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Registered number: 03810318 UNION SQUARE MUSIC LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
UNION SQUARE MUSIC LIMITED COMPANY INFORMATION
Directors | David D'Urbano
| Alistair Norbury
Registered number | 03810318
Registered office | Floors 1-3
| 20 Vauxhall Bridge Road
| London, United Kingdom
| SW1V 2SA
Independent auditor | Grant Thornton UK LLP
| The Maurice Wilkes Building, St John’s Innovation Park
| Cowley Road
| Cambridge, United Kingdom
| CB4 0DS
UNION SQUARE MUSIC LIMITED CONTENTS
| Page
Strategic Report | 1 - 4
Directors' Report | 5 - 7
Directors' Responsibilities Statement | 8
Independent Auditor's Report to the members of Union Square Music Limited | 9 - 13
Statement of Comprehensive Income | 14
Balance Sheet | 15
Statement of Changes in Equity | 16
Notes to the Financial Statements | 17 - 34
UNION SQUARE MUSIC 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 Union Square Music Limited ("the Company"). Principal activities The Company is a wholly-owned United Kingdom subsidiary of BMG Rights Management (UK) Limited. The Company is domiciled and registered in the United Kingdom. The Company owns and administers rights to all forms of recorded music, exploits and markets these compositions and receives royalties or fees for their use. Strategy The Company is part of an international group of companies focused on the management of music rights. The Company will continue to exploit its rights in conjunction with other members of the BMG group. Business review The Company reported revenues of £3,621,000 (2024: £4,439,000) and gross profit of £2,299,000 (2024: £1,732,000). The revenue and gross profit fluctuation is expected with the Company as the music rights fluctuate in usage and as such through to receipt of royalties. Operating profit increased to £1,594,000 (2024: £1,170,000) due to the increase in gross profit. The Company's net assets as at 31 December 2025 were £796,000 (2024 net liabilities: £290,000). This improvement is due to an increase in amounts owed by group undertakings.
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 alternative performance measures 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 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 immediate parent company and through equity. Page 1
UNION SQUARE MUSIC LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Key performance indicators ('KPIs') (continued)
A reconciliation of EBIT and EBITDA is as follows:
|  | 2025 | 2024
|  | £000 | £000
| Profit before tax | 1,478 | 989
| Adjustment for: |  |
| Interest payable and similar expenses | 116 | 181
| EBIT | 1,594 | 1,170
| Amortisation of intangible assets | 192 | 185
| EBITDA | 1,786 | 1,355
EBIT for the period was a profit of £1,594,000 (2024: £1,170,000), which was primarily driven by an increase in gross profit. EBITDA for the period was £1,786,000 (2024: £1,355,000) which is primarily due to the reasons explained above. 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. Page 2
UNION SQUARE MUSIC LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Principal risks and uncertainties (continued)
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. 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. Page 3
UNION SQUARE MUSIC LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025 Directors' 172 statement (continued) 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. 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 4
UNION SQUARE MUSIC 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 £1,086 thousand (2024 - £741 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 5
UNION SQUARE MUSIC LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025
Future developments
The directors do not anticipate any significant change in the activities of the Company. 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 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 long-term plan approved by the Board and takes account of prior trends and key cost drivers such as inflation. The Company's liquidity is managed within the group’s cash pooling arrangements which ensures appropriate funds are made available as and when required. 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. Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed and the written confirmation of support from BMG Rights Management (UK) Limited, 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. 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. 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. Page 6
UNION SQUARE MUSIC LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2025 Post balance sheet events There were no significant post balance sheet events which have happened since the year end effecting the Company.
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. Independent auditor Pursuant to Section 487 of Companies Act 2006, the auditor will be deemed to be reappointed and Grant Thornton UK LLP will therefore continue in office. This report was approved by the board on 22 June 2026 and signed on its behalf.
