in the balance sheet in the item
there are indications that these assets are subject to impairment.
to be distributed rights revenue.
If such indications are present, the realisable value of the asset is estimated. The realisable value is the higher of the fair value less
The rules for distribution determine the distribution and
costs to sell and its value in use. When the carrying amount of an
payment of rights revenues received by Stemra pursuant to
asset is higher than the realisable value, an impairment is
music copyright to the participants and other stakeholders. The
recognised for the difference between the carrying amount and
rules for distribution are assessed by the Board every three years.
the realisable value. Departing from that which is stated above,
In the distribution process, reserves are formed for among others:
on each balance sheet date, the realisable value is determined for
• Works for which Stemra possesses insufficient information for
intangible assets that have not yet been taken into use.
distribution, for example, because of missing information on rights holders, copyright details or cue sheets of films, series or
The estimated useful life is as follows: • hardware/computer equipment 3 years • other operating fixed assets 3 - 7 years
commercials; • Works with a cumulative rights revenue that is lower than the
threshold for distribution (bagatelle); • Claims pertaining to the distribution (also in connection with the
Appropriated reserve
indemnification that Stemra provides to the paying music user*).
Deficits are expected to occur in Stemra’s business operations in
The reserve is based on empirical data regarding claims per
the coming years. The appropriated reserve serves to cover these
distribution category that were deemed to be justified and were paid
deficits.
out, and lies between 0 and 2 percent. * In the agreements that Stemra concludes with the music user, Stemra
Provisions
indemnifies the music user against claims from rights holders who are directly
A provision is included in the balance sheet for a legally enforce-
affiliated to Stemra or who are affiliated via sister organisations.
able or constructive obligation arising from a past event when it is probable that an outflow of funds will be required for the
Reserves are assessed periodically and paid out when the
settlement of such an obligation, and for which the amount can
necessary information is supplied or, in the event of a bagatelle,
be estimated reliably. Provisions are valued at the present value
the threshold for distribution has been attained. Reserves that
of the expenses that are expected to be necessary in order to
have not been paid out within three years after the year of
settle the obligation. The long-service provision concerns the
collection, are paid out in the fourth year after collection (in
actuarial value of future long-service awards payments for active
accordance with the Supervisory Act) via the regular distribution.
employees with a permanent employment contract
Works that are claimed by several rights holders (double claims) are not paid out until it is clear who the rights holder is. A longer
Pension plan for employees
reserve period can be maintained for rights revenues received
The Stemra Foundation offers its employees an average wage
from sister organisations with insufficient information for
pension plan. This pension plan is administrated by the Stichting
distribution
Bedrijfstakpensioenfonds voor de Media, PNO [Foundation for the Industry Sector Pension Fund for the Media, PNO]. The pension contributions that are payable for the financial year are recognised as costs. A liability is recognised for unpaid pension contributions on the balance sheet date. As pension liabilities are of a short-term nature, these are measured at nominal value. The
60 BUMA/STEMRA - ANNUAL REPORT 2014
Administration costs The administration costs are recognised as income in the operating statement. Upon distribution to rights holders, a percentage of the collected rights revenue is withheld and recognised in the year of distribution as an income item in the operating statement as ‘Withheld administration costs’.
Financial income and expenses Interest income and expenses are recognised in the period to which they relate.
Cash Flow Statement The cash flow statement has been prepared using the indirect method. Cash flows in foreign currencies are converted at an estimated average exchange rate. Exchange rate differences in connection with cash balances are shown separately in the cash flow statement. Interest payments received are regarded as cash flows from operating activities.
Taxes The Dutch Tax and Customs Administration has determined in a settlement agreement that the Stemra Foundation is subject to corporation tax. Deductible foreign withholding tax and Dutch dividend tax may be deducted from the tax due based on this settlement agreement. The item taxes reported in the financial statements thus pertains to corporation tax after the deduction of tax deductible foreign withholding tax.
FINANCIAL STATEMENTS STEMRA 61
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS (1) Tangible fixed assets The changes in tangible fixed assets are as follows: (x € 1,000)
Hardware / computer equipment
1,005
Acquisition cost
-732
Cumulative amortisation and depreciation Carrying amount as at 1 January 2014
273
Investments
157
Amortisation and depreciation
-186
Changes in carrying amount
-29
1,162
Acquisition cost
-918
Cumulative amortisation and depreciation
244
Carrying amount as at 31 December 2014
(2) Other receivables (x € 1,000) Loan to Buma Stemra participants Current account Buma Total
2014
2013
25,000
18,000
1,611
1,207
-
670
26,611
19,877
Loan to Buma In the event of short-term cash requirements related to distribution planning, Buma and Stemra may borrow funds from each other. The interest rate that is charged for lending between Buma and Stemra up to September was the Euribor three-month rate at the end of the quarter. As from September, this interest rate was revised to the Euribor one-month rate + 1% at the end of the month. As at the balance sheet date, the loan from Stemra to Buma amounted to €25 million (2013: €18.0 million). Other receivables are due within one year.
