NZ Content CountsAnnual Report 2015 a little bit AbOut us Copyright Licensing New Zealand exists to help the owners of published content earn a living from their work. We license the use of books journals magazines and newspapers to schools and other education and commercial organisations so that material can be copied and distributed legally. We then distribute the nett income generated from our licenses to the authors and publishers of the work that has been copied. Every year more than 4000000 is allocated by Copyright Licensing New Zealand to distribute to rights holders. This money contributes to the development of new works creating a cycle which benefits all of society and fosters a growing vibrant New Zealand culture. Copyright Licensing New Zealand exists to help the owners of published content earn a living from their work. Advocacy for authors and publishers rights to earn a living from their work Sell licenses for legal copying of books journals and newspapers License income is distributed to the publishers and authors whose work was copied Encouraging the development of new material and a culture that values creativity Grants and awards available from our Cultural Fund AWARDS GRANTS Whats inside... 4 Highlights from 2015 and Looking Ahead to 2016 6 Paulas Message 8 Adrians Message 10 Who We Are and What We Do 12 Meet the Team Behind the Scenes 14 60 Seconds with Dr Dana Wensley Our 2015 Directors 15 We NZ Authors CLNZ is getting WISE 16 CLNZ Education Awards Gives Teachers a Choice 17 WIPO Best Practice 19 Financials at a Glance 20 Money Map 22 Financial Statements 4.3mallocated to publishers and authors for the copying of their work 10new literary projects within a variety of genres thanks to the help of our Cultural Fund awards and grants program for authors publishers 20kto the Publishers Association of New Zealand Training Fund providing for a wide range of professional development opportunities 535klicensed students in NZ schools to enable legal copying and sharing of resources for learning and a fair return to the authors and publishers whose work is used Recognition With a panel of experts we recognised excellence in education publishing and authorship in eight different categories We NZ AuthorsWe supported the NZ Children and Young Adult Book Awards raising the profile and importance of authors to schools and young readers with the We NZ Authors brand Research Grants 2015 Highlights From contributing to the success of new published works to the formal recognition of publishing excellence 2015 was another year of positive investments into people and projects. Consistent with CLNZs objectives these investments support and encourage growth in New Zealands writing and publishing industry. It was also a year of anticipating new opportunities heading into 2016. To celebrate the year that was and the year that will be our team put together highlights looking back into 2015 as well as ahead. 4 See you later 2015 TODAY... 20kIn conjunction with NZ Society of Authors we awarded 4 authors 5000 to undertake research on a project 15kinvestment into the inaugural NZ Society of Authors National Writers Forum 160ktotal annual allocation from the Cultural Fund 60kannual Contestable Fund with broad criteria for applications wipo IFRROhave developed a compendium of best practice in collective management Find out more on page 15 wiseCLNZ is getting WISE - a new cloud-based software system to manage our business processes Find out more on page 15 15knew Tertiary Scholarships to further CLNZs support across the tertiary sector 25knew Writers Award to be presented at the NZSA National Writers Forum Looking Ahead to 2016CLNZ is proud to maintain a key role in supporting success in the New Zealand publishing industry. Heading into 2016 were looking forward to 5 woohoo 2017 TOMORROW... PAULA SAYS... Your challenge as we head into a review of the Copyright Act is to be a voice in the conversation. 6 Paulas message At the beginning of 2015 we expected to be facing a review of the Copyright Act at some stage soon. and then along came the Trans Pacific Partnership Agreement TPP. While much of the commentary on the TPP is negative it is excellent news for New Zealand authors whose term of copyright will now match those of our major trading partners at life plus 70 years. If youve been following some of the media reports on term extension youd think that they world was ending by giving authors and their heirs the right to earn from the authors work. Of course the world will not end and neither will works that are still within their copyright term be locked up. It simply means that authors can generate a return on their efforts for just a little longer which sounds like a good thing to me CLNZ has been making submissions on the various stages of the TPP implementation. We think its important that our stakeholders know what were saying on their behalf