Registered number: 01177822
FOR THE YEAR ENDED 31 DECEMBER 2025
DORLING KINDERSLEY LIMITED
COMPANY INFORMATION
DORLING KINDERSLEY LIMITED
CONTENTS
DORLING KINDERSLEY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their Strategic Report for Dorling Kindersley Limited (“the Company” or “DK”) for the year ended 31 December 2025.
The Company is a subsidiary of Penguin Random House Limited (“PRHL”), a company owned 100% by Bertelsmann UK Limited and registered in the United Kingdom. The Company is domiciled and registered in the United Kingdom. The principal activity of the Company is global publishing of illustrated reference content and travel information across a range of platforms in print and digital.
The results and financial position of the Company are set out in the attached financial statements. The Company made a loss for the financial year of £8,734,132 (2024: £22,285,914).
Management have reviewed forecasts and are confident that the outlook for 2026 and beyond looks promising for the Company and will continue to seek suitable publishing opportunities to ensure growth.
Gross profit margin reduced year on year to 30.7% (2024: 32.7%), whilst earnings before interest, tax, depreciation and amortisation (EBITDA) also reduced further from a loss £448,931 in 2024 to a loss of £6,012,514 in 2025. This is largely due to the reduction in gross profit caused by a fall in revenue to £115,529,676 (2024 - £123,239,060). The decrease in revenue was on account of weaker coedition sales to China and intercompany sales to DK's global businesses in 2025. This was partially offset by stronger Sourcebooks publishing. Bestsellers for the year included The Tenant, The Housemaid is Watching and The Natural History Book.
The Company made an operating loss for the year of £6,342,554 (2024: £1,599,930). The movement largely relates to decreased revenue, partially offset by administrative expenditure which decreased during the year as a result of the comparative year including costs relating to the exiting of leased office premises, compared to £Nil in the current year.
The loss for the financial year reduced to £8,734,132 (2024: £22,285,914), this is primarily due to an impairment charge for the investment in Phonic Books Limited of £16,681,073 in 2024.
Net liabilities decreased to £758,297 (2024 - net liabilities £22,024,165) principally as a result of a capital injection from the parent company of £30,000,000 during the year.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company monitors progress and performance during the year and historical trend data which is set out in
the following KPIs:
the following KPIs:
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Detailed explanations for the year on year movements have been provided in the business review section.
Management makes use of certain alternative performance measures (APMs) that are non-UK 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 UK GAAP measures and notes that their definition and basis of calculation may differ from other companies. The Company’s APMs are defined and a reconciliation to the most directly comparable UK GAAP measure is shown below.
EBITDA is operating profit as measured using UK GAAP principles adjusted for the effects of depreciation, amortisation and impairment of non-financial assets. EBITDA is reported to the Board as management considers that it provides a useful proxy for the Company’s operating profit excluding non-cash items. It can be reconciled to the operating profit measure reported in the Statement of comprehensive income as shown below:
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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. The risks are monitored and reported to management.
Commercial risk
The changing book market and particularly the transition to digital is creating both challenges and opportunities for the Company, notably regarding the latter in terms of new markets and sales channels. The Company is facing increased pressure on margins. Other risks arise from the entry of non-traditional publishers into the market, the decline in retail space in high street bookshops and economic uncertainty. The continuing uncertainty in the global economy and high level of inflation in the UK presents ongoing pressure on costs and margins. The directors regularly review the appropriateness of commodity purchasing policies, particularly in the event of changes to the size or nature of the Company’s operations in an attempt to mitigate the risk.
Price risk
The Company is exposed to commodity price risk as a result of its operations. The directors regularly review the appropriateness of commodity purchasing policies, particularly in the event of changes to the size or nature of the Company's operations in an attempt to mitigate the risk.
Credit risk
The Company may offer credit terms to its customers which allow payment of the debt after delivery of the goods. The Company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. The Company has mitigated this risk of payment default by implementing policies which ensure that appropriate checks on potential customers are performed before credit terms are granted. Where a customer or group of customers is assessed to have a higher risk profile, these are included within the Company's credit insurance programme.
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.
