FOR THE LOVE OF MUSIC NOAH KIN COMPOSER, LYRICIST TEOSTO MEMBER SINCE 2011 FINANCIAL STATEMENT

Transcription

1 FOR THE LOVE OF MUSIC NOAH KIN COMPOSER, LYRICIST TEOSTO MEMBER SINCE 2011 FINANCIAL STATEMENT

2 TABLE OF CONTENTS PROFIT AND LOSS STATEMENT 3 BALANCE 4 NOTES TO THE FINANCIAL STATEMENTS 1 Accounting principles 7 2 Income statement by activity 9 3 Notes to the balance sheet, assets 11 4 Notes to the balance sheet, liabilities 13 5 Securities and contingent liabilities 14 6 Notes on personnel 14 7 Ownership in other companies 14 PROPOSAL FOR DISTRIBUTION TO RIGHTHOLDERS 15 SIGNATURES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS 15 2

3 PROFIT AND LOSS STATEMENT 1 Jan 31 Dec Jan 31 Dec 2016 DAY-TO-DAY OPERATIONS Income Royalties collected by Teosto 59,778, ,701, Other copyright royalties 5,363, ,889, Remuneration for public lending 757, , Compensation for private copying 1,760, ,429, Other income 2, , ,661, ,621, Costs Personnel expenses -6,116, ,234, Depreciation -853, , Other costs -5,754, ,902, ,724, ,937, ,937, ,683, FUNDRAISING Membership fees 112, , ,050, ,798, INVESTMENTS AND FINANCING Income 3,125, ,707, Costs -378, , ,747, ,261, ,797, ,060, Transfer for distribution to rightholders -54,990, ,032, Changes to the self-financed reserve -2,806, ,028, SURPLUS/DEFICIT FOR THE FINANCIAL YEAR

4 BALANCE SHEET 31 Dec Dec 2016 ASSETS NON-CURRENT ASSETS Intangible assets Other long-term expenditure 1,708, ,408, ,708, ,408, Tangible assets Machinery and equipment 542, , , , Investments Shares and similar rights of ownership 32,101, ,258, ,101, ,258, TOTAL NON-CURRENT ASSETS 34,352, ,451, ASSETS IN THE SELF-FINANCED RESERVE Shares and similar rights of ownership 23,758, ,270, Other receivables 89, Financial securities ,814, Cash in hand and at bank 3,195, ,151, ,044, ,237, CURRENT ASSETS Non-current receivables Other receivables 1,250, ,250, ,250, ,250, Current receivables Trade receivables 8,214, ,054, Loan receivables 19, , Prepayments and accrued income 5,099, ,059, ,333, ,121, Financial securities Shares 12,296, ,856, Cash in hand and at bank 1,518, ,875, TOTAL CURRENT ASSETS 28,398, ,103, TOTAL ASSETS 89,794, ,791,

5 BALANCE SHEET 31 Dec Dec 2016 LIABILITIES EQUITY Self-financed reserve Teosto Fund 27,044, ,237, Surplus/deficit for the financial year Total capital and reserves 27,044, ,237, DEBTS Trade debts 956, , Other debts 9,891, ,750, Accruals and deferred income 1,195, ,472, Distribution funds to rightholders 50,707, ,842, Total debts 62,750, ,554, TOTAL LIABILITIES 89,794, ,791,

6 CASH FLOW STATEMENT Cash flow from operating activities: Cash received for sales 64,058,248 68,550,319 Extraordinary items Cash received from fundraising 112, ,702 Cash paid for operating costs -11,706,190-12,803,295 Cash flow from operating activities 52,464,458 55,862,727 Cash flow from investment activities: Investments in tangible and intangible assets -911, ,994 Other investments -15,076,904-5,214,259 Cash flow from investments -15,988,735-5,321,253 Cash received for investments 2,747,253 1,261,746 Cash flow from operating activities and investments 39,222,977 51,803,220 Cash flow from distributed royalties Royalties distributed by Teosto to Finnish and international rightholders in total -53,543,567-51,481,515 CHANGE IN CASH -14,320, ,705 Cash at the start of the financial year -28,605,295-28,283,589 Cash at the end of the financial year 14,284,704 28,605,295-14,320, ,705 6