so weve added a new page to our website called Informing Government. Read more about this on page 17. Its critically important to us that the stakeholders we serve understand who CLNZ is and what it is that we do. Weve set this out on pages 10-11 and youll see examples of our work on pages 4-5. One project that was new in 2015 was our support of the Children and Young Adult Book Awards. You can no longer run a communications plan without a solid social media presence and the We NZ authors brand and hashtag that has been developed for the Awards will be prominent in our future communications and advocacy efforts. Youll find more about this on page 15. As a further insight into who we are you can Meet the Team across pages 12 and 13. We also introduce you to our new Board member Dr Dana Wensley on page 14. As we welcome Dana we need to say a huge thank you to Adrian Keane who has stepped down following 4 years as Chair of the Board. Adrians strong leadership during the 20132014 licence dispute with the universities was invaluable to both myself and the company. While he has handed the Chair role to Vanda Symon he will continue as a director until the end of 2016. While the majority of CLNZs work is outward-facing 2016 will see us spending more time than usual indoors. We are finally replacing our decade-old software that manages our distribution payments with a cloud-based system that will not only be used by CLNZ but a number of our sister-organisations in other countries. The timing of this couldnt be better as it will enable us to reap maximum benefit from the electronic provision of copying data that New Zealand universities will be providing to us under the new licence that was agreed for 2015-16. Page 16 has more on this. And lastly a call to action. While a review of the Copyright Act wont happen this year it will happen. Currently the dominant voices that the government is listening to in relation to copyright are content consumers. This needs to change. Theres no other sector in New Zealand where the consumer is listened to more than the producer. Can you imagine the government talking to wine-drinkers about policy relating to wine production and export No. And the creative sector should be engaged with in the same way we create the content and should be the ones leading the conversation about whats needed so that our sector can develop and grow. Your challenge as we head into a review of the Act is to be a voice in that conversation. Talk to your family friends local MP and others tell them why copyright is important to you. CEO Copyright Licensing NZ 7 adrian SAYS... 2015 was my last year as Chair of CLNZ and I hand over to Vanda Symon knowing that the governance structure the business needs is in place. 8 adrians message A clearly defined and articulated strategy is one of the main drivers of business success and in the past 5 years the CLNZ Board has invested time and resources to ensure that we have both the strategy and monitoring of our delivery of it firmly in our sights. We have also taken steps to improve our governance practices and other equally significant areas of the business. With this work behind us we engaged in the process of measuring CLNZ against WIPOs new TAG Transparency Accountability Governance best practice recommendations in collective management with enthusiasm. We assessed CLNZ against TAG in the 8 areas of best practice that include financial administration distribution policies and practice and member relations. While our processes met the recommended TAG standards we found we could do better in making information about some of our practice available to both our licensees and rightsowners and steps have been taken to improve this. Risk has been another area of focus for the Board during 2015. This has included both business risks as well as the organisations compliance with the new Health Safety legislation. The CLNZ staff is a small team and this presents some challenges in terms of being able to separate certain duties however we have worked with our auditors to ensure that within the limitations we do have we are operating with the appropriate level of oversight. 2015 was my last year as Chair of CLNZ and I hand over to Vanda Symon knowing that the business now has the governance structure it needs to take it into what will be a challenging few years as we face a review of the Copyright Act. My thanks go to my fellow directors including Tony Simpson whose term as a director representing authors came to an end in December and to Paula and her team for helping to make my time as Chair rewarding. Chairperson Copyright Licensing NZ 9 Our PurpOseEnabling creativity and learning through access to a world of content. 