2018 HDS ZAMP Summary annual report 2018 HDS ZAMP in 2018 eventful and successful year
HDS ZAMP continued its rise of collected royalties as well as decrease in operating costs...
Nenad Marčec HDS ZAMP General Manager
It has been an eventful year for HDS ZAMP – in 2018 we were part of far-reaching decisions for all au- thors and right holders. Our pleasure is bigger because we think we have contributed significantly to almost all of these changes being made to the benefit of all of our members. I’d like to begin with the most important fact: for another year in a row, HDS ZAMP continued its rise of collected royalties as well as decrease in operating costs which positions us as one of the most successful collective rights management organizations. In 2018, almost 99 million HRK were distrib- uted to members, songwriters and right holders, namely 98.968.275,99 HRK - 9.42% more than the previous year. At the same time, our operating costs have been reduced to all-time lowest percentage: 21,64% of total amount collected. The decrease in costs compared to previous year is 0,63% - one more reason for satisfaction another year in a row. In this successful year we have been granted a new license by State Intellectual Property Office (DZIV) for collective rights management. This also formally confirms complete compliance of our business and internal acts with the provisions of new Copyright law and the CRM Directive. 2018 was also marked by the fight of European authors and their associations for better position in the digital market and the vote for new EU copyright Directive. The voices and activities of our members and HDS representatives, as well as our partners from other music associations, were fruitful and the members of EU Parliament finally adopted the new Directive on March 26th 2019, making it an import- ant regulation that will ultimately regulate digital market and secure a fair and balanced playing field while also providing even richer offer of creative works online for the citizens. The role of Croatian Government representatives during this process, especially that of Minister of culture, Nina Obuljen-Koržinek, cannot be highlighted enough – we would like to thank all our MEPs
2 2018 was strongly marked by the fight of European authors and their associations for better position in the digital market and by voting for the new EU copyright Directive
who recognized the facts and saw the importance of the Directive for Croatian and European cul- ture, democracy and economy. The process of implementing the Directive into Croatian legislation is ahead of us, enabling Croatian authors and their societies to negotiate fair remunerations with large Internet providers, which wasn’t the case so far. We look forward to a free, open and fair Internet that will also be enjoyed by the creators whose creative work was the foundation for Internet platforms.
During the public debate, the testimonials and statements from our members explaining the effects of the Directive were of great importance – thank you once again for your efforts! HDS ZAMP is also the organization behind the web site clanak13.org, dedicated to providing information about the Directive – I invite you to look it up for the real purpose and latest updates on the Directive. During the vote for the Directive, we had a good partnership with other associations of authors and creators: journalists, media publishers and filmmakers. By this time, the idea of respecting copyright was no longer identi- fied only by HDS ZAMP who was by far the most vocal about it during the past decades and has, more often than not, met with misunderstanding, even in the related circles. We hope that „the battle for the Directive“ changed that while also preparing for its implementation in our legislation, which should result with the new copyright law during the following 2 year period. New digital challenges were welcomed by HDS ZAMP – direct licensing of Croatian repertoire on on- line music services (YouTube, Google Play and Deezer) began in early 2018 in 40 different countries. It resulted in doubling the revenue from some services. In September 2018 we reached a licensing agreement with Spotify, making the catalogue of Croatian authors available in more than 40 countries. We belive that the effects of this will be visible in the distribution statements received by our mem- bers, but we are also working on the localization and the availability of Spotify and other services in our market.