Foreign exchange risk
The Company is exposed to currency exchange rate risk due to a proportion of its trade receivables, and trade payables for purchases of inventories, being denominated in non-sterling currencies. The net exposure of each currency is monitored and managed by the use of forward foreign exchange contracts. The forward foreign exchange contracts are generally all short term in nature.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors of the company must act in accordance with a set of general duties, as detailed in section 172 of the UK Companies Act 2006, summarised as follows:
A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:
• the likely consequences of any decisions in the long-term;
• the interest of the Company’s employees;
• the need to foster the Company’s business relationships with suppliers, customers and others;
• the impact of the Company’s operations on the community and environment;
• the desirability of the company maintaining a reputation for high standards of business conduct; and
• the need to act fairly as between the shareholders of the company.
Examples of how the Directors have oversight of these stakeholder matters are included throughout the strategic and Director’s report as well as set out specifically below.
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, the closure of the Grantham site and the ongoing management of the current economic situation.
The Board recognises that employees are central to the long-term success of the Company. The Company systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, and providing forums and communication routes so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the company is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the Company plays a major role in maintaining its prosperity. The Company also regularly informs staff and staff representatives of company updates and activity to keep them informed of the Company’s progress and performance.
The Company is committed to employment policies, which follow best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or sexual orientation as well as providing various employee networks to support the diverse and inclusive culture of the Company.
All staff receive regular performance reviews as well as opportunity for learning to support the development of all employees' careers. This includes training programs and secondment opportunities for staff.
Engagement with customer, suppliers and other stakeholders
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-
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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 impact and customer relations
The Board ensures significant consideration is given to the impact of the Company's operations on the community and their customers. 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 Company aims to provide everyone equal access to books, working with a range of organisations to allow the opportunity to read books. As part of this, the Company actively invests in young people, partnering with schools and local community projects to nurture and create readers for the future.
The Company continues to make books for everyone ensuring the creators of books, including authors and illustrators, represent the society we live in. The Company continually strives to print and produce diverse, relevant and accessible content for all customers.
Environmental sustainability
The Company’s leadership team ensure environmental issues are managed effectively and considered in the strategic decisions of the Company. The Company strives to create positive change in reducing the environmental impact of its businesses whilst maintaining effective and continuing business practices. The Company is key in the collaboration of the publishing industry in tackling climate action as part of their role within ‘Publishing Declares’. The Company considers sustainability, ethical and environmental issues when sourcing core material for use in the printing of their books using the books created to provide a positive leverage for behaviour change of our consumers. As part of the environmental strategy, the Company aims to be climate neutral by 2030.
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
The Board recognises the importance of regular and open dialogue with the shareholders and the need to ensure the strategy and goals of the company are effectively communicated to them. Feedback on these plans and objectives is welcomed by the directors and major business decisions are made closely and with the approval of the shareholders.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Due to the nature of activities carried out across the Group it is impracticable to calculate energy usage on an individual company by company basis. DK’s employees are based within the Penguin Random House (PRH) managed site offices at Vauxhall Bridge Road and its stock is stored and distributed from the main PRH UK distribution centre in Colchester. As a result of this, the report is calculated based on apportioned Group streamlined energy and carbon reporting numbers based on employee headcount and space allocation for inclusion in the financial statements.
Currently the following sites are shared with Penguin Random House UK and other Bertelsmann entities:
DK relocated to Vauxhall Bridge Road in August 2024. However, for the 2024 SECR report, all emissions data pertaining to the operations carried out at Vauxhall Bridge Road was reported under Penguin Random House UK.
UK Greenhouse gas emissions and energy use data for the period 1st January 2025 to 31st December 2025. The previous year ending 2024 figures have been included to demonstrate DK’s commitment to reducing their energy use and greenhouse gas emissions.
The energy consumption and associated carbon emissions reported in this statement are based on the best available data at the time of reporting.