10 Who we are What we do We are Advocators As a non-profit organisation Copyright Licensing New Zealand represents the interests of authors and publishers from New Zealand and around the world paying them when their works are used. Established on the principles of collective rights management we encourage respect for copyright and for those who create the work we love to read. We are Facilitators CLNZ is perfectly positioned between publisherauthor and reader to issue a Copying Licence that makes copying scanning and sharing printed material e.g. books journals and newspapers simple and legal for education providers businesses and government departments to the benefit of everyone. We are Contributors CLNZ actively contributes to the production and growth of new works in New Zealand by investing in publishers and authors new projects and supporting industry initiatives. Through the CLNZ Cultural Fund established in 2001 funding investments are made into people and projects that benefit cultural or social purposes that are directly in the interest of the rightsholders that we represent. CLNZs main role is to Provide licenses for the reproduction of extracts from books journals and periodicals Distribute licensing fees collected to copyright owners Encourage respect for copyright Take action against copyright infringement 11 great NEWwOrk Meet the team behind the scenes Ann LICENSING AND ADMINISTRATION MANAGER Hi Im Ann. Ive been with CLNZ for over 15 years and as Licensing and Administration Manager I wear many hats dependant on what time of year it is and whats happening around the place. I would love to ride the NZ Alps to Ocean cycle trail one day for the fun and scenery and if I were to rule the world for a day the first thing I would do is just get everyone organised. Monika SAMPLING MANAGER Hello my name is Monika. For many years I enjoyed working as a secondary school teacher and in my role at CLNZ I continue to appreciate working within the education environment communicating and encouraging the practice of copyright responsibility. I meet face-to-face with licensees to explain and advocate appreciation and respect for someone elses work. I ensure that a data collection of works copied is taking place and running smoothly. I have been at CLNZ for 15 years and I love sailing and reading good books. Emma Katie DATA ENTRY RESEARCH We research process and audit the information received from the data collection ensure each title is assigned to the correct rights holder. Katie I work part time at CLNZ have two young daughters am a lawyer by training and I enjoy yoga wine with friends reading and going to the beach. Still on my list of things to do is explore India. Emma I love animals and the 80s everything about that decade was cool. 12 Jason Monika Ann Emma MiriamAnn Emma Miriam Kirsteen KatieMonika Ann Emma Miriam KirsEmma Miriam Kirsteen Katie Kirsteen COMMUNICATIONS MANAGER I inform stakeholders of CLNZ news and views activities and opportunities during the year including grants sponsorships and community engagement. I manage the Copy. Write. e-newsletter and website communications. Outside of CLNZ I enjoy yoga biscuits and novels by Margaret Atwood not necessarily in that order. Miriam DISTRIBUTION MANAGER I ready the survey data for our Data Entry and Research Team. Once the data has been processed and audited I action the Distribution. I notify rights holders and oversee the claims process. A perfect day for me would be one with no commitments and unlimited funds but all I need to feel content is a good book and a cool breeze. Hawaii would be nice too. 13 Jason SYSTEMS MANAGER Ive been at CLNZ for over 5 years and as Systems Manager I am charged with ensuring we have the tools in place to perform our duties effectively. When Im not monitoring and upgrading systems Im usually enjoying the beach with a book beer and a boat. Miriam Kirsteen KatieAnn Emma Miriam Kirsteen Katie 60seconds with 2015directorsdrdana wensley What is one of your aims as a CLNZ Director To encourage a better understanding of copyright and why its so important for writers and others in the creative industries. Why is licensing important for New Zealand authors A world without copyright is a world where talent goes unrewarded creativity is not promoted and the next generation is denied a rich cultural heritage. Who is your favourite author Helen Humphreys my writer mentor in Toronto. She taught me that the space between the words is as important as the words themselves. How do you recharge Walk my dog. I credit her with my best ideas. Without her I would be stuck looking at a blank computer screen waiting for inspiration. What is one word you would use to describe yourself as a child Excired. Its a word invented by my son. A combination of excited and scared. It pretty much sums up my enthusiasm for the future but a deep worry about what it might bring. CLNZ welcomes Dr Dana Wensley to the Board of the Company for a 3 year term commencing on 1 January 2016. Dana joins Vanda Symon Chair in the Author Director positions on the CLNZ Board. Dana writes on