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Registered number: 06705101 BMG RIGHTS MANAGEMENT (UK) LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
BMG RIGHTS MANAGEMENT (UK) LIMITED COMPANY INFORMATION
Directors | David D'Urbano
| Alistair Norbury
Registered number | 06705101
Registered office | Floors 1-3
| 20 Vauxhall Bridge Road
| London United Kingdom
| SW1V 2SA
Independent auditor | Grant Thornton UK LLP
| 17th Floor
| 103 Colmore Row
| Birmingham, United Kingdom
| B3 3AG
BMG RIGHTS MANAGEMENT (UK) LIMITED CONTENTS
| Page
Strategic Report | 1 - 5
Directors' Report | 6 - 8
Directors' Responsibilities Statement | 9
Independent Auditor's Report to the members of BMG Rights Management (UK) Limited | 10 - 14
Statement of Comprehensive Income | 15
Balance Sheet | 16
Statement of Changes in Equity | 17
Notes to the Financial Statements | 18 - 42
BMG RIGHTS MANAGEMENT (UK) LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2025
Introduction
The directors present their Strategic report for the year ended 31 December 2025 for BMG Rights Management (UK) Limited ('the Company' or 'BMG'). Principal activities The Company is a United Kingdom subsidiary of Bertelsmann SE & Co. KGaA, which trades as 'BMG', one of the world's leading independent music content groups. BMG ranks among the largest independent music publishers in Europe and in the United States and is one of the largest owners of master recordings among the independent recorded music companies in Europe. The Company owns and administers rights to musical compositions, exploits and markets these compositions and receives royalties or fees for their use. It additionally contracts as a sub-publisher for collection and transfer of monies to other affiliated companies. Strategy The Company is part of an international group of companies focused on the management of music rights. The Company covers the entire range of rights administration, development and exploitation, placing the needs of songwriters and artists at the core of its business model. At the core of the Company’s strategy is delivering a high quality rights administration service to artists and writers. The Company acts as a sub-publishing hub for all of the BMG affiliates worldwide. It therefore collects revenues on behalf of these companies and redistributes it on a quarterly basis. Business review Throughout 2025 the Company continued to invest in music rights with total intangible asset additions of £43,995,000 (2024: £15,140,000). This included music rights hived up from a subsidiary entity. The Company has a strong roster of internationally successful songwriters and artists and therefore there remains a healthy mix of income from all traditional sources. As shown in the Company's Statement of Comprehensive Income on page 14, the Company reported revenues of £209,350,000 (2024: £232,133,000) and gross profit of £70,662,000 (2024: £69,472,000). This represents a decrease in revenue of £22,783,000 and an increase in gross profit of £1,190,000. The decrease in revenue is primarily driven by a reduction in physical goods income of £20,631,000. This reflects the Group’s strategy to centralise certain global operations through other BMG group companies outside the UK. These operational changes, and the subsequent decrease in revenue, have also resulted in a corresponding decrease in royalty expenses within cost of sales. Royalty licencing revenues represent the continued investment in music rights and their subsequent exploitation. Royalties on copyrights are typically received with up to a twelve-month lag between distribution and collection by intermediating collection societies. As a result, investments made in 2023 and 2024 have contributed significantly towards the revenue and gross profit generated in 2025. Contracts entered into during 2025 are expected to contribute towards income in 2026 and beyond. The operating profit for the year has decreased from an operating profit of £25,992,000 in 2024 to £17,107,000 in 2025. This movement is primarily driven by increased amortisation charges, higher expenses arising from movements on provisions, and increased management fees charged by other group entities. Page 1
BMG RIGHTS MANAGEMENT (UK) LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Business review (continued)
Profit before tax was £26,748,000 (2024: £5,698,000) driven by the factors outlined above, together with a decrease in finance expenses and income from shares in group undertakings of £10,354,000 (2024: £497,000). The decrease in interest payable is primarily due to the capitalisation of the intercompany cash pooling facility amount payable to Bertelsmann UK Limited during the previous year. The trade and assets of The Echo Label Limited, a subsidiary of the Company, were transferred to the Company on 21 March 2025, with an effective date of 1 January 2025. Total consideration of £20,000,000 represents the fair value of the intangible assets acquired. As part of the closure of this entity, a dividend of £24,081,000 was paid to the Company. This dividend has been treated as a return of capital and has therefore been accounted for as a reduction in the cost of investment. The dividend received exceeded the carrying value of the investment by £10,354,000, which is recognised within income from shares in group undertakings in the Statement of Comprehensive Income. The Company’s net assets as at 31 December 2025 were £483,033,000 (2024: £463,265,000). This increase is largely attributable to a decrease in intercompany payables during the year.
Key performance indicators ('KPIs')
The directors monitor the Company's performance in a number of ways including alternative performance measures ('APMs') such as reported revenue, gross profit, earnings before interest and taxes ('EBIT'), and EBIT as adjusted for depreciation and amortisation ('EBITDA'). The movement in revenue and gross profit has been explained in the Business review section. The Board makes use of certain APMs that are non-GAAP measures. The Board uses these to assess performance of the Company and considers them to provide useful supplementary information to the statutory results. The Board does not consider APMs to be more relevant or reliable than IFRS measures and notes that their definition and basis of calculation may differ from other companies. The Company's APM's are defined and a reconciliation to the most directly comparable IFRS measure is shown below. EBITDA is calculated by adjusting loss or profit before tax for the following items: amortisation, depreciation, finance costs, and finance income. It is reported to the board as the Company is financed through intercompany funding, such as cash pooling, from its group parent companies and through equity and management considers this a useful proxy for the company’s performance. EBIT and EBITDA reconciliation:
|  | 2025 | 2024
|  | £000 | £000
| Profit before tax | 26,748 | 5,698
| Adjustment for: |  |
| Interest receivable and similar income | (3,313) | (2,744)
| Interest payable and similar expenses | 4,026 | 23,535
| EBIT | 27,461 | 26,489
| Amortisation of intangible assets | 21,371 | 19,494
| EBITDA | 48,832 | 45,983
Page 2
BMG RIGHTS MANAGEMENT (UK) LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025 EBIT for the period was a profit of £27,461,000 (2024: £26,489,000) which was primarily driven by the significant decrease in operating profit, offset by the income from shares in group undertakings generated in the period. EBITDA for the period was £48,832,000 (2024: £45,983,000) which is in line with expectations after taking into consideration key movements discussed in the business review. The KPIs are in line with forecast.