David D'Urbano Director
Page 7
UNION SQUARE MUSIC 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 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 8
UNION SQUARE MUSIC LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNION SQUARE MUSIC LIMITED
Opinion
We have audited the financial statements of Union Square Music 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 9
UNION SQUARE MUSIC LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNION SQUARE MUSIC 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 and high inflation rates, 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 10
UNION SQUARE MUSIC LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNION SQUARE MUSIC 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 8, 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 11
UNION SQUARE MUSIC LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNION SQUARE MUSIC 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. In addition, we concluded that there are certain laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements such as health and safety, employee matters and copyright laws. ∙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 of 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 Page 12
UNION SQUARE MUSIC LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNION SQUARE MUSIC LIMITED (CONTINUED) 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. ∙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. 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. Paul Brown Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Cambridge 22 June 2026 Page 13
UNION SQUARE MUSIC LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024
Note | £000 | £000
Revenue | 4 | 3,621 | 4,439
Cost of sales |  | (1,322) | (2,707)
Gross profit |  | 2,299 | 1,732
Administrative expenses |  | (705) | (562)
Operating profit | 5 | 1,594 | 1,170
Interest payable and similar expenses | 7 | (116) | (181)
Profit before tax |  | 1,478 | 989
Tax on profit | 8 | (392) | (248)
Profit for the financial year |  | 1,086 | 741
Other comprehensive income |  | - | -
Total comprehensive income for the year |  | 1,086 | 741
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 17 to 34 form part of these financial statements.
Page 14
UNION SQUARE MUSIC LIMITED REGISTERED NUMBER: 03810318 BALANCE SHEET AS AT 31 DECEMBER 2025
|  | 2025 |  | 2024
Note |  | £000 |  | £000
Fixed assets |  |  |  |  |
Intangible assets | 9 |  | 1,253 |  | 1,443
|  |  | 1,253 |  | 1,443
Current assets |  |  |  |  |
Debtors: amounts falling due within one year | 10 | 3,137 |  | 1,498 |
|  | 3,137 |  | 1,498 |
Creditors: amounts falling due within one year | 11 | (3,365) |  | (2,982) |
Net current liabilities |  |  | (228) |  | (1,484)
Total assets less current liabilities |  |  | 1,025 |  | (41)
Provisions for liabilities |  |  |  |  |
Deferred tax provision |  | (229) |  | (249) |
|  |  | (229) |  | (249)
Net assets/(liabilities) |  |  | 796 |  | (290)
Capital and reserves |  |  |  |  |
Profit and loss account | 14 |  | 796 |  | (290)
|  |  | 796 |  | (290)
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 17 to 34 form part of these financial statements. Page 15
UNION SQUARE MUSIC 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 | - | (1,031) | (1,031)
Comprehensive income for the year |  |  |
Profit for the year | - | 741 | 741
At 1 January 2025 | - | (290) | (290)
Comprehensive income for the year |  |  |
Profit for the year | - | 1,086 | 1,086
At 31 December 2025 | - | 796 | 796
| The notes on pages 17 to 34 form part of these financial statements.
Page 16
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
1. | General information
Union Square Music 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 ∙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; Page 17
UNION SQUARE MUSIC 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)
- 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. ∙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 ∙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 | 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 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 long-term plan approved by the Board and takes account of prior trends and key cost drivers such as inflation. The Company's liquidity is managed within the group’s cash pooling arrangements which ensures appropriate funds are made available as and when required. 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. Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed and the written confirmation of support from BMG Rights Management (UK) Limited, 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 18
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.4 | 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. Payment terms are generally 30-60 days from the end of the royalty reporting period. 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. Payment terms vary by individual deal but customers are generally given a credit term of 30 days from the date of invoice. c) Physical goods income This revenue stream includes physical sales of recorded music (CDs, DVDs and Vinyls) and merchandising. Page 19
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.4 | 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.
| 2.5 | 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 recouped royalties, less any provision.
| 2.6 | 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 Statement of comprehensive income as it accrues, using the effective interest method. Page 20
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.7 | 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 21
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.8 | 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 22
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.9 | 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 years. The estimated useful lives are as follows: Music catalogues 15 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 23
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.10 | 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.
| 2.11 | 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.
| 2.12 | 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. The Company recognises any additional royalties agreed with artists when it is sufficiently probable that a payment will be due and the amount can be reasonably estimated. Page 24
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.13 | 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.
