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REGISTERED NUMBER: 10250890 (England and Wales)















Financial Statements for the Year Ended 31 December 2023

for

Naxos Rights (Europe) Ltd

Naxos Rights (Europe) Ltd (Registered number: 10250890)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Balance Sheet 2

Notes to the Financial Statements 3


Naxos Rights (Europe) Ltd

Company Information
for the Year Ended 31 December 2023







DIRECTORS: K Heymann
Mrs E M L Lei
M Lutzweiler





SECRETARY: J McClure





REGISTERED OFFICE: 3rd Floor
Forum House
41-51 Brighton Road
Redhill
Surrey
RH1 6YS





REGISTERED NUMBER: 10250890 (England and Wales)





AUDITORS: Deeks Evans Audit Services Limited
Statutory Auditor
First Floor, West Barn
North Frith Farm, Ashes Lane, Hadlow
Tonbridge
Kent
TN11 9QU

Naxos Rights (Europe) Ltd (Registered number: 10250890)

Balance Sheet
31 December 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 4 3,638,418 3,820,420
Tangible assets 5 23,762 19,939
Investments 6 675,000 675,000
4,337,180 4,515,359

CURRENT ASSETS
Stocks 419,732 404,021
Debtors 7 2,076,887 2,741,089
Cash at bank 135,867 340,306
2,632,486 3,485,416
CREDITORS
Amounts falling due within one year 8 18,975,538 17,563,631
NET CURRENT LIABILITIES (16,343,052 ) (14,078,215 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

(12,005,872

)

(9,562,856

)

CAPITAL & RESERVES
Called up share capital 550,000 550,000
Retained earnings (12,555,872 ) (10,112,856 )
SHAREHOLDERS' FUNDS (12,005,872 ) (9,562,856 )

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Statement of Income and Retained Earnings has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 22 August 2024 and were signed on its behalf by:





M Lutzweiler - Director


Naxos Rights (Europe) Ltd (Registered number: 10250890)

Notes to the Financial Statements
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Naxos Rights (Europe) Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared in conformity with the principles applicable to a going concern basis. The applicability of these principles is dependent upon continued availability of adequate finance in the future in view of the group's net current liabilities. There is a material uncertainty at group level in relation to going concern and this condition that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. The group directors, Mr Klaus Heymann and Mr. Yu He have confirmed their intention to provide financial support to the Group and not to call upon the Group to repay any of the loans due to them until it is in a position to do so without compromising the rights of the Group's creditors. Note 10 to the financial statements indicate group debtor balances of £809,005 which are treated as recoverable.

Critical accounting estimates and judgements
Estimates and assumptions concerning the future and judgements are made by the management in the preparation of the financial statements. They affect the application of the Company's accounting policies, reported amounts of assets, liabilities, income and expenses and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable in the period of revision and future periods, in case the revision also effects future periods.

Revenue recognition
Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Revenue is recognised when it is possible that the economic benefits will flow to the company and when the revenue and costs, if applicable, can be measured reliably and on the following basis:

Nature of goods or services
The nature of the goods or services provided by the company is as follows:
- Sale of products: digital sale of musical works on retail website and sale of compact discs and DVDs
- Downloading and streaming services: provision of music subscriptions services via downloading or
streaming
- Licensing services: licensing of sound recordings and other intellectual property
- Royalty services: administers and remits payment of mechanical royalties from underlying compositions
contained on products licensed, owned, and/or controlled by its customers

Identification of performance obligations
At contract inception, the company assesses the goods or services promised in a contract with a customer and identifies as a performance obligation each promise to transfer to the customer either:
(a) a good or service (or a bundle of goods or services) that is distinct; or
(b) a series of distinct goods or services that are substantially the same and that have the same pattern of
transfer to the customer.

Naxos Rights (Europe) Ltd (Registered number: 10250890)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued



Revenue is recognised when it is possible that the economic benefits will flow to the company and when the revenue and costs, if applicable, can be measured reliably and on the following basis:

Sale of goods is recognised on the transfer of risks and rewards of ownership, which generally coincides with the time when goods are delivered to customers and title has passed.

Royalty income is recognised on receipt of statements from licensees.

Download, streaming income and service income are recognised when services are rendered.

Subscription income is recognised when services are provided under the terms of the online subscription agreements. Payments received in advance of providing services are recorded as deferred revenue and amortised to revenue over the term of agreement.

Licencing income and royalty income are recognised as revenue based on the contract terms.

Intangible assets
Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. The costs comprise recording costs incurred in producing master recordings for physical and digital distribution. Intangible assets are amortised on a straight line basis over a period of five years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Computer equipment - 20% on cost

Stocks
Stocks of finished goods have been valued at the lower of cost and estimated selling price less costs to sell, after making due allowance for obsolete and slow moving items.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Naxos Rights (Europe) Ltd (Registered number: 10250890)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Foreign currencies
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign exchange gains and losses resulting from the retranslating of non-monetary items carried at fair value are recognised in profit or loss except for those arising on the retranslating of non-monetary items in respect of which gains and losses are recognised directly in equity,

The results and financial position of all the Group entities that have a functional currency different from the presentation currency ("foreign operations") are translated into the presentation currency as follows:

- Assets and liabilities for each statement of financial position presented are translated at the closing rate
at the end of the reporting period;
- Income and expenses for each statement of comprehensive income are translated at average exchange
rate;
-All resulting exchange differences arising from the above translation and exchange differences arising
from a monetary item that forms part of the company's net investment in a foreign operation are
recognised as a separate component of equity.