3 Total remuneration collected | last 5 years:
2014 | 111,5 mil. kn
2015 | 120,1 mil. kn
2016 | 124,4 mil. kn
2017 | 127,3 mil. kn
2018 | 137,6 mil. kn
Working with the DJ section of Musicians’ Union, we agreed the new terms for renewed Contract for temporary dubbing for DJ’s shows – new conditions reflect our appreciation of mutually agreed attitu- des of DJs from electronic and club scene. But, it is important to emphasize that, although with some technical flexibility, we have maintained intact the foundation, and that is the respect for the authors and other copyright holders. Agreements for music use with other business partners, such as cinema broadcasters and publishers of schoolbooks were also finalized while the partnership with caterers and hoteliers (with whom a new model has been agreed!) successfully continued throughout 2018. Last year’s 6th edition of MAKK conference, organized by HDS ZAMP’s PR department, welcomed Guy Chambers, world famous songwriter whose CV includes working with Robbie Williams and other star musicians. The richness of domestic talent and the messages sent from MAKK positioned our little conference on European map of cultural and creative industry. MAKK became a meeting place for various art professionals, decision and policy makers, legal experts, media and startup entrepreneurs. We expect MAKK to be equally useful and interesting for music scene in the future. The media and the public recognized our prize contest aimed at business users who respect the copyright by paying the fee for commercial use of music – the final concert „Best music for best party“ by Croatian band Neno Belan & Fiumens was held in Hrvatska Kostajnica. The dialogue between music and business world continued on our website with the series of columns by renowed musicologist and music writer Zlatko Gall. There you will also find the list of our partnerships with projects who promote the role and importance of authors in creative industry. Of course, the most important focus of our work are the authors, 383 regular and more than 9500 affiliated members. Apart from regular royalties payments (4 throughout the year!), wearecon- tinually dedicated to education and promotion of their work. Very successful series of 42 epi- sodes of „My song“ was substituted by new series of our collaboration with CMC TV, „Autograph“. It is a project which will present the work and various genres of up & coming artists, younger than 30. Education activities delivered by HDS ZAMP are something to be proud of – regular INTRO le- ctures are continuously well attended, but special workshops about various music business se- gments, from music publishing, media ralations to concert booking, were also excellently visited.
4 Administraton costs in % of gross income collected | last 5 years:
2014 | 23,41 %
2015 | 22,95 %
2016 | 22,49 %
2017 | 22,27 %
2018 | 21,64 %
To continue informing the public about collective rights management system, in 2018 we produced a short promotional film „This is HDS ZAMP“ with appearences by our famous authors. The business of HDS ZAMP was, as always, socially aware and responsible - during 2018, we partici- pated as partners in a total of 290 benefit concerts and events throughout Croatia, opening the year by participating in the benefit project for the Center for Autism and concluding it with 12 thousands HRK raised on our Christmas dinner for young families in Vukovar. Last year’s World Intellectual Property Day, April 26, was devoted to female creators and innovators, both in science and in cultural and creative industries around the world. It was the perfect occasion to present the interesting infographic “Women in Music” about the impact and successes of our authors. It was also a fitting closure and a cherry-on-top to the story started with our compilation CD “Women’s voices of Croatia” from 2017. The succes of many projects and activites by Croatian Composers’ Society was reflected in positi- ve media analysis related to our society and organization. We are pleased that, based on the 1876 newspaper and web articles last year, 64% of them are affirmative, 33% neutral and 3% negative. Based on independent analysis by Press Clipping company, „HDS ZAMP positioned itself in affirmative media context“. Our authors and members also deserve credit and praise for that. So, with that in mind, I would like to thank them all for successful cooperation, understanding and support through individual projects and business at large.
5 almost 99 million HRK were distributed to members, songwriters and right holders
6 Guests at MAKK: Ante Pecotić, Nina Obuljen-Koržinek, Guy Chambers | Music diva Josipa Lisac | European Copyright Directive: delegation of Croatian musicians in Strasbourg | Intro workshop – educating young creators on authors rights | Best music for best party – Neno Belan 7 A B C D E F G H
DEDUCTI- ONS FOR DEDU- COLLECTED COLLECTED EXPEN- FOR NET FOR DIS- EXPENSES SOCIAL AND CTIONS % IN 2018 - HRK IN TOTAL SES % DISTRIBUTION TRIBUTION CULTURAL % PURPOSES
PUBLIC PERFORMANCE RIGHTS
Radio stations 17.268.809,86 4.088.543,46 23,68% 13.180.266,40 1.318.026,64 10,00% 11.862.239,76 68,69%
Television stations 26.315.995,45 6.040.425,27 22,95% 20.275.570,18 2.027.557,02 10,00% 18.248.013,16 69,34%
Cable retransmission 14.459.625,28 2.656.006,27 18,37% 11.803.619,01 1.180.361,90 10,00% 10.623.257,11 73,47%
Concerts 2.779.297,18 18,00% 12.661.242,73 0,00 0,00% 12.661.242,73 82,00%
Hotels, clubs, caterers, 41.114.140,23 10.272.736,54 24,99% 30.841.403,69 3.035.964,49 9,84% 27.805.439,20 67,63% transporters, etc..
