stim annual report 2012

| ÅRET 2012

Stands for the Swedish Performing Rights Society

Is an economic association that is owned by thosewho create music and by music publishers

Is a non-profit organization

Works on behalf of its registered authors and music publishers

Defends their economic interests as defined in the Swedish Copyright Act

Also works on behalf of corresponding organizations in other countries

Issues licenses to those who wish to use and distribute music

Collects the licensing fee

Distributes royalties to individual authors and their music publishers

Promotes Swedish musical culture

STIM in numbers 3

A word from the CEO 4

The STIM process

– from license to distribution

6

Distributions in 2012 were

at an all-time high

8

STIM soon as big as Skellefteå 12

Swedish composers' successes are paving

the way for global collaboration

14

Scholarships 17

Multi-faceted festival year

–and sold-out arenas

18

STIM - promoting the Swedish music culture 20

Streamed music increasing in popularity

– and now TV is next

22

Music choice important for business 24

Gender equality organization

– equipped for the future

26

The STIM sphere 28

STIM committees 32

Administration Report 36

Notes 42

2012ANNUAL REPORT

2012 | STIM ANNUAL REPORT

SEK 8.1 MILLION ALLOCATED TO SCHOLARSHIPSNUMBER OF REPORTED WORKS

WTIH AT LEAST ONE STIM-AFFILIATED AUTHOR

1,223,058FOUNDED 1923

STIM

IN NUMBERSTOTAL OPERATING INCOME

IN SWEDEN AND ABROAD

SEK 1.5 BILLION

INCOME FOR

ONLINE PERFORMANCES INCREASED BY

NUMBER OF STIM MEMBERS

71,291AN INCREASE

OF 40% IN SEVEN YEARS

43.4%

COMPARED

TO 2011

3


Our affiliates make the decisions in STIM. This is a fantastic strength

and has contributed to making STIM a dynamic organization. One

piece of particularly good news is that STIM's authors and music

publishers developed strategies at an early stage for how the use of

music on the Internet can be licensed. In 2012 we reaped the benefits

of this long-term project.

One of the important guiding principles for STIM's owners has been

to be receptive to change. The ability to utilize technological develop-

ments and changes in the market to benefit our members has been

very important in recent years. Benefits for our members in practice

also mean good, simple solutions for music users. The initiatives STIM

has taken online are examples of this.

It is important that we provide a valuable service and create added

value for both rightsholders and licensees. Our focus is to make the

administration of music rights simple, effective and transparent.

In 2012 STIM experienced:

• continued international successes for our authors

• strong growth in the online market

• revenue growth in other important areas

• intensive development of national and international licensing

systems

• strong focus on international cooperation projects

• major involvement in EU's work with the Collective Management

Directive

• creation of new methods for promoting the Swedish music culture

and the promotion of Swedish music

• work to reform STIM's distribution rules

• move of STIM's office and the establishment of ”The STIM Building”

STIM-licensed revenue increased in total by more than 8 percent. Reve-

nue from the online area increased by more than 43 percent. Revenue

from TV decreased by more than 6 percent, which is due to the fact

that in 2011 this item included unusually high retroactive revenue. The

markets for background music and live music are showing an increase

of more than 12 percent. Foreign revenue decreased by 1 percent due

to foreign exchange rates and the restructuring of distribution proce-

dures at some collecting societies. Mechanical reproduction revenue

continued to fall, but the curve is not as dramatic as many people

expected. In 2012 STIM's revenue from NCB decreased by 10 percent.

The total costs for STIM's operations as a whole increased 4 percent.

However, a comparison of total operating income to total operat-

ing costs shows that STIM's administrative overhead ratio is basically

unchanged at just under 11 percent. The Swedish STIM distributions to

authors and music publishers increased by almost 10 percent.

Overall, 2012 was a good year for STIM. However, several challenges

are waiting just around the corner. We would like to:

• develop, streamline and improve the licensing in Sweden

• develop and establish international licensing and administration

cooperations

• create even better services for our affiliates

• finalize in 2013 the reforms to STIM's distribution rules

This means that 2013 will be a year when many important initiatives

fall into place. I am convinced that STIM will continue to welcome

change, and I look forward to participating in the development of

collective rights management.

Kenth Muldin

CEO

STIM is an organization for authors and music

publishers. We exist so that authors are paid

when their music is used. After deducting costs,

all revenue is sent to the authors and music

publishers. STIM is a genuine not-for-profit

organization.

A FEW WORDS FROM CEO

KENTH MULDIN

4


The Copyright Act provides the creator of a musical work the copyright

to that work. This person is entitled to decide whether the musical work

is to be performed in public, recorded, copied or otherwise distributed,

and to grant permission to do so. The act establishes entitlement to

economic compensation.

By becoming a registered member of STIM, authors and their music

publishers instruct STIM to manage their economic rights, as laid down

in the law on copyright.

Those who become registered members of STIM notify details of their

musical works. These are documented by being entered in the works

register with details of current ownership shares. Information about

foreign musical works is also entered in the works register.

STIM licenses the works, collects the royalties due and then pays them

to the authors and their music publishers on an individual basis. The

amount of the royalty is based on the tariffs or agreements stipulated

in the signed agreement.

STIM instructs its counterparts in other parts of the world to defend the

economic rights of STIM-affiliated members in their respective territo-

ries. The payment is sent to STIM for onward distribution to the STIM-

affiliated members. In the same way, STIM represents rights to foreign

music performed in Sweden.

Payments to authors are calculated on the basis of reports about

which music has been played, recorded, downloaded or streamed.

The information in the reports is linked to the details in the works regis-

ter on who at the time owns the rights to the musical works used.

The royalties are distributed according to STIM's distribution rules and

paid to the musical works' creators and their publishers, as well as

to corresponding foreign organisations. These organisations subse-

quently forward remuneration to their members.

THE STIM SYSTEM FROM LICENSE

TO PAYMENT

6


MUSIC PUBLISHERS

REPORTING WORKS WITH BREAKDOWN OF

SHARES WITHIN WORKS

MEMBERSHIP APPLIES TO PUBLIC PERFORMANCE AND

RECORDINGS (MECHANICAL REPRODUCTION)

INTERNET/MOBILE

MUSIC REPORTS FROMONLINE MUSIC SERVICES

DIRECTORY OF WORKS

PUBLICPERFORMANCES

DISTRIBUTION

MUSIC REPORTS FROMARTIST OR ORGANIZERS

CORRESPONDINGORGANIZATIONS IN OTHER COUNTRIES

IN SWEDEN

OF MONEY BETWEEN WORKSAND RIGHTSHOLDERS

CORRESPONDING ORGANIZATIONS IN OTHER COUNTRIES

INFORMATION ABOUT WORKS FROM OTHER

RIGHTSHOLDERS

AUTHOR

MEMBERSHIP APPLIES TO PUBLIC PERFORMANCE AND RECORDINGS (MECHANICAL

REPRODUCTION)

RECORDINGS

IDENTIFICATIONMATCHING

PAYMENT IS MADESEVERAL TIMES A YEAR

PRODUCTION CONTENT TO WORKS FROM THE PRODUCER

CORRESPONDING ORGANIZATIONS IN OTHER COUNTRIES

(MECHANICAL REPRODUCTION) IN SWEDENPERFORMANCES/MECHANICAL

REPRODUCTIONS

PAYMENT

Money in

Money out

7


0

100

200

300

400

500

600

700

800

+9.5%

+20.2%

+7.2%

+8.3%

0

50

100

150

200

250

300

+7.1%

-19.1%

-14.9%

-10.4%

DISTRIBUTIONS IN

2012 WERE AT AN ALL-TIME HIGH

Performance revenue, Sweden, SEK million Mechanical reproduction revenue, SEK million

The core of STIM's assignment is to pay money to the rightshold-

ers whose music is played in public. The organization has been very

successful in this area for a long time.

In 2012 STIM paid almost SEK 1.3 billion, which is more than it has ever

paid before.

The largest revenue increase in 2012 was in the Online and new media

area, which as a whole increased by SEK 49 million, or 43 percent.

Revenue in the Live and Background Music areas also increased sharply

during the year.

Record sales continue to fall, but at a slower rate. In 2012 revenue

related to record production landed at approximately the same level

as revenue from Online and new media.

A prerequisite for STIM's continued success is, naturally, the attrac-

tive repertoires that we represent. With this as support, we continue

to increase the number of customers in the traditional market,

while at the same time we are working with industry representa-

tives to find systems for the new areas of use for music that are

constantly appearing.

But it is not sufficient to merely increase market coverage. Working

consistently to minimize the administrative costs has become an

increasingly important goal for collecting societies. In order to be able

to compare the efficiency of different organizations, we use a compari-

son figure, i.e. the administrative overhead ratio. This describes the

relationship between the administrative costs and total revenue.

STIM's administrative overhead ratio in 2012 was the same as in 2011,

just under 11 percent, which in an international comparison puts STIM

among the most efficient collecting societies in the world.

8


Mechanical reproduction

11.2%Radio and TV

23.5%

Live music 8.2%

Background music 10.6%Online and

new media 11.0%

Private copying levy0.7%

Other revenue 1.8%

International30.1%

International distributed

by STIM 2.9%

Foreign music with STIM affiliated sub-publishers

25%

Foreign music39%

Music with STIM affiliated authors and music publishers

36%

Total revenue per revenue category Payment of performance revenue, Sweden 2012

STIM's profit before distribution, SEK million 2012 2011 %

Performance in Sweden 785.1 724.8 8.3%

Performance abroad 443.0 457.5 –3.2%

Performance abroad for distribution by STIM 42.8 34.9 22.6%

Other revenue 36.0 40.8 –11.8%

Total revenue for performances 1,306.9 1,258.0 3.9%

Operating costs –160.4 –154.3 4.0%

Distributable revenue for performances 1,146.5 1,103.7 3.9%

Mechanical reproduction 165.5 184.8 –10.4%

STIM 's profit before distribution 1,312.0 1,288.5 1.8%

Distribution of STIM's profit, SEK million 2012 2011 %

Royalties for performances in Sweden 626.7 571.7 9.6%

Promotion of Swedish music 32.6 37.2 –12.4%

Scholarships 8.1 7.8 3.8%

Royalties for performances abroad 443.0 457.5 –3.2%

Royalties for performances abroad that are distributed by STIM on behalf of a third party 36.1 29.5 22.4%

Royalties for mechanical reproduction 165.5 184.8 –10.4%

Distribution of STIM's profit 1,312.0 1,288.5 1.8%

9


1 Concerts Publicly subsidized concerts with contem-porary classical music

total of all of the cat-egory's music reports

Grading large/small concert

7.1 (5.6) 5.4 (4.3) 34 (35) 16 (14) 50 (51)