Principal risks and uncertainties
The Company's operations expose it to a variety of commercial and financial risks. The Company is subject to risk management procedures and an annual risk assessment implemented by the ultimate parent company, Bertelsmann SE & Co KGaA. The Company has procedures in place to make the directors aware of the various risks to the Company's business and to ensure that these are continuously monitored and reported to management. Commercial risk The music industry continues to evolve, driven by the developing digital landscape on which consumers access their music. This creates both challenges and opportunities for the Company, emphasis is placed on growth within the digital space such to offset the decline in the sale of physical product. Intense competition has accelerated these developments with the risk of future increases to contract costs to ensure talent can be attracted and retained within such a congested market. The Company actively monitors market trends and these are incorporated into the detailed commercial plans of the business. Price risk In the last year, the UK economy has seen high levels of inflation which has led to a significant increase in interest rates. The combination of high inflation and an increase to interest rates is likely to increase the Company’s cost base. Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's receivables from customers. The risk is mitigated as balances are spread across multiple parties. The Company's management make assessments on new customers before work is earned out, based on their knowledge of the industry and the customer's acceptance of imposed credit terms. The majority of the Company’s receivables are balances with fellow Group undertakings and are considered to be low credit risk due to the nature of the Group’s funding arrangements. Liquidity and cash flow risk The objective of the Company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The Company expects to meet its financial obligations through operating cash flows. The Company’s results, including cash flows, are reviewed by the Board on a monthly basis. Risks are further mitigated by the cash pooling arrangements in place across the Bertelsmann group, which ensures funds are available to the Company to meet all liabilities as and when they fall due.
Directors' section 172 statement
Directors of a company must act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to: a)The likely consequences of any decision in the long term; b)The interests of the Company’s employees; c)The need to foster the Company’s business relationships with suppliers, customers and others; d)The impact of the Company’s operations on the community and the environment; e)The desirability of the Company maintaining a reputation for high standards of business conduct; and f)The need to act fairly as between members of the Company. Page 3
BMG RIGHTS MANAGEMENT (UK) LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025 Directors' section 172 statement (continued) When making decisions and setting the strategy for the Company, the directors engage with management to ensure that due consideration has been given to the impacts on key stakeholders including shareholders, employees, suppliers, customers, the community, and the environment to ensure that the company maintains a high level of ethical business practice. The directors fulfil these duties as follows: Long- term decision making The Board operates a structured governance model which supports the Company in ensuring that decisions are considered, documented and reported upon, and in alignment with its strategic plans. Detailed budgets and forecasts are prepared which enable the Board to track performance and ensure that it is as expected, or that mitigation steps are taken to deliver performance in line with, or close to, expectations. The Board and senior management personnel operate within this structure, with the aim of promoting the success of the Company and delivering long- term shareholder value. The Board is presented with regular board packs and other information that it needs to fulfil its responsibilities. During the period at Board meetings the Board have discussed and made decisions on a number of specific issues including business priorities and strategy, capital investment and the ongoing management of the current economic situation. The interest of the Company’s employees The Company does not employ any staff directly. Employee costs are recharged from a fellow Group undertaking, BMG Rights Management Services (UK) Limited. Details of the Group’s employees are disclosed in the financial statements of that entity. Engagement with suppliers, customers and others The directors appreciate the importance of fostering business relationships with key stakeholders, such as customers and suppliers, and focus on the maintenance and growth of these relationships in their decision-making and strategic planning. The Company employs dedicated relationship managers to foster these relationships which also ensures the board has a high degree of visibility to take stakeholder considerations into account. Community and environment The Company’s approach is to use its position of strength to ensure it is an asset to the communities and people with which it interacts. The Board ensures significant consideration is given to the impact of the Company’s operations on the community and environment in their decision-making. The Company strives to create positive change in reducing the environmental standards, whilst maintaining effective and continuing business practices. Page 4
BMG RIGHTS MANAGEMENT (UK) LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025 Directors' section 172 statement (continued) High standards of business conduct The Company has a Code of Conduct setting out the behaviours and values expected of all of our employees, which is communicated to all colleagues. Company processes ensure the Board and management are continually updated on the operation of the code and an independent whistleblowing service enables employees and third parties to anonymously raise concerns. Through its oversight and monitoring role, the Board requires all of its people to work to the highest standards of business conduct. Shareholders As a wholly owned subsidiary, the Company operates within the wider Group strategy for shareholder engagement. The Company’s activities and strategic direction are aligned with the Group and subject to oversight and approval by the parent undertaking.
General
The Company is presenting the financial statements in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). This report was approved by the board on 22 June 2026 and signed on its behalf.
David D'Urbano Director
Page 5
BMG RIGHTS MANAGEMENT (UK) LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2025 The directors present their report and the financial statements for the year ended 31 December 2025.
Results and dividends
The profit for the year, after taxation, amounted to £19,768 thousand (2024 - £3,002 thousand). The directors do not recommend a dividend (2024: £nil).