Live music 6.504.027,06 1.644.868,25 25,29% 4.859.158,81 485.915,88 10,00% 4.373.242,93 67,24%
TOTAL 121.103.137,79 27.481.876,97 22,69% 93.621.260,82 8.047.825,93 8,60% 85.573.434,89 70,66%
MECHANICAL REPRODUCTION RIGHTS
Discography 798.836,56 143.790,58 18,00% 655.045,98 0,00 0,00% 655.045,98 82,00%
Private copying 3.254.512,62 602.084,83 18,50% 2.652.427,79 795.728,34 30,00% 1.856.699,45 57,05%
TOTAL 4.053.349,18 745.875,41 18,40% 3.307.473,77 795.728,34 24,06% 2.511.745,43 61,97%
ONLINE AND DIGITAL
DSPs 1.986.368,56 397.273,71 20,00% 1.589.094,85 0,00 0,00% 1.589.094,85 80,00%
DJs 384.708,80 76.941,76 20,00% 307.767,04 30.776,70 10,00% 276.990,34 72,00%
MP3 juke-boxes 380.694,24 76.138,85 20,00% 304.555,39 0,00 0,00% 304.555,39 80,00%
Other (dig.archives, 256.077,36 51.117,63 19,96% 204.959,73 0,00 0,00% 204.959,73 80,04% recorders, portals, etc.)
TOTAL 3.007.848,96 601.471,95 20,00% 2.406.377,01 30.776,70 1,28% 2.375.600,31 78,98%
INTERNATIONAL
Revenue from abroad 9.452.772,58 945.277,26 10,00% 8.507.495,32 0,00 0,00% 8.507.495,32 90,00%
TOTAL (1+2+3+4) 137.617.108,51 29.774.501,59 21,64% 107.842.606,92 8.874.330,97 8,23% 98.968.275,95 71,92%
8 Total reuneration 88% 2,9% by rights Public Mechanical collected performance growth 6,3 % reproduction decline 1,2 % in 2018 | compared to 2017
2,2% 6,9% Online and International digital growth 93 % income growth 22,7 %
Total 2018 100% | 8,14% growth ↑
Remuneration Total payments in 2018
remuneration NET DISTRIBUTABLE 101.883.440,48 kn collected – 2018 PAID OUT 91.940.111,03 kn | compared to 2017 To our members 70.171.253,90 kn To sister societies 21.768.857,13 kn NOT ALLOCATED 3.195.575,95 kn BALANCE 9.943.329,45 kn
Payments to HDS ZAMP’s members include payments to our Net distributable members from abroad who have conferred the management income of their rights to HDS ZAMP for the territory of Croatia, as well as payments to sub-publishers of major foreign publishers (EMI, BMG, SONY, UNIVERSAL, etc). growth 9,42 % In 2018, there remains the amount of 3.195.575,95 kn that has not been allocated. This amount refers to the remuneration collected from concerts and live music events of popular music (3.078.545,16 kn) and of serious music (117.030,79 kn). The organizers and/or promoters of these events have not fulfilled their legal obligation of delivering programmes and setlists for these events. Due to lack of these data HDS ZAMP could not distribute these royalties, nor pay Administrative costs them out to shareholders. We are continuously gathering the data necessary for distributing these royalties. decline 0,63 % The payment frequency is prescribed by the Art.83 of Regulations on the management of economic rights of authors, in accordance with Art.168.d §3 of Croatian Copyright and Related Rights Law.