issues touching on the intersection of law society politics and morality. She has a Ph.D. from Kings College London an LLB Hons from University of Auckland and a postgraduate diploma in writing from the School for Writers Humber College Toronto. Previously she has been a Research Fellow at the University of Otago an assistant editor of the Bulletin of Medical Ethics in London and a member of the Guelph Mercury Community Editorial Board in Canada. She is also a member of the Hospital Advisory Committee of the Nelson Marlborough District Health Board. We asked Dana to answer a mix of questions just to get to know her a little better AUTHOR DIRECTORS Vanda Symon Tony Simpson PUBLISHER DIRECTORS Sam Elworthy Adrian Keane Chair INDEPENDENT DIRECTORS Emeritus Professor Pat Walsh Andrew McKenzie 14 Follow us on Twitter CLLNZ www.copyright.co.nz WE AREA JUDGESCHOOLVOTE FOR YOURFAVOURITEAUTHOR We nz authors CLNZ is getting wise A new project for 2015 was the development of the We NZ Authors brand. This is part of CLNZs advocacy efforts on behalf of authors in NZ aimed at communicating with schools and students the essence of copyright responsibility respect for the authors who write the books they read. The current avenue for the new brand is a presence on Twitter and through supporting the New Zealand Book Awards for Children and Young Adults. CLNZ envisions continuing this partnership with the New Zealand Book Awards Trust until at least 2017 As part of our support we took the opportunity to spread a love of authors amongst their readers by providing We NZ Authors branded bookmarks to the students to use as they read and posters for the schools to display. The message is simple - a love and appreciation of books goes hand in hand with a love and appreciation of the authors who write them. CLNZ is proud to take a lead role in connecting the dots when it comes to encouraging knowledge and creativity with respect for authors. We whole-heartedly agree with our European colleagues who recently commented that a world that values knowledge and culture must value its creators. This is what the We NZ Authors brand is all about. CLNZs international body IFRRO has recently secured a licensing agreement with a Canadian cloud-based software company to provide a number of RROs like CLNZ with software that manages both groups of RRO customers licensees and rightsholders. The software WISE will replace CLNZs current business operating system that was custom-built in 2006. The core functions of WISE have been in use in Ireland and South Africa for a year and reports from the RROs in those territories on the systems benefits are all positive. In order for CLNZ to achieve optimal business process improvement from the software some customisation is needed and this work is underway at present led by CLNZs Systems Manager Jason Kay. We have already migrated our licensing functions to WISE and will have the distribution functions in place for when we receive the first sets of e-reporting data from the universities later in 2016. Being cloud-based enables us to integrate other business software such as the Xero accounting system into WISE to maximise our investment and streamline our payments to rightsholders. Rightsholders will hear more about the timeline for the system rollout and what this means in terms of licensing distribution payments as 2016 progresses. 15 clnz educatiOn awards gives teachers a chance We know that students learn best when they can see themselves reflected in the educational resources used in their classroom and we know that 61 of teachers say that access to resources with NZ content is very important and further that more than half of all teachers say they need materials with NZ content to meet their teaching requirements. CLNZ believes that the excellent resources New Zealand publishers and authors release in the education market should be celebrated so created the annual CLNZ Education Awards to do just that. In 2015 for the first time classroom teachers from across New Zealand joined forces with the judging panel of education experts to add their choice of best resources to the judges selection of award winning educational resources. The locally relevant NZ content that won the vote of teachers as well as awards from a panel of education experts at the CLNZ Education Awards in 2015 is summarised below. We head into 2016 eager to see what new and exciting resources will be brought to market to meet the needs of teachers and students around the country. The CONNNECTORS Fiction Series Global Ed was named Best Resource in Primary for 2015 by the judging panel. The commercial success of the series developed for the UK market also saw CONNECTORS Fiction named as the 2015 Best Resource for Export demonstrating that excellent NZ content also performs very well in overseas education markets. The Teachers Choice award for Best Resource in Primary was