2 Church concerts total of all of the cat-egory's music reports

grading 2.1 (1.7) 1.6 (1.3) 49 (55) 13 (9) 38 (36)

4 Dance - discothèque total of the category's statistically selected music reports

grading 9.6 (7.5) 7.3 (5.7) 36 (33) 27 (26) 37 (41)

5 Other live music, loggedconcerts and other performances with reporting

per music report grading 66.6 (56.5) 50.8 (43.1) 60 (60) 17 (16) 23 (24)

6 Other live music, unlogged

based on information from the Other live music category

in accordance with analogous data

35.9 (30.7) 27.4 (23.4) 69 (63) 12 (14) 19 (23)

7 Theatre music total of all of the cat-egory's music reports

grading 0.7 (0.6) 0.5 (0.5) 20 (25) 32 (27) 48 (48)

8 Background music, loggedRecorded background music

per music report and total of all of the cat-egory's music reports

grading 2.1 (1.9) 1.6 (1.4) 42 (62) 24 (12) 33 (26)

9 Background music, unlogged

based on data from SR, commercial radio, TV and record sales/downloads in Sweden


135.8 (128.2) 103.6 (97.9) 39 (37) 25 (26) 36 (37)

10 Public service radio total of all of the cat-egory's music reports

grading 50.7 (49.8) 38.7 (38.0) 36 (36) 21 (21) 43 (43)

11 Public service TV total of all of the cat-egory's music reports

grading 70.7 (82.9) 54.0 (63.3) 29 (31) 20 (20) 51 (49)

12 Commercial radio total of all of the cat-egory's music reports

grading 27.2 (27.4) 20.8 (20.9) 28 (26) 33 (35) 39 (39)

13 Commercial TV total of all of the cat-egory's music reports

grading 194.2 (201.5) 148.2 (153.8) 15 (16) 28 (29) 57 (55)

14 Community radio total of the category's selected music reports and analogous data from SR, P4 local radio, respectively

grading and in accord-ance with analogous data

3.4 (3.3) 2.6 (2.5) 38 (38) 25 (25) 37 (37)

15 Cinema, Movie, Theaters

per music list and movie

17.3 (14.7) 13.2 (11.2) 12 (18) 33 (32) 55 (50)

16 Online and new media, logged

total of all of the cat-egory's music reports

grading 153.9 (106.9) 139.5 (97.1) 45 (46) 28 (26) 27 (28)

19 Online and new media, unlogged

based on data from SR, SVT and commercial radio


7.7 (5.7) 6.9 (5.1) 30 (30) 27 (28) 43 (42)

17 Private copying levy based on data from SR, TV and record sales/downloads in Sweden


10.2 (7.4) 10.2 (7.4) 58 (58) 28 (28) 14 (14)

18 Library levy based on borrowing statistics from libraries

2.5 (2.5) 2.5 (2.5) 100 (100) 0 (0) 0 (0)

20 International perfor-mance royalties

443.0 (457.5) 443.0 (457.5) 47 (41) 53 (59) 0 (0)

21 International perfor-mance royalties, for distribution by STIM

42.8 (34.9) 36.1 (29.5) 15 (15) 48 (44) 37 (41)

98 Mechanical reproduction rights

165.5 (184.8) 165.5 (184.8) 39 (35) 61 (65) 0 (0)

DISTRIBUTION CATEGORY PAYMENT TO BE DISTRIBUTED

PAYMENT DETERMINED BY NATURE OF PERFORMANCE / WORK

AMOUNT COLLECTED SEK MILLION

AMOUNT DISTRIBUTEDSEK MILLION

% MUSIC WITH STIM AFFILIATED AUTHORS AND MUSIC PUBLISHERS

% FOREIGN MUSIC WITH STIM AFFILIATED SUB-PUBLISHERS

% FOREIGN MUSIC

Distribution per category of revenue

10


0

200

400

600

800

1000

1200

1400

Mechanical reproduction

Performance

Profit, SEK millionKlara and Johanna

Söderberg in First Aid Kit

11

During 2012, 3,088 authors and 142 music publishers registered

with STIM. At year-end, STIM had 71,291 affiliates, of which 68,273

were authors and 3,018 were music publishers. This means that

there are just as many members in STIM as there are residents in

Skellefteå Municipality.

The breakdown between men and women is roughly the same as

before, i.e. just under 20 percent women and just over 80 percent

men. However, this trend appears to be changing – of the new affili-

ates in 2012, the share of women was slightly higher, more than 23

percent. A number of activities are being conducted among STIM's

affiliates to raise an interest in music creation among young women

and to include women's music to a larger extent in the repertoire of

the concert institutions.

It is worth noting that foreign rightsholders continue to register with

STIM – both authors and music publishers. At the end of 2012, STIM

had more than 1,000 registered rightsholders from 64 countries

throughout the world. This shows that STIM is a strong international

player in the competition for music rights.

Stim Music Expo, the annual music industry trade show, was held as

usual in October. This fully scheduled all-day event pulled around 700

people and filled Hotel Rival. Based on the survey filled in by the visi-

tors, this year's Stim Music Expo was also much appreciated. During

the day, international hit writer Johan ”Shellback” Schuster won

STIM's award, the Platinum Guitar. The Platinum Guitar has been

awarded since 2004 to a STIM-affiliated author who has experienced

exceptional success during the year.

In December, the STIM scholarships were handed out at a ceremony at

The STIM Building. The objective of STIM's scholarships is to encourage

the broad, professional creation of music in all genres.

The number of STIM afffiliates has increased by

almost 33% in the past five years. The number of

new members in 2012 was also strong.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000 Publishers

Authors

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

Number of affiliates Number of works with at least one STIM affiliated author

STIM SOON

SKELLEFTEÅas big as

12



13

During large parts of 2012, Swedish song writers were completely

dominant on the top half of the Billboard chart, and on many other

charts around the world. Johan ”Shellback” Schuster and Max Martin

are topping the charts week after week, sometimes with other STIM-

affiliated songwriters, such as Carl Falk, Rami Yacoub, Jörgen Elofson

and Avicii.

Max Martin was named Pop Music Songwriter of the Year in the spring

of 2012 by American performing rights organization ASCAP. This is the

fifth time this songwriter and producer won this award – he won in

1999, 2000, 2001 and 2011.

In the 2012 Eurovision Song Contest, the Swedish entry, which was

written by STIM members Thomas G:son and Peter Boström, took

home the coveted first prize. But this winning song was not the only

one that had a link to STIM. STIM-affiliated songwriters were behind

no less than nine of the entries in the finale.

Swedish music exports are much more than just top hits on the

charts. Swedish metal has a broad, dedicated international following

with bands such as Opeth, In Flames and Sabaton. Under the inter-

national definition of jazz/folk, artists such as Lisa Ekdahl, Nils Land-

gren, Oddjob and First Aid Kit continue to attract attention outside of

Sweden. Singer-songwriters such as Lykke Li and Ane Brun have made

a name for themselves outside of Sweden.

In terms of art works, the music of STIM affiliated composers made

an impression on international stages in 2012. For example, an entire

festival in Toronto was dedicated to the music of Anders Hillborg at the

beginning of the year. At the same time, Rolf Martinsson's successes

in Europe continued. A younger generation of composers is being

played regularly in other countries, for example Tobias Broström and

Esaias Järnegard, whose music was performed in both Europe and the

USA in 2012. The STIM affiliated composers Hanna Hartman and Klas

Torstensson, both of whom live abroad (Germany and Holland, respec-

tively) have created a following not only in their home countries but

also internationally.

The reason Swedish music is so successful around the world is partly

structural, i.e. popular movements, municipal music schools and a

musical infrastructure. An openness to influences from other cultures

and the creative self-image that was formed, for example, by the

Cheiron studio's successes in the 1990s, have also played an impor-

tant role. Just like in Finland, where successful conductors are contin-

uously emerging, the Swedish music marvel has become the norm.

There has been no indication that the successes will abate, and in fact

the opposite holds true.

The positive image of Sweden as a music nation combined with

Sweden's strong IT skills and long tradition of cooperation has created

excellent conditions for STIM's international work. Today, STIM is

one of the most influential copyright organizations in the world and

Songs with the most foreign revenue in 2012 (with at least one STIM-affiliated author)

Title Author ArtistF**KIN PERFECT MARTIN, M/SHELLBACK/MOORE, A PINK

RAISE YOUR GLASS MARTIN, M/SHELLBACK/MOORE, A PINK

DJ GOT US FALLING IN LOVE KOTECHA, S H/PEREZ, AC/MARTIN, M/SHELLBACK USHER feat. PITBULL

I-I-I WANNA GO-O-O MARTIN, M/SHELLBACK, J/KOTECHA, S H BRITNEY SPEARS

TILL THE WORLD ENDS MARTIN, M/GOTTWALD, L/SEBERT, K/KRONLUND, A BRITNEY SPEARS

MOVES LIKE JAGGER LEVINE, A/MALIK,A/LEVIN, B/SHELLBACK MAROON 5

LAST FRIDAY NIGHT (T.G.I.F.) MC KEE,B L/GOTTWALD, L/MARTIN, M/PERRY KATY KATY PERRY

ET PERRY KATY/GOTTWALD, L/COLEMAN, J E/MARTIN,M KATY PERRY

DANCING QUEEN ANDERSSON, B/ULVAEUS B/ANDERSON, S ABBA

ON THE FLOOR PEREZ, A C/HAJJI, B/HAMID, K V/JANNUSI, A/KHAYAT, N/HERMOSA GONZALES, G/HERMOSA GONZALES, U/TEDDY, S JENNIFER LOPEZ

Swedish music successes are continuing unabated. This means that

STIM can take a leading position in an international context – in

terms of both collaborations and competition.

SWEDISH COMPOSERS' successes are paving the way for GLOBAL COLLABORATION

14


is represented in basically all of the international contexts where the

music market of the future is being formed.

One example of a successful and innovative international cooperation

is ICE, International Copyright Enterprise AB. The company is currently

owned by STIM and our British counterpart, PRS for Music. ICE and

the international cooperative FastTrack received the assignment to

deliver the technical platform for the global repertoire database, GRD.

The purpose of this database is to facilitate the online dissemination

of music and at the same time be able to quickly handle payments

to rightsholders.

Through the ICE cooperation, STIM is in all material respects ready to

work in accordance with the regulations the EU Commission proposed

last summer for all European performing rights organizations. Before

the Directive can be adopted, it must be approved by the EU Council

and the European Parliament.