| 2.14 | 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 25
UNION SQUARE MUSIC 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 10 for the carrying amount of advances and associated provision. Royalty cost accrual Artist royalty cost accruals were made during the year based on income stream and expected royalty rates. The actual costs will not be known for a number of months after the end of a royalty period due to the lag time in system processing. Royalty accruals are periodically reversed and the actual costs recognised. Therefore, the accuracy of accruals made in relation to the royalty period July to December will not be known until the following reporting period. Intangible assets - 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 9 for the carrying amount of intangible assets and the accounting policies for details of the associated useful economic lives. Judgements Timing of revenue As per IFRS15.123 an entity shall disclose the judgements, and changes in the judgements, made in applying the Standard that significantly affect the determination of the amount and timing of revenue from contracts with customers. Due to the nature of income received from collection societies, it is not uncommon for income earned in a particular royalty period to be reported and paid in a subsequent period. In this scenario, the performance obligations of the Company are likely to have been satisfied but the value of the income will be unknown. Income accruals are made when this information is available, but management have concluded that where there is insufficient information available, no income accruals will be made as they cannot be accurately estimated. Page 26
UNION SQUARE MUSIC 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 (continued)
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 appropriateness of the determination of the cash-generating unit being at an individual song level, an individual catalogue level or at the Company level as a whole. Management have made the judgement that separately identifiable cash flows can only be reliably measured at the Company level.
4. | Revenue
| An analysis of revenue by class of business is as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Royalty licencing | 3,400 | 3,516
| Sychronisation licencing | 221 | 208
| Physical goods income | - | 715
|  | 3,621 | 4,439
An analysis of revenue by country of destination is as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| United Kingdom | 624 | 1,729
| North America | 1,136 | 833
| Europe | 1,825 | 1,797
| Other | 36 | 80
|  | 3,621 | 4,439
| The following table provides information about contract assets and contract liabilities from contracts with customers:
|  | 2025 | 2024
|  | £000 | £000
| Contract assets | 28 | 129
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 10. The contract assets are transferred to trade debtors when the rights become unconditional. Page 27
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
5. | Operating profit
| The operating profit is stated after charging/ (crediting):
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amortisation of intangible assets | 192 | 185
| Foreign exchange (gain)/ loss | (67) | 12
| Management charges from group undertakings | 652 | 454
| Change in provisions: |  |
| Decrease in provision for artist and writer advances | (83) | (16)
| Decrease in other provisions | (1) | (79)
| The audit fee of £16,750 (2024: £16,750) was borne by BMG Rights Management Services (UK) Limited and it was recharged to the Company as part of the management charges.
6. | 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 | 23 | 12
| Company pension contributions to money purchase schemes | 1 | 1
|  | 24 | 13
Retirement benefits are accruing to 2 directors (2024: 2) under a money purchase scheme.
Page 28
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
7. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Bank interest payable | 1 | 1
| Interest payable on cash pooling | 115 | 180
|  | 116 | 181
| Further details regarding cash pooling arrangements are included in note 11.