presented to NZ Curriculum Mathematics Connecting all Strands Caxton Educational. Winner of Best Resource in Secondary was Tangata Whenua An Illustrated History Bridget Williams Books. Visually rich Tangata Whenua charts Mori history from ancient origins to present day. Teachers Choice in this category was awarded to ESA Publications custom workbooks. Working with Mori children with special education needs He mahi whakahirahira NZCER Press won the judges award for Best Resource in Higher Education. The book explores physical disability intellectual disability vision and hearing impairment autism spectrum disorder and giftedness from a Mori perspective as well as the key components of culturally responsive evidence-based special education practice. The Te Reo Singalong Books The Writing Bug were named the Best Resource in Te Reo Mori. This series impressed the judges as well as the Te Reo Tuatahi teaching network. Matariki was voted as Teachers Choice. 16 EDUCATION AWARDS wipO IFRRO for CMOs ON BOARD WITH TRANSPARENCYACCOUNTABILITY GOOD GOVERNANCE In 2015 WIPO World Intellectual Property Organisation and IFRRO International Federation of Reproduction Rights Organisations released a compendium of advice for collective management organisations like CLNZ on transparency accountability and governance. Our CEO was a member of the reference panel that developed the resource and the good news is that CLNZs business practices are well on the way to being fully compliant with the best-practice recommendations. One of the improvements CLNZ has made recently in line with these recommendations is to make our submissions and advocacy efforts to government more readily available to stakeholders. CLNZ submissions will now be accessible on the CLNZ website at httpwww.copyright.co.nzAbout Informing-Government CLNZ plays an active role in informing and influencing future government policy advocating the importance of authors and publishers and their absolute right to earn a living from their work. A review of the Copyright Act is on the political agenda and a government study of the creative industries use of copyright and design is currently being undertaken. We will continue to engage with government on this and other matters and we strongly encourage authors and publishers to participate in the conversation and be heard by government also. clnz plays an active role... informing and influencing government on the importance of authors and publishers and their absolute right to earn a living from their work 17 Financial Statements 19 Financials at a Glance 20 Money Map Where did overseas revenue for NZ rightsowners come from in 2015 22 Independent Auditors Report 23 Directors Report 24 Statement of Financial Performance Statement of Movements in Equity 25 Statement of Financial Position 26 Notes to the Financial Statements 18 Financials at-a-glance 19 gross revenue 2015 6793303 total overseas revenue 2015 850867 nO. of school students licensed 537922 DID YOU KNOW LICENSING IS VOLUNTARY IN NZ Pte 6 Business Other 1 university 53 itpte Wananga 20 SchOOls 20 ITP Institutes of Technology Polytechnics. PTE Private Training Establishments. LICENSING REVENUE BY SECTOR IN 2015 WHERE DID OVERSEAS DISTRIBUTIONS OF REVENUE GO IN 2015 USAA ukA Other australia 43 37 16 4 28 Money Map Where did overseas revenue for New Zealand rightsowners come from in 2015 20 united kingdOm 27 ireland 3 Other 3 switzerland 3 2921 australia 39 japan 25 Independent AuditOrs RepOrt To the Shareholders of Copyright Licensing Limited We have audited the financial statements of Copyright Licensing Limited on pages 3 to 9 which comprise the statement of financial position as at 31 December 2015 and the statement of financial performance and statement of movements in equity for the year then ended and a summary of significant accounting policies and other explanatory information. This report is made solely to the companys shareholders as a body in accordance with Section 207B1 of the Companies Act 1993. Our audit has been undertaken so that we might state to the companys shareholders those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the company and the companys shareholders as a body for our work for this report or for the opinions we have formed. Directors Responsibility for the Financial Statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with generally accepted accounting practice in New Zealand and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing New Zealand. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments the auditor considers internal control relevant to the entitys preparation and fair presentation of financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates as well as evaluating the presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Other than in our capacity as auditor we have no relationship with or interests in Copyright Licensing Limited. Opinion In our opinion the financial statements on pages 3 to 9 present fairly in all material respects the financial position of Copyright Licensing Limited as at 31 December 2015 and its financial performance for the year ended on that date in accordance with generally accepted accounting practice in New Zealand. RSM Hayes Audit Auckland New Zealand 14 April 2016 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 22 DirectOrs RepOrt To the Shareholders of Copyright Licensing Limited The Directors of Copyright Licensing Ltd are pleased to present the companys report for the financial year ended 31 December 2015. Directors The names of the Directors in office at the end of the year are Adrian Keane Chairman PANZ Sam Elworthy PANZ Vanda Symon NZSA Tony Simpson NZSA Professor Pat Walsh Independent Andrew McKenzie Independent Principal Activities Copyright Licensing Ltd CLNZ is part of a global network of copyright collectives that provide centralised licensing services for the reproduction of extracts from published works. CLNZ makes it easier for users of books journals and periodicals to gain clearance to copy from a worldwide repertoire of literary works. Copyright Licensing Ltd is a non-profit organisation. All licensing revenue is returned to rightsholders after deduction of operating costs and a contribution of 2 of domestic licensing revenue to the CLNZ Cultural Fund. The Cultural Fund is used to invest in cultural and social purposes that help to grow the sector. Operating Results Gross revenue for the year was 6793303 2014 6895385 of which 850867 2014 717404 was received from overseas reproduction rights organisations for distribution to New Zealand rightsholders. Domestic licensing revenue was 5587254 2014 5818884. Additional revenue was generated from interest on investments and administrative services. After the deduction of operating costs and a contribution of 111745 2014 116378 to the Cultural Fund 4820514 2014 4514982 was allocated for distribution from domestic licensing revenue. Operating expenditure represented 16.0 of gross revenue 2014 15.6. Significant Changes There has been no change in the nature of the business of the company during the financial year. Events Subsequent to Balance Date Directors and Officers Insurance The company has paid a premium of 5805 2014 5800 to insure directors and the Chief Executive Officer against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director or officer of the company other than conduct involving a wilful breach of duty in relation to the company. Directors Declaration The Directors of the company declare that the following financial statements comply with Accounting Standards the Companies Act 1993 and the Financial Reporting Act 1993 and give a true and fair view of the companys financial position as at 31 December 2015 and of its performance for the year ended on that date. The company has taken advantage of the exemptions to exclude certain information required in Section 211 1a e - j of the Companies Act. The Directors confirm that the company is in a sound financial position. Adrian Keane Chairman Auckland Vanda Symon Director Dunedin CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 23 24 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 Note 2015 2014 Revenue Domestic licensing 5587254 5818884 Overseas Reproduction Rights Organisations 850867 717404 Interest received 341068 328990 Other income 14114 30106 Total revenue 6793303 6895385 Expenditure Audit fee 10250 10250 Copyright Tribunal costs 0 543748 Depreciation 3 10265 25041 Directors costs 97304 97309 Operations 343814 346643 Partner development 0 1000 Office lease costs 74156 74819 Salaries and wages 547787 522991 Total expenditure 1083577 1621800 Less tax expense 1vii 2302 0 Less transfers to Cultural Fund 1ix - Domestic revenue 111745 116378 - Unattributable overseas revenue 50229 87638 Net available for distribution to rightsholders 5545450 5069569 Note 2015 2014 Equity brought forward 100 100 Net licensing revenue for the year 1xii 5545450 5069569 Funds transferred for distribution 5545450 5069569 Equity carried forward 100 100 STATEMENT OF FINANCIAL PERFORMANCE STATEMENT OF MOVEMENTS IN Equity The accompanying notes form part of these financial statements 25 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 Note 2015 2014 Current Assets Cash and bank balance 436089 1228909 Investments 2 7615021 6577301 Indemnity Fund 1x 206970 210698 South Pacific Development Fund 1xi 12823 12511 Receivables 1vi 0 832346 Taxation Refund 1vii 96491 68883 GST Refund 111318 0 Other Current Assets 0 12352 Prepayments 9923 10714 Total Current Assets 8488636 8953714 Fixed Assets 3 80725 33031 Total Assets 8569361 8986745 Current Liabilities Distributable Funds 1xii 7833822 7903030 Cultural Fund 4 432381 425799 Holiday pay accrual 39902 33829 Income in Advance 0 3886 Accruals 19595 50451 PAYE Due 18667 19333 GST Payable 0 