Hipgnosis Songs Fund Limited

Interim Report and Condensed Consolidated Financial Statements For the six months ended 30 September 2019

Registered number: 65158 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 01

Contents

Overview O v

Corporate Summary 02 e r v i

Chairman’s Statement 05 e w Financial and Operational Highlights 08 Investment Adviser’s Report 12 Investment Objective and Policy 19

Governance Directors’ Responsibility Statement 21 G o v e r

Financial Statements n a n

Condensed Consolidated Statement c of Comprehensive Income 22 e Condensed Consolidated Statement of Financial Position 23 Condensed Consolidated Statement of Changes In Equity 24

Condensed Consolidated Statement F i n

of Cash Flows 25 a n c i Notes to the Condensed Consolidated a l S

Financial Statements 26 t a t e m e

Other Information n t Glossary of Capitalised DeXned Terms 37 s Directors and General Information 42 O t h e r I n f o r m a t i o n

Capitalised terms are deXned in the Glossary of DeXned Terms on pages 37 to 41 unless separately deXned. 02 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Corporate Summary

Investment Objective The Company’s investment objectiv e is to provide Shareholders with an attractive and growing level of income, together with the potential for capital growth, from investment in a portfolio of Songs and their associated musical intellectual property rights. The Portfolio has been created by investing in Catalogues of proven established Songs from well-known songwriters and recording artists. However, each Song is considered to be a separate asset.

Structure The Company is an investment company limited by shares, registered and incorporated in Guernsey under the Companies Law on 8 June 2018. The Company is registered with the Guernsey Financial Services Commission under the Registered Collective Investment Scheme Rules 2015, and the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The Company is not authorised or regulated by the Financial Conduct Authority. The Company makes and manages its investments directly or indirectly through a number of wholly owned subsidiary companies incorporated in England & Wales, together referred to as the Group.

Investment Process The Company’s Investment Adviser, The Family (Music) Limited, was founded by Merck Mercuriadis. Merck is the manager and/or former manager of globally successful recording artists such as Elton John, Guns N’ Roses, Morrissey, Iron Maiden, Nile Rodgers and Beyoncé, and hit songwriters such as Diane Warren, Justin Tranter and The-Dream. Merck Mercuriadis is the former CEO of The Sanctuary Group plc. The Family (Music) Limited has been appointed by the Board to source Songs and provide recommendations to the Board on acquisition and disposal strategies. The Investment Adviser is also responsible for managing and monitoring royalty and/or fee income due to the Company from its copyrights and collection agents, and developing strategies to maximise the earnings potential of the Songs in the portfolio through improved placement and coverage of Songs. The Investment Adviser continues to assemble an Advisory Board of highly successful music industry experts which include award winning members of the artist, songwriter, publishing, legal, Xnancial, recorded music and music management communities, all with in-depth knowledge of music publishing and access to a signiXcant network of relationships in the music industry. The Board has formed a Portfolio Committee which considers the recommendations of the Investment Adviser before granting its approval to purchase the Catalogues of Songs, as well as an Asset Management Committee which considers the ongoing management and revenue maximisation of the Catalogues of Songs. These committees are chaired by Paul Burger and Andrew Sutch, respectively. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 03

Corporate Summary continued O

Principal Risks and Uncertainties v e r v

The Company’s principal risks are related to market conditions in the music business in general, but i e also the particular circumstances of the Catalogues of Songs in which it is invested. The Board and w the Investment Adviser seek to mitigate these risks through active asset management initiatives and carrying out due diligence work on potential targets before entering into any investments. The principal risks and uncertainties of the Company will be continuously monitored by the Board, with input from the Investment Adviser and its Advisory Board. The risks set out below are taken from the Company’s latest Prospectus published on

27 September 2019. The principal risks facing the Company are concentration risk from investing G o only in the global music copyright sector and inherent risks associated with the fast-changing v e r landscape within the music industry. n a n c