At the beginning of 2012, STIM presented its new technological solu-

tion, the WOI portal, which enables the simultaneous licensing of

rights in multiple territories. During the year STIM also negotiated an

agreement with the influential publisher, Kobalt Music Group. In Janu-

ary 2013, STIM and Kobalt announced that they had jointly started a

company, Kobalt STIM Aggregated Rights AB, to license rights for multi-

territorial, digital music services.

STIM's foreign revenue fell by 1 percent between 2011 and 2012. The

cause behind this was not that Swedish music was played less in other

countries, but rather primarily that other performing rights organiza-

tions changed their payment periods.

The future for STIM as an international player – both in terms of collab-

oration and competition – is bright. And there have not been any indi-

cations that its successes will abate.

John Eriksson, Björn Yttling and

Peter Morén in Peter Bjorn and

John

15

Countries Received Of which, revenue from sub-published foreign music

Of which, revenue from Swedish music abroad

Paid

Finland 78,088 67,979 10,109 5,326

Denmark 133,042 114,978 18,065 10,875

Iceland 1,810 1,627 184 0

Norway 63,330 48,539 14,791 5,311

Estonia 1,542 1,233 309 100

Latvia 4,303 3,661 643 42

Lithuania 3,525 3,109 416 121

Total Nordic & Baltic 285,641 241,126 44,515 21,776

Belgium 3,853 3,853 513

France 7,305 7,305 10,035

Greece 371 371 158

Ireland 1,561 1,561 720

Israel 726 726 82

Italy 5,125 5,125 2,866

Netherlands 15,914 15,914 2,882

Poland 2,369 2,369 254

Portugal 449 449 65

Romania 427 427 106

Russia 977 977 218

Switzerland 4,075 4,075 1,314

Slovakia 333 333 30

Spain 4,664 4,664 2,975

Great Britain 21,851 21,851 46,858

Czech Republic 608 608 192

Germany 19,480 19,480 7,117

Hungary 1,335 1,335 96

Austria 3,274 3,274 746

Rest of Europe 542 542 165

Total Europe (excl. Nordic & Baltic)

95,239 0 95,239 77,391

Argentina 653 653 489

Australia 6,892 6,892 4,485

Brazil 2,575 2,575 704

Hong Kong 216 216 12

Japan 7,277 7,277 457

Canada 5,574 5,574 6,865

Korea 730 730 19

Mexico 478 478 103

Singapore 504 504 0

South Africa 1,659 1,659 202

USA 35,568 35,568 119,336

Other 1,761 1,761 99

Total Rest of world (excl. Europe, Nordic & Baltic)

63,888 0 63,888 132,771

TOTAL 444,768 241,126 203,641 231,938

Received Of which, revenue from sub-published foreign music

Of which, revenue from Swedish music abroad

Paid

77,014 66,320 10,694 4,895

140,026 120,729 19,297 11,970

2,323 2,136 187 214

80,179 60,184 19,995 5,613

2,308 2,075 233 170

2,230 2,059 171 53

3,700 3,281 419 93

307,780 256,784 50,996 23,009

3,708 3,708 410

11,521 11,521 11,532

508 508 106

1,060 1,060 459

361 361 146

4,092 4,092 1,879

8,873 8,873 2,202

2,713 2,713 337

310 310 104

1,335 1,335 97

712 712 318

3,503 3,503 687

392 392 58

3,763 3,763 1,714

23,121 23,121 43,046

764 764 272

20,008 20,008 7,530

1,679 1,679 104

2,780 2,780 683

843 843 227

92,046 0 92,046 71,910

237 237 394

7,276 7,276 4,498

2,753 2,753 161

163 163 11

6,344 6,344 502

5,390 5,390 6,484

548 548 38

666 666 232

366 366 25

2,150 2,150 233

33,302 33,302 110,511

839 839 242

60,033 0 60,033 123,333

459,859 256,784 203,075 218,252

2012 (SEK thousand) 2011 (SEK thousand)

STIM - BALANCE OF PAYMENTS WITH INTERNATIONAL COLLECTING SOCIETIES 2011 AND 2012

16


Every year, STIM earmarks three per cent of the STIM members' Swedish

royalties for scholarships. Only STIM affiliated authors are eligible to apply

for these scholarships, which are awarded once a year. Of the scholarship

funds for 2012 totaling SEK 8.1 million, SEK 4.7 million was allocated to STIM

scholarships and SEK 3.4 million was split equally between FST and SKAP.

Ahovalli, Jimmy

Almgren, Karolina

Almgren, Malin

Almgren, Vera (to be shared with Jack Almgren and Linnea Eriksson)

Antilla, Kristian

Bao, Noonie

Beijbom, Daniel

Benkahla, Nadir

Bergmark, Johannes

Bertilsson, Andreas

Blomdahl, Tony

Bromander, Vilhelm

Carlberg, Martin

Cervin, Billy (to be shared with Joacim Nilsson, Hugo Mårtensson and Elias Jungqvist)

Coldheart, Mia

Correia de Verdier, Leo

Costéus, Henrik (to be shared with Daniel Cvetcovic)

Danell, Daniel

Devercerski, Alina (to be shared with Christoffer Wikberg)

Diffner, Fredrik (to be shared with Alexander Ceci Forsberg, Oliver Boson and Arthur Acking) Duncanson, Johan

Ekelund, Magnus

Eklöf, Andreas

Eriksson, Anna

Evileye, Ida

Moin, Mahan Fathi

Flyckt, Rasmus (to be shared with Emil Gustafsson)

Force, Klara

Grönberg, Niklas

Gustafsson, Emelie

Hedberg, Johan

Hellstrand, Staffan

Hogman, Sanna

Humlebo, Oskar

Hylander, Tobias

Högberg, Fredrik

Johansson, David

Johansson, Jäje

Johansson, Natalie

Johansson, Ove

Jutterström, Johan

Jäger, Mio (to be shared with Maria Säfstrand, Elizabeth Andrews and Sandra Randi Stensen)

Kadic, Adna

Kallerdahl, Fabian

Karlsson, Nalle

Karlsson, Sofia

Krafman, Johan

Küchen, Martin

Larsson, Jeremia

Larsson, Karl

Lidbo, Håkan

Lindebergh, Mikael

Lindfors, Elin (to be shared with David Lehnberg)

Lindsjö, Clara

Lindström, Niclas(to be shared with Daniel Gustafsson, Jakob Gustafsson and Daniel Svensson)

Livebrant, Sofie

Ljungqvist Henrik (to be shared with Otto Wallgren)

Lundin, Linus (to be shared with Emil Lundin, Oscar Rydelius and Fredrik Johansson)

Löfberg, Anders

Magnusson, Per

Molavi, Saeed

N’Diaye, Mary

Abdelaziz, Karima Nait

Nilsen, Charlotta

Nordström, Fredrik

Nurulla-Khoja, Farangis

Olsson, Ida

Olsson Bauer, Axel

Persson, Britta

Persson, Cecilia

Richter, Suvi (to be shared with Julius Duhs) Rintamäki, Jukka

Risberg, Mattias

Risberg, Susanna

Rosen, Gustav

Rydvall, Erik

Rylander, Lisen

Rådström, Victor

Samuelsson, Marie

Sandell Billström, Olivia (to be shared with Lisa Grotherus, Erik Boman, Timmy Fredriksson, August Persson and Eric Ahlqvist)

Shah, Rebin

Sidén, Eva

Sigvardsson, Elin Ruth

Simmerud, Patric

Stackenäs, David

Staern, Benjamin

Stolt, Benjamin

Sundemo, Frida (to be shared with Joel Humlén)

Svensson, Fabian

Svensson, Johan

Söderberg, Johanna

Söderberg, Klara

Sörling, Isabel

Tarrodi, Andrea

Thurfjell, Lovisa (to be shared with Lisa Löfgren, Canan Rosén and Lotta Wennström)

Tomner, Martina

von Hofsten, Anders

Warelius, Dennis (to be shared with William Turner, Christoffer Apell, Patrik Larsson and Niclas Staberg)

Wennström, Niklas

Westin, Maja (to be shared with Lina Westin)

Wicked, Nicki

Wärme, Sabina (to be shared with Amanda Lindgren)

Zethraeus, Leo

Zetterlund, Magnus

Åberg, Johan

Åhlund, Lars

Öberg, Linn

SCHOLARSHIPS

17


Many of the visitors to the summer's music festivals got wet and cold.

But this is not to say that 2012 was a lost year for the festival promoters.

The EDM festival, Summerburst, which had its premier in 2011 as a

one-day festival in Stockholm, expanded to two days and also estab-

lished itself in Gothenburg. A number of new festivals were also held

throughout the year. The three-day Stockholm Music and Arts festi-

val in August sold out quickly. The new Öresund Festival, a coopera-

tion between music venues in Malmö and Copenhagen, presented a

broad, two-day program within the electro-soul, reggae, experimental

jazz and indie rock genres. A number of musical events were arranged

at Hesselby Slott outside of Stockholm during the year, but the one

that received the most attention was Stockholm Folk Festival, a two-

day festival in August that offered an ambitious program of folk and

world music.

German festival promoten FKP Scorpio, announced that in June 2013

it will be holding a giant festival in Bråvalla outside of Norrköping. FKP

Scorpio also promotes the Hultsfred festival (since 2011) and Getaway

Rock Festival (since 2012).

STIM continues to focus on its communication with the festival promot-

ers, in part through a regular newsletter but also through personal

contact with festivals throughout Sweden.

At the end of the year, STIM was in discussions with Sweden Rock Festival.

These discussions resulted just a few days into 2013 in the resolution

of a dispute that had been going on for several years. The parties were

thus able to withdraw their claim from the court.

Performances in large arenas continue to draw large crowds, not in

the least for EDM. Swedish House Mafia said goodbye to their Swedish

fans with three sold-out concerts in the newly opened Friends Arena in

Solna. Tim ”Avicii” Berg also sold out three arena shows in Stockholm.

In addition to the large shows that were held at music festivals and

arenas, a large number of smaller music venues – clubs, restaurants

and music associations – throughout the country continued to promote

concerts. One of these devoted concert promoters, the Sticky Fingers

rock club in Gothenburg, received the STIM Guitar in April. This award is

intended to encourage work that results in financial compensation for

composers and songwriters when their music is played.

The number of art music premiers increased in 2012. No less than 325

newly composed works of music premiered during the year, which can

be compared to just over 200 the year before. A handful of these were

held at the Sounds of Stockholm festival at Kulturhuset in November.

Anna-Lena Laurin, a composer who moves freely between jazz and art

music, was one of the composers who received a lot of attention in

2012. During the year she premiered in big band jazz, chamber music

and orchestral music, including Persephone for orchestra and jazz

groups that premiered in Helsingborg in September.