Energy Consumption - Dorling Kindersley UK employees are based within the PRH managed offices at 20 Vauxhall Bridge Road, London. DK UK stock is stored and distributed from the main PRH distribution centre in Colchester. As a result, they also benefit from the following:
Green Electricity – Since 2018 PRH UK site’s use traceable energy that is 100% generated from renewable sources. To comply with the new ESRS indicators, the categories for energy consumption have been adjusted.For DK, 'Total Renewable Energy Consumption' now includes electricity generated from the solar panels at the Colchester Distribution Centre, while ‘Non-Renewable Energy Consumption' pertains to total heat consumption.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
∙During the 2025 reporting year, PRH’s Distribution Centre expanded its on-site renewable generation capacity with the installation of an additional 906 kWp solar photovoltaic (PV) system, supplementing the existing 429 kWp installation commissioned in 2021. In 2025, the original installation generated ~420,500 kWh of electricity, approximately 18% of the site’s total requirement in 2025. The new installation includes a battery energy storage system to store excess solar generation and support peak demand management, increasing the proportion of renewable electricity consumed on site. Commissioning and testing of the additional solar PV and battery system took place in late 2025, with full operational use expected from 2026. Once operational, the expanded system will further reduce reliance on grid-supplied electricity and support the Group’s ongoing carbon reduction strategy.
∙DK UK has successfully maintained ISO14001 accreditation for their Environmental Management System, covering their Vauxhall Bridge Road office.
∙Penguin Random House UK maintained ISO14001 accreditation for their Environmental Management System across the three major sites within the UK. This accreditation covers both the building facilities at Vauxhall Bridge Road, which DK relocated to in August 2024, and the Colchester Distribution Centre.
∙DK have integrated carbon reduction target and reporting requirements in their commercial deals with manufacturing suppliers and are beginning to see a positive impact in printer emissions as a result.
∙DK have also set paper wastage reduction targets with their suppliers to ensure printing materials are being used more efficiently. DK are beginning to see a positive impact on their paper usage figures, which will continue to positively affect the carbon emissions associated with paper usage.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company is committed to managing environmental issues effectively across its entire value chain. The Board has set three key targets for the future. The details of these are outlined in the Company’s Sustainability Policy https://res.cloudinary .com/dk-hub/image /upload/v1731333872 /dk-core-nonprod/000 -upload/g4suyj7yw1
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∙Becoming Climate Neutral across our extended value chain by 2030
∙Maintaining the 100% use of Forest Stewardship Council (FCSC™) materials across our product range
∙Expanding the scope of our ISO14001 accreditation to incorporate all of our global offices by 2027
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Figures highlighted in the table above reflect adjustments in methodology to align with the GHG Protocol. The 2024 comparative data ('2024gs') has been restated to reflect these changes. For further details on the changes in methodology, please refer to the 'Reporting Methodology' section below.
Figures highlighted in the table above reflect adjustments in methodology to align with the GHG Protocol. The 2024 comparative data ('2024gs') has been restated to reflect these changes. For further details on the changes in methodology, please refer to the 'Reporting Methodology' section below.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
We have followed the UK BEIS (Department Business, Energy & Industrial Strategy) 2019 guidance. The energy and emission figures provided are taken from Bertelsmann’s “Green Screen”, this a Bertelsmann owned internal recording application used by all companies within the Bertelsmann Group including Dorling Kindersley and Penguin Random House UK. All conversions are completed using government guidance ratios and the scopes 1, 2 and 3 are as outlined by BEIS guidance pages 50 and 51.
As part of the Bertelsmann’s rebaselining project, and in line with SBTi requirements, the 2018 base year data has been restated to reflect significant portfolio changes and methodology updates. This ensures a consistent basis for comparison with the 2025 figures.
To comply with the European Sustainability Reporting Standards (ESRS), the emissions reporting format now focuses on Scope 3 categories instead of 'Employee', 'Site', and 'Product-related' data. From 2024, Bertelsmann have updated the calculation method for Scope 1, 2, and 3 emissions of a paper mill to ensure a more accurate emission factor, using data from third-party industry datasets instead of outdated proxies.
As part of Bertelsmann’s SBTi-aligned reporting, we have updated our approach to Scope 3 emissions for transportation and retail operations in line with the GHG Protocol. For the first time, emissions for both online and offline retail activities have been included. In addition, outbound transport paid by The Company has been reclassified from Scope 3.9 (Downstream Transport) to Scope 3.4 (Upstream Transport) to align with GHG Protocol guidance. The figures highlighted in the tables above reflect these adjustments, and the 2024 comparative data (‘2024gs’) has been restated accordingly.