(3) Prepayments and accrued income 2014
2013
Interest to be received
109
181
Other prepayments and accrued income
218
236
327
417
(x € 1,000)
Total
Other prepayments and accrued income are due within one year.
62 BUMA/STEMRA - ANNUAL REPORT 2014
(4) Cash and cash equivalents (x € 1,000) Deposits Other cash and cash equivalents Totaal
2014
2013
26,000
29,000
1,512
2,187
27,512
31,187
Stemra’s deposits are held on deposit accounts and are freely available. The cash and cash equivalents are deposited with Dutch banks. The decrease in deposits is mainly due to the higher loan that Stemra provided to Buma at the balance sheet date. The interest rate on this loan (Euribor 1-month + 1%) is higher than the interest on the deposits that Stemra holds.
(5) Reserves Foundation capital
Continuity reserve
Appropriated reserve
Unappropriated result
Total 2014
Total 2013
1
5,760
7,773
-1,552
11,982
13,534
Appropriation of the result of the previous financial year
-
-
-1,552
1,552
-
-
Result for the financial year
-
-
-
-2,342
-2,342
-1,552
Total changes
-
-
-1,552
-790
-2,342
-1,552
1
5,760
6,221
-2,342
9,640
11,982
(x € 1,000) Balance as at 1 January
Balance as at 31 December
Continuity reserve One of the objectives of the continuity reserve is to guarantee the continuity of the execution of the activities and it also serves to fulfil the obligations to third parties, in particular with regard to the distribution of the to be distributed rights revenues according to the financial statements.
Appropriated reserve The appropriated reserve is used to cover deficits in the business operations. The result over 2014 of -/- €2,342 (2013: -/- €1,552) will be deducted from the appropriated reserve at the time of the appropriation of the result. After the appropriation of the result, the balance in the appropriated reserve, including the unappropriated result, will amount to €3,879 (2013: €6,221). The appropriated reserve including the unappropriated result is sufficient to cover the budgeted result for 2015 and part of the result of 2016.
FINANCIAL STATEMENTS STEMRA 63
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS (6) Provisions 2014
2013
43
120
Other provisions
695
695
Total
738
815
(x € 1,000) Long-service provision
The provisions concern the provision for long-service awards and other provisions. The other provisions mainly concern provisions for claims regarding rights revenues for which an outflow of funds is expected.
The changes in the provision for long-service awards were as follows:
2014
2013
120
113
2
3
Allocation charged to the results / release credit to the result
-74
6
Payments
-10
-
5
-2
(x € 1,000) Balance as at 1 January
Changes: Interest
Change in interest rate Change in life expectancy Total changes Balance as at 31 December
-
-
-77
7
43
120
The long-service awards scheme was changed as of 1 July 2014 with the introduction of the new employment conditions. As a result, a long-service award is no longer paid out every ten years, instead long-service awards are paid out when the employee reaches 25 and 40 years of service. Due to this change in the long-service award scheme, the provision for long-service awards decreased by €77.
(7) Rights revenues to be distributed The breakdown of the rights revenue to be distributed as of the balance sheet date is as follows: (x € 1,000)
2014
2013
7,076
7,247
To be distributed rights revenue from the financial year
29,538
22,796
To be distributed rights revenue excluding double claims reserve
36,614
30,043
2,693
2,611
39,307
32,654
Rights revenue reserve
Double claims reserve Total
On balance, the to be distributed rights revenue is €6.6 million higher than last year. The increase can largely be attributed to the increase in the rights revenues received from the Stichting de Thuiskopie [Private Copying Foundation], which reached a settlement with the State at the end of 2014 in order to end the lengthy proceedings against the Orders in Council regarding the freezing of the Dutch Private Copying system. Part of this settlement amount was paid to Stemra for distribution to the rights holders by the Stichting de Thuiskopie at the end of 2014. Furthermore, as a result of the implementation of the new ERP system, a number of distributions have been shifted to 2015. The to be distributed rights revenues are partially of a long-term nature. The specification below according to annual tranche provides insight into the development of the to be distributed rights revenue and the accrual in annual tranches.