Anders Hillborg, who in 2011 became the first Swede to have the premier

of a commissioned work performed by the Berlin Philharmonic, was

asked in January 2012 by the Los Angeles Philharmonic to write a piece

for Polar Prize winner, cellist Yo-Yo Ma, and pianist Emanuel Ax. The

new work will premier some time during the 2013-2014 season.

One of the world's oldest festivals, Nordic Music Days (which has been

arranged since 1888), rotates between the Nordic countries. In the fall

of 2012 the festival returned to Stockholm and lit up three locations in

the city for four days in October.

More and more live music is being played in Sweden. Despite rising ticket

prices, more people are choosing to attend concerts and festivals. It is

obvious that live music plays an important role in people's lives.

Multi-faceted festival year

and sold-out arenas

18


Anders Hillborg

19

By promoting the creation and distribution of both new music and what is

referred to as "areas of music that are vulnerable to market forces", STIM's

owners want to contribute to a vital and multi-faceted Swedish music culture.

The possibility of allocating up to 10% of the Swedish revenue after

deductions for expenses to fund Swedish music is written into the recip-

rocal agreements between STIM and its international counterparts.

In 2012, STIM allocated a total of SEK 32.6 million to national funds.

Until 2012, STIM's operations were primarily carried out via the

subsidiary Svensk Musik Swedmic AB, which worked with communica-

tions, PR activities, sheet music and documentation. In addition, the

national funds were also used as special support for music areas that

are vulnerable to market forces and grants for the owner associations'

projects and member activities.

Svensk Musik

In 2012, Svensk Musik finished an opera anthology that contains a unique

collection of Swedish opera arias written during the period 1874–2009.

The sheet music in four volumes contains 147 arias from 89 operas.

No less than 54 Swedish composers are represented in the anthology:

Elfrida Andrée, Helena Munktell, Kurt Atterberg, Karl-Erik Blomdahl,

Jonas Forssell, Hans Gefors, Paula af Malmborg, Karin Rehnqvist, Sven-

David Sandström, Wilhelm Stenhammar, and many more.

During the year the following three CD releases were finalized under

the inhouse label, Phono Suecia:

Swedish Concertos for Soprano Saxophone (PSCD 188)

Solo concerts by Rolf Martinsson, Sven-David Sandström and Anders

Eliasson. Soloist: Anders Paulsson.

ZzzKaa’s Dance (PSCD 191)

The Nogenja ensemble performs compositions by Bosse Broberg.

Pendants (PSCD 192)

Benjamin Carat and Gageego! under the leadership of Pierre-André

Valade perform works by Jesper Nordin.

In 2012, the project to scan in all of Svensk Musik's database of unpub-

lished contemporary Swedish art music, in total 18,400 works, was

completed. Only the digital copies are now used for printing sheet

music. All of the original manuscripts are stored at the National Archives.

Promotion Committee

Svensk Musik's assignment changed in 2012 and a new promotion

committee was established, STIM's Committee for the Promotion of

Swedish Music. The Promotion Committee should create conditions

for the future creation of music. It should strive to be at the forefront

in terms of understanding the new Swedish music and using the best

tools and projects to disseminate information about this music. During

the Promotion Committee's first operational year, around 25 different

types of projects were implemented or initiated. The projects cover a

wide base, for example:

Swedish music in Spanish in Mexico – presenting, introducing

and opening a new market for Swedish music in Latin America.

Plug-in – continued education in the creation of music for

music teachers in elementary and middle schools.

KVAST network (Association of Swedish Women Composers) – devel-

opment and marketing of the KVAST webpage – a website with infor-

mation about composers and repertoires.

In addition, a preliminary study for international projects, copyright

seminars and much more was started.

STIM - PROMOTING the Swedish

MUSIC CULTURE

20


Ann Rosén, Ida Lundén

and Lise-Lotte Norélius in Syntjuntan

(Synth Circle)

21

0

18

36

54

72

90

108

126

144

162

180

+43%

+71%

+138%+64%

The digital market continues to grow. STIM's Online and new media

revenue increased by 43 percent in 2012. In the past five years, revenue

has increased tenfold. During the same period, revenue from music on

"physical sound carriers" (music on CDs, LPs, etc.) fell by 50 percent,

although this decrease has slowed in the past couple years. Revenue

from digital music and physical sound carriers are almost the same. Of

the digital music services, subscription services for streamed music are

the largest. The transition from an ownership model (purchased CDs)

to a subscription model has proven itself to be very successful, even for

compensating the author.

It also does not appear to be a problem for streamed music and the

downloading of music files to co-exist. Legal downloading of music

increased sharply in 2012.

During the year, STIM signed a new agreement with Spotify and started

negotiations with Youtube.

The start of a development similar to that in the music industry is

discernible on the TV market. Several new actors established them-

selves in Sweden in 2012 and the sale of smart TV sets rocketed. SVT

Play has been established for several years, but the commercial chan-

nels' on demand TV services are now growing at the same time as

viewers are being offered more online-based TV services such as simul-

casting (simultaneous web broadcast) and live streaming.

STIM continuously analyses the changes in the media market and

follows the new techniques for the dissemination of TV that are emerg-

ing. As part of this work, we maintain an ongoing dialogue with cable

operators and TV channels about the future of the TV market.Revenue Online and new media

Subscription services for streamed music have proven themselves to

be a successful concept. The digital market has multiplied in just a few

years. All signs are now pointing toward a similar development in the

TV segment.

STREAMED MUSIC increasing in popularity - and now

TV IS NEXT

22


Sonny Boy Gustafsson and

Linda Carlsson – Miss Li

23

MUSIC CHOICE IMPORTANT FOR

BUSINESS

The radio that used to be a standard at the hairdresser's or in a cloth-

ing store is becoming less common. Music is naturally still present, but

today it is used in a manner that is more thought-out. This is a develop-

ment that is evident in both the sales and service sectors. Companies

are working very consciously with music as a tool to profile their opera-

tions and to create the right atmosphere in their premises. A number

of surveys conducted in the past year confirm the opportunities that

are created by taking a deliberate approach to how music is used, both

in terms of strengthening the brand and increasing sales.

STIM's revenue for music in businesses rose by more than 11 percent

in 2012. The largest part of the increase comes from the restaurant

industry, which experienced improved profitability since the restaurant

tax was lowered at the beginning of 2012. In order to offer a better

service to its customers, STIM directed considerable resources in 2012

to the development of a new CRM system. This system will simplify

and streamline STIM's contact with its customers, but it also includes

a number of improvements to the online services for music report-

ing and accounting. We also developed a more convenient function

for new customers to obtain a license for their use of music. The new

system will be taken into operation during the spring of 2013.

At the café, on the airplane, in the clothing store or at the hairdresser.

Music is played everywhere. But even if more background music is being

played today, the way music is being played has changed. Companies are

profiling themselves today with the help of music. Everyone wins with this

development.

Example:The license fee for a shop with a sales area of up to 100m2 that is open more than 312 days a year is SEK 1,450 per year, i.e. SEK 4.65 per day of business. Establishments with a sales area of between 2,001-2,500m2 open for more than 312 days a year pay a fee of SEK 17,921 per year, i.e. SEK 57.44 per day of business.

Example:The license fee for a supervised fitness session and up to 25 participants is SEK 13.21 per session/occasion. The licence fee for a fitness session with more than 75 participants is SEK 58.93 per session/occasion.

Example:The license fee for the use of background music in a restaurant establishment with 1-20 covers that is open more than 312 days a year is SEK 2,423, i.e. SEK 7.77 per day of business. The fee for a restaurant with 101-150 covers that is open more than 312 days a year is SEK 9,753 per year, i.e. SEK 31.26 per day of business.

0

5

10

15

20

25

30

35

40

45

50

0

2

4

6

8

10

12

14

16

0

5

10

15

20

25

30

Shops, shopping centres etc., revenue, SEK million

Restaurants, revenue, SEK million

Fitness, revenue, SEK million

24


Chief Legal Officer Helena Woodcock

and Legal Counsellor Emil Dicksved

25

Authors and publishers are the focus of STIM's activities, which char-

acterises our commitment and corporate culture. A willingness

to develop and change is part of this culture, which, for example,

is manifested in our constant efforts to develop our work so that it

functions as simply and efficiently as possible for our customers and

members. This places great demands on the entire organization.

The management development program that was started in the fall

of 2011 continued during the year. The aims of the program include

clarifying the role of the executive management group, establishing

a structure for meetings and improving management efficiency. The

program comprised development activities at both the group and

individual level.

The trainee program that was started in 2011 ended in mid-year

2012. A need for a mix of skills was behind the initiative – new knowl-

edge as well as solid experience. Our industry is constantly evolving

and we need employees who are aware of the latest research find-

ings and have acquired the tools to apply these findings.

At year-end, STIM had 65 employees. The Swedish Equal Opportunities

Act requires employers with at least 25 employees to analyse its salary

structure once every three years. STIM analyses its salaries every year in

collaboration with the STIM branch of local trade union Unionen. The

analysis from 2012 shows that women's salaries are 100.26 percent of

the men's salaries, and that there are no unjustified salary differences

in the organization.

As a special interest organization in a competitive market, STIM

is subject to special requirements. The solution is to develop its

personnel and mix new skills with experience.

GENDER EQUALITY ORGANIZATION equipped for

THE FUTURE

26


Scott FarrantInternational Director

Tomas EricssonDeputy CEO and Head of

Strategy

Kristina PaulssonDirector of Finance

Karin Jihde Communications Director

27


The Society of Swedish Composers (FST), the Swedish Society of Popular

Music Composers (SKAP) and the Swedish Music Publishers Associa-

tion each appoint two members and two deputy members. FST, SKAP

and the the Swedish Music Publishers Association jointly appoint the

chairman and two additional members. The STIM branch of Unionen

appoints one member and two deputy members.