7 NOTES TO THE FINANCIAL STATEMENTS 1 ACCOUNTING PRINCIPLES Entering performing right and mechanical reproduction royalty revenue as income The income is not fully comparable with the corresponding figures for the previous year, as the accounting practices for income have been expanded to include all royalties licensed through Teosto, regardless of the collection method. Teosto income statement includes copyright royalties collected by Teosto and, from the beginning of 2016, Network of Music Partners A/S (NMP) and copyright royalties paid to Teosto and NMP by other organisations. The royalties collected by Teosto are mainly performing right royalties. Teosto managed the licensing of cross-border online music services, while NMP was responsible for their background processes, such as collection. Teosto has transferred the administration of mechanical reproduction rights to the Nordisk Copyright Bureau (NCB), a joint Nordic agency. For mechanical reproduction rights, Teosto s income statement includes those NCB payments that are distributed by Teosto to Finnish rightholders. Valuation and depreciation and intangible and tangible assets Non-current assets are stated at cost. Depreciation is calculated on a straight-line basis. The depreciation principles are as follows: Computer software Other long-term expenditure Machinery and equipment Computer hardware, other devices and cars Office machinery and equipment 5 years 10 years 5 years 10 years Valuation of investment assets Securities and other investment assets are valued at cost or at market value on the date of the financial statements, whichever is lower. Using reciprocal representation agreements, Teosto has assigned the licensing and collection of foreign performing right royalties to foreign copyright societies. The royalties distributed by them to Teosto s rightholders are included in Teosto s income statement. 7

8 Income statement by activity Teosto issues licences for the performance of music, collects performing right royalties from users of music, and distributes royalties to rightholders in Finland and abroad. Royalty payments to foreign rightholders are distributed through the copyright society in the country in question. Conversely, Teosto distributes royalties received from foreign organisations to Finnish rightholders ROYALTIES COLLECTED BY TEOSTO Operating income 59,778, ,701, Operating costs* -10,990, ,185, Fundraising 112, , Investments and financing* 1,525, , Other income 2, , Net income to rightholders 50,428, ,467, Percentage of operating income 84.4 % 83.1 % Promotion of Finnish music (national funds transferred to reserves) 2,737, ,063, Percentage of performing right royalty income in Finland 6.0 % 6.7 % Transfer for distribution to rightholders 47,690, ,404, OTHER COPYRIGHT ROYALTIES Royalties from other organisations 5,363, ,889, Remuneration for public lending 757, , Compensation for private copying* 1,670, ,429, Costs -491, , Transfer for distribution to rightholders 7,299, ,628, TOTAL TRANSFER FOR DISTRIBUTION TO RIGHTHOLDERS 54,990, ,032, *Excluding self-financed reserve 8

9 2 NOTES TO THE FINANCIAL STATEMENTS Royalties collected by Teosto Radio and television* 31,317, ,505, Online** 8,173, ,094, Events*** 10,891, ,574, Background music 9,395, ,527, ,778, ,701, OTHER COPYRIGHT ROYALTIES Royalties for distribution to Teosto rightholders NCB, Denmark 2,021, ,835, GEMA, Germany 489, , STIM, Sweden 448, , PRS, UK 235, , SACEM, France 194, , ASCAP, USA 167, , TONO, Norway 167, , SGAE, Spain 150, , SABAM, Belgium 119, , AKM, Austria 114, , SIAE, Italy 113, , KODA, Denmark 111, , Other 731, , Total 3,043, ,774, Royalties for distribution to rightholders of Teosto and other organisations Broadcasting Finnish TV channels abroad, STIM 114, , Mechanical reproduction for use in education, Kopiosto 184, , Total 298, , OTHER COPYRIGHT ROYALTIES TOTAL 5,363, ,182, *Includes the free online services of broadcasters and the network personal video recorder services of operators **Includes, among others, video streaming and subscription video services ***Includes licenses for background music to, for example, municipalities, parishes and ships 9