Financial instruments
Short term debtors and creditors with no stated interest rate are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account.

3. EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2022 - NIL).

4. INTANGIBLE FIXED ASSETS
Patents
and
licences
£   
COST
At 1 January 2023 11,491,028
Additions 1,650,572
Disposals (74,434 )
At 31 December 2023 13,067,166
AMORTISATION
At 1 January 2023 7,670,608
Amortisation for year 1,758,140
At 31 December 2023 9,428,748
NET BOOK VALUE
At 31 December 2023 3,638,418
At 31 December 2022 3,820,420

Naxos Rights (Europe) Ltd (Registered number: 10250890)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

5. TANGIBLE FIXED ASSETS
Computer
equipment
£   
COST
At 1 January 2023 33,543
Additions 6,648
At 31 December 2023 40,191
DEPRECIATION
At 1 January 2023 13,604
Charge for year 2,825
At 31 December 2023 16,429
NET BOOK VALUE
At 31 December 2023 23,762
At 31 December 2022 19,939

6. FIXED ASSET INVESTMENTS
Unlisted
investments
£   
COST
At 1 January 2023
and 31 December 2023 675,000
NET BOOK VALUE
At 31 December 2023 675,000
At 31 December 2022 675,000

The company's investments at the Balance Sheet date in the share capital of companies include the following:

Arc Music Productions International Limited
Registered office: Unit C3, Moor Hall, Sandhawes Hill, East Grinstead, West Sussex, England, RH19 3NR
Nature of business: Sound recording and music publishing activities
%
Class of shares: holding
Ordinary Shares 100.00
2023 2022
£    £   
Aggregate capital and reserves 250,659 232,092
Profit for the year 18,567 71,605

7. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 482,937 440,772
Other group companies 809,005 1,418,426
Other debtors 66,548 46,899
Prepayments & accrued income 718,397 834,992
2,076,887 2,741,089

Naxos Rights (Europe) Ltd (Registered number: 10250890)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade creditors 569,808 607,765
Parent company 14,528,739 13,725,065
Other group companies 3,529,765 3,043,368
Social security & other taxes 158 18,368
Accrued expenses 347,068 169,065
18,975,538 17,563,631

9. DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Richard Young (Senior Statutory Auditor)
for and on behalf of Deeks Evans Audit Services Limited

10. RELATED PARTY DISCLOSURES

The value of group purchases and expenses purchased by the company during the year was £2,843,893 (2022 : £3,007,478), this includes fixed asset additions of £288,787 (2022: £263,947). Sales to companies within the group amounted to £2,586,467 (2022: £2,406,256).

Balances outstanding at the year end were as follows: 2023 2022
£    £   
Amounts owed by other group companies
Naxos of America Inc 265,963 349,924
Naxos Global Logistics GmbH 217,470 254,579
Naxos Japan 6,389 25,869
Naxos Audio books (UK) Ltd - 265,790
ARC Music Production International Limited 59,602 231,025
Naxos Digital Services US Inc 225,282 286,877
Naxos Sweden AB 56 -
Naxos Finland OY 538 -
Orfeo International GmbH - -
Naxos Denmark 448 1,488
Naxos (Beijing) Culture & communication 33,257 2,874

Amount owed to parent company
Naxos Rights International Limited (Hong Kong) 14,528,739 13,725,065

Amounts owed to other group companies
HNH International Ltd 1,659,461 1,027,088
Naxos Rights US Inc 40 159,772
Naxos Music UK Limited 916,440 677,005
Naxos Deutschland 148,251 325,735
Naxos Global Distribution 355,531 396,365
Naxos Digital Services 388,274 408,828
K & A Productions Ltd 3,988 47118
Naxos Audio books (UK) Ltd 57,780 -
Oehms Classics Musikproducktion GmbH - 409
Ondine OY - 564
Orfeo International GmbH - 484

Mr Heymann is common director of the Company's holding company and related companies

Naxos Rights (Europe) Ltd (Registered number: 10250890)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

11. ULTIMATE CONTROLLING PARTY

The company is a wholly owned subsidiary of Naxos Rights International Limited, a company registered in Hong Kong. The ultimate controlling party is Desun Holding Limited , a BVI company controlled by Mr He Yu.

The results for the year of the company are included in the group financial statements of Angelina Assets Limited (a BVI company) for the year ended 31 December 2023. The Company's registered office is located at Vistra Corporate Services Centre, Wickham's Cay II,Road Town, Tortola, VG1110, British Virgin Islands.

The group financial statements are not publicly available.