Directors
The directors who served during the year were:
David D'Urbano
Alistair Norbury
Page 6
BMG RIGHTS MANAGEMENT (UK) LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Future developments
The Company will continue to enhance and optimise the exploitation of its music rights and control its cost base, taking into account the wider UK group structure. The directors do not anticipate any significant changes in the activities of the Company. On 15 June 2026, Bertelsmann UK Limited sold its entire 100% shareholding in BMG Rights Management (UK) Limited to fellow group company Reinhard Mohn Nederland B.V. Going Concern In preparing these financial statements, the directors have assessed the ability of the Company to continue to operate for a period of at least twelve months from the date of signing the financial statements. The going concern period considered is to 30 June 2027. The Company has undertaken a risk assessment and forecasting exercise to assess the Company’s liquidity position. The forecast for the going concern period has been prepared using the three year plan approved by the Board and takes account of prior trends and key cost drivers such as inflation. For the purposes of the Company’s going concern assessment, the directors have performed sensitivity analysis on cashflows based on unforeseen changes in demand and the potential impact of increased inflationary pressures. In addition, reverse stress testing has been performed to establish the levels of performance where cash availability would be breached. The results of the analysis demonstrated that there was sufficient cash availability within the current intra group cash pooling facility to deal with all of the identified plausible scenarios. The forecast is dependent on a group cash pooling facility being available for the going concern period. During 2026, the cash pooling arrangement will transfer from Bertelsmann UK Limited to Reinhard Mohn Nederland B.V. The directors have assessed that the terms of the facility state that it can be terminated by either party with three days' notice. The Company has therefore received written confirmation from Reinhard Mohn Nederland B.V. that it will not seek repayment of the amounts currently due for the going concern period and that the cash pooling facility will remain available on the same terms until the transfer takes place. In addition, Bertelsmann SE & Co. KGaA have provided written confirmation to Reinhard Mohn Nederland B.V. that it will provide the necessary funds required throughout the going concern period and that it will honour the terms of the cash pooling facility, which expires on 31 December 2026, until a minimum of 30 June 2027. Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed and the written confirmation of support from Reinhard Mohn Nederland B.V., the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of no less than twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. Engagement with employees All employees and directors for the BMG group of companies in the UK are employed and paid for by BMG Rights Management Services (UK) Limited. All UK operating companies are recharged for services performed by BMG Rights Management Services (UK) Limited. Research and development The Company has recognised assets from development expenditure during the period. Development expenditure is costs directly attributable to the creation of ancillary content that is linked to the exploitation of music catalogues. Page 7
BMG RIGHTS MANAGEMENT (UK) LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025 Greenhouse gas emissions and energy consumption The Company has not disclosed information in respect of greenhouse gas emissions and energy consumption as its energy consumption in the United Kingdom is less than 40,000kWh for the year. Qualifying indemnity provisions The Company had no qualifying third party indemnity provisions in place at any time during the financial year (2024: none). Matters covered in the Strategic report Details on financial risk management, engaging with customers, suppliers and other stakeholders are not included in the Directors' report as they are considered to be of strategic importance to the Company and, as allowed under the Companies Act 2006 s414C (11), they have instead been included in the Strategic report.
Post balance sheet events
There have been no significant events affecting the Company since the year end.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Auditor
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board on 22 June 2026 and signed on its behalf.
David D'Urbano Director
Page 8
BMG RIGHTS MANAGEMENT (UK) LIMITED DIRECTORS' RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2025 The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: ∙select suitable accounting policies and then apply them consistently; ∙make judgements and accounting estimates that are reasonable and prudent; ∙state whether applicable UK Accounting Standards comprising FRS 101 have been followed, subject to any material departures disclosed and explained in the financial statements; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Page 9
BMG RIGHTS MANAGEMENT (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BMG RIGHTS MANAGEMENT (UK) LIMITED
Opinion
We have audited the financial statements of BMG RIGHTS MANAGEMENT (UK) LIMITED (the 'Company') for the year ended 31 December 2025, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: ∙the financial statements give a true and fair view of the state of the Company's affairs as at 31 December 2025 and of its profit for the year then ended; ∙the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Page 10
BMG RIGHTS MANAGEMENT (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BMG RIGHTS MANAGEMENT (UK) LIMITED (CONTINUED)
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern. In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as the cost of living crisis impacting consumer spending patterns and the impact of worldwide events such as the Middle East conflict, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period. In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report and financial statements other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report and financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Page 11
BMG RIGHTS MANAGEMENT (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BMG RIGHTS MANAGEMENT (UK) LIMITED (CONTINUED)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or ∙the financial statements are not in agreement with the accounting records and returns; or ∙certain disclosures of directors' remuneration specified by law are not made; or ∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page 9, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, 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. In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Page 12
BMG RIGHTS MANAGEMENT (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BMG RIGHTS MANAGEMENT (UK) LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: ∙We obtained an understanding of the legal and regulatory frameworks applicable to the company and industry in which it operates through our general commercial and sector experience, discussions with management and review of board minutes. We determined that the following laws and regulations were most significant; United Kingdom Accounting Standards, including Financial Reporting Standard 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice), the Companies Act 2006 and the relevant tax compliance regulations in the UK. ∙We enquired of management concerning the company’s policies and procedures relating to: - the identification, evaluation and compliance with laws and regulations; - the detection and response to the risks of fraud; and - the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations. ∙We enquired of management and those charged with governance, whether they were aware of any instances of non-compliance with laws and regulations or whether they had any knowledge of actual, suspected or alleged fraud. We corroborated our inquiries through our review of board minutes. ∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur and the risk of management override of controls. Audit procedures are performed by the engagement team included: - identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; - challenging assumptions and judgements made by management in its significant accounting estimates; - identifying and testing journal entries, in particular journal entries with unusual account combinations that increased revenues or that reduced costs in the Statement of comprehensive income; and - assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item. ∙In addition, we completed audit procedures to conclude on the compliance of disclosures in the Reports and financial statements with applicable financial reporting requirements. ∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. Page 13
BMG RIGHTS MANAGEMENT (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BMG RIGHTS MANAGEMENT (UK) LIMITED (CONTINUED) ∙The assessment of the appropriateness of the collective competence and capabilities of the engagement team including consideration of the engagement team’s: - Understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation; - knowledge of the industry in which the client operates; and - understanding of the legal and regulatory requirements specific to the entity including, the provisions of the applicable legislation and the applicable statutory provision. ∙We communicated relevant laws and regulations and potential fraud risks to all engagement team members. We remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's 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 Company's members, as a body, for our audit work, for this report, or for the opinions we have formed. David P White Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Birmingham 22 June 2026 Page 14
BMG RIGHTS MANAGEMENT (UK) LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024
Note | £000 | £000
Revenue | 4 | 209,350 | 232,133
Cost of sales |  | (138,688) | (162,661)
Gross profit |  | 70,662 | 69,472
Administrative expenses |  | (53,984) | (43,480)
Other operating income | 5 | 429 | -
Operating profit | 6 | 17,107 | 25,992
Income from shares in group undertakings | 12 | 10,354 | 497
Interest receivable and similar income | 8 | 3,313 | 2,744
Interest payable and similar expenses | 9 | (4,026) | (23,535)
Profit before tax |  | 26,748 | 5,698
Tax on profit | 10 | (6,980) | (2,696)
Profit for the financial year |  | 19,768 | 3,002
Other comprehensive income |  | - | -
Total comprehensive income for the year |  | 19,768 | 3,002
All activities derive from continuing operations. There were no recognised gains and losses for 2025 or 2024 other than those included in the Statement of comprehensive income.
The notes on pages 18 to 42 form part of these financial statements.