Regular Members

Kjell-Åke Hamrén ChairpersonMartin Q. Larsson FSTErik Peters FSTAlfons Karabuda SKAPJohan Ekelund SKAPMonica Ekmark Swedish Music Publishers AssociationErik Hasselqvist Swedish Music Publishers AssociationKristina Rennerstedt External memberLeif Pagrotsky External memberClaes Tullbrink Unionen

Deputy members

Jonas Forssell FSTIda Lundén FSTDouglas Carr SKAPElise Einarsdotter SKAPLars Karlsson Swedish Music Publishers AssociationNutta Hultman Swedish Music Publishers AssociationEva Botmar UnionenAnders Cangemark Unionen

Board of Directors

Paulina Sundin FST, chairpersonErik Hasselqvist Swedish Music Publishers AssociationAlfons Karabuda SKAP

Co-opted memberEva Modin STIM

Svensk Musik Swedmic AB

Board of Directors

THE

STIM SPHERE

28


STIM FASTIGHETS HOLDING AB

STIM CEO Kenth Muldin

CEE SERVICES AB SVENSK MUSIKSWEDMIC AB

DIRECTOR OF OPERATIONS GUSTAF BERGEL

CEO MAGNUS BOSTRÖM

ICE AB

INTERNATIONAL COPYRIGHT

ENTERPRISE

JOINTLY OWNED WITH BRITISH PRS FOR MUSIC

CEO CARSTEN DRACHMANN

NCB

NORDISK COPYRIGHT BUREAU

JOINTLY OWNED WITH STIM'S NORDIC COUNTERPARTS

CEO KARSTEN DYHRBERG NIELSEN

29


In 2007, STIM established the wholly owned subsidiary CEE Services

AB to provide administrative support and development resources in

documentation, music reporting, distribution and IT. The processes

involved are complex, and CEE is currently engaged in a number of

projects aimed at simplifying functions for STIM, Svensk Musik and ICE

above all via IT facilities, support and service. Every year, CEE issues a

cost reduction guarantee for administrative services on a fixed-price

basis. As a result, operations that are taken over by CEE are made more

efficient in a clear and measurable way.

NCB, Nordisk Copyright Bureau, is tasked with safeguarding the rights

of authors and music publishers during the recording, copying and

distribution of protected music and lyrics on CD, vinyl, DVD, etc. NCB

is owned by STIM and its counterparts in Denmark (KODA), Finland

(TEOSTO), Norway (TONO) and Iceland (STEF). NCB also administers

the mechanical reproduction rights of the Baltic collecting societies,

LATGA-A (Lithuania), EAÜ (Estonia) and AKKA-LAA (Latvia). NCB has

agreements with collecting societies abroad that administer mechani-

cal reproduction rights in a corresponding manner in their countries.

In 2011, NCB’s Board of Directors passed a decision to centralize its

entire operations. As a result, regional operations in the Nordic and

Baltic countries were transferred to NCB’s headquarters in Copenhagen

in 2012.

ICE, founded in 2007 with STIM's UK counterpart PRS for Music as an

independent, commercial company, is owned on a 50/50 basis by

STIM and PRS for Music. ICE's primary role is to administer the data

volumes required to license and distribute financial remuneration to

authors and publishers, both Swedish and international, when their

works are played, recorded, streamed or legally downloaded.

Board of Directors

Kenth Muldin Chairperson

Eva Modin Deputy member

Nicklas Lindström Unionen

Hans Wickberg Unionen, deputy member

Board of Directors

Anders Lassen CEO, Koda, Chairperson

Susi Hyldgaard Author, Koda

Tine Birger Christensen Music publisher, Koda

Gudrun Björk Bjanadottir CEO, STEF

Kenth Muldin CEO, STIM

Alfons Karabuda Author, STIM

Lars Karlsson Music publisher, STIM

Katri Sipilä CEO, TEOSTO

Kim Kuusi Author, TEOSTO

Tommi Tuomainen Music publisher, TEOSTO

Cato Ström CEO, TONO, Deputy Chairperson

Bendik Hofseth Author, TONO

Steinar Fjeld Music publisher, TONO

Observers from the

Baltic countries

Inese Paklone CEO, AKKA/LAA

Kalev Rattus CEO, EAÜ

Jonas Liniauskas CEO, LATGA-A

Anne Louise Holsoe Employee representative

Board of Directors

Wanda Goldwag PRS For Music, Chairperson

Kjell-Åke Hamrén STIM

Kenth Muldin STIM

Tomas Ericsson STIM

Robert Ashcroft PRS For Music

Craig Nunn PRS For Music

CEE Services AB

NCB, Nordic Copyright Bureau

ICE, International Copyright Enterprise

30


Sara Kilander Chief Operating Officer

31

Assessment Committee for Music and CopyrightMakes statements regarding similarities between musical works in the event of copyright disputes.

Helena Woodcock STIM, Chairperson

Per Wahlsten STIM, Secretary

Patrik Sventelius Swedish Music Publishers Association

Douglas Carr SKAP

Jonas Forssell FST

Scholarship CommitteeSelects STIM's scholarship recipients.

Ragnar Grippe Chairperson

Ben Malén Swedish Music Publishers Association

Sarah Riedel SKAP

Per Mårtensson FST

Eva Lindal External

Josephine Forsman External

Grading CommitteeEstablishes industry practice for grading and the handling of grading complaints.

Regular members

Mats Edén SKAP

Torgny Söderberg SKAP

Jonas Valfridsson FST

Paulina Sundin FST

Kristina Fryklöf Swedish Music Publishers Association

Deputy members

Jan Levander SKAP

Anna Einarsson SKAP

Ylva Q. Arkvik FST

Per Mårtensson FST

Ingemar Hahne Swedish Music Publishers Association

Distribution CommitteePreparatory body for the Board in matters pertaining to distribution.

Kenth Muldin Chairperson

Martin Q. Larsson FST

Chrichan Larson FST

Alfons Karabuda SKAP

Johan Ekelund SKAP

Kettil Skarby Swedish Music Publishers Association

Monica Ekmark Swedish Music Publishers Association

STIM COMMITTEES

32


Operations Sara Kilander

Sales & Marketing Media/Online

Nicklas Sigurdsson (as of 2013)

Service(Acting) Robert Gehring

DistributionFredrik Lomäng

CEO

Kenth Muldin

Deputy CEO

Eva Modin

Deputy CEO

Tomas Ericsson

CommunicationKarin Jihde

PersonnelVenke Osnes

LegalHelena

Woodcock

Strategy & Business

DevelopmentTomas

Ericsson

Finance Kristina Paulsson

33


Johan ”Shellback” Schuster

34

Description of operations

STIM was established to protect the copyright interests of authors and

music publishers in Sweden. On their behalf, STIM administers and

licenses rights to music and lyrics. Through its international network,

STIM also represents rights to the worldwide repertoire of music.

In addition, STIM promotes the creation and dissemination of new

Swedish music.

At year-end STIM had more than 71,000 registered composers, lyric

writers, arrangers and music publishers. STIM’s task is to safeguard

the rights of authors and music publishers, as defined in the Swedish

Copyright Act Based on inter-governmental agreements and reciprocal

agreements between the collecting societies, rights to both domestic

and international music are safeguarded in Sweden. On joining STIM,

the rightsholder assigns to STIM his legal rights to compensation in

connection with public performance, recording and mechanical repro-

duction. It is STIM’s task to ensure that anyone who plays music in

public or who records, downloads or streams music has a valid licence

and pays a fee. STIM then pays the monies received to the owner or

owners of the right to the music. Thus, STIM licenses all the music of

the world to users of music and distributes the revenue collected to the

individual rightsholders, both Swedish and international. This means

that anyone who wishes to use music, for example in a radio broad-

cast, in a shop or in a discotheque, may, via a STIM licence, obtain

simple access to millions of works. It also means that the owners of the

copyright to the music are paid for the use of their music.

STIM and the British performing rights organization, PRS for Music,

jointly own a company to administer bulk data in works documen-

tation, music reporting and certain distribution services. Each party

owns an equal share of this associated company, International Copy-

right Enterprise AB (ICE).

Significant events during the financial year

The "CISAC case", which resulted in a prohibition ruling on July 16,

2008, addressed to STIM and the European collecting societies, has

now been tried by the Tribunal, the EU's first court of instance. The

EU Commission's decision from 2008 ordered STIM and the other

European societies to eliminate territorial limitations within cable and

satellite TV and the Internet. STIM signed new agreements with the

other European performing rights organizations that were interested

in a collaboration and phased out the territorial limitations. The EU

Commission's requirements for STIM have therefore been fulfilled.

The Tribunal upheld the Commission's decision against STIM in April

2013 but ruled in favor of the other societies. The reason for the differ-

ing outcomes is that STIM presented a different legal basis than the

other societies for its appeal. The other performing rights organiza-

tions asserted that they had not entered into any "organized proceed-

ings" with the aim of dividing the EU market into national territories.

STIM asserted that the decision entailed risks for the cultural diversity

in the EU since there was a risk that smaller repertoires would be

treated unfairly. The Tribunal followed STIM's line in principle, i.e. it

ruled that the Commission must take cultural diversity in the EU into

consideration. However, the Tribunal found that the Commission had

been sufficient in its consideration of cultural diversity and therefore

rejected STIM's appeal. The ruling does not have a significant legal or

financial impact on STIM's operations.

STIM acquired the building Krukomakaren 7, Hornsgatan 103, Stock-

holm, at the end of 2011. In September 2012, STIM moved as planned

into the new offices together with its subsidiaries and FST, SKAP and

the Swedish Music Publishers Association. Approximately 1,800 m2

are leased to external tenants, primarily other music or copyrights

organizations.

Significant events after the end of the financial year

In January 2013, Kobalt STIM Aggregated Rights AB was founded by

STIM and music publisher Kobalt Music Group. This partnership makes

it possible for multi-territorial digital music services to acquire music

licenses for the entire European market through an integrated turn-key

solution. The licensing service is offered by a newly formed subsidiary

to STIM, which started operations on March 1, 2013.

Sales and profit

Group

The Group’s revenue during the financial year was SEK 1,479.9 million

(1,433.0). Operating costs totaled SEK 175.6 million (160.0). Profit/

loss from participations in associated companies amounted to SEK 0.7

million (–0.2).

Profit/loss for the Group before distribution totaled SEK 1,312.0 million

(1,288.5).

The Board of Directors and the Chief Executive Officer of

Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a.,

CIN 702002-3524, hereby present their Annual Report and

Consolidated Financial Statements for the 2012 financial year.

ADMINISTRATION REPORT

36


Turnover for the current financial year for Parent Society STIM amounts

to SEK 1,455.8 million (1,425.8), which corresponds to an increase of

2.1 percent (3.8) compared to the previous year.

Revenue for music performed both in Sweden and abroad increased by

SEK 53.6 million (99.7) or 4.4 percent (8.9), while revenue for mechan-

ical reproduction rights is in a negative trend and decreased by SEK 19.3

million (32.3) or –10.5 percent (–14.9).

Profit/loss for the Parent Society STIM before distribution totals SEK

1,312.0 million (1,288.5), which means that distribution to rightshold-

ers increased by SEK 23.5 million (61.2) or 1.8 percent (5.0).