64 BUMA/STEMRA - ANNUAL REPORT 2014
The breakdown of the to be distributed rights revenue per annual tranche is as follows: (x € 1,000)
Balance as at 1 January
Accrued in the financial year
Distributed in the financial year
Released Balance as at in the 31 December financial year
Previous years
6,125
-153
2011
1,601
-313
-1,932
4,040 1,288
2012
3,377
-1,547
1,830
2013
21,551
-19,778
1,773
33,642
-3,266
30,376
33,642
-25,057
2014 Total (including withheld administration costs) Withheld administration costs Total rights revenue distributed to members and participants
32,654
-1,932
39,307
3,144 -21,913
In addition to the reserve for double claims of €2.7 million, the reserve for collection for the years before 2011 consists mainly of amounts received from sister organisations for which the information for a correct distribution was not yet available. An amount of €1.9 million released from rights revenue reserves was added to the amount available for distribution (2013: €1.8 million), concerning the released reserves after the end of the (statutory) reserve period. The organisation will still have to incur expenses in 2015 for the distribution of the to be distributed rights revenues.
The composition of the rights revenue that has become available for distribution during the financial year is as follows:
2014
2013
31,710
28,324
1,932
1,836
33,642
30,160
2014
2013
BIEM Phono-Mechanical Rights & Central Licensing
6,895
8,119
Work by Work & Special Licensing
5,564
5,366
(x € 1,000) Rights revenue Addition from release rights revenue reserve Rights revenue that has become available for distribution during the year
The rights revenues were received from the following categories: (x € 1,000)
Radio & TV
5,692
5,419
Online Licensing
3,134
2,635
Private Copying & Public Lending Rights
4,631
1,479
Reprographic Rights
1,006
436
Mechanical Rights Foreign
4,788
4,870
31,710
28,324
Total
FINANCIAL STATEMENTS STEMRA 65
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS (8) Other liabilities 2014
2013
Stemra members and participants
822
1.125
Sister organisations, foreign
113
117
(x € 1,000)
Current account Buma Other Total
37
-
411
504
1,383
1,746
2014
2013
5,427
5,754
The other liabilities are payable within one year.
(9) Accrued liabilities (x € 1,000) Dutch industry advance payments Amounts to be credited To be settled with the industry Holiday allowances and annual leave payable Other Total
53
223
260
262
89
90
-
26
5,829
6,355
The Dutch industry advance payments include advance payments on reproduction rights that have yet to be settled by the Dutch industry over periods up to the end of 2015. Advance payments are offset against the final settlement. Other accrued liabilities are due within one year.
(10) Financial instruments Stemra’s most important financial instruments concern cash and cash equivalents (47% of the balance sheet total; 2013: 57%). Cash and cash equivalents concern mainly revenues that cannot yet be distributed to the rights holders. Cash and cash equivalents are mainly deposited with Dutch banks. Other financial instruments under the assets concern receivables (52% of the balance sheet total; 2013: 42%), which are measured at amortised cost. Receivables are generally non-interest bearing, with the exception of a loan to Buma that amounted to €25 million at the end of 2014 (2013: €18 million) of which the variable interest rate is 1-month Euribor +1%. The interest on cash is marginal. The maximum credit risk in connection with receivables and cash and cash equivalents equals the carrying amount. There are no concentrations of credit risks. The financial obligations represent 83% of the balance sheet total (2013: 78%). The most important component in the financial obligations is the to be distributed rights revenues (67% of the balance sheet total; 2013: 60%). These are measured at amortised cost. Financial obligations are non-interest bearing. It is the case for all of the financial instruments that the fair value is close to the carrying amount. There are no financial instruments with a carrying amount that is higher than the fair value. Stemra did not have any derivative financial instruments at the end of the financial year and does not apply hedge accounting.
66 BUMA/STEMRA - ANNUAL REPORT 2014
(11) Off-balance sheet assets and liabilities The Buma Association and the Stemra Foundation work together within one organisation under one Board, one Council of Members and one Board of Directors. Off-balance sheet assets and liabilities have been entered into by Buma and Stemra jointly in connection with outsourcing and are disclosed in full both for the Buma Association and the Stemra Foundation. The division of costs between Buma and Stemra for each liability is specified in the explanatory notes. Liabilities in connection with the lease of the office building and the operational lease of coffee machines, cars and copiers have been entered into by Buma; costs are charged to Stemra for this based on 75% for Buma and 25% for Stemra. These costs have not been included in the off-balance sheet assets and liabilities.