Key risks relating to the Company: e • The Company has a limited operating history, and investors have a limited basis on which to evaluate the Company’s ability to achieve its investment objective; and • The Company’s target annual dividend yield and target total NAV return are based on estimates and assumptions that are inherently subject to signiXcant business and economic

uncertainties and contingencies. The actual dividend yield and total NAV return may be F i n

materially diWerent to those targeted and payments of dividends from capital reduces the a n

amount of cash that can be deployed for investment purposes. c i a l S

Key risks relating to the music industry: t a t e

• For a wide number of reasons, a Song may not prove to be as popular, or as commercially m e

successful, as had been forecast at the time of acquisition and there can be no guarantee that n t the historic performance of a Song will continue in the future; s • DSPs may alter their current prices for consumers which could impact on the proXtability of the Songs licensed to such DSPs; and O t h

• The streaming business model is yet to be proven in the long term and the streaming market e r I

is vulnerable to online domination by one DSP, which may aWect the pricing structures used by n f such DSPs. o r m a

Key risks relating to the Company’s Investment Adviser: t i o • The Company and the other fund entities are reliant on the expertise of the Investment n Adviser and its key personnel (including Merck Mercuriadis) to source and advise on potential Catalogues and to implement the Company’s investment strategy so as to meet the target dividend yield and target total NAV return. 4 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Corporate Summary continued

Principal Risks and Uncertainties (continued) Key risks relating to the Company’s investment policy: • Catalogues and other Songs are diZcult to value and Song valuations are subject to Yuctuations. The market standard valuation method is to value Songs and Catalogues by reference to historic revenues generated. There can therefore be no guarantee that the valuation will be justiXed by reference to future revenues or that the Company will be able to realise the acquisition value upon a future sale; • The Company’s investments may be subject to foreign currency Yuctuations between Sterling and any other currency in which acquisitions of Catalogues are denominated or income is earned by the Company, which may have an adverse eWect on the performance of the Company; and • The Company may utilise borrowings for working capital, interest rate hedging purposes, and for short-term bridging purposes to Xnance the acquisition of Songs. While such leverage provides Yexibility and presents opportunities for increasing total NAV return, it can also have the opposite eWect of increasing losses. Key risks relating to regulation and taxation: • If payments to the Group are subject to withholding tax in any tax jurisdiction, the Company’s Xnancial condition and prospects could be materially and adversely aWected; and • Changes in law or regulations underpinning the Company’s regulatory environment, or a failure to comply with any laws or regulations, may adversely aWect the businesses, investments and performance of the Company and the Investment Adviser.

AIC The Company is a member of the Association of Investment Companies and complies with the AIC Code. The Company’s page can be found by clicking on this link .

Website The Company’s website, which can be found at www.hipgnosissongs.com, includes information on the Company, such as its prospectus, past reports and accounts, policies, media coverage and regulatory news announcements. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 05

Chairman’s Statement O

Introduction v e r v

This is the Company’s second interim report since its launch and it covers the six months ended i e 30 September 2019. The report summarises that signiXcant progress has been made in building a w portfolio of proven Songs which are generating strong investment returns and in raising new equity capital to fund further investments with a view to delivering increased value for our shareholders. During the period , the Company has invested a further £199.5 million across 15 Catalogues utilising the remaining proceeds from the IPO in 2018 as well as proceeds from the subsequent placing raising £141.5 million in April 2019. Having deployed or committed our existing capital resources the Company raised a further £51.1 million of equity capital in August 2019. G

At the end of September the portfolio consisted of 27 Catalogues with an aggregate acquisition o v value of £319.4 millio n. Since the period end , the Company has acquired a further 15 Catalogues for e r n

an aggregate of £186.1 million increasing our current portfolio to 42 Catalogues comprising 11,225 a n

Songs . c e In September, the Compan y transferred its entire issued share capital to the Premium Listing Segment of the OZcial List of the FCA and to the London Stock Exchange’s Premium Segment of the Main Market ahead of a successful C Share issue in October which raise d £231 .0 million , taking the total equity capital raised since IPO to over £625 million. Investments F i n

During the period to 30 September 2019, the Company acquired 15 Catalogues comprising a n

4,37 9 Songs for a total consideration of £19 9.5 million. The acquisitions have signiXcantly diversiXed c i a the portfolio which now includes Songs performed by hundreds of artists across multiple genres. All l S t of the acquisitions were sourced by our Investment Adviser, The Family (Music) Limited, who a t e

together with its Advisory Board provide access to some of the most successful artists, songwriters m and producers globally. e n t s Performance I am pleased to report an increase in net income from the portfolio to £ 22.6 million for the period