9 FINANCIAL DATA on cooperation with foreign CMOs
Top 5 societies | countries per total royalties for HDS members in 2018
01 02 03 04 05 SAZAS SOKOJ ARTISJUS PRS PAM CG SLOVENIA serbia HUNGARY UNITED MONTENEGRO KINGDOM
Revenue from abroad | received by HDS from foreign CMOs in 2018:
Mechanical SOCIETY Territory Costs Other rights Costs Total rights ACUM Israel 111,43 11,14 2.573,97 257,4 2.685,40 AKKA LAA Latvia 0,00 0,00 3.062,27 306,23 3.062,27 AKM Austria 0,00 0,00 483.992,81 48.399,28 483.992,81 AMCOS Australia 0,00 0,00 5.505,81 550,58 5.505,81 AMUS Bosnia and Hercegovina 0,00 0,00 373.638,55 37.363,86 373.638,55 APRA Australia 0,00 0,00 18.912,41 1.891,24 18.912,41 ARTISJUS Hungary 65.389,27 6.538,93 1.020.892,18 102.089,22 1.086.281,45 ASCAP Usa 0,00 0,00 16.572,46 1.657,25 16.572,46 AUME Austria 65.388,31 6.538,83 0,00 0,00 65.388,31 BMI Usa 0,00 0,00 24.199,90 2.419,99 24.199,90 Revenue sent abroad to fore- BUMA Netherlands 0,00 0,00 22.564,88 2.256,49 22.564,88 EAU Estonia 0,00 0,00 2.578,96 257,9 2.578,96 GEMA Germany 44.194,61 4.419,46 468.230,97 46.823,10 512.425,58 ign CMOs in 2018: other rights IMRO Ireland 0,00 0,00 3.112,24 311,22 3.112,24 JASRAC Japan 4.680,13 468,01 74.419,72 7.441,97 79.099,85 KODA Denmark 0,00 0,00 16.033,67 1.603,37 16.033,67 KOMCA South korea 0,00 0,00 1.258,05 125,81 1.258,05 LATGA Lithuania 0,00 0,00 3.764,45 376,45 3.764,45 MCPS United Kingdom 4.390,40 439,04 0,00 0,00 4.390,40 MESAM Turkey 0,00 0,00 2.560,13 256,01 2.560,13 MUSICAUTOR Bulgaria 700,34 70,03 48.106,44 4.810,64 48.806,78 NCB Scandianvian countries* 5.895,08 589,51 0,00 0,00 5.895,08 OSA Czech republic 6.554,16 655,42 11.167,12 1.116,71 17.721,28 PAM CG Montenegro 0,00 0,00 543.804,05 54.380,41 543.804,05 PRS United kingdom 0,00 0,00 868.303,26 86.830,33 868.303,26 RAO Russia 90,65 9,07 2.687,41 268,74 2.778,06 SABAM Belgium 3.421,59 342,16 14.397,64 1.439,76 17.819,23 SACEM France 6.822,54 682,25 32.215,84 3.221,58 39.038,38 SAZAS Slovenia 7.049,20 704,92 2.075.094,61 207.509,46 2.082.143,81 SGAE Spain 2.571,20 257,12 5.416,22 541,62 7.987,42 SIAE Italy 0,00 0,00 71.427,04 7.142,70 71.427,04 SOCAN Canada 0,00 0,00 14.197,83 1.419,78 14.197,83 SODRAC Canada 1.181,65 118,17 0,00 0,00 1.181,65 SOKOJ Serbia 20.717,23 2.071,72 1.977.245,08 197.724,51 1.997.962,31 SOZA Slovakia 7.451,97 745,2 26.566,51 2.656,65 34.018,48 SPA Portugal 766,09 76,61 4.612,03 461,2 5.378,12 STEMRA Netherlands 2.973,64 297,36 0,00 0,00 2.973,64 STIM Sweden 0,00 0,00 64.569,23 6.456,92 64.569,23 SUISA Switzerland 12.530,82 1.253,08 252.474,33 25.247,43 265.005,15 TEOSTO Finland 0,00 0,00 18.119,11 1.811,91 18.119,11 TONO Norway 0,00 0,00 20.448,79 2.044,88 20.448,79 UCMR ADA Romania 34,12 3,41 16.999,19 1.699,92 17.033,31 ZAIKS Poland 17.755,03 1.775,50 232.193,99 23.219,40 249.949,02 ZAMP MACEDONIA Macedonia 0,00 0,00 328.183,97 32.818,40 328.183,97 UKUPNO 280.669,46 28.066,95 9.172.103,12 917.210,31 9.452.772,58
10 FINANCIAL DATA on cooperation with foreign CMOs
Revenue sent abroad to foreign CMOs in 2018 | mechanical rights
NET NET SOCIETY TERRITORY COSTS SOCIETY TERRITORY COSTS DISTRIBUTED DISTRIBUTED