10 Lending compensation Remuneration paid by the government to authors for lending of works from public libraries. 757, , Compensation for private copying Compensation for private copying paid by the Government to Teosto rightholders 568, ,429, Compensation for private copying paid by the Government for authors shared purposes via the Teosto Fund 89, ,760, ,429, DEPRECIATION Other long-term expenditure 666, , Machinery and equipment 186, , , , Fees to auditing companies Auditing fees 28, , Counselling on taxes 72, , Other services , , INVESTMENTS AND FINANCING Revenue Interest 23, , Dividends Rents Sales profit 3,020, ,312, Restoration of value decrease 82, ,312, ,125, ,312, Costs Charges Sales loss -261, , Value decrease -101, , Other costs -15, , , , TOTAL FOR INVESTMENTS AND FINANCING 2,747, ,261,

11 TRANSFER FOR DISTRIBUTION TO RIGHTHOLDERS Performing right royalties collected by Teosto 40,663, ,882, Mechanical reproduction right royalties collected by Teosto 1,247, ,174, Performing right royalties from other organisations 3,071, ,439, Mechanical reproduction royalties from other organisations 2,065, ,319, Remuneration for public lending 630, , Compensation for private copying 1,419, ,357, Gramex royalties collected by Teosto 154, , Online royalties collected by NMP 5,737, ,206, ,990, ,032, NOTES TO THE BALANCE SHEET, ASSETS CHANGES IN NON-CURRENT INTANGIBLE AND TANGIBLE ASSETS Other long-term expenditure Acquisition cost at the beginning of the financial year on 1 January 3,096, ,015, Accumulated depreciation -1,688, ,111, Amount at the beginning of the financial year on 1 January 1,408, ,903, Increases in the financial year 967, , Demolitions Depreciation in the financial year -666, , Book value on 31 December 1,708, ,408, Machinery and equipment Acquisition cost at the beginning of the financial year on 1 January 1,438, ,553, Accumulated depreciation -655, , Amount at the beginning of the financial year on 1 January 783, , Increases in the financial year 9, , Deductions in the financial year -64, , Depreciation in the financial year -186, , Book value on 31 December 542, , SHARES AND SIMILAR RIGHTS OF OWNERSHIP Quoted shares and rights of ownership Total market value 33,665, ,408, Corresponding book value 31,777, ,965, Difference 1,887, ,443, Other interests and rights of ownership 323, , TOTAL SHARES AND SIMILAR RIGHTS OF OWNERSHIP 32,101, ,258,

12 ASSETS OF THE INDEPENDENT FOUNDATION Quoted shares and rights of ownership Total market value 25,458, ,497, Corresponding book value 23,758, ,138, Difference 1,699, ,358, Other shares , Total shares and similar rights of ownership 23,758, ,270, Other receivables Compensation for private copying 89, Financial securities Total market value ,270, Corresponding book value ,814, Difference , Non-current receivables Other receivables Capital loan to GT Music Licences Ltd 1,250, ,250, Current receivables Accounts receivable Royalties collected by Teosto 8,109, ,054, Other copyright royalties 105, ,214, ,054, Accrued income Royalties 277, , Other 4,822, ,441, ,099, ,059,

13 4 NOTES TO THE BALANCE SHEET, LIABILITIES CHANGES TO THE CAPITAL OF THE SELF-FINANCED RESERVE Capital of the Teosto Fund at 1 Jan 24,237, ,208, Return on Fund assets 1,233, , Fund costs -12, , Use of Fund assets -1,241, ,493, Private copying fee for 2015 (VAT return) 89, National funds transferred to the Fund 2,737, ,063, Capital of the Teosto Fund at 31 Dec 27,044, ,237, The Teosto fund was established in 2009 for the purposes of securing ideological operations and the continuity of promotion work. The primary funding source is so-called national funds which Teosto retains from its distributions for national promotion purposes, in accordance with the agreements it has made with its rightholders and foreign copyright organisations. In addition to this, the fund can be accumulated by receiving gifts, wills, grants and benefits, or by merging other funds with it. Other debts Foreign copyright organisations 3,164, ,848, Finnish rightholders 1,677, ,735, Withholding tax 1,579, ,218, VAT 574, , Other 2,894, ,218, ,891, ,750, Accruals and deferred income Holiday pay 831, , Promotion of Finnish music 195, , Other 168, , ,195, ,472, Distribution funds to rightholders Performing right royalties 43,112, ,345, Mechanical reproduction royalties 1,403, ,309, Remuneration for public lending , Compensation for private copying 1,429, ,366, Online royalties collected by NMP 4,697, ,801, Gramex royalties collected by Teosto 63, , ,707, ,842,