Page 15
BMG RIGHTS MANAGEMENT (UK) LIMITED REGISTERED NUMBER: 06705101 BALANCE SHEET AS AT 31 DECEMBER 2025
|  | 2025 |  | 2024
Note |  | £000 |  | £000
Fixed assets |  |  |  |  |
Intangible assets | 11 |  | 345,019 |  | 322,395
Investments | 12 |  | 100,198 |  | 113,926
|  |  | 445,217 |  | 436,321
Current assets |  |  |  |  |
Stocks | 13 | 217 |  | 2,581 |
Debtors | 14 | 162,948 |  | 186,158 |
Bank current accounts |  | 7,163 |  | 21 |
|  | 170,328 |  | 188,760 |
Creditors: amounts falling due within one year | 15 | (127,405) |  | (159,002) |
Net current assets |  |  | 42,923 |  | 29,758
Total assets less current liabilities |  |  | 488,140 |  | 466,079
Creditors: amounts falling due after more than one year | 16 |  | (5,107) |  | (2,814)
|  |  | 483,033 |  | 463,265
Net assets excluding pension asset |  |  | 483,033 |  | 463,265
Net assets |  |  | 483,033 |  | 463,265
Capital and reserves |  |  |  |  |
Called up share capital | 18 |  | 380,000 |  | 380,000
Profit and loss account | 19 |  | 103,033 |  | 83,265
|  |  | 483,033 |  | 463,265
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 June 2026.
David D'Urbano
Director
The notes on pages 18 to 42 form part of these financial statements. Page 16
BMG RIGHTS MANAGEMENT (UK) LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2025
| Called up share capital | Profit and loss account | Total equity
| £000 | £000 | £000
At 1 January 2024 | - | 80,263 | 80,263
Comprehensive income for the year |  |  |
Profit for the year | - | 3,002 | 3,002
Contributions by and distributions to owners |  |  |
Shares issued during the year | 380,000 | - | 380,000
At 1 January 2025 | 380,000 | 83,265 | 463,265
Comprehensive income for the year |  |  |
Profit for the year | - | 19,768 | 19,768
At 31 December 2025 | 380,000 | 103,033 | 483,033
| The notes on pages 18 to 42 form part of these financial statements.
Page 17
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
1. | General information
BMG Rights Management (UK) Limited ('the Company') is a private company limited by shares and incorporated in England and Wales. The address of its registered office is Floors 1-3, 20 Vauxhall Bridge Road, London, SW1V 2SA. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and the Companies Act 2006. In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted international accounting standards (“UK-adopted IFRS”), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken. The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3. The following principal accounting policies have been applied:
| 2.2 | Financial Reporting Standard 101 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101: ∙the requirements of IFRS 7 Financial Instruments: Disclosures ∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement (disclosure of valuation techniques and inputs used for fair value measurement of assets and liabilities). ∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers ∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: - paragraph 79(a)(iv) of IAS 1; - paragraph 73(e) of IAS 16 Property, Plant and Equipment; - paragraph 118(e) of IAS 38 Intangible Assets; ∙the requirements of the following paragraphs of IAS 1, 'Presentation of financial statements': - 10(d) statement of cash flows; - 10(f) statement of financial position as at the beginning of the preceding period when retrospective restatement or reclassifications apply; - 16 statement of compliance with all IFRS; - 38A requirement for minimum of two primary financial statements, including cash flow statements; - 38B, 38C, 38D additional comparative information; - 40A, 40B, 40C, 40D requirements to provide additional statements in respect of retrospective restatements and reclassifications; - 111 statement of cash flows information; and - 134 - 136 capital management disclosures. Page 18
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.2 | Financial Reporting Standard 101 - reduced disclosure exemptions (continued)
∙the requirements of IAS 7 Statement of Cash Flows ∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures (key management compensation). ∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member This information is included in the consolidated financial statements of Bertelsmann SE & Co KGaA as at 31 December 2025 and these financial statements may be obtained from Bertelsmann SE &Co KGaA, Corporate Communications, Carl Bertelsmann Strasse 270, Postfach 111, D-33311Gütersloh, Germany.
| 2.3 | Exemption from preparing consolidated financial statements
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of a state other than the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006. The consolidated financial statements of the Company's ultimate parent company, Bertelsmann SE & Co KGaA, are available from: Bertelsmann SE & Co KGaA, Carl Bertelsmann Strasse 270, Postfach 111, D-33311 Gütersloh, Germany. Page 19
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.4 | Going concern
In preparing these financial statements, the directors have assessed the ability of the Company to continue to operate for a period of at least twelve months from the date of signing the financial statements. The going concern period considered is to 30 June 2027. The Company has undertaken a risk assessment and forecasting exercise to assess the Company’s liquidity position. The forecast for the going concern period has been prepared using the three year plan approved by the Board and takes account of prior trends and key cost drivers such as inflation. For the purposes of the Company’s going concern assessment, the directors have performed sensitivity analysis on cashflows based on unforeseen changes in demand and the potential impact of increased inflationary pressures. In addition, reverse stress testing has been performed to establish the levels of performance where cash availability would be breached. The results of the analysis demonstrated that there was sufficient cash availability within the current intra group cash pooling facility to deal with all of the identified plausible scenarios. The forecast is dependent on a group cash pooling facility being available for the going concern period. During 2026, the cash pooling arrangement will transfer from Bertelsmann UK Limited to Reinhard Mohn Nederland B.V. The directors have assessed that the terms of the facility state that it can be terminated by either party with three days' notice. The Company has therefore received written confirmation from Reinhard Mohn Nederland B.V. that it will not seek repayment of the amounts currently due for the going concern period and that the cash pooling facility will remain available on the same terms until the transfer takes place. In addition, Bertelsmann SE & Co. KGaA have provided written confirmation to Reinhard Mohn Nederland B.V. that it will provide the necessary funds required throughout the going concern period and that it will honour the terms of the cash pooling facility, which expires on 31 December 2026, until a minimum of 30 June 2027. Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed and the written confirmation of support from Reinhard Mohn Nederland B.V., the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of no less than twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. Page 20
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.5 | Revenue
Revenue from contracts with customers is recorded when performance obligations, promised in the contract are satisfied, and for an amount for which it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Revenues are reported net of discounts. Intellectual property licensing (musical works) As per the principal activities of the Company, revenue primarily comprises royalty licencing from the exploitation of musical compositions. These licenses transfer to a customer either a right to use an entity's intellectual property as it exists at the point in time at which the license is granted (right to use), or a right to access an entity's intellectual property as it exists throughout the license period (right to access). Revenues are accounted for when the performance obligation promised in the contract is satisfied (right to use) or over time upon satisfaction (right to access), i.e., when the seller transfers the control over the right to use/access the intellectual property and the customer obtains control of the use/access of that license. Consequently, revenues from right to use are recognised at the point in time when the license is transferred and the customer is able to use and benefit from the license. Revenues from right to access are accounted for over time, over the license period from the date the customer is able to use and benefit from the license and in line with the sale or usage. Revenue streams The Company has the following revenue streams: a) Royalty licencing income Royalty licencing income relates to the use by a third party of the copyrights and masters rights on musical works owned or administered by the Company. The licences provided to third parties provide a right to access a catalogue of music over a period of time and revenue is therefore recognised as such. This includes income collected by partners from digital exploitation, such as streaming, and the public performance of musical compositions. For these contracts, royalties are recognised in the year to which it relates, or if it cannot be reliably estimated, on a receipts basis. b) Synchronisation income Synchronisation income relates to the licences from the pairing of music content to another medium (usually audiovisual). Synchronisation licences are recognised as at point in time when the licence begins. c) Physical goods income This revenue stream includes physical sales of recorded music (CDs, DVDs and Vinyls) and merchandising. The Company’s physical recorded music products are predominantly sold through retailers and wholesalers both in-store and online. Revenue relating to physical sales of recorded music and merchandise is recognised at a point in time when a sale is made to the final customer. Page 21