ACUM Israel 233,58 42,04 SACM Mexico 152,52 27,45
AMCOS Australia 1.760,74 316,93 SAYCO Colombia 1,88 0,34 Bosnia and AMUS 831,75 149,72 SAZAS Slovenia 2.727,72 490,99 Herzegovina ARTISJUS Hungary 1.785,80 321,44 SDRM France 3.856,18 694,11
AUME Austria 1.434,67 258,24 SESAC USA 30,16 5,43
GEMA Germany 7.700,65 1.386,12 SGAE Spain 402,14 72,39
JASRAC Japan 11,51 2,07 SOKOJ Serbia 40.444,40 7.279,99
MCPS United Kingdom 5.222,19 939,99 SOZA Slovakia 1,34 0,24
MESAM Turkey 112,42 20,24 SPA Portugal 77,95 14,03
MSG Turkey 154,58 27,82 STEMRA Netherland 1.006,24 181,12
MUSICAUTOR Bulgaria 1.629,75 293,36 SUISA Switzerland 2.816,51 506,97
NCB Denmark 984,08 177,13 ZAMP MAC Macedonia 1.455,20 261,94
OSA Czech Republic 23,53 4,24 total 76.299,49 13.733,91 SABAM Belgium 1.442,00 259,56
Top 5 societies | countries per total royalties for their members in 2018
01 02 03 04 05 PRS UNITED ASCAP BMI GEMA SOKOJ KINGDOM USA USA GERMANY SERBIA
11 Revenue sent abroad to foreign CMOs in 2018 | other rights
SOCIETY TERRITORY NET DISTRIBUTED COSTS CULTURE FUNDS
ABRAMUS Brasil 12.616,04 2.841,42 879,07 ACUM Israel 190.497,99 42.904,55 13.273,67 AKKA LAA Latvia 1.211,76 272,92 84,43 AKM Austria 100.550,89 22.646,38 7.006,26 AMRA USA 114.377,80 25.760,52 7.969,70 AMUS Bosnia and Hercegovina 82.198,10 18.512,91 5.727,46 APRA Australia 170.026,39 38.293,87 11.847,23 ARTISJUS Hungary 48.698,23 10.967,97 3.393,23 ASCAP USA 3.683.076,24 829.513,92 256.632,24 AUME Austria 18.568,94 4.182,15 1.293,86 BMI USA 3.617.212,90 814.679,97 252.042,96 BUMA Netherlands 264.282,62 59.522,56 18.414,89 EAU Estonia 1.313,19 295,76 91,50 GCA Georgia 920,13 207,23 64,11 GEMA Germany 1.379.504,64 310.696,34 96.122,19 IMRO Ireland 71.198,96 16.035,65 4.961,06 JASRAC Japan 9.744,37 2.194,66 678,98 KODA Denmark 56.673,99 12.764,29 3.948,97 LATGA Lithuania 1.277,96 287,83 89,05 MESAM Turkey 389.191,11 87.654,84 27.118,36 MSG Turkey 72.616,85 16.354,99 5.059,85 MUSICAUTOR Bulgaria 2.523,84 568,43 175,86 NCB Scandinavian countries* 74.757,04 16.837,01 5.208,98 OSA Czech Republic 11.804,12 2.658,56 822,50 PRS United Kingdom 7.354.319,81 1.656.362,84 512.439,99 SABAM Belgium 71.474,19 16.097,64 4.980,23 SACEM France 804.345,04 181.157,10 56.045,78 SACM Mexico 39.737,79 8.949,87 2.768,88 SAMRO South African Republic 9.003,93 2.027,89 627,38 SAYCO Columbia 24.920,51 5.612,67 1.736,43 SAZAS Slovenia 80.082,44 18.036,42 5.580,05 SESAC USA 212.042,08 47.756,78 14.774,83 SGAE Spain 154.379,39 34.769,81 10.756,97 SIAE Canada 308.287,08 69.433,38 21.481,07 SOCAN Canada 577.161,78 129.990,18 40.215,93 SOKOJ Serbia 980.760,11 220.889,85 68.338,16 SOZA Slovakia 2.083,16 469,18 145,15 SPA Portugal 33.251,86 7.489,09 2.316,95 STEF Iceland 11.056,19 2.490,11 770,38 STIM Sweden 395.951,66 89.177,47 27.589,43 SUISA Switzerland 190.803,22 42.973,30 13.294,93 TEOSTO Finland 46.958,79 10.576,20 3.272,03 UACRR Ukraine 1.784,17 401,84 124,32 ZAMP MAC Macedonia 19.310,34 4.349,14 1.345,52
total 21.692.557,64 4.885.665,49 1.511.510,82
12 Other reciprocal representation agreements with foreign CMOs:
AAS | Azerbaijan MACP | Malasya
ALBAUTOR | Albania MCSC | China
AUTODIA | Greece MüST | Taiwan