Long-term liabilities The included off-balance sheet assets and liabilities have the following periods to maturity as at 31 December: (x € 1,000) Less than 1 year
3,714
Between 1 and 5 years
6,823 -
Longer than 5 years
10,537
Total
The long-term liabilities specified in the table above concern expenses for outsourcing activities.
Outsourcing of activities - Accenture The Buma Association and the Stemra Foundation have entered into the contractual obligation as from 2007 up to an including 31 March 2017 to have a large part of the back office activities carried out by Accenture. The resulting financial obligation for the remaining term of the contract amounts to €6.6 million given unchanged volumes. The costs are divided over Buma and Stemra according to the ratio 75% / 25%.
Outsourcing of activities – ICE Copyright The Buma Association and the Stemra Foundation have jointly entered into the obligation for a period of five years (as from March 2015) to outsource their works database to ICE. The financial obligation resulting from this amounts to €3.1 million (SEK 29.7 million). The costs of ICE are divided over Buma and Stemra according to the ratio 75% / 25%.
Outsourcing of activities – ICE Online The Buma Association and the Stemra Foundation have entered into the obligation for a period of five years (as from 2015) to outsource the processing of online usage to ICE. The financial obligation resulting from this amounts to €0.8 million. This obligation will be paid in the beginning of 2015.
Investment obligations As at 31 December 2014, an investment obligation for the outsourcing of online to ICE exists amounting to €0.8 million.
Claims A number of claims have been lodged against the organisation which the organisation disputes as well as a number of claims for which an outflow of funds is expected. A reserve has been formed for the claims where an outflow of cash is expected. Although the outcome of these disputes cannot be predicted with certainty, it is assumed -also based on legal advice - that these disputes will not have a material negative impact on Buma’s financial position.
FINANCIAL STATEMENTS STEMRA 67
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS (12) Affiliated parties The following parties are considered to be affiliated parties of the Stemra Foundation: The Buma Association, the Directors under the Articles of Association, Board members and members of the Council of Members of the Buma Association and the Stemra Foundation. For more information on the remuneration of the Board members and members of the Council of Members reference is made to explanatory note (14). Regular transactions resulting from the management of copyrights of Board members and members of the Council of Members or parties affiliated to Board members and members of the Council of Members have not been explicitly disclosed in the financial statements. The distributions to Board members and members of the Council of Members or to parties affiliated to Board members and members of the Council of Members have been calculated in the same manner as the distributions to all members and have been paid out in accordance with the normal procedures within Stemra. Due to the affiliations within the sector, Board members and members of the Council of Members can also be connected to Buma as customer of Buma, for example, via a music-related service which Buma uses. Transactions with these parties are carried out at arm’s length and the conditions are no different from the conditions that would be demanded in transactions with other parties. The Buma Association charges costs for personnel, accommodation and overhead to the Stemra Foundation. The costs charged for 2014 amount to €4,678 (2013: €5,050). Costs are charged based on cost.
(13) Personnel costs (x € 1,000)
2014
2013
Salaries
827
847
Social security contributions
140
134
Pension costs Other personnel costs
76
78
-42
39
1,001
1,098
Charged to third parties
2,456
2,625
Total
3,457
3,723