8. | Tax on profit
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Current taxation |  |
| UK Corporation tax on profits for the year | 403 | 246
| Adjustments in respect of prior years | 9 | (1)
| Double taxation relief | (3) | (4)
| Foreign tax on income for the year | 3 | 4
| Total current tax | 412 | 245
| Deferred tax |  |
| Origination and reversal of temporary differences | 1 | 1
| Adjustments in respect of prior years | (21) | 2
| Total deferred tax | (20) | 3
| Total tax charge | 392 | 248
Page 29
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 8.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 | 1,478 | 989
| Profit multiplied by standard rate of corporation tax in the UK of 25% (2024: 25%) | 370 | 247
| Effects of: |  |
| Adjustments in respect of prior years | 9 | 1
| Recharged costs not deductible | 34 | -
| Adjustments to deferred tax in respect of prior years | (21) | -
| Total tax charge | 392 | 248
Page 30
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
9. | Intangible assets
|  | Music catalogues | Development expenditure | Audio-visual | Total
|  | £000 | £000 | £000 | £000
| Cost |  |  |  |
| At 1 January 2025 | 3,381 | 2,653 | 96 | 6,130
| Additions | - | 2 | - | 2
| Disposals | - | (2,543) | - | (2,543)
| At 31 December 2025 | 3,381 | 112 | 96 | 3,589
| Amortisation |  |  |  |
| At 1 January 2025 | 1,968 | 2,623 | 96 | 4,687
| Charge for the year | 169 | 23 | - | 192
| On disposals | - | (2,543) | - | (2,543)
| At 31 December 2025 | 2,137 | 103 | 96 | 2,336
| Net book value |  |  |  |
| At 31 December 2025 | 1,244 | 9 | - | 1,253
| At 31 December 2024 | 1,413 | 30 | - | 1,443
10. | Debtors: amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Trade debtors | 11 | 6
| Amounts owed by group undertakings | 2,854 | 788
| Other debtors | 243 | 574
| Prepayments and accrued income | 29 | 130
|  | 3,137 | 1,498
Page 31
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 10.Debtors: amounts falling due within one year (continued)
| Amounts owed by group undertakings are unsecured, interest free and repayable on demand. Artist and writer advances of £2,079,000 (2024: £2,651,000) are included in other receivables and are stated after a provision of £2,000,000 (2024: £2,082,000). The carrying amount of trade debtors is stated net after provisions of £nil (2024: £1,000).
11. | Creditors: amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Trade creditors | 25 | 25
| Amounts owed to group undertakings | 2,609 | 1,850
| Accruals and deferred income | 725 | 1,102
| Other creditors | 6 | 5
|  | 3,365 | 2,982
| Amounts owed to group undertakings include a group cash pooling facility balance of £1,997,000 (2024: £1,807,000) and is unsecured and repayable on demand and bears interest at the GBP SONIA rate plus a margin of 1.5% (2024: 1.5%). Other amounts owed to group undertakings are unsecured, interest- free and repayable on demand.
Page 32
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
12. | Deferred tax provision
As at 31 December 2025, deferred tax has been provided for at 25% (2024: 25%) in relation to temporary differences as set out below.
| Movement in recognised deferred tax during the year: | 1 January 2025 | Income statement movement | 31 December 2025
|  | £000 | £000 | £000
| Deferred capital allowances | 5 | (1) | 4
| Intangible fixed assets | (254) | 21 | (233)
|  | (249) | 20 | (229)
| Movement in recognised deferred tax during the previous year: | 1 January 2024 | Income statement movement | 31 December 2024
|  | £000 | £000 | £000
| Deferred capital allowances | 13 | (8) | 5
| Intangible fixed assets | (260) | 6 | (254)
|  | (247) | (2) | (249)
13. | Called up share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
|  | Allotted, called up and fully paid |  |
|  | 1 (2023 - 1 ) Ordinary share of £1 each | - | -
| There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.
14. | 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.
15. | Post balance sheet events
There were no significant post balance sheet events which have happened since the year end effecting the Company. Page 33
UNION SQUARE MUSIC LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
16. | Related party transactions
| As the Company is a wholly owned subsidiary of BMG Rights Management (UK) Limited, which is in turn wholly owned within the Bertelsmann SE & Co. KGaA group, the Company is exempt from the requirement, under International Accounting Standard 24 ‘Related party disclosures’, to disclose transactions with entities that are wholly owned by BMG Rights Management (UK) Limited or the wider Bertelsmann SE & Co. KGaA 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:
|  | 2025 | 2024
|  | £000 | £000
| Sale of goods |  |
| BMG Rights Management Brasil Ltda | 2 | 4
17. | Controlling party
The immediate parent company is BMG Rights Management (UK) Limited, a company incorporated in the United Kingdom. The ultimate controlling party and parent company is Bertelsmann SE & Co. KGaA. The results of the Company are included in the consolidated financial statements of Bertelsmann SE & Co. KGaA which is registered at Carl-Bertelsmann-Strasse 270, 33311 Gütersloh, Germany. These consolidated financial statements are publicly available. No other group financial statements include the results of the Company.
Page 34