CASH | Hong Kong NCIP | Belarus
HFA | USA SADAIC | Argentina
13 Top 10 authors: (in alphabetical order) croatia
Ante Pecotić Branimir Mihaljević Denis Dumančić Husein Hasanefendić Miro Buljan Neno Belan Predrag Martinjak Tonči Huljić Vjekoslava Huljić Zlatan Stipišić
world
Bruce Springsteen Bryan Adams Edward Christopher Sheeran George Michael Gordon Matthew Sumner (Sting) Mark Knopfler Martin Karl Sandberg (Max Martin) Michael (Joe) Jackson Paul (James) McCartney Prince
14 domestic works: Top 10 according to the number of broadcast in 2018
Nama se nikud (Ivan Dečak / Ivan Dečak / Ivan Dečak, Mario Robert Kasumović, Vatra feat. Massimo ne žuri Robert Kelemen, Tomislav Franjo Šušak)
Ako te pitaju (Tonči Huljić / Vjekoslava Huljić / Tonči Huljić, Leo Škaro, Petar Grašo) Petar Grašo Do posljednjeg (Vjekoslav Dimter / Damir Bačić / Mia Dimšić, Branimir Jovanovac) Mia Dimšić retka Željko Bebek Ako voliš ovu ženu (Branimir Mihaljević / Nenad Ninčević, Jadran Ninčević) & Oliver Dragojević
(Nenad Borgudan / Nenad Borgudan / Nenad Borgudan, Vibor Čerić, Vikend Gina Damjanović, Edi Grubišić, Alen Križaj) Detour
(Predrag Martinjak / Predrag Martinjak / Predrag Martinjak, Bojan Da Šalamon) Saša Lozar
Pruži mi ruku (Ante Pecotić / Ante Pecotić / Bojan Šalamon) Zsa Zsa
Rekao si (Ante Pecotić / Ante Pecotić / Predrag Martinjak, Bojan Šalamon) Nina Badrić
(Nenad Borgudan / Nenad Borgudan / Nenad Borgudan, Vibor Čerić, Bez tebe Gina Damjanović, Edi Grubišić, Dominik Žagmešter, Alen Križaj) Detour
Kao ti i ja (Branimir Mihaljević / Nenad Ninčević, Jadran Ninčević) Franka Batelić
foreign works: Top 10 according to the number of broadcast in 2018
(Leon Anthony Rolle, Amir Izadkhah, Julian C Bunetta, Ben Haggerty, John Rudimental ft. Jess Glynne, These days Henry Ryan, Daniel Sebastian Caplen, Kesi Dryden, Jamie Scott, Piers Sean Aggett) Macklemore & Dan Caplen
(Zachary Scott Carothers, Asa Taccone, William E., Gourley John Baldwin Feel it still Garrett, Freddie Gorman, Robert Bateman, John Graham Hill, Kyle O Quin, Portugal. The Man Brian Holland, Georgia Dobbins, Eric Andrew, Sechrist Jason Wade Howk)
(Belcalis Almanzar, Jason Gregory Evigan, Brittany Talia Hazzard, Adam Noah Girls like you Levine, Gian Michael Stone, Henry Russell Walter) Maroon 5 feat. Cardi B
One kiss (Dua Lipa, Jessie Reyes, Adam Richard Wiles) Calvin Harris, Dua Lipa
Say (Floyd Nathaniel Hills, Larrance Levar Dopson, Timothy Z. Mosley, Christopher Justin Timberlake something Alvin Stapleton, Justin R Timberlake) ft. Chris Stapleton
Shotgun (George Ezra Barnett, Joel Laslett Pott) George Ezra
Paradise (George Ezra Barnett) George Ezra
(Christopher Kenneth Braide, Sia Kate I Furler, Pierre David Guetta, Giorgio H Flames Tuinfort) David Guetta & Sia
(Grace Elizabeth Chatto, Frederick John Philip Gibson, Demitria Lovato, Jack Clean Bandit Solo Robert Patterson, Camille Purcell) feat. Demi Lovato
(Rita Ora, Nolan Joseph Lambroza, Alexandra Leah Tamposi, Alessandro Anywhere Rodolfo Renato Lindblad, Andrew Wotman, Nicholas James Gale, Brian D Lee) Rita Ora
15 Report of factual findings Deloitte 2018