The decrease in other personnel costs is related to the release from the long-service provision in connection with a change in the employment conditions (see also explanatory note 6). The decrease in the amount charged to third parties is related to the transition to the works database of ICE. The cover ratio of the pension plan administrator Stichting Bedrijfstakpensioenfonds voor de Media PNO amounted to 104.8 % on 31 December 2014 (31 December 2013: 105.2%). Due to the financial situation, PNO Media must submit a recovery plan to the Dutch Central Bank before 1 July 2015. This plan will contain measures that the fund will take to bring the cover ratio up to the prescribed level in no more than 12 years. The average number of workers, converted into full-time equivalents (FTEs) in the financial year 2014 amounted to 16.6 (2013: 17.3 FTE). The workforce can be divided into the following personnel categories:
2014
2013
General Affairs
3.7
3.8
Front office
8.7
9.3
Back office
4.2
4.2
16.6
17.3
Total
68 BUMA/STEMRA - ANNUAL REPORT 2014
(14) Remuneration of the Board, Council of Members and Directors under the Articles of Association Based on the Supervisory Act, a number of provisions of the Standards for Remuneration of Senior Officials in the Public and SemiPublic Sector Act (the WNT) also apply to collective management organisations (CMOs). The Buma Association and the Stemra Foundation work together as one organisation under one Board, one Council of Members and one Board of Directors. The agreements with the Directors under the Articles of Association, the Board and the Council of Members have been entered into by Buma and Stemra jointly. The total remuneration package of the Directors, the Board and the Council of Members is specified in the tables below in accordance with Article 4.1 of the WNT. However, the costs for the Board and the Council of Members are recognised in the financial statements for 50% by Buma and for 50% by Stemra. The remuneration of the Board of Directors is reported in the financial statements of Buma and Stemra respectively based on 75% / 25%. In accordance with Article 4.2 of the WNT, the total remuneration of the CFO is also included, this is reported in the financial statements of Buma and Stemra respectively based on a 75% / 25% division. The Association has applied the Policy Rules for the application of the WNT as a reference framework when preparing these financial statements as well as the Policy Framework Collective Management of the CvTA. Based on Article 4.1 of the WNT, the information on the ‘senior officials’ of the Stemra Foundation, i.e. the daily management (CEO/ Director under the Articles of Association), the Board and the Council of Members is provided below. Based on Article 4.2 of the WNT, an explanation is also included regarding the CFO as the CFO’s remuneration is higher than the maximum remuneration as referred to in Article 2.3, first paragraph of the WNT. The remuneration packages of the CEO and the CFO were agreed before the WNT came into effect. In accordance with the statutory transitional scheme as this now applies, the remuneration of the CEO will be respected by Stemra for a period of four years after the coming into effect of the WNT, after which the remuneration will be reduced in a period of three years to the applicable WNT maximum. The WNT maximum in 2014 was 130% of the salary of a Minister, which amounts to €230,474, including tax-exempt expense allowances and pension contributions.
FINANCIAL STATEMENTS STEMRA 69
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS The remuneration per individual over 2014 - as defined in the Supervisory Act - can be specified as follows (in â‚Ź)*: Name
Position
Employment contract Remuneration Name
L.A.J.M. de Wit
Chairman of the Board
1 Jan - 31 Dec 40%
46,076
Chairman of W. Henselmans the Council of Members
1 Jan - 31 Dec
8,000
H.O. Westbroek
DeputyChairman of the Board
1 Jan - 31 Dec 25%
15,000
B.B. Dessaur
DeputyChairman of the Council of Members
1 Jan - 31 Dec
6,500
P.M. van Brugge
Board Member
1 Jan - 31 Dec 20%
12,560
M.A. Bremer
Member of the Council of Members
1 Jan - 31 Dec
5,000
L.J. Deuss
Board Member
1 Jan - 31 Dec 20%
12,000
I.M. Chronis
Member of the Council of Members
21 Mei - 31 Dec
3,049
L.A. Dikker
Board Member
1 Jan - 31 Dec 20%
12,280
A.H.M. van Dongen
Member of the Council of Members
1 Jan - 21 Mei
1,951
J.N. Hamburg
Board Member
1 Jan - 31 Dec 20%
12,000
J.M.F. Everling
Member of the Council of Members
1 Jan - 31 Dec
5,000
A.B. Molema
Board Member
1 Jan - 31 Dec 20%
12,840
M.T. Felis
Member of the Council of Members
1 Jan - 31 Dec
5,000
P.L. Perquin
Board Member
1 Jan - 31 Dec 20%
12,000
H. Kosterman
Member of the Council of Members
1 Jan - 21 Mei
1,951
A.A.L. de Raaff
Board Member
1 Jan - 31 Dec 20%
12,000
T. Kalksma
Member of the Council of Members
21 Mei - 31 Dec
3,049