In addition to the above DK have begun to offset site and colleague related emissions as of 2020. The current offset credits are sourced from a reduction project in the peatlands of Borneo, Indonesia.
This project, managed by Pachama, focuses on carbon sequestration and significantly contributes to biodiversity preservation. Its goal is to prevent deforestation, degradation, and drainage of one of Indonesia’s largest swamps. By collaborating with local communities, the project has successfully protected and restored one of the world’s largest carbon sinks. You can find the project link here: https://app.pachama.com /projects/borneo -peatlands/overview #overview
The intensity ratio for DK is calculated by dividing the total annual tCO2e by the actual yearly revenue (£ Million). The intensity ratio for 2024 has been revised in line with the restated total annual tCO2e.
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DORLING KINDERSLEY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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 and signed on its behalf.
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DORLING KINDERSLEY 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.
The loss for the year, after taxation, amounted to £8,734,132 (2024 - loss £22,285,914).
No interim dividend was paid in the 2025 financial year and no final dividend is proposed (2024 - £Nil).
The directors who served during the year and up to the date of signing the financial statements were:
Looking ahead, the market remains challenging and the economic backdrop remains similarly tough. The Company will continue to create and publish reference content as books, both physically and digitally. The directors do not anticipate any significant changes in the activities of the Company.
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DORLING KINDERSLEY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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 being to 30 April 2027, has been prepared using the three year plan approved by the Board and takes account of prior trends and expected titles to be published in the future and key cost drivers such as commodity prices and 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 the group cash pooling facility being available for the going concern period and Bertelsmann UK Limited not seeking repayment of the amounts currently due. The directors have assessed the terms of the facility and note that they state that that it can be terminated by either party with three days notice and, therefore, the Company has received written confirmation from Bertelsmann UK Limited that it will not seek repayment of the amounts due at any time within the forecast going concern period and that the cash pooling facility will be available throughout on the same terms. In addition to this, Bertelsmann SE Co. KGaA have provided written confirmation to Bertelsmann UK Limited that it will provide the necessary funds it requires 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 31 March 2027.
Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed and the written confirmation of support from Bertelsmann UK Limited and Bertelsmann SE Co. KGaA, 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.
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DORLING KINDERSLEY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Employee involvement in the Company is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the Company plays a major role in maintaining its prosperity.
The Company encourages the involvement of employees by means of regular meetings with staff and staff representatives to keep them informed of the Company’s progress. The Company operates a pension scheme for which all employees are eligible.
The Company is committed to employment policies, which follow best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or sexual orientation. The Company gives full and fair consideration to applications for employment from disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the Company. If members of staff become disabled the Company continues employment, either in the same or an alternative position, with appropriate retraining being given if necessary.
The Company maintains directors' and officers' liability insurance, which provides appropriate cover for legal actions brought against its directors and officers.
Details on key performance indicators ('KPIs'), energy and carbon reporting, engagement with customers, suppliers and other stakeholders, and financial risk management policy sections are not included within the Directors Report as they are considered to be of strategic importance to the Company and, as permitted under the Companies Act 2006 s.414C(11), they have instead been included in the Strategic Report.
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DORLING KINDERSLEY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The auditors, 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 and signed on its behalf.
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DORLING KINDERSLEY 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 of the Company and of the 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.
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DORLING KINDERSLEY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DORLING KINDERSLEY LIMITED
We have audited the financial statements of Dorling Kindersley 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 notes to the financial statements, 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).
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 'Auditors' 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 UK, including the FRC'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.
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.
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.
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DORLING KINDERSLEY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DORLING KINDERSLEY LIMITED (CONTINUED)
Conclusions relating to going concern (continued)
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual report and financial statements, other than the financial statements and our auditors' 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.
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.
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.
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.
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DORLING KINDERSLEY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DORLING KINDERSLEY LIMITED (CONTINUED)
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 auditors' 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.
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.
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.
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DORLING KINDERSLEY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DORLING KINDERSLEY LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements (continued)
∙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 posted 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 Annual report 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;
∙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 auditors' report.