14 5 SECURITIES AND CONTINGENT LIABILITIES Securities Rent deposit 164, , Rent liabilities Payments outstanding in connection with leases Payments to be made in the next financial period 560, , To be paid later 1,239, ,815, Total 1,799, ,377, Leasing liabilities Payments outstanding in connection with leasing agreements Payments to be made in the next financial period 89, , To be paid later 85, , , , TOTAL SECURITY AND CONTINGENT LIABILITIES 2,138, ,673, NOTES ON PERSONNEL Average number of personnel Personnel expenses Salaries 4,604, ,678, Fees 250, , Pension costs 1,078, ,062, Other personnel costs 183, , ,116, ,234, Board of Directors Fees paid to Board members 97, , The retirement age of the CEO has been agreed at 60 years. 7 OWNERSHIP IN OTHER COMPANIES Name Domicile Ownership Polaris Nordic A/S Copenhagen 33.3 % GT Music Licences Ltd Helsinki 50.0 % Mind Your Rights Oy Helsinki % 14

15 PROPOSAL FOR DISTRIBUTION TO RIGHTHOLDERS The Board of Directors proposes that the total amount of EUR 55,913, be distributed for THE DISTRIBUTABLE AMOUNT IS MADE UP AS FOLLOWS Performing right royalties collected by Teosto 40,663, ,882, Mechanical reproduction right royalties collected by Teosto 1,247, ,174, Performing right royalties from other organisations 3,071, ,439, Mechanical reproduction royalties from other organisations 2,065, ,319, Remuneration for public lending 630, , Compensation for private copying 1,419, ,357, Gramex royalties collected by Teosto 154, , Online royalties collected by NMP 5,737, ,206, ,990, ,032, Distribution reserves from previous years 923, , TOTAL DISTRIBUTION TO RIGHTHOLDERS 55,913, ,023, SIGNATURES TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS Helsinki 14 March 2018 KIM KUUSI Chairman of the Board of Directors KATRI SIPILÄ CEO KIMMO HAKOLA ARI NIEMINEN MARKUS NORDENSTRENG TOMMI TUOMAINEN KAIJA KÄRKINEN An auditor s report has been submitted on the audit conducted on this date. Helsinki KPMG Oy Ab HEIDI VIERROS, Authorised Public Accountant 15

16 LIST OF ACCOUNTING BOOKS AND DOCUMENT TYPES USED The organisation s general ledger accounting is done in the Wintime accounting system, the banking software is the Opus Capita system and travel expense reports are processed using the Populus system. Financial statements safe + O:/ drive Journal and general ledger electronically: Wintime, Painter reports Accounts ledger itemisations MSV, MS, MSP, OM electronically Bank receipts KKA electronically: Opus Capita and O:/ drive Purchase invoices WF electronically: Wintime + Workflow + Archive Sales invoices MLLASKU, MLWIN, MLVAKLA, electronically: Opus Capita MLWINEL, MLWINLL, TI Payroll accounting receipts PT electronically: Personec W Travel expense receipts PO electronically: Populus + binder Payments of royalties KAR electronically: TEPA Memo vouchers KMU In binders Documentation pertaining to the notes to the financial statements electronically, O:/ drive DOCUMENTATION PERTAINING TO THE NOTES TO THE FINANCIAL STATEMENTS Royalties collected by Teosto Note 1 Other copyright royalties Note 1 Remuneration for public lending Note 1 Compensation for private copying Note 1 Depreciation Note 1 Auditors fees Note 2 Investments and financing Notes 3-5 Transfer for distribution to rightholders Note 1 Other capitalised long-term assets Note 6 Machinery and equipment Note 7 Shares and similar rights of ownership Note 3 Assets of the independent foundation Note 4 Financial securities Note 5 Accounts receivable Note 8 Accrued income Note 9 Other debts Note 9 Accruals and deferred income Note 9 Distribution funds to rightholders Note 9 Securities and contingent liabilities Note 10 Average number of personnel Note 11 Personnel expenses Note 1 Fees paid to the Board of Directors Note 12 Proposal for distribution to rightholders Notes 1, Note 13 16

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