Financial position

Group

The Group’s accumulated loss at year-end was SEK –13.1 million (–12.1).

Parent Society

The Parent Society STIM’s equity at year-end was SEK 1.2 million (1.2)

or 0.1 percent (0.1) of total assets. Debts to rightsholders at year-end

totaled SEK 709.2 million (708.0).

Liquidity

STIM’s cash and cash equivalents, including short-term investments,

totaled SEK 148.2 million (229.8) for the Parent Society and SEK 183.6

million (259.4) for the Group.

Group contributions

Group contributions during the financial year were paid to Stim

Fastighets Holding AB in accordance with the following:

Proposed appropriation of profits

The following amount is available for allocation by the Annual General

Meeting:

Parent Society profit (SEK thousand)

Operating income 1,455,816 1,425,780 1,373,605 1,385,137 1,164,390

Operating costs –160,263 –154,025 –151,648 –146,413 –127,225

Operating profit 1,295,553 1,271,755 1,221,957 1,238,724 1,037,165

Interest 16,551 16,822 5,370 10,495 20,184

Appropriations and tax –71 –78 –40 1,527 4,660

Profit before distribution 1,312,033 1,288,499 1,227,287 1,250,746 1,062,009

STIM SEK –337.1 thousand

CEE Services AB SEK –2,963.0 thousand

Stim Fastighets AB SEK –1,532.0 thousand

Stimhuset KB SEK –2,991.7 thousand

Retained earnings, SEK 4,841

Profit/loss for the year, SEK 0

Total 4,841

The Board of Directors proposes that the profit be allocated

as follows:

profit carried forward, SEK 4,841

Parent Society

37


INCOME STATEMENT

Operating income NotePerformance revenue 1,270,818 1,217,226 1,270,818 1,217,226Mechanical reproduction revenue 165,456 184,805 165,456 184,805Other revenue 43,635 30,994 19,542 23,749Total operating income 1, 3 1,479,909 1,433,025 1,455,816 1,425,780

Operating costsExternal costs 2, 3, 6 –78,972 –64,797 –105,459 –101,309Personnel costs 2, 4, 5 –83,768 –86,702 –49,335 –47,474Depreciation/amortization according to plan 2, 9 –11 –12,862 –8,469 –5,469 –5,242Total operating costs –175,602 –159,968 –160,263 –154,025

Profit/loss from participations in associated companies

13 739 –225 – –

Distribution 7 –1,312,033 –1,288,499 –1,312,033 –1,288,499Operating profit/loss –6,987 –15,668 –16,480 –16,744

Interest income 9,420 13,856 20,170 16,830Interest expenses –3,637 –12 –3,619 –8Profit/loss before tax –1,204 –1,824 71 78Tax on profit for the year 20 197 –140 –71 –78

Profit/loss for the year –1,007 –1,964 0 0

Parent SocietyGroupSEK thousand

38


Assets NoteNon-current assetsIntangible assetsCurrent investment in new IT systems 8 33,207 11,079 33,207 11,079Capitalized system development costs 9 4,584 7,136 4,584 7,136Total intangible assets 37,791 18,215 37,791 18,215

Property, plant and equipmentBuildings and land 10, 21 418,570 352,222 – –New construction, extensions and renovations in progress 7,580 3,099 – –Equipment 11 12,498 8,709 9,596 6,610Total property, plant and equipment 438,648 364,030 9,596 6,610

Financial assetsParticipations in Group companies 12 – – 250 250Participations in associated companies 13 42,334 41,595 0 0Receivables from Group companies – – 491,435 419,261Receivables from associated companies 33,632 43,632 33,632 43,632Total financial assets 75,966 85,227 525,317 463,143Total non-current assets 552,405 467,472 572,704 487,968Current assetsCurrent receivablesAccounts receivable 96,953 120,969 95,468 120,627Receivables from Group companies – – 9,227 1,299Receivables from associated companies – – 597 –Other receivables 26,384 20,804 19,066 20,163Tax assets 2,866 3,175 2,503 2,370Prepaid expenses and accrued income 14 175,384 158,781 173,130 158,380Total current receivables 301,587 303,729 299,991 302,839Current investments 66,704 124,403 66,704 124,403Cash and bank balances 16 116,917 134,982 81,512 105,366Total current assets 485,208 563,114 448,207 532,608Total assets 1,037,613 1,030,586 1,020,911 1,020,576

Equity and liabilitiesEquityRestricted equityCapital contributed 5 5 5 5Restricted reserves/Statutory reserve 1,226 1,226 1,226 1,226Total restricted equity 1,231 1,231 1,231 1,231

Accumulated deficit/non-restricted equityAccumulated deficit/non-restricted equity – 12,144 –10,180 5 5Profit/loss for the year –1,007 –1,964 0 0Total accumulated deficit/unrestricted equity capital – 13,151 –12,144 5 5Total equity 15 –11,920 –10,913 1,236 1,236

ProvisionsDeferred tax 20 1,716 2,052 – –Total provisions 1,716 2,052 – –

Current liabilitiesLiabilities to credit institutions 100,000 100,000 100,000 100,000Accounts payable 25,243 17,834 14,496 13,973Distribution liabilities 17 709,168 708,004 709,168 708,004Liabilities to Group companies – – 6,335 17,641Liabilities to associated companies 4,345 14,947 – –Other liabilities 13,539 12,603 6,656 3,222Accrued expenses and deferred income 18 195,522 186,059 183,020 176,500Total current liabilities 1,047,817 1,039,447 1,019,675 1,019,340Total equity and liabilities 1,037,613 1,030,586 1,020,911 1,020,576Pledged assets 19 176,045 176,045 176,045 176,045Contingent liabilities – – – –

Parent SocietySEK thousand Group

BALANCE SHEET

39


CASH FLOW STATEMENT

Accounting principles

The applied accounting and measurement principles are in agreement

with the Swedish Annual Accounts Act and the general recommenda-

tions of the Swedish Financial Accounting Standards Council, except

for the accounting for Group contributions, which are reported in the

income statement as Other income or expense. Unless otherwise indi-

cated, the accounting principles are unchanged from the preceding year.

Consolidated accounts

The consolidated accounts include subsidiaries where the parent

company, directly or indirectly, controls more than 50 percent of the

votes, or in any other way exercises a controlling influence.

The Group's financial statements are prepared in accordance with the

acquisition method, whereby the equity of the subsidiaries at acquisi-

tion - calculated as the difference between the fair value of the assets

and liabilities - is eliminated in its entirety. Thus, the Group's equity

includes only the portion of the equity in its subsidiaries that has arisen

after the acquisition.

Operating activities Note

Payments from customers 1,496,347 1,459,117 1,465,800 1,132,022

Payments to rightsholders 17 –1,278,303 –1,189,648 –1,278,303 –1,189,648

Payments to suppliers and employees –201,927 –172,781 –194,855 –165,466

Cash flow from operating activities before payment of interest and income taxes 16,117 96,688 –7,358 –223,092

Interest received 9,420 13,856 20,170 16,830

Interest paid –3,637 –12 –3,619 –8

Income tax 170 –309 –203 –709

Cash flow from operating activities 22,070 110,223 8,990 –206,979

Investing activities

Investments in intangible assets 8 –22,128 –11,079 –22,128 –11,079

Investments in property, plant and equipment 10-11 –85,253 –4,338 –6,412 –4,001

Disposal of property, plant and equipment 10-11 675 457 509 157

Investments in financial assets –739 2,971 –72,175 2,971

Amortization of financial assets 10,000 – 10,000 –

Current financial investments 57,699 137,182 57,699 137,182

Investment in subsidiaries 21 –389 –298,450 – –

Disposal of subsidiaries – – – 50

Cash flow from investing activities –40,135 –173,257 –32,507 125,280

Financing activities

Loans from credit institutions – 100,000 – 100,000

Group contributions received – – – 3,763

Group contributions paid – – –337 –

Cash flow from financing activities – 100,000 –337 103,763

Cash flow for the year –18,065 36,966 –23,854 22,064

Cash and cash equivalents at beginning of year 134,982 98,016 105,366 83,302

Cash and cash equivalents at year-end 116,917 134,982 81,512 105,366

Parent SocietyGroupSEK thousand

ACCOUNTING AND MEASUREMENT PRINCIPLES

40


Accounting for associated companies

"Associated companies" are companies that are not subsidiaries but in

which the parent company, directly or indirectly, controls no less than

20% of the votes represented by all participations, or otherwise exer-

cises a controlling influence.

In the Group's financial statements, participations in associated compa-

nies are recognized using the equity method. According to this method,

participations in a company are accounted for at acquisition value on

the acquisition date and are then adjusted to reflect the Group's share

of the change in the net assets of the associated company.

The Consolidated Income Statement includes the Group's share in the

profit/loss of associated companies. The parent company financial

statements recognize shares in associated companies at acquisition

value less any impairment losses.

Revenue recognition

Operating income includes - after deductions for value added tax -

rental income during the rental period and royalties in accordance

with the economic impact of the current agreement. Interest income

is recognized at the effective return.

Intangible assets and property, plant and equipment

Intangible assets, such as computer software, are recognized at cost, less

accumulated amortization. “Off-the-shelf” software is shown at cost.

Expenditure in connection with software developed or modified

substantially on STIM's behalf is capitalized as an intangible asset if

such software is deemed to lead to probable economic benefits that

after one year will exceed the cost incurred. Capitalized expenditure

on purchased software is amortized on a straight-line basis over the

estimated service life, although subject to a maximum of 10 years.

Amortization is applied as of the time at which the asset is ready to be

placed in service. Thus, no depreciation is applied to new investments

in progress.

Property, plant and equipment is reported at acquisition cost, less

accumulated depreciation. Expenditure to improve the performance

of assets above their original level is added to the reported value of the

asset. Expenses for repairs and maintenance are recognized as costs.

Property, plant and equipment are depreciated on a straight-line basis

over the estimated service life of the asset. A straight-line method is

applied to all categories of property, plant and equipment and intan-

gible assets.

The following depreciation periods are applied:

Pensions

The Group's employees are covered by the ITP scheme, which is

managed by Alecta. Some senior executives have pension commit-

ments in addition to the ITP scheme that fall within the national

pension plan. These pensions are covered by insurance arrangements.

Taxes

Reported income taxes refer to tax to be paid or refunded in respect

of the current year. Income tax liabilities/assets are valued at the

amounts that in the Society's view will be paid to or received from the

Swedish Tax Agency. This judgement is based on the tax rules and tax

rates that are in effect or that have been announced and are consid-

ered highly likely to be effected.