Deloitte d.o.o. ZagrebTower Radnička cesta 80 10 000 Zagreb Croatia PIN: 11686457780
Tel.: + 385 (0) 1 2351 900 Fax: + 385 (0) 1 2351 999 www.deloitte.com/hr
REPORT OF FACTUAL FINDINGS
13 May 2019
Croatian Composers' Society Berislavićeva 9 10 000 Zagreb Mr. Ante Pecotić
Dear Sir,
We have performed the procedures agreed with you and enumerated below with respect to the general statement of account regarding payment collection calculation and distribution of funds to the holders of rights (hereinafter “General Statement of Account for Payment Collection and Distribution”) for the period from 1 January to 31 December 2018, prepared by the Croatian Composers’ Society (hereinafter: “the Society”).
This Report has been prepared to assist in examining and evaluating the General Statement of Account for Payment Collection and Distribution in accordance with the provisions of the Copyright and Related Rights Act (Official Gazette 167/03, 79/07, 80/11, 141/13, 127/14, 62/17 and 96/18; hereinafter: “the Act”).
The aforementioned procedures were performed in accordance with the International Standard for Related Services 4400, applicable to agreed-on procedures engagements. The sufficiency of these procedures is solely the responsibility of the Society. Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the purpose for which the report has been requested or for any other purpose.
We have performed the following procedures:
1) We examined the Society’s normative documents, on the basis of which the Society performs the copyright protection tasks and the remuneration collection and distribution tasks, in order to check whether the determinants of these normative documents comply with the requirements of the Act. The documents that we examined within the scope of our procedures include the Statute of the Society (adopted on 31 May 2015), the Rules on the Exercise of Author’s Copyright (of 8 March 2018, 19 June 2018 and 13 February 2019), the Price Lists and the Remuneration Rules for Public Performance and Communication of Musical Works to the Public, and the Decision on the Amount of Protection Costs (of 10 September 2013). We have examined the provisions of the abovementioned documents in order to understand the rules of accounting and distribution, as well as the percentages used in the calculation of the allocations from the distribution budget as provided by law in the General Statement of Account for Payment Collection and Distribution in Annex 1.
The Society is registered with the Court Register of the Commercial Court of Zagreb: Reg. No. (MBS) 030022053; paid-up share capital: HRK 44,900,00; Board Members: Branislav Vrtačnik, Marina Tonžetić, Juraj Moravek and Dražen Nimčević; commercial bank: Zagrebačka banka d.d., Trg bana Josipa Jelačića 10, 10 000 Zagreb, bank account no. 2360000-1101896313; SWIFT Code: ZABAHR2X IBAN: HR2723600001101896313; Privredna banka Zagreb d.d., Radnička cesta 50, 10 000 Zagreb, bank account no. 2340009-1110098294; SWIFT Code: PBZGHR2X IBAN: HR3823400091110098294; Raiffeisenbank Austria d.d., Petrinjska 59, 10 000 Zagreb, bank account no. 2484008-1100240905; SWIFT Code: RZBHHR2X IBAN: HR1024840081100240905.