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.5 | Revenue (continued)
Analysis of principal v agent relationship in sales transactions involving a third party If the nature of the entity's undertaking is a performance obligation to provide the specified goods or services itself, then the entity acts on its own behalf and it is “principal” in the sale transaction: it accounts for revenue as the gross amount of consideration to which it expects to be entitled in exchange for the goods or services provided, and the commission due to the third-party as cost of revenues. If the entity arranges for a third-party to provide the goods or services specified in the contract, then it recognises as revenues the net amount of consideration to which it expects to be entitled in exchange for the goods or services provided. Financing components The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
| 2.6 | Royalty advances
Advance royalty payments to artists are carried forward within other receivables where they relate to proven artists and where it is estimated that sufficient future income will be recouped against those advance payments. Advances are presented at their net realisable value, being the advance less any provision.
| 2.7 | Interest receivable and similar income
Interest receivable and similar income comprises interest receivable on funds invested and foreign exchange gains that are recognised in the Statement of comprehensive income. Interest income is recognised in the income statement as it accrues, using the effective interest method.
| 2.8 | Dividend income
Dividend income is recognised when the right to receive payment is established. Where payments are received from subsidiaries which are accounted for as a return of capital, these are credited against the Company’s investment cost in that subsidiary.
| 2.9 | Interest payable and similar expenses
Interest payable and similar expenses comprises interest payable and foreign exchange losses that are recognised in the Statement of comprehensive income. Interest payable is recognised in the income statement as it accrues, using the effective interest method. Page 22
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.10 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP. Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates. The financial statements are presented in pound sterling, which is also the functional currency of the Company. Transactions and balances Transactions in a currency other than the functional currency ('foreign currency') are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Management assess the underlying asset and liability in the transaction to determine the nature of the foreign exchange gains and losses. As this results from operating activities gains and losses resulting from the settlement of transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the Statement of comprehensive income within ‘Administrative expenses’. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on translation are recognised in the Statement of comprehensive income under administrative expenses. Page 23
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.11 | Current and deferred taxation
Tax for the year comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the Balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax bases of those assets and liabilities. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the Balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Page 24
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.12 | Intangible assets
Intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to 'Administrative expenses' in the Statement of comprehensive income on a straight-line basis over the estimated useful lives of intangible assets. For music catalogues, the amortisation method used reflects the expected exploitation pattern of the rights held but will not exceed 15-25 years. Assets under construction comprise costs incurred on projects for the development of music rights. Assets under construction are not amortised until they are placed in service, at which point they are transferred to the appropriate intangible asset category. The estimated useful lives are as follows: Music catalogues 15 - 25 years Development expenditure 1.5 - 2 years Audio visual 1.5 - 2 years Development expenditure Development expenditure is costs directly attributable to the creation of ancillary content that is linked to the exploitation of music catalogues. This is primarily internal staff costs (recharged from group companies) that contribute to music contents and graphic design creations that are directly attributable to identifiable and unique music content components controlled by the Company. They are recognised as intangible assets when the following criteria are met: ∙It is technically feasible to complete the content so that it will be available for use; ∙Management intends to complete the content and use it or sell it; ∙There is an ability to use or sell the content; ∙It can be demonstrated how the content will generate probable future economic benefits; ∙Adequate technical, financial and other resources to complete the development and to use or sell the content are available; and ∙The expenditure attributable to the content during its development can be reliably measured. Other development expenditures that do not meet these criteria, as well as ongoing maintenance costs are recognised as the expense is incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Costs incurred during the period that do not meet the criteria for capitalisation are reflected in the Statement of comprehensive income in the period in which the expenditure is incurred. Intangible assets that have been developed but are sold before the Company has exploited them are expensed in 'Cost of sales' at cost. Page 25
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.13 | Investments
Investments in subsidiaries are measured at cost less accumulated impairment. At each balance sheet date, management review the investments in order to determine whether there is any objective evidence present that in accordance with IAS 36 would lead to an impairment being charged. Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversals at each reporting date, where a favourable event or change in circumstance has materialised that would indicate the impairment loss no longer exists or has decreased in size.
| 2.14 | Business combinations
Assets and liabilities acquired as a group are first determined whether the transaction is a business combination by applying the definition and criteria of IFRS 3. Where management have deemed the transaction not to constitute a business, the transaction is accounted for as an asset acquisition with the cost of the transfer being allocated to the individual identifiable assets and liabilities based on their relative fair value. For transactions qualifying as a business combination under the criteria outlined in IFRS 3, the fair value of the relative assets and liabilities are first determined and then allocated, with the remainder of the purchase price being recognised as goodwill.
| 2.15 | Impairment of assets
Assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable in accordance to IAS 36. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount, being the higher of an asset’s fair value less costs of disposal or value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which independent cash inflows are generated (cash-generating units). Prior impairments of non-financial assets are reviewed for possible reversal at each reporting date, if there have been favourable events or changes in circumstances, since the impairment loss was recognised that would indicate that the impairment loss no longer exists or might have decreased.