(Xnancial period ended 31 March 2019: £7.2 million), which was ahead of management’s O

(1) t expectations for the period. Adjusted operating proXt for the period before tax increased to h e r

£14. 1 million (Xnancial period ended 31 March 2019: £3.0 million ) with a n increased ongoing charges I n f

Xgure of 1.76% (Xnancial period ended 31 March 2019 : 1.70% ) as a result of increased due diligence o r and other variabl e acquisitions costs as the Company has acquired a greater number of Catalogues m a during the period and built a signiXcant pipeline of Catalogues for acquisition in the second half of t i o our Xnancial year. n Adjusted Earnings Per Share (EPS) (1) grew to 3.55p (Xnancial period ended 31 March 2019: 1.17p ) and basic EPS grew to 3.19p (Xnancial period ended 31 March 2019: 1.17p) .

(1) Exclude s £1.5 million o f exceptional expenses relating to the Working Capital Facility and Migration to the Premium Segment of the London Stock Exchang e. 06 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Chairman’s Statement continued

Performance (continued) The Board considers that the most relevant NAV for Shareholders is the ‘Operative NAV’ which reYects the fair value of the Company’s Catalogues as valued by an Independent Valuer and is calculated semi-annually. The Operative NAV as at 30 September 2019 increased by 5.03% to 108.46p per Ordinary Share, from 103.27p as at 31 March 2019. Therefore, together with the dividends of 2.5p per Ordinary Share paid, the Company has delivered a total NAV return of 7.45% during the period. At 30 September 2019 the Company had no C Shares in issue; therefore the Xrst NAV for the C Shares to be published, unless already converted, will be as at 31 March 2020. Dividend In the Xrst half of the current Xnancial year the Company has paid dividends of 2.5p per Ordinary Share. The Company’s third interim dividend for the period from 1 January 2019 to 31 March 2019 of 1.25p per Ordinary Share was paid on 31 May 2019. The Xrst interim dividend for the period from 1 April 2019 to 30 June 2019 of 1.25p per Ordinary Share was paid on 30 August 2019. Since the period end, on 24 October 2019 the Company declared its second interim dividend for the period from 1 July 2019 to 30 September 2019 of 1.25p Ordinary Share and which was paid to shareholders on 29 November 2019. As previously reported, the Company is targeting a total dividend of 5.0 p(2) per Ordinary Share for the current Xnancial year ending 31 March 2020. Working Capital Facility In its Xrst Annual Report, the Company stated that the Directors considered it a priority that the Company’s level of gearing should be established at appropriate levels with suZcient Yexibility to enable the Board to adapt at short notice to take advantage of changes in market conditions. In August 2019, the Company negotiated a £65 million Revolving Credit Facility with JP Morgan Chase Bank, N.A., with an option to increase this to £100 million , subject to certain conditions and commitments from willing lenders . The facility, which is available for three years, will provide Hipgnosis with increased Yexibility to fund investments and working capital going forward. At period end £13.75 million was drawn on this facility which has since been repaid . The Revolving Credit Facility is at present unutilised. The maximum level of gearing under the Company’s investment restrictions is 20% of the Company’s net asset value. The Board will continue to review the Company’s level of gearing, if any, on a regular basis.

(2) This is a target only and there can be no assurance that the target can or will be met and should not be taken as an indication of the Company's expected or actual future results. Accordingly, potential investors should not place any reliance on this target in deciding whether or not to invest in the Company or assume that the company will make any distributions at all and should decide for themselves whether or not the target dividend yield is reasonable or achievable. 7