Page 20
DORLING KINDERSLEY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DORLING KINDERSLEY LIMITED (CONTINUED)
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 auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
David White
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor
Chartered Accountants
Birmingham
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor
Chartered Accountants
Birmingham
Page 21
DORLING KINDERSLEY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 22
DORLING KINDERSLEY LIMITED
REGISTERED NUMBER: 01177822
BALANCE SHEET
AS AT 31 DECEMBER 2025
Page 23
DORLING KINDERSLEY LIMITED
REGISTERED NUMBER: 01177822
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2025
The notes on pages 25 to 52 form part of these financial statements.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
Page 24
DORLING KINDERSLEY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 25
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company is a private company limited by shares and is incorporated in the United Kingdom. The principal activity of the Company is global publishing of illustrated reference content and travel information across a range of platforms in print and digital. The address of its registered office is 20 Vauxhall Bridge Road, London, SW1V 2SA. The registered number is 01177822.
2.Accounting policies
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 judgement 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:
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 judgement 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:
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 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 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 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);
- 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 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);
Page 26
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
- 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-33311 Gütersloh, Germany.
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of its ultimate parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006. The address of the ultimate parent's registered office is Bertelsmann SE & Co KGaA, Corporate Communications, Carl Bertelsmann Strasse 270, Postfach 111, D-33311 Gütersloh, Germany.
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 being to 30 April 2027, has been prepared using the three year plan approved by the Board and takes account of prior trends and expected titles to be published in the future and key cost drivers such as commodity prices and 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 the group cash pooling facility being available for the going concern period and Bertelsmann UK Limited not seeking repayment of the amounts currently due. The directors have assessed the terms of the facility and note that they state that that it can be terminated by either party with three days notice and, therefore, the Company has received written confirmation from Bertelsmann UK Limited that it will not seek repayment of the amounts due at any
Page 27
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
time within the forecast going concern period and that the cash pooling facility will be available throughout on the same terms. In addition to this, Bertelsmann SE Co. KGaA have provided written confirmation to Bertelsmann UK Limited that it will provide the necessary funds it requires 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 31 March 2027.
Going concern (continued)
Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed and the written confirmation of support from Bertelsmann UK Limited and Bertelsmann SE Co. KGaA, 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.
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 within ‘Administrative expenses’.
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 within ‘Administrative expenses’.
Page 28
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The Company recognises revenue when performance obligations have been satisfied and for the Company this is when the goods (books) have transferred to the customer and the customer has control of these. The Company’s activities are described in detail below. The Company bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Sale of books
Revenue from the sale of books is recognised at the point in time when title passes. This is generally at the point of delivery when title passes to the customer and a present right to payment occurs.
A liability for anticipated returns is made based primarily on historical return rates. If these estimates do not reflect actual returns in future periods, then revenue could be understated or overstated for a particular period. This estimate of anticipated returns is recognised in creditors in the balance sheet.
Digital sales
Revenue from the sale of Ebooks and audio sales are recognised at a point in time when the content is delivered. This is commonly when the customer has access to the download and a present right to payment occurs.
Income from subrights
Revenue from licensing and subrights, including film, overseas and electronic, is recognised when the performance obligation under the agreement has been satisfied. This is at the point in time when the associated material is transferred.
An assessment is made on each contract as to the relevant performance obligations to assess whether the customer receives a right to access or use the Company’s intellectual property. Where the performance obligation is deemed overtime, an appropriate recognition framework is created based on the consumption and provision of the goods or service in question.
For related sales-based royalties of license of Company’s intellectual property, the income is recognised as the subsequent sale occurs. Where the third party sales information is not readily available at the reporting date, an estimation is made based on the information available to hand. An adjusting post balance adjustment is made where subsequent information is received post year end but before the date of approval of the financial statements.
Principal v agent considerations
The Company may enter contracts with another party in addition to the customer in the arrangement. An assessment is made for each such contract as to who understands the related good or service prior to the transfer to the end customer to determine if turnover should be recognised on a gross or net basis. Where the Company acts as agent, revenue represents any commissions and fees receivable for such services rendered. Any third-party costs incurred on behalf of the principal that are rechargeable under the contractual arrangement are included in revenue with a corresponding expense recognised in administrative expenses in the Statement of comprehensive income.