Cash flow statement

The cash flow statement is prepared in accordance with the direct

method. Reported cash flow consists only of the transactions that

involve incoming or outgoing payments. Cash and cash equivalents

comprise cash in hand and on deposit.

Receivables

Receivables are shown at the amount at which they are expected to be

received, following an examination of the circumstances in each case.

Foreign currency

The Parent Society receives a not-insignificant part of its revenue in

foreign currencies. The amounts are reported in SEK at the exchange

rates prevailing on the date of conversion. STIM has no receivables or

liabilities in foreign currency.

Leasing

All leasing costs reported by STIM refer to operational leases. Leasing

costs for the year total SEK 0.3 million.

Buildings 50 years

Tenant adjustments 5 years

Facade 30 years

Walkway and elevators 25 years

Passageway, locks and fiber 15 years

Plumbing and plumbing fixtures 10 years

System development 5 or 10 years

Machinery and equipment 5 years

Computers 3 years

41


Parent SocietyGroup

Performance licenses 1,270,818 1,217,226 1,270,818 1,217,226

Performance of Swedish and foreign music in Sweden 785,085 724,818 785,085 724,818

Of which,

Online and new media 161,556 112,636 161,556 112,636

Radio 30,596 31,549 30,596 31,549

Public service TV & Radio 121,472 132,641 121,472 132,641

Swedish TV 166,540 164,829 166,540 164,829

Foreign TV 15,464 14,155 15,464 14,155

Copyswede TV 12,207 21,669 12,207 21,669

Cinemas 17,301 14,677 17,301 14,677

Festivals, concerts and events 67,465 53,388 67,465 53,388

Dancing, entertainment 31,615 23,704 31,615 23,704

Shops, sales 47,265 46,795 47,265 46,795

Hotels 22,352 20,135 22,352 20,135

Restaurants 27,385 24,081 27,385 24,081

Municipal, county council and care 15,953 17,448 15,953 17,448

Sport and fitness 19,419 16,272 19,419 16,272

Music in the workplace 10,523 9,661 10,523 9,661

Transport 8,225 8,489 8,225 8,489

Theatre, variety and cabaret 4,193 5,398 4,193 5,398

Church music 5,356 4,649 5,356 4,649

Miscellaneous 198 2,642 198 2,642

Performance of Swedish music abroad and foreign music sub-published by STIM-affiliated publishers for entire Nordic region

442,958

457,536

442,958

457,536

Performance of Swedish and foreign music abroad that STIM distributes on behalf of others 42,775 34,872 42,775 34,872

Mechanical reproduction licenses Relates to the right to record, reproduce and and sell phonograms, etc. See Note 17. Licensing was administered by NCB, Nordic Copyright Bureau, in Copenhagen for the Nordic territory. 165,456 184,805 165,456 184,805

Other revenue 43,635 30,994 19,542 23,749

STIM/Svensk Musik, hiring out of sheet music and phonogram sales 983 1,158 – –

STIM/Svensk Musik govt grant/subsidy 3,353 3,366 – –

Private copying levy 10,185 7,383 10,185 7,383

Library levy 2,500 2,500 2,500 2,500

Administrative contribution from NCB 1,720 4,004 1,720 4,004

Rental income 11,482 3,899 – –

Miscellaneous 13,412 8,684 5,137 6,099

Group contributions received by the Parent Society – – – 3,763

Total operating income 1,479,909 1,433,025 1,455,816 1,425,780

NOTES (SEK thousand)

Note 1.

OPERATING INCOME

42


Parent SocietyGroup

External costs

Office and administration 69,768 55,779 95,814 91,565

IT operations 3,954 3,905 8,845 9,221

System development and maintenance 16,651 9,422 20,923 9,543

Development costs brought forward –20,460 –9,020 –20,460 –9,020

Property costs 9,059 4,711 – –

Group contributions paid by the Parent Society – – 337 –

Total external costs 78,972 64,797 105,459 101,309

Personnel costs

Salaries and other remuneration 54,835 56,721 31,776 30,621

Social security expenses 17,528 17,810 12,959 9,814

Pension expenses 7,868 8,416 2,328 5,045

Other personnel costs 3,537 3,755 2,272 1,994

Total personnel costs 83,768 86,702 49,335 47,474

Of which Board of Directors, CEO and Deputy CEO

Salaries and other remuneration 7,808 6,791 6,513 5,342

Social security expenses 2,453 2,134 2,046 1,678

Pension expenses 2,044 2,093 1,750 1,768

Depreciation/amortization

Capitalized system development expenditure 2,552 2,577 2,552 2,577

Equipment 3,732 3,477 2,917 2,665

Buildings 6,578 2,415 – –

Total depreciation/amortization 12,862 8,469 5,469 5,242

Total operating costs 175,602 159,968 160,263 154,025

OPERATING COSTS

Note 2.

Of the Parent Society’s total operating income for 2012, 0.2 percent

refers to sales to other Group companies. Of the Parent Society’s total

operating costs for 2012, 52.7 percent refer to purchases from other

Group companies.

Note 3.

INTRA-GROUP PURCHASES AND SALES

43


Group

An agreement on severance payment was entered into with the CEO

of CEE Services AB, under which a severance payment amounting to

18 months’ salary will be paid in the event of employment being termi-

nated by CEE Services. The required period of notice is 6 months on the

part of CEE Services and 3 months on the part of the CEO.

Parent Society

An agreement on severance payment has been entered into with the

CEO, under which the CEO will be paid two years’ salary if the CEO’s

employment is terminated by STIM. The required period of notice is

six months on both sides. Any severance payments shall be reduced by

salary or other remuneration that the CEO may earn from other activ-

ity during the period in which the severance payment is payable. The

CEO's pensionable age is 60 years. The insurance arrangement is a

defined-benefit plan.

Average number of employees Average number of employees

Men Women Average number of employees

Men Women

Parent Society 61 51% 49% 64 52% 48%

Subsidiaries 61 48% 52% 60 48% 52%

Group 122 50% 50% 124 50% 50%

Board members and senior executives Number on balance sheet date

Men Women Number on balance sheet date

Men Women

Parent Society

Board members, including personnel representatives 10 80% 20% 10 80% 20%

Deputy Board members, including personnel representatives 8 50% 50% 8 50% 50%

CEOs, deputy CEOs and other senior executives 11 45% 55% 9 50% 50%

Group

Board members, including personnel representatives 15 87% 13% 15 87% 13%

Deputy Board members, including personnel representatives 9 44% 56% 9 44% 56%

CEOs, deputy CEOs and other senior executives 18 44% 56% 18 44% 56%

Note 4.

Note 5.

AVERAGE NUMBER OF

EMPLOYEES

CONDITIONS OF EMPLOYMENT FOR CEOS

44


Auditing

Öhrlings PricewaterhouseCoopers 490 510 355 380

Auditors appointed by STIM 30 30 30 30

Other non-auditing assignments 331 90 331 90

Total fees to auditors 851 630 716 500

Distribution, performance licences

Performance in Sweden 634,945 579,473 634,945 579,473

Performance abroad 442,958 457,536 442,958 457,536

Performance abroad for distribution by STIM 36,108 29,455 36,108 29,455

Total performance distribution 1,114,011 1,066,464 1,114,011 1,066,464

Distribution of mechanical reproduction licenses 165,456 184,805 165,456 184,805

Distribution of national funds 32,566 37,230 32,566 37,230

Total distribution 1,312,033 1,288,499 1,312,033 1,288,499

Parent SocietyGroup

Parent SocietyGroup

Note 6.

Note 7.

FEES TO AUDITORS

DISTRIBUTION

45


Opening acquisition values 88,262 88,534 88,262 88,534

Acquisitions during the year – – – –

Reclassification – –272 – –272

Closing accumulated acquisition values 88,262 88,262 88,262 88,262

Opening depreciation/amortization –81,126 –78,821 –81,126 –78,821

Depreciation/amortization for the year –2,552 –2,577 –2,552 –2,577

Reclassification 272 – 272

Closing accumulated depreciation/amortization –83,678 –81,126 –83,678 –81,126

Closing residual value according to plan 4,584 7,136 4,584 7,136

Parent SocietyGroup

Opening acquisition value 11,079 – 11,079 –

Acquisitions during the year 22,128 11,079 22,128 11,079

Closing acquisition value 33,207 11,079 33,207 11,079

Parent SocietyGroup

Note 8.

Note 9.

CURRENT INVESTMENT IN NEW

IT SYSTEM

CAPITALIZED EXPENDITURE FOR SYSTEM DEVELOPMENT

46


Parent SocietyGroup

Buildings

Opening acquisition value 266,421 92,182 – –

Acquisitions during the year 72,537 – – –

Value on consolidation attributable to acquired subsidiary (see Note 21)

– 174,239 – –

Closing accumulated acquisition value 338,958 266,421 – –

Opening depreciation/amortization –54,256 –51,841 – –

Depreciation/amortization for the year –6,578 –2,415 – –

Closing accumulated depreciation/amortization –60,834 –54,256 – –

Closing residual value according to plan, buildings 278,124 212,165 – –

Land

Opening acquisition value 140,057 11,301 – –

Value on consolidation attributable to acquired subsidiary (see Note 21) 389 128,756 – –

Closing acquisition value, land 140,446 140,057 – –

Closing residual value according to plan, buildings and land 418,570 352,222 – –

Tax value of property 276,000 276,000 – –

of which, buildings 171,000 171,000 – –

Opening acquisition values 22,367 19,593 18,517 15,664

Acquisitions during the year 8,235 4,338 6,412 4,001

Disposals/Sales –1,716 –1,564 –1,406 –1,148

Closing accumulated acquisition values 28,886 22,367 23,523 18,517

Opening depreciation/amortization –13,658 –11,372 –11,907 –10,390

Depreciation/amortization for the year –3,732 –3,477 –2,917 –2,665

Disposals/Sales 1,041 1,191 897 1,148

Adjustment for differences, previous years –39 – – –

Closing accumulated depreciation/amortization –16,388 –13,658 –13,927 –11,907

Closing residual value according to plan 12,498 8,709 9,596 6,610

Parent SocietyGroup

Note 10.

Note 11.

BUILDINGS AND LAND

EQUIPMENT

47


Carrying amount 12/31/2012

Carrying amount 12/31/2011

41,595 41,820

739 –225

42,334 41,595

Group

Subsidiaries CIN Reg’d office Share of capital % Number of shares, thousands

CEE Services AB 556723-5923 Stockholm 100 100

Svensk Musik Swedmic AB 556754-1338 Stockholm 100 1

Stim Fastighets Holding AB 556842-4880 Stockholm 100 1

Total participations in Group companies

Subsidiaries, indirectly owned CIN Reg’d office

Stimhuset KB 969696-4361 Stockholm

Stim Fastighets AB 556745-2841 Stockholm

Book value 12/31/2012

Book value 12/31/2011

100 100

100 100

50 50

250 250

Parent Society

Note 12.