| 2.16 | Stocks
Stocks are stated at the lower of cost and net realisable value. Stocks are recognised as an expense in the period in which the related revenue is recognised. Cost is determined using the weighted average cost method. Cost includes the purchase price, including taxes, duties, freight and handling directly attributable to bringing the stock to its present location and condition. Page 26
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.17 | Trade debtors and amounts owed by group undertakings
Trade debtors and amounts owed by group undertakings are measured at amortised cost, less any allowance for expected credit losses. The Company applies IFRS 9 when using the expected credit loss model. Management adopts the “simplified approach” to determine an amount equal to the lifetime expected credit losses for insignificant trade debtors and a risk score on an individual basis for significant trade debtors. To measure the expected credit losses, trade debtors are grouped based on shared credit risk characteristics and the balance of uninsured debt across the Company.
| 2.18 | Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short- term highly liquid investments with original maturities of three months or less, and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in creditors: amounts falling due within one year.
| 2.19 | Creditors including group undertakings
Trade and other creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers or a commitment to provide goods and services where monies have been receipted. Page 27
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.20 | Financial assets
The company classifies its financial assets in the following categories: ∙Amortised cost ∙Fair value through profit or loss (FVTPL) ∙Fair value through other comprehensive income (FVOCI) The classification depends on the purpose for which the financial assets were acquired i.e. the entity’s business model for managing the financial assets and/or the contractual cash flow characteristics of the financial asset. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: ∙it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and ∙its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Subsequent to initial recognition these are measured at amortised cost using the effective interest method. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in the Statement of comprehensive income and presented in other (expenses)/income together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the Statement of comprehensive income under ‘net impairment losses on financial and contract assets’. On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis. All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. The Company does not have any assets classified at FVOCI nor FVTPL. The Company assesses at the end of each reporting period whether there is objective evidence that one or more event has occurred which has impacted on the estimated cash flows of the financial asset. Financial assets are impaired and impairment losses are incurred only if such objective evidence of impairment can be reliably measured.
| 2.21 | Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the Balance sheet if there is currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. Page 28
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
3. | Judgements in applying accounting policies and key sources of estimation uncertainty
In the application of the Company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates, underlying assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable and relevant under the circumstances. Key accounting estimates and assumptions Advances Writer and recorded artist advances provisions were made during the year based on a recoupment profile calculation used by the Company and across other affiliated companies. The recoupment profile calculation is a mechanical calculation that has been applied across all our artist advances. The calculation has been derived through a number of variables such as age of advances, historical activity, future sale projections and extrapolated average recoupment rates over deal term. See note 13 for the carrying amount of advances and associated provision. Impairment of investments Investments in subsidiary companies are held at cost less accumulated impairment losses. Each subsidiary is considered a separate cash-generating unit and the Company tests annually whether there any impairment indicators have been identified. Where indicators are identified, a full impairment assessment is performed using budgeted profits, projected cash flows and weighted average cost of capital in order to determine whether any impairment is required. See note 12 for the carrying amount of investments and associated provision. No impairment indicators were identified other than in respect of The Echo Label Ltd which ceased to trade and has been fully impaired. Intangible asset - useful economic lives The useful economic lives of intangible assets are determined by management based on the expected period over which the assets will generate economic benefits. This assessment is based on a number of factors, including the nature of the assets and historical patterns of consumption. Useful economic lives are reviewed periodically and have remained consistent over time. While no significant changes have been identified, changes in assumptions could impact the amortisation charge recognised in future periods. See note 11 for the carrying amount of intangible assets and the accounting policies for details of the associated useful economic lives. Judgements Determination of cash-generating units A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Management have considered the viability of producing valuations on individual catalogues and concluded that this does not represent the smallest identifiable group of assets. This is partially due to the inability to separate out associated cash flows such as overheads and management’s monitoring processes. Management therefore considers the Company to be one cash-generating unit. Page 29
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
4. | Revenue
| An analysis of revenue by class of business is as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Royalty licencing | 178,456 | 177,271
| Synchronisation licencing | 28,931 | 32,268
| Physical goods income | 1,963 | 22,594
|  | 209,350 | 232,133
Analysis of revenue by country of destination:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| United Kingdom | 68,021 | 67,916
| North America | 62,139 | 75,931
| Europe | 64,815 | 73,280
| Asia | 8,242 | 7,399
| Other | 6,133 | 7,607
|  | 209,350 | 232,133
| The following table provides information about contract assets and contract liabilities from contracts with customers:
|  | 2025 | 2024
|  | £000 | £000
| Contract assets | 1,859 | 3,002
| Contract liabilities | (10,730) | (9,593)
The contract assets primarily relate to the Company’s right to consideration for the provision of music licences not yet billed and are included within prepayments and accrued income in note 14. The contract assets are transferred to trade debtors when the rights become unconditional. The contract liabilities primarily relate to the advance consideration received from customers for music licences and are included within accruals and deferred income in note 15. The amount of £7,964,000 included in contract liabilities as at 31 December 2024 has been recognised as revenue in 2025 (2024: £5,713,000). Page 30
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
5. | Other operating income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Other operating income | 429 | -
|  | 429 | -
6. | Operating profit
| The operating profit is stated after charging/(crediting):
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amortisation of intangible assets | 21,371 | 19,494
| Foreign exchange (gain)/loss | (848) | 567
| Management charges from group undertakings | 27,572 | 23,173
| Cost of stocks recognised as an expense | 2,326 | 9,232
| Change in provisions: |  |
| Decrease in stock provision | (776) | (4,339)
| Increase in provision for artist and writer advances | 4,225 | 1,976
| Increase in expected credit loss provision | 2,183 | 353
| The audit fee of £392,250 (2024: £414,948) and non-audit fees of £20,000 (2024: £30,279) were borne by BMG Rights Management Services (UK) Limited and it was recharged to the Company as part of the management charges. The non-audit fee relates to audit-related assurance services.
7. | Employee costs and directors
| All employees and directors for the BMG group of companies in the UK are employed and paid for by BMG Rights Management Services (UK) Limited. All UK operating companies are recharged for services performed by BMG Rights Management Services (UK) Limited. The below directors remuneration represents the amounts allocated to the Company for services undertaken by the directors of the Company.
|  | 2025 | 2024
|  | £000 | £000
| Directors' remuneration: |  |
| Aggregate emoluments | 696 | 644
| Company pension contributions to money purchase schemes | 36 | 35
|  | 732 | 679
Retirement benefits are accruing to 2 directors (2024: 2) under a money purchase scheme. Page 31
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
7. | Employees and directors (continued)
|  | 2025 | 2024
|  | £000 | £000
| Highest paid director: |  |
| Aggregate emoluments | 426 | 392
| Company pension contributions to money purchase schemes | 22 | 20
|  | 448 | 412
8. | Interest receivable and similar income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Interest receivable on cash pooling | 3,313 | 2,744
|  | 3,313 | 2,744
| Further details regarding cash pooling arrangements are included in note 14.
9. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Bank interest payable | 21 | 22
| Interest payable on cash pooling | 3,738 | 22,453
| Other loan interest payable | - | 8
| Discount on deferred consideration | 267 | 1,052
|  | 4,026 | 23,535
| Further details regarding cash pooling arrangements are included in note 15.
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BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
10. | Tax on profit
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Current taxation |  |
| UK corporation tax on profit for the year | 6,605 | 2,698
| Adjustments in respect of prior years | 635 | 1,030
| Double tax relief | (1,376) | (1,403)
| Foreign tax on income for the year | 1,376 | 1,403
| Total current tax | 7,240 | 3,728
| Deferred tax |  |
| Origination and reversal of temporary differences | (337) | 376
| Adjustments in respect of prior years | 77 | (1,408)
| Total deferred tax | (260) | (1,032)
| Total tax charge | 6,980 | 2,696
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BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 10.Tax on profit (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year differs from the standard effective rate of corporation tax in the UK for the year ended 31 December 2025 of 25% (2024: 25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Profit before tax | 26,748 | 5,698
| Profit multiplied by standard rate of corporation tax in the UK of 25% (2024: 25%) | 6,687 | 1,425
| Effects of: |  |
| Adjustments to current tax in respect of prior years | 635 | 1,030
| Recharged costs not deductible | 963 | -
| Dividends from UK subsidiaries | (2,589) | (124)
| Interest not taxable | (237) | -
| Non-deductible amortisation | 2,410 | 1,943
| Losses utilised not previously recognised | (368) | (219)
| Adjustments to deferred tax in respect of prior years | 77 | (1,408)
| Other non-deductible costs | 195 | 49
| Provision of deferred tax on losses | (793) | -
| Total tax charge | 6,980 | 2,696
Page 34
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
11. | Intangible assets
|  | Music catalogues | Development expenditure | Audio-visual | Total
|  | £000 | £000 | £000 | £000
| Cost |  |  |  |
| At 1 January 2025 | 432,920 | 4,004 | 13,070 | 449,994
| Additions | 43,123 | 872 | - | 43,995
| Disposals | - | (3,202) | - | (3,202)
| At 31 December 2025 | 476,043 | 1,674 | 13,070 | 490,787
| Amortisation |  |  |  |
| At 1 January 2025 | 111,219 | 3,310 | 13,070 | 127,599
| Charge for the year | 20,660 | 711 | - | 21,371
| On disposals | - | (3,202) | - | (3,202)
| At 31 December 2025 | 131,879 | 819 | 13,070 | 145,768
| Net book value |  |  |  |
| At 31 December 2025 | 344,164 | 855 | - | 345,019
| At 31 December 2024 | 321,701 | 694 | - | 322,395
The Company has no restricted title intangible assets and has none pledged as security for liabilities. Included within additions are the music catalogues from a subsidiary of the Company, The Echo Label Limited. Further details of the transaction is set out in note 12.
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BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
12. | Investments
|  | Investments in subsidiary companies
|  | £000
| Cost |
| At 1 January 2025 | 419,575
| Return of capital on investment | (13,728)
| At 31 December 2025 | 405,847
| Impairment |
| At 1 January 2025 | 305,649
| At 31 December 2025 | 305,649
| Net book value |
| At 31 December 2025 | 100,198
| At 31 December 2024 | 113,926
| The trade and assets of The Echo Label Limited, a subsidiary of the Company, were transferred to the Company on the 21 March 2025 with an effective date of 1 January 2025. Total consideration of £20,000,000 was paid, representing the fair value of the assets acquired. As part of the closure of this entity, a dividend of £24,081,000 was paid to the Company. The dividend has been treated as a return of capital and has therefore been accounted for as a reduction in the carrying value of the investment. The dividend received exceeded the carrying value of the investments by £10,354,000 and this is shown in Income from shares in group undertakings in the Statement of comprehensive income.
Page 36
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
| Subsidiary undertakings
| Details of all the investments of the Company are as follows:
| Name | Principal activity | Direct or indirect investment | Proportion of ordinary shares held %
| BMG Production Music (UK) Ltd | Production Music | Direct | 100%
| BMG Rights Management Services (UK) Ltd | Service company | Direct | 100%
| BMG VM Music Ltd | Dormant | Direct | 100%
| Cavalcade Records Ltd | Dormant | Direct | 100%
| Chrysalis Copyrights Ltd | Dormant | Direct | 100%
| Chrysalis Holdings Ltd | Dormant | Direct | 100%
| Chrysalis Music Ltd | Dormant | Direct | 100%
| Deep East Music Ltd | Dormant | Direct | 100%
| G W Mills Ltd | Dormant | Direct | 100%
| Infectious Music Ltd | Recorded Music | Direct | 100%
| Loaded Records Ltd | Recorded Music | Direct | 100%
| Minder Music Ltd | Dormant | Direct | 100%
| Mute Records Ltd | Recorded Music | Direct | 100%
| Ram Records Ltd | Recorded Music | Direct | 100%
| Rock Music Company Ltd | Dormant | Direct | 100%
| Sanctuary Records Group Ltd | Recorded Music | Direct | 100%
| Skint Records Ltd | Dormant | Direct | 100%
| Stage Three Music (Catalogues) Ltd | Dormant | Direct | 100%
| The Echo Label Ltd | Dormant | Direct | 100%
| Tom Jones (Enterprises) Ltd | Dormant | Direct | 99%
| Union Square Music Ltd | Recorded Music | Direct | 100%
| USM Copyrights Ltd | Dormant | Direct | 100%
| USM Copyrights Nazareth Ltd | Dormant | Direct | 100%
| World Circuit Ltd | Recorded Music | Direct | 100%
| Air Records Ltd | Dormant | Indirect | 100%
| Creole Records Ltd | Dormant | Indirect | 100%
| Men From The North Ltd | Dormant | Indirect | 100%
| Oxford Street Studios Ltd | Dormant | Indirect | 100%
| Sanctuary Copyrights Ltd | Dormant | Indirect | 100%
| Trojan Recordings Ltd | Dormant | Indirect | 100%
| All investments have the registered address of Floors 1-3, 20 Vauxhall Bridge Road, London, United Kingdom, SW1V 2SA. All investments are in ordinary share capital.