Page 29
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Other operating income consists of income not directly related to the Company's principal activity in relation to the publication of books.
It mainly comprises of the management recharge of administrative, distribution and other operating expenses incurred by the Company on behalf of other group undertakings. It is recognised at a point in time that the services are provided in accordance with the relevant performance obligation. The management charge is a combination of certain fixed costs and the allocation of expenses calculated using agreed specific percentages within a recharge model.
It mainly comprises of the management recharge of administrative, distribution and other operating expenses incurred by the Company on behalf of other group undertakings. It is recognised at a point in time that the services are provided in accordance with the relevant performance obligation. The management charge is a combination of certain fixed costs and the allocation of expenses calculated using agreed specific percentages within a recharge model.
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.
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.
The Company has two lease contracts for office floors at Embassy Gardens, London ("EG"), used in the operations of the business. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company.
Page 30
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Page 31
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, 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 amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. 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 temporary difference can be utilised.
Page 32
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The estimated useful lives range as follows:
Computer Software
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Company are recognised as intangible assets when the following criteria is met:
•It is technically feasible to complete the software product so that it will be available for use;
•Management intends to complete the software product and use it or sell it;
•There is an ability to use or sell the software product;
•It can be demonstrated how the software product will generate probable future economic benefits;
•Adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and
•The expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Development costs are written off over the assets useful life.
At each reporting date the company assesses whether there is any indication of impairment by applying the indicators set out in IAS 36. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount and is charged to the Statement of comprehensive income.
Page 33
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Management applies judgement in determining both the residual value and economic life of the asset.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of comprehensive income.
Assets under construction are not depreciated. External borrowing costs attributable to assets under construction are accounted for under IAS 23 and added to the asset value if material to the company and can be directly attributed to the asset under construction. All other borrowing costs, including those arising through intercompany borrowing are recognised as an expense when incurred.
Investments in subsidiaries are measured at cost less accumulated impairment.
At each year-end, management review the investments performance, asset value and performance projections to determine whether there is any objective evidence present that in accordance with IAS 36 would lead to an impairment being charged. Where an impairment is identified, the difference between the investments determined value, and the cost less previous impairments is booked as an impairment charge to the Statement of comprehensive income.
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.
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.
At each year-end, management review the investments performance, asset value and performance projections to determine whether there is any objective evidence present that in accordance with IAS 36 would lead to an impairment being charged. Where an impairment is identified, the difference between the investments determined value, and the cost less previous impairments is booked as an impairment charge to the Statement of comprehensive income.
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.
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.
Page 34
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Non-financial 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 with 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.
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 with 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.
Stocks mainly comprise origination costs, finished goods and work in progress in respect of books and are stated at the lower of cost and net realisable value. Cost is determined using FIFO method. Cost includes the direct costs of paper, printing and binding incurred on a title-by-title basis. Plant costs, which do not vary with the number of copies printed (for example typesetting, origination and illustration), are charged to the income statement in full on publication.
A provision is made for excess, obsolete and slow-moving stocks by considering the future expected sales and comparing to the current quantity held. Any provision for obsolete stock is charged to the profit and loss and included in the value of stock as shown in note 14. Net realisable value is calculated as the estimated selling price in the ordinary course of business less applicable variable selling expenses.
A provision is made for excess, obsolete and slow-moving stocks by considering the future expected sales and comparing to the current quantity held. Any provision for obsolete stock is charged to the profit and loss and included in the value of stock as shown in note 14. Net realisable value is calculated as the estimated selling price in the ordinary course of business less applicable variable selling expenses.
Advances of royalties paid to authors are included within debtors and are recognised once a signature advance has been paid or manuscript has been accepted or marked as future accepted on the title. Advances of royalties paid to authors under licensing agreements are recognised based on the related performance obligation identified in the contract. Where the advance is not linked to any further obligations by the proprietor, the advance is recognised upon signing of the contract or a specific date identified in the contract.