M. Schimmer
Board Member
1 Jan - 31 Dec 20%
12,000
W.J. Kwakman
Member of the Council of Members
1 Nov - 31 Dec
833
M.H. Swemle
Board Member
1 Jan - 31 Dec 20%
12,000
M.H. van Norden
Member of the Council of Members
1 Jan - 31 Dec
5,000
R.D. van Vliet
Board Member
1 Jan - 31 Dec 20%
12,000
D.L. van Peursen
Member of the Council of Members
29 Jan - 31 Dec
4,611
N.M. Walboomers
Board Member
1 Jan - 31 Dec 20%
12,000
B.N.A.D. van der Poel
Member of the Council of Members
1 Jan - 31 Dec
5,000
G.J.M. Reinders
Member of the Council of Members
1 Jan - 31 Dec
5,000
R.M. Visser
Member of the Council of Members
1 Jan - 31 Dec
4,167
* This concerns the total remuneration received from Buma/Stemra
70  BUMA/STEMRA - ANNUAL REPORT 2014
Position
Employment contract Remuneration
The remuneration per individual over 2013 - as defined in the Supervisory Act - can be specified as follows (in â‚Ź)*: Name
Position
Employment contract Remuneration Name
Position
Employment contract Remuneration
L.A.J.M. de Wit
Chairman of the Board
1 Jan - 31 Dec 40%
45,665
Chairman of W. Henselmans the Council of Members
1 Jan - 31 Dec
7,077
H.O. Westbroek
DeputyChairman of the Board
1 Jan - 31 Dec 25%
15,000
B.B. Dessaur
DeputyChairman of the Council of Members
1 Jan - 31 Dec
6,039
P.M. van Brugge
Board Member
1 Jan - 31 Dec 20%
13,120
M.A. Bremer
Member of the Council of Members
1 Jan - 31 Dec
5,000
L.J. Deuss
Board Member
1 Jan - 31 Dec 20%
12,000
A.H.M. van Dongen
Member of the Council of Members
1 Jan - 21 Mei
5,000
L.A. Dikker
Board Member
1 Jan - 31 Dec 20%
12,000
J.M.F. Everling
Member of the Council of Members
1 Jan - 31 Dec
5,000
J.N. Hamburg
Board Member
1 Jan - 31 Dec 20%
12,395
M.T. Felis
Member of the Council of Members
1 Jan - 31 Dec
5,000
A.B. Molema
Board Member
1 Jan - 31 Dec 20%
12,000
H. Kosterman
Member of the Council of Members
1 Jan - 21 Mei
5,923
P.L. Perquin
Board Member
1 Jan - 31 Dec 20%
12,000
M.H. van Norden
Member of the Council of Members
1 Jan - 31 Dec
5,000
A.A.L. de Raaff
Board Member
1 Jan - 31 Dec 20%
12,000
B.N.A.D. van der Poel
Member of the Council of Members
1 Jan - 31 Dec
5,000
M. Schimmer
Board Member
1 Jan - 31 Dec 20%
12,000
G.J.M. Reinders
Member of the Council of Members
1 Jan - 31 Dec
3,750
M.H. Swemle
Board Member
1 Apr - 31 Dec 20%
9,000
J. Tiemersma
Member of the Council of Members
1 Jan - 31 Dec
5,000
R.D. van Vliet
Board Member
1 Jan - 31 Dec 20%
12,000
R.M. Visser
Member of the Council of Members
1 Jan - 31 Dec
5,000
N.M. Walboomers
Board Member
1 Jan - 31 Dec 20%
12,000
* This concerns the total remuneration received from Buma/Stemra
The other WNT components that are subject to obligatory disclosure are nil for the Board and the Council of Members.
FINANCIAL STATEMENTS STEMRA   71
EXPLANATORY NOTES TO THE STEMRA FINANCIAL STATEMENTS The remuneration per individual over 2014 - as defined in the Supervisory Act - can be specified as follows (in €)*: Employment contract
Fixed and variable remuneration
Name
Position
H.G. van der Ree
CEO
1 Jan - 31 Dec 100%
395,232
W.J. Ketellapper
CFO
1 Jan - 31 Dec 100%
280,108
Supplement/tax addition company car
Total remuneration
Taxable fixed and Social security variable expense contributions allowance
Provisions payable in the future
-
395,232
9,532
-
65,251
15,600
295,708
9,532
5,082
39,084
* This concerns the total remuneration received from Buma/Stemra
The remuneration per individual over 2013 - as defined in the Supervisory Act - can be specified as follows (in €)*: Employment contract
Name
Position
H.G. van der Ree
CEO
1 Jan - 31 Dec 100%
W.J. Ketellapper
CFO
1 Jan - 31 Dec 100%
Fixed and variable remuneration
384,864
277,849
Supplement/tax addition company car
Total remuneration
Taxable fixed and Social security variable expense contributions allowance
Provisions payable in the future
-
384,864
8,902
-
67,094
15,600
293,449
8,902
6,685
40,458
* This concerns the total remuneration received from Buma/Stemra
** 2013 was the first year in which Buma/Stemra, in accordance with the rules of the WNT, was obliged to disclose the details of the remuneration in the financial statements. In this first year of the obligatory disclosure, a small part of the provision payable in the future was mistakenly not reported over 2013. The amounts under ‘provisions payable in the future’ have been adjusted for 2013 for the sake of comparison. However, this does not have any consequences for the application of the WNT provisions.