Note 13.

PARTICIPATIONS IN GROUP COMPANIES

PARTICIPATIONS IN ASSOCIATED COMPANIES

Associated companies, indirect holdings CIN Reg’d office Share of capital and voting rights, %

Number of shares, thousands

International Copyright Enterprise Services AB

556723-5907 Stockholm 50 50

Opening balance

Share in profit/loss of associated companies

Closing balance

48


Accrued performance revenue 142,104 133,234 142,104 133,234

Accrued revenue, private copying levy 14,222 13,486 14,222 13,486

Pre-paid expenses 10,962 6,585 10,962 6,388

Miscellaneous 8,096 5,476 5,842 5,272

Total prepaid expenses and accrued income 175,384 158,781 173,130 158,380

Parent SocietyGroup

Restricted equity

Capital contributed 5 5 5 5

Non-distributable reserve – – 1,226 1,226

Restricted reserves 1,226 1,226 – –

Total restricted equity 1,231 1,231 1,231 1,231

Non-restricted equity

Accumulated deficit/non-restricted equity –12,144 –10,180 5 5

Profit/loss for the year –1,007 –1,964 – –

Total non-restricted equity –13,151 –12,144 5 5

Total equity –11,920 –10,913 1,236 1,236

Parent SocietyGroup

Both the Group and Parent Society have an unutilized bank overdraft

facility of SEK 100 million.

Note 14.

Note 15.

Note 16.

PREPAID EXPENSES AND ACCRUED INCOME

CHANGES IN EQUITY

BANK OVERDRAFT

FACILITY

49


Prepaid performance revenue 171,383 169,524 171,383 169,524

Prepaid rental income 6,653 904 – –

Accrued vacation pay liability 4,005 3,438 2,110 1,998

Accrued social security expenses and special employer's contribution 3,751 1,717 2,446 1,845

Other accrued expenses 9,730 10,476 7,081 3,133

Total accrued expenses and deferred income 195,522 186,059 183,020 176,500

Parent SocietyGroup

Distribution of performance revenue, Sweden

Undistributed revenue from previous years 533,230 506,615

Payment to Swedish rightsholders –200,239 –164,933

Payment to foreign collecting societies –128,021 –101,087

Outstanding payments of previous years' revenue 204,970 240,595

Revenue for the year for distribution 671,053 609,133


Payment to foreign collecting societies –124,802 –120,269

Outstanding payment from revenue for the year 351,049 292,635

Outstanding payment at year-end 556,019 533,230

Distribution of performance revenue, international



Outstanding payments of previous years' revenue 75,038 67,504





Distribution of mechanical reproduction revenue



Outstanding payments of previous years' revenue 0 0





Total distribution liability at year-end 709,168 708,004

Parent Society & Group

Note 17.

Note 18.

DISTRIBUTION LIABILITIES

ACCRUED EXPENSES

AND PREPAID INCOME

50


Contingent liabilities

On 4 August 2008, STIM entered into a guarantee (Swedish: proprie-

borgen) as for its own debt as regards CEE Services AB's commitments

as stated in the shareholders' agreement between CEE Services AB

and MCPS-PRS-Alliance Ltd, regarding the associated company, Inter-

national Copyright Enterprise Services AB.

Pledged assets

STIM has in its possession mortgages totaling SEK 27.2 million at Stet-

tin 7 (Sandhamnsgatan 75–83). A mortgage totaling SEK 176.0 million

for the property Krukomakaren 17 (Hornsgatan 103) is held by SEB as

collateral for loans and an overdraft facility.

For own provisions and liabilities regarding liabilities to credit institutions:

Property mortgages 176,045 176,045 176,045 176,045

Total pledged assets 176,045 176,045 176,045 176,045

Parent SocietyGroup

Tax on profit for the year

Current tax for the year –141 –151 –73 –89

Current tax attributable to previous years 2 11 2 11

Change in deferred tax for the year due to changed tax rate 336 – – –

Total tax as per the income statement 197 –140 –71 –78

Deferred income taxes attributable to untaxed reserves at acquisition of Stimhuset KB (previously GE Real Estate Söder KB). 1,716 2,052 – –

Parent Society

Parent Society

Group

Group

Note 19.

Note 20.

CONTINGENT LIABILITIES AND PLEDGED ASSETS

TAXES

51


Cash purchase consideration on day of taking possession 299,300 299,300 – –

Additional purchase price 389 – – –

Acquisition-related costs 1,300 1,300 – –

Total acquisition cost 300,989 300,600 – –

Consideration paid previous years 300,600 – – –

Buildings and land 389 302,995 – –

Redevelopment and extension in progress – 3,099 – –

Current assets – 2,625 – –

Provisions - deferred tax liability – –2,052 – –

Current liabilities – –6,067 – –

Total consideration 300,989 300,600 – –

Cash and cash equivalents in acquired company – –2,150 – –

Impact on Group's cash and cash equivalents 389 298,450 – –

Parent Society

Parent Society

Group

Group

On 30 December 2011, Stim Fastighets Holding AB acquired all shares

in GE Real Estate Söder KB (CIN:. 969696-4361), now renamed Stim-

huset KB, at an estimated consideration of SEK 300.6 million in accord-

ance with the set out below. Final settlement of the consideration was

made in 2012 via a payment of an additional SEK 0.4 million.

The 2011 consolidated financial statements do not include any part

of the net sales or profit/loss from the limited partnership since the

acquisition was made at the end of the 2011 financial year. The Group

profit/loss for 2012 includes the limited partnership's operations for

the entire 2012 financial year. In the acquisition of the limited partner-

ship, the total value of the acquired assets and liabilities, consideration

and impact on the Group’s cash and cash equivalents was as follows:

Note 21.

ACQUISITION OF SUBSIDIARIES

52


Alfons Karabuda

Leif Pagrotsky

Eva Botmar

Nutta Hultman

Monica Ekmark

Kristina Rennerstedt

Martin Q. Larsson

Erik Peters

Johan Ekelund

Kjell-Åke Hamrén

Chairperson of the Board of Directors

Kenth Muldin

CEO

Evy Jakobsson

Authorized public accountant

Kettil Skarby

Appointed by the General Meeting

Stockholm, April 25, 2013

The income statement and balance sheet will be presented to the Annual General Meeting on May 22, 2013, for adoption.

Our auditor's report was submitted on April 25, 2013.

SIGNATURES

53


To the annual general meeting of the Society

Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a.

Corporate Identity Number 702002-3524

Report on the annual accounts

We have audited the annual accounts of Svenska Tonsättares Inter-

nationella Musikbyrå (STIM) u.p.a. for the year 2012. The annual

accounts and the consolidated accounts of the Society are included in

the printed version of this document on pages 36 - 53.

Responsibilities of the Board of Directors and the CEO for the annual accounts

The Board of Directors and the CEO are responsible for the prepa-

ration and fair presentation of annual accounts in accordance with

the Annual Accounts Act, and for such internal control as the Board

of Directors and the CEO determine is necessary to enable the prepa-

ration of annual accounts that are free from material misstatement,

whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these annual accounts

based on our audit. The audit was conducted in accordance with

generally accepted auditing standards. This implies that the author-

ized public accountant has performed the audit in accordance with

International Standards on Auditing and generally accepted audit-

ing standards in Sweden. Those standards require that the authorized

public accountant complies with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether the

annual accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the annual accounts. The proce-

dures selected depend on the auditor’s judgment, including the assess-

ment of the risks of material misstatement of the annual accounts,

whether due to fraud or error. In making those risk assessments, the

auditor considers internal control relevant to the Society’s preparation

and fair presentation of the annual accounts 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 Society’s

internal control. An audit also includes evaluating the appropriateness

of accounting policies used and the reasonableness of accounting esti-

mates made by the Board of Directors, as well as evaluating the overall

presentation of the annual accounts.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the annual accounts have been prepared in accordance

with the Annual Accounts Act and present fairly, in all material respects,

the financial position of the Society as of December 31, 2012, and of

its financial performance and cash flows for the year then ended, in

accordance with the Annual Accounts Act. The statutory administra-

tion report is consistent with the other parts of the annual accounts.

We therefore recommend that the annual general meeting of the Soci-

ety adopt the income statement and balance sheet for the Society.

AUDIT REPORT

54


Report on other legal and regulatory requirements

In addition to our audit of the annual accounts, we have also exam-

ined the proposed appropriations of the Society’s profit or loss and

the administration of the Board of Directors and the CEO of Svenska

Tonsättares Internationella Musikbyrå (STIM) u.p.a. for the year 2012.

Responsibilities of the Board of Directors and the CEO

The Board of Directors is responsible for the proposal for appropria-

tions of the Society’s profit or loss, and the Board of Directors and the

CEO are responsible for administration under the Swedish Cooperative

Societies Act.

Auditors’ responsibility

Our responsibility is to express an opinion with reasonable assurance

on the proposed appropriation of the Society’s profit or loss and on the

administration based on our audit. We conducted the audit in accord-

ance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors’ proposed appropri-

ation of the Society’s profit or loss, we examined whether the proposal

is in accordance with the Swedish Cooperative Societies Act.

As a basis for our opinion concerning discharge from liability, in addi-

tion to our audit of the annual accounts, we examined significant

decisions, actions taken and circumstances of the company in order to

determine whether any member of the Board of Directors or the CEO

is liable to the Society. We also examined whether any member of the

Board of Directors or the CEO has, in any other way, acted in contravent-

ion of the Swedish Cooperative Societies Act, the Annual Accounts Act

or the Society’s Articles of Association.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

Opinion

We recommend to the annual general meeting of the Society that the

profit be appropriated in accordance with the proposal in the statutory

administration report and that the members of the Board of Directors

and the CEO be discharged from liability for the financial year.

Stockholm, April 25, 2013

Evy Jakobsson

Authorizsed Public

Accountant

Kettil Skarby

Appointed by the general

of the Society

55


Photo: The pictures on page 13 and page 34 were taken by photographer Rickard Eriksson. The other pictures were taken by photographer Viktor Gårdsäter

Graphic design: Ineko AB

Printer: Ineko AB, which satisfies ISO 9001, ISO 14001 and FSC certification and is a Nordic Ecolabelled printing works.

www.stim.se

stim annual report 2012

Documents

music publishers

use of music

swedish music culture

streamed music

music users

swedish composers successes

swedish musical culturestim

swedish copyright act