Advances are presented at their net realisable value, being the advance less any write down or valuation allowance. Management apply judgement in their bi-annual assessment to unpublished books as to whether the book will sustain economic loss based on the future projections of revenues and associated costs. For published titles, a quarterly assessment determines whether the unearned royalty advances of a particular title is recoverable based on the projected future sales of the title and the related royalty income.
Once the author advance is earned out, future author payments are expensed at the contracted or effective royalty rate as the related turnover is earned.
Advances are presented at their net realisable value, being the advance less any write down or valuation allowance. Management apply judgement in their bi-annual assessment to unpublished books as to whether the book will sustain economic loss based on the future projections of revenues and associated costs. For published titles, a quarterly assessment determines whether the unearned royalty advances of a particular title is recoverable based on the projected future sales of the title and the related royalty income.
Once the author advance is earned out, future author payments are expensed at the contracted or effective royalty rate as the related turnover is earned.
Page 35
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Trade debtors and amounts owed by group undertakings are stated at amortised cost after provision for bad and doubtful debts.
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.
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.
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.
Trade creditors and amounts owed to group undertakings 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 received.
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 received.
The Company operates various post-employment schemes, including defined contribution pension plans and post-employment medical plans.
The Company operates a defined contribution plan for certain employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
The Company operates a defined contribution plan for certain employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
Page 36
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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 profit or loss 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.
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.
Page 37
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
If the Company considers a contract has become onerous, whereby the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from it, an onerous contract provision is recognised for the present obligations under the contract. Onerous contract provisions which arise on advances paid on unpublished manuscripts which have not yet been delivered, are utilised on various timescales based on manuscript delivery and performance. Management estimates the future recoverability based on performance within the contract.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
If the Company considers a contract has become onerous, whereby the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from it, an onerous contract provision is recognised for the present obligations under the contract. Onerous contract provisions which arise on advances paid on unpublished manuscripts which have not yet been delivered, are utilised on various timescales based on manuscript delivery and performance. Management estimates the future recoverability based on performance within the contract.
Key accounting estimates and assumptions
Periodic impairment reviews are undertaken on all origination costs, with unsuccessful titles being provided for in full and written off to the income statement. The assessment of the recoverability of the origination asset and the determination of the amortisation profile involve a significant degree of judgement based on historical trends and management estimate of future potential sales.
Page 38
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
3.Judgements in applying accounting policies (continued)
Page 39
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Analysis of revenue by country of destination:
Page 40
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 41
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Although the directors of the Company have service contracts with Penguin Books Limited ("PBL"), the entirety of their time and efforts relate to the Company and therefore their emoluments are included in these financial statements.
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Retirement benefits are accruing to 3 directors (2024: 3) under a money purchase scheme.
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Page 42
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 43
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
9.Tax on loss (continued)
There were no factors that may affect future tax charges.
Page 44
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Page 45
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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The Company held two lease contracts for office floors at Embassy Gardens, London ("EG"), used in the operations of the business. In August 2024, the Company exited the lease agreement and disposed of the right-of-use asset.
Amounts charged to the income statement in respect of leases:
Amounts charged to the income statement in respect of leases:
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Total cash outflow for leases during the year was £Nil (2024: £1,832,440).
Page 46
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Page 47
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 48
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 49
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 50
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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The Company had no unrecognised deferred tax assets at 31 December 2025 (2024: Nil)
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The provision for deferred tax consists of the following deferred tax assets:
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Page 51
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Share premium account
Profit and loss account
Page 52
DORLING KINDERSLEY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company’s immediate parent is Penguin Random House Limited.
The Company’s ultimate parent undertaking and controlling party is Bertelsmann SE & Co KGaA, which is incorporated in Germany, copies of whose consolidated financial statements (the smallest and largest financial statements in which the company is consolidated) can be obtained from:
Bertelsmann SE & Co KGaA
Corporate Communications
Carl Bertelsmann Strasse 270
Postfach 111
D-33311 Gütersloh
Germany
The Company is wholly-owned by Penguin Random House Limited and as such has taken exemptions under the terms of International Accounting Standard 24 ‘Related party disclosures’, from disclosing related party transactions with other wholly-owned subsidiaries within the Bertelsmann SE & Co KGaA group.
Page 53