(15) Other expenses 2014
2013
110
160
56
52
183
150
349
362
Charged to third parties
2,228
1,930
Total
2,577
2,292
(x € 1,000) Contributions Advisory costs Other expenses
There are no research and development costs.
(16) Financial income and expenses Stemra maintains its available cash and cash equivalents mostly on deposit accounts. In addition, Stemra lends funds to Buma to fund short-term liquidity requirements of the Association. The interest received for this is Euribor 1-month +1%. This is a higher interest rate than the interest on deposits. The decrease in the financial result is related to the decrease in interest rates. No exchange rate differences have been included in Stemra’s operating statement. The interest expenses and similar expenses include the interest income in connection with the loan provided by Stemra € 79 (2013: €18).
72 BUMA/STEMRA - ANNUAL REPORT 2014
(17) Taxes The settlement agreement with the Dutch Tax and Customs Administration dates from 6 November 2001 and was extended in May 2012 for a period of five years up to and including 31 December 2016.
Hoofddorp, 8 April 2015
The Board L.A.J.M. de Wit
Chairman
H.O. Westbroek
Deputy Chairman
A.A.L. de Raaff
Secretary
P.M. van Brugge
Board Member
L.J. Deuss
Board Member
L.A. Dikker
Board Member
J.N. Hamburg
Board Member
A.B. Molema
Board Member
P.L. Perquin
Board Member
M. Schimmer
Board Member
M.H. Swemle
Board Member
R.D. van Vliet
Board Member
N.M. Walboomers
Board Member
Board of Directors H.G. van der Ree
Director under the Articles of Association
FINANCIAL STATEMENTS STEMRA   73
OTHER INFORMATION INDEPENDENT AUDITOR’S REPORT
We believe that the audit evidence we have obtained is sufficient
To: the Affiliates of Stichting Stemra
and appropriate to provide a basis for our audit opinion.
Report on the financial statements
Opinion
We have audited the accompanying financial statements 2014,
In our opinion, the financial statements give a true and fair view
set out on pages 54 to 73, of Stichting Stemra, Amstelveen, which
of the financial position of Stichting Stemra as at 31 December
comprise the balance sheet as at 31 December 2014, the
2014 and of its result for the year then ended in accordance with
operating statement for the year then ended and the notes,
Part 9 of Book 2 of the Netherlands Civil Code and the require-
comprising a summary of the accounting policies and other
ments of WNT.
explanatory information.
Report on other legal and regulatory requirements The Board of Directors’ responsibility
Pursuant to the legal requirements under Section 2:393 sub 5 at e
The Board of Directors is responsible for the preparation and fair
and f of the Netherlands Civil Code, we have no deficiencies to
presentation of these financial statements and for the prepara-
report as a result of our examination whether the director’s
tion of the director’s report, both in accordance with Part 9 of
report, to the extent we can assess, has been prepared in
Book 2 of the Netherlands Civil Code and the requirements of the
accordance with Part 9 of Book 2 of this Code, and whether the
“Wet normering bezoldiging topfunctionarissen publieke en
information as required under Section 2:392 sub 1 at b - h has
semipublieke sector (WNT)”. Furthermore, the Board of Directors
been annexed. Further, we report that the director’s report, to the
is responsible for such internal control as it determines is
extent we can assess, is consistent with the financial statements
necessary to enable the preparation of the financial statements
as required by Section 2:391 sub 4 of the Netherlands Civil Code.
that are free from material misstatement, whether due to fraud or error. Utrecht, 10 April 2015
Auditor’s responsibility
KPMG Accountants N.V.
Our responsibility is to express an opinion on these financial
R.P. van der Brugge RA
statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing and the “Controleprotocol WNT”. 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 material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Foundation’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements.
EVENTS AFTER THE BALANCE SHEET DATE
result for the formation of, allocation to or withdrawal from one or more general or special (appropriated) reserves.
No events occurred after the balance sheet date which would have a material impact on the presentation of the financial
Result appropriation proposal
statements.