13. | Stocks
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Finished goods and goods for resale | 217 | 2,581
|  | 217 | 2,581
| The carrying amount of stocks is stated net of provisions totalling £26,000 (2024: £2,890,000).
Page 37
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
14. | Debtors
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Trade debtors | 6,762 | 9,972
| Amounts owed by group undertakings | 53,903 | 56,149
| Other debtors | 96,686 | 115,097
| Prepayments and accrued income | 4,064 | 3,453
| Deferred tax asset | 1,533 | 1,273
| Tax recoverable | - | 214
|  | 162,948 | 186,158
| Included within amounts owed by group undertakings are two separate group cash pooling facilities. The first is with the immediate parent as at the balance sheet date, Bertelsmann UK Limited, for £27,589,000 (2024 owed to group undertakings: £27,870,000) and is unsecured and interest-bearing at the GBP SONIA rate plus a margin of 0.175% (2024: 0.175%) and has no fixed repayment date but can be terminated by either party giving three days’ notice. The second facility is across all BMG UK entities of £10,894,000 (2024: £15,256,000) and is unsecured, repayable on demand and bears interest at the GBP SONIA rate less a margin of 0.175% (2024: 0.175%). Artist and writer advances of £165,462,000 (2024: £172,546,000) are included in other debtors and are stated after a provision of £68,899,000 (2024: £57,591,000). Also included within other debtors is a receivable acquired as part of The Echo Label acquisition with a value of £3,600,000 (2024: £nil), which is fully provided for (2024: £nil). The carrying amount of trade debtors is stated net after provision of £560,000 (2024: £777,000). Deferred tax assets of £1,207,000 (2024: £718,000) fall due after more than one year.
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BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
15. | Creditors: amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Trade creditors | 783 | 458
| Amounts owed to group undertakings | 54,462 | 83,406
| Accruals and deferred income | 60,364 | 50,490
| Other creditors | 6,978 | 12,295
| Deferred consideration | 4,818 | 12,353
|  | 127,405 | 159,002
| Amounts owed to group undertakings include the cash pooling facility across all BMG UK entities of £30,575,000 (2024: £26,613,000) and is unsecured and interest-bearing at the GBP SONIA rate plus a margin of 1.5% (2024: 2.75%). Other amounts owed to group undertakings are unsecured and repayable on demand. Other creditors include future advances due to artists and writers of £3,222,000 (2024: £6,076,000). Deferred consideration is in respect of amounts due as a result of the acquisition of music catalogues.
16. | Creditors: amounts falling due after more than one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Other creditors | 4,118 | 2,464
| Deferred consideration | 989 | 350
|  | 5,107 | 2,814
| Other creditors include future advances due to artists and writers of £4,118,000 (2024: £2,418,000). Deferred consideration is in respect of amounts due as a result of the acquisition of music catalogues. As at 31 December 2025 other creditors include future liabilities of £nil which are due after 5 years (2024: £148,500). Finance expense on deferred consideration recognised in the financial statements was £267,000 (2024: £1,052,000).
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BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
17. | Deferred tax assets
| Movement in recognised deferred tax during the year: | 1 January 2025 | Income statement movement | 31 December 2025
|  | £000 | £000 | £000
| Tax losses | - | 793 | 793
| Short term temporary differences | 1,273 | (533) | 740
|  | 1,273 | 260 | 1,533
| Movement in recognised deferred tax during the previous year: | 1 January 2024 | Income statement movement | 31 December 2024
|  | £000 | £000 | £000
| Short term temporary differences | 241 | 1,032 | 1,273
|  | 241 | 1,032 | 1,273
Below is an analysis of the expected future recoverability of the deferred tax asset:
|  | 2025 | 2024
|  | £000 | £000
| Deferred tax assets due within 12 months | 326 | 555
| Deferred tax assets due in more than 12 months | 1,207 | 718
|  | 1,533 | 1,273
The company has an unrecognised deferred tax asset in relation to trading losses of £4,119,000 at 25% (2024: £2,840,000 at 25%) which has not been recognised because there is currently insufficient evidence that sufficient profits will be generated to offset the future reversal of these tax losses.
18. | Called up share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
|  | Allotted, called up and fully paid |  |
|  | 380,000,005 (2024 - 380,000,005) Ordinary shares of £1.00 each | 380,000 | 380,000
| There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.
Page 40
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
19. | Reserves
Profit and loss account This includes all current and prior period retained profits and losses. All reserves in respect of profit and loss are distributable reserves.
20. | Commitments
There are commitments to artists for the payment of royalty advances amounting to £9,789,569 at 31 December 2025 (2024: £5,555,235). Together with the advances already paid these will be charged against sales of future accounting periods.
21. | Related party transactions
| As the Company is a wholly owned subsidiary within the Bertelsmann SE & Co KGaA group, the Company is exempt from the requirements of International Accounting Standard 24, 'Related Party Disclosures', to disclose transactions entered into between wholly owned members of the group. The Company has taken advantage of this exemption. During the year the Company entered into the following transactions with related parties not wholly owned by the group:
| Sales/(purchases) of goods
|  | 2025 | 2024
|  | £000 | £000
| 72 Films Limited | (4) | -
| 8ball Music B.V. | - | (4)
| Amygdala Records Inc | - | (123)
| Bertelsmann Business Support S.a r.l. | - | (3)
| BMG Rights Management Brasil Ltda | 893 | (161)
| FremantleMedia Ltd | (444) | (389)
| Trade receivable/(payable) balances
|  | 2025 | 2024
|  | £000 | £000
| 8ball Music B.V. | - | (5)
| BMG Rights Management Brasil Ltda | (87) | (38)
Creditor balances are unsecured and no guarantees have been received. Creditor balances will be settled in cash.
22. | Post balance sheet events
There were no significant post balance sheet events which have happened since the year end effecting the Company. Page 41
BMG RIGHTS MANAGEMENT (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
23. | Controlling party
The immediate parent company at the balance sheet date was Bertelsmann UK Limited, a company incorporated in the United Kingdom. The ultimate parent company was Bertelsmann SE & Co. KGaA. The results of the Company are included in the consolidated financial statements of Bertelsmann SE & Co. KGaA, which are publicly available and may be obtained from Carl-Bertelsmann-Strasse 270, 33311 Gütersloh, Germany. Subsequent to the balance sheet date, on 15 June 2026, Bertelsmann UK Limited sold its entire 100% shareholding in the Company to fellow group company Reinhard Mohn Nederland B.V. No other group financial statements include the results of the Company.
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