Deloitte refers to Deloitte Touche Tohmatsu Limited (“DTTL”), also known as “Deloitte Global”, a UK private company limited by guarantee, its network of member firms and related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. A detailed description of DTTL and its members can be found at www.deloitte.com/hr/o-nama.
© 2019. For further information, please contact Deloitte Hrvatska.
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2) In view of the fact that, within the Society, the obligor debt amounts are calculated automatically (the calculation rules are defined in the Remuneration Rules for Public Performance and Communication of Musical Works to the Public), based on the selected sample, we have tested whether obligors’ debt is properly calculated and invoices issued correctly in accordance with debt. We have also checked whether debt is correctly entered into the information system of the Society.
3) Based on the selected sample, we examined the accounting records and bookkeeping documents, which form the basis for the calculation of the rights to the distribution of funds to authors, in order to verify their credibility and applicability with regard to the preparation of the General Statement of Account for Payment Collection and Distribution.
4) Since the distribution of the collected remunerations to the revenues of the Society and the suspense items intended for disbursement to authors is carried out automatically, within the information system, and based on the percentages determined in the normative documents referred to in item 1, we have requested the review of receivables as at 31 December 2018, and we have selected a representative sample, based on which we have carried out the verification of data on the issued invoice with the data entered in the system, based on which invoices are created automatically and periodically. During the testing and comparing of data entered into the system and those on the inovice, we have recalculated and checked the amounts which refer to authors' remuneration, performance remuneration and phonogram producers' remuneration.
5) Since the Society's information system, based on the enetered data (the point value and the number of points), automatically creates an invoice, and allocates each collected invoice to the Copyright Promotion and Anti- Piracy Fund, the protection costs, the Fund for Culture, the Appeals and Complaints Fund, the Deloitte Enterprise Risk Services (ERS) Department was engaged in the testing of automatic postings. When performing the recalculation, we have also checked whether the Society applies the percentages (performs the allocation from the distribution budget) in the manner specified in the normative documents referred to in item 1 and in accordance with the provisions of the Act.
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Our findings are as follows:
a) With respect to item 1, we found that the determinants of the normative documents of the Society, on the basis of which the copyright protection tasks and the remuneration collection and distribution tasks are performed, and which directly pertain to the General Statement of Account for Payment Collection and Distribution, comply with the requirements of the Act.
b) With respect to item 2, we did not find any deviations or deficiencies either in the process of calculation of obligor debt amounts or in the process of issuing invoices.
c) With respect to item 3, based on the selected sample, we found that the accounting records and bookkeeping documents, which form the basis for the calculation of the rights to the distribution of funds to authors, are proper and credible, and that, as such, are applicable for the preparation of the General Statement of Account for Payment Collection and Disbribution from Annex 1.
d) With respect to item 4, based on the selected sample, we did not find the existence of differences between the amounts obtained from the calculation of the Society and the amount obtained by maunal recalculation.
e) With respect to item 5, we confirmed that the Society performs the allocations from the distribution budget in the manner specified in the normative documents referred to in item 1 and in accordance with the provisions of the Act. We did not establish the existence of any differences between the collected amounts, specified in bank statements, the amounts used in the General Statement of Account for Payment Collection and Disbribution and the amounts specified in the accounting records of the Society. We did not observe any deviations or deficiencies in the process of the automatic calculation of remunerations (within the information system), to be paid to the authors.
Based on the procedures performed on the selected samples and the identified findings, we have assessed that the General Statement of Account for Payment Collection and Distribution has been prepared in accordance with the Copyright and Related Rights Act and other normative documents referred to in item 1.
Defined Scope of Work
Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing and International Standards on Review Engagements, we do not express our opinion as to the procedures performed.
Had we performed additional procedures in accordance with International Standards on Auditing or International Standards on Review Engagements, or other applicable national standards or practices, other matters might have come to our attention which would have been reported to you.
The Report is solely for the purpose set forth in the first paragraph hereof and for your information. This Report relates only to the items specified above and does not extend to any financial statements of the Society, taken as a whole.
Signature
Marina Tonžetić
Member of the Board
Deloitte d.o.o. 13 May 2019 Radnička cesta 80, 10 000 Zagreb Republic of Croatia
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