113495 NRWT Payable 0 202937 Indemnity provision 1x 212028 221018 Provision for Development in South Pacific 1xi 12864 12864 Total Current Liabilities 8569260 8986645 Total Liabilities 8569260 8986645 Net Assets 100 100 EQUITY Share capital 7 100 100 Total Equity 100 100 STATEMENT OF FINANCIAL PositiOn The accompanying notes form part of these financial statements 26 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 1. Statement of Accounting Policies i Basis of Reporting Copyright Licensing Limited is a private company registered under the Companies Act 1993. The Directors consider Copyright Licensing Limited to be a non-profit company. The company is a qualifying entity within the Differential Reporting Framework and has taken advantage of the differential reporting concessions available to it. The company qualifies for differential reporting exemptions as it is not publicly accountable and the company is not large as defined by the External Reporting Board XRB A1 Accounting Standards Framework. The financial statements have been prepared in accordance with the requirements of the Companies Act 1993 and the Financial Reporting Act 1993. These financial statements have been prepared on the basis of historical cost. Copyright Licensing Ltd has chosen to adopt generally accepted accounting practice in New Zealand GAAP as defined by financial reporting standards and applicable statements of standard accounting practice. ii Foreign Currencies Transactions in a foreign currency are converted at the exchange rate at the date the transaction is settled. Foreign currency receivables and payables at balance date are translated at exchange rates current at balance date. Any resulting exchange gains or losses are recognised in the Statement of Financial Performance. iii Fixed Assets Depreciation Fixed assets costing 1000 or more are recorded at original cost less depreciation. Depreciation using the straight line method is calculated at 15 on Furniture Fittings 39 on Office Equipment and 40 on Computer hardware and software. Gains and losses on disposal of fixed assets are taken into account in arriving at the net surplus for the year. iv Leased Assets Assets obtained under an operating lease are expensed over the period of the lease. v Investments Investments are valued at cost. vi Receivables Receivables are valued at anticipated realisable value. A provision is made for doubtful debts based on a review of all outstanding amounts at year end. Bad debts are written off during the period in which they are identified. vii Income Tax The entity qualifies as a non-profit company under the Income Tax Act 2007 section DV 8. The entity does not have the purpose of making a profit for a proprietor member or shareholder. Under the constitution the entity prohibits the distribution of property in any form to a member proprietor or shareholder. After expensing operating costs and the cultural fund contribution the net surplus is transferred to the distributable funds account resulting in a zero net surplus. Due to timing differences the entity is subject to non-deductible expenditure which may result in an income tax liability. viii Goods and Services Tax GST The financial statements have been prepared so that all components are stated exclusive of GST except for accounts receivable and accounts payable. ix Contribution to Cultural Fund A contribution of 2 of annual domestic licensing revenue is transferred to the Cultural Fund each year refer also Note 4. This amount is deducted before arriving at the net surplus. x Indemnity Provision Unallocated overseas licensing revenue was historically placed into the Indemnity Fund which is held in a separate bank account and shown as a current asset in the Statement of Financial Position. A corresponding amount is accounted for as a liability at balance date. Funds held to satisfy the indemnity provision are held as term deposits and therefore have not been broken so as to maximise the investment returns to Copyright Licensing Limited. The result at year end is bank accounts identified to cover the indemnity provision exceed the amount of the provision. xi South Pacific Development Fund Unspent money budgeted for the development of copyright licensing in the South Pacific has been set aside for future use. xii Distributable Funds New Zealand licensing revenue is received from a number of different sectors each year and is accounted for by sector by year. After pro rata deductions are made for operating costs and contributions to the Cultural Fund the net surplus is allocated for distribution pending the identification of publishers and authors whose works are copied under licence through annual sampling surveys carried out in each sector. xiii Distribution Revenue from overseas Reprographic Rights Organisations and transactional licensing services is distributed to identified publishers and authors after deduction