The financial statements are prepared in accordance with Article 26 paragraph 2 of the Articles of Association. The Board proposes
Profit appropriation
to deduct the negative result of €2,342 from the appropriated
Pursuant to Article 18 paragraph 3 of the Articles of Association
reserve
of the Foundation, the Board decides on the appropriation of the result. The Board does this by full or partial appropriation of the
74 BUMA/STEMRA - ANNUAL REPORT 2014
Birth of Joy Photograph: Bart Heemskerk
COMPOSITION OF THE BOARD, COUNCIL OF MEMBERS AND BOARD OF DIRECTORS 76 BUMA/STEMRA - ANNUAL REPORT 2014
AT 31 DECEMBER 2014
THE BOARD OF THE BUMA ASSOCIATION AND THE STEMRA FOUNDATION
L.A.J.M. de Wit
H.O. Westbroek
A.A.L. de Raaff
Chairman
Deputy Chairman, Author
Secretary, Publisher
P.M. van Brugge
L.J. Deuss
L.A. Dikker
Board Member, Author
Board Member, Publisher
Board Member, Author
J.N. Hamburg
M. Schimmer
N.M. Walboomers
Board Member, Author
Board Member, Author
Board Member, Publisher
A.B. Molema
M.H. Swemle
R.D. van Vliet
Board Member, Author
Board Member, Author
Board Member, Publisher
P.L. Perquin Board Member, Author
COMPOSITION OF THE BOARD, COUNCIL OF MEMBERS AND BOARD OF DIRECTORS  77
BOARD OF DIRECTORS BUMA/STEMRA
H.G. van der Ree Director under the Articles of Association
W.J. Ketellapper
J.G.M. van de Kamer
J.G.M. Kroeze
Chief Financial Officer
Chief Operating Officer
General Counsel
78  BUMA/STEMRA - ANNUAL REPORT 2014
COMPOSITION OF THE BOARD, COUNCIL OF MEMBERS AND BOARD OF DIRECTORS 79
PROVISIONS IN THE ARTICLES OF ASSOCIATION REGARDING THE BOARD AND THE BOARD OF DIRECTORS The relevant provisions in the Articles of
The Board of Directors of Buma and
Association regarding the Board and the
Stemra consists of one or several natural
Board of Directors are the following:
persons who are not members, affiliates,
The Board of the Buma Association and
Foundation.
or participants of the Association or the the Stemra Foundation consists of thirteen persons. Twelve persons are
The complete provisions in the Articles of
appointed in the manner as referred to in
Association regarding the Board are
paragraph 2 under a and b. A thirteenth
included in Article 13 up to and including
independent person is appointed by the
20 of the Articles of Association of Buma
members/participants in accordance with
and Stemra.
Article 17, paragraph 2. The complete set of provisions in the A board member of the Buma Association
Articles of Association regarding the Board
must also be a board member of the
of Directors are included in Article 21 up
Stemra Foundation.
to and including 23 of the Articles of Association of Buma and Stemra.
The Board is comprised of
Board profile A. e ight actors who are members or who
The profile of the Board is based on ‘that
are the authors of companies that are
which the Board requires to function
members, which authors are nomina-
properly’, considering and taking into
ted by the author members / partici-
account various aspects such as:
pants of whom:
• the type of organisation
• a composer of serious music
• the development phase of the organisation
• three composers/songwriters of
• restructuring objectives of the board
popular music • a songwriter
The composition of the Board must be in
• three composers of media music
line with the contemporary standards and provisions of good governance and codes
B. four persons who are member-publis-
of conduct. Reference is made to the
hers (Article 8 paragraph 1) or a hold a
Buma/Stemra website for the complete
managerial position in a publishing
profile of the Board.
company that is a member (Article 9, paragraph 1), and who are nominated by publisher members / participants. C. an independent person, as referred to in Article 13, paragraph 1, as an independent chairman
80 BUMA/STEMRA - ANNUAL REPORT 2014
COLOPHON ADDRESS
HEAD OFFICE
THE HAGUE OFFICE
SIRIUSDREEF 22-28
LANGE VOORHOUT 86-12
2132 WT HOOFDDORP
2514 EJ THE HAGUE
T: 023 799 79 99
T: 070 310 91 09
F: 023 799 77 77
F: 070 310 91 00
INFO@BUMASTEMRA.NL
DENHAAG@BUMA.NL
WWW.BUMASTEMRA.NL
EDITOR IN CHIEF
FRANK JANSSEN, BUMA/STEMRA
CONCEPT & REALISATION
DE MERKELIJKHEID
PHOTO INTERVIEWS
DE MERKELIJKHEID AND THE BITTER END
DESIGN
DE MERKELIJKHEID: BRIGITTE OLIVIER ARIE DE VROED
PHOTOGRAPH COVER
PIERRE KARTNER FOTOGRAAF: JOHN BAARS
PHOTO INTERVIEWS
MERKELIJKHEID AND ROGIER CHANG JARNO KRAAYVANGER
De Staat foto: Sander Baks 82 BUMA/STEMRA - ANNUAL REPORT 2014