of an appropriate administrative charge 7.5 for distributions to mandated rightsholders 15 for distribution to non- mandated rightsholders. xiv Changes in Accounting Policies There have been no changes in accounting policies. NOTES TO THE FINANCIAL STATEMENTS 27 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 2. Investments Note 2015 2014 ANZ - Term Deposits 925000 91629 Westpac Term Deposit 6690021 6485672 7615021 6577301 3. Fixed Assets Furniture and Fittings At cost 23246 23246 Loss on disposal 0 0 Accumulated depreciation 8962 6173 14284 17073 Depreciation expense for year 2789 1517 Office Equipment At cost 11562 11562 Loss on disposal 0 0 Accumulated depreciation 10565 10320 998 1242 Depreciation expense for year 245 332 Computer HardwareSoftware At cost 55639 46002 Loss on disposal 0 0 Accumulated depreciation 38074 31282 17565 14720 Depreciation expense for year 7231 8504 System Development At cost 349080 349080 Work in Progress to be completed in 2016 42387 0 Accumulated depreciation 349080 349080 42387 0 Depreciation expense for year 0 0 Trademarks At cost 5490 0 Accumulated depreciation 0 0 5490 0 Depreciation expense for year 10265 14688 Opening Book Value 33031 59240 Plus additions 15827 20864 Plus Work in Progress 42387 0 Less disposals 256 22032 Less depreciation 10265 25041 Closing Book Value 80725 33031 28 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 4. Cultural Fund Annual contributions of up to two percent of domestic licensing revenue are made to this fund which is then invested in cultural and social purposes to benefit the rightsowners the Company represents. The sum of 111745 2014 116378 has been transferred from 2015 domestic licensing revenue. The fund has also benefitted from non-title-specific revenue received from overseas RROs. 2015 2014 Opening balance 425799 330783 Less Awards and Grants payments 168978 109000 Unattributable overseas revenue 63815 87638 Contribution from licensing revenue 111745 116378 Closing balance 432381 425799 5. Captial and Leasing Commitments Obligations payable after balance date on financial and operating leases are as follows 2015 2014 Premises Operating lease Expires November 2016 Payable - not later than one year 48060 57480 - later than one year but not later than five years 0 48060 Motor Vehicle Operating lease Expires May 2016 Payable - not later than one year 2851 7956 - later than one year but not later than five years 0 2851 Photocopier Operating lease Expires November 2015 Payable - not later than one year 0 4543 - later than one year but not later than five years 0 0 6. Company Visa Card A Company Visa card used by senior staff has a limit of 10000. NOTES TO THE FINANCIAL STATEMENTS COnt... 29 CLNZ FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 7. Share Capital 2015 2014 Authorised issued and fully paid up capital 100 Ordinary shares of 1 100 100 8. Related Party Transactions Shareholders The shareholders in Copyright Licensing Limited are the Publishers Association of New Zealand PANZ - 50 shares and New Zealand Society of Authors NZSA 50 shares. 2015 2014 New Zealand Society of Authors Research Grant Funds paid to grant winners 20000 20000 Administration of Research Grants 1000 1000 Total 21000 21000 Publishers Association of New Zealand Professional Development Training paid to publishers 20000 20000 Total 20000 20000 None of the above payments have been made as dividends bonuses or payments of profits to these organisations and therefore do not contravene clause 2.6 of the Companys Constitution. Directors Sam Elworthy was employed by the University of Auckland during the year and did not take part in any discussions regarding transactions with or matters related to the University of Auckland. 9. Going Concern The financial statements have been prepared using the going concern assumption. The directors have adopted the going concern assumption based on the future cash flows expected to be received in the year after balance date and the cash reserves that are able to be utilised to fund operating activities. 10. Events Subsequent to Balance Date There have been no events occurring after balance date that would materially affect these financial statements. Copyright Licensing New Zealand CLNZ is jointly owned by the Publishers Association of New Zealand PANZ and the New Zealand Society of Authors NZSA. As a member of the International Federation of Reproduction Rights Organisations IFRRO CLNZ is part of a global network that represents the interests of publishers and authors from around the world. Our tailored licensing solutions allow education facilities businesses and government departments to copy scan and share from copyright protected material including books magazines journals and periodicals beyond what is permitted by the Copyright Act 1994. CLNZ is a non-profit business and all net proceeds from licensing are distributed to copyright owners.