0 Overview Governance Financial Statements Other Information 9 s the the he ir 201 ve ry f t from o ration r t As strong mittee. capital. fo portfolio change’ ai ns as une s r e b m e m l om ; Ex eWec ttee. l a C em mbers r r tembe Sep 19 rem e mi rectors: on a 30 ol de rs m 20 tock with Di committees: S remains iversiXed eh all remaining Com d of and is its lo gu es ed end a d our , s r o t c e r i D Sh ar ember ndon tors, irector e thes munerati r ttee o an D Ca ta loy e L ination mble ept ou R irec nths mo S of of D ix ee. dep 9 oard s sse of B the a Nom commi f v i t u c e x E on the we tive al l - o to remuneration he ment xecutive vestment t pe li ne the o or as E For t in f ommitt - pi u to o n o N ee. Seg and C ur Execu rman yo o - mination Non ai Ou r n ing ed mit Direct ion . Li t n e d tirelessly r st no th an ks Ch mmitt and n No tment Li a hanges ent erat und dating c ork Co he on F my Chairman oin t ed w up dent ing Ad vi se billi mun pend o as e p e d n i to the lish t app 1 d ation gs Son s Re £ f o llow pr es s ab en t as independent Premium Inde for ard d fo st ex osis e ver the e an indepen ued ontin te o bl the c d nior to Nomin of the forw of y l l o h w o as e of s t gn Hip appointe continue S In ve st m nt the li ke ittee ppoin Boar ook on lue as l a sponsi I e of made va . n ou r wholly re been s rati s ed t th me d , e ee by nt member ha b IPO mmittee wo ul d b Comm an appointed mig d e s i r p m o c has oi d ll I Company s i Co are wi e as 2019 our stmen has app tate ny’s w ar d member of Th ich 2019; n S e comprised inve t. Bo so ur ce eration ation Holden d r a o B was ar wh is Board Company 019 Burger time he gs , lema on 2 ee t Compa e h t total the the f uppor a Co urger the s o he September So n Remun Nomin Paul Board Sim s A Board of ber utch t B mitt ia ket 9 at S November of with ar ha lf an’s irm Board • • com Paul Sylv 21 On M

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T A Cha 1 a A C 08 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Financial and Operational Highlights

As at 30 September 2019, the Company had raised a total of approximately £395 million (gross equity capital) through its Initial Public OWering on 11 July 2018, and subsequent placings in April 2019 and August 2019.

Catalogue Acquisitions during the period As at 30 September 2019, the Company had deployed approximately £199 .5 million during the interim period and £319.4 million in total since IPO on 27 Catalogues (7,475 Songs). The Catalogues acquired as at 30 September 2019 are as belo w: Acquisition Interest Total Catalogue Date Ownership Songs Terius Nash (The-Dream) 11 July 2018 75% 302 Jason Boyd (Poo Bear) 16 November 2018 100% 214 Bernard Edwards 28 November 2018 37.5% 290 TMS 7 December 2018 100% 121 Tricky Stewart 17 December 2018 100% 121 Giorgio Tuinfort 3 January 2019 100% 182 Itaal Shur 30 January 2019 100% 209 Rico Love 21 March 2019 100% 245 Sean Garrett 21 March 2019 100% 588 Johnta Austin 21 March 2019 100% 249 Ari Levine 31 March 2019 100% 76 Sam Hollander 31 March 2019 100% 499 Teddy Geiger 9 April 2019 100% 6 Starrah 23 April 2019 100% 73 David A. Stewart 10 May 2019 100% 1,068 Jamie Scott 21 May 2019 100% 144 Al Jackson Jr. 30 May 2019 100% 185 Michael Knox 10 June 2019 100% 110 Lyric Catalogue 12 June 2019 100% 571 Brian Kennedy 12 June 2019 100% 101 Jon Bellion 12 June 2019 100% 180 Neal Schon 21 June 2019 100% 357 Eric Bellinger 1 July 2019 100% 242 Jason Ingram 1 July 2019 100% 462 Andy Marvel 26 July 2019 100% 740 Benny Blanco 7 August 2019 100% 93 The Chainsmokers 20 August 2019 100% 47 Total 7,475 9

0 Overview Governance Financial Statements Other Information 9 2 5 0% 201 2019 n i .7 1,92 3,79 ng he March on 3.27p 2.25p t and 1 4.10% NAV rki 31 10 107.50p ,558,826 sts. ising 1,49 8,74 r e h t e h w Wo 8,794,543 tive ud ing 98 co e ar ra 1 20 th s r tembe Sep re measure ex cl impairment ) tu to , e r u t u f 30 s Ope ££ 2 4 fu nd , % 40 /losse ance les .5p ting 6 ge of fu 8 642 , 2 2019 st .7 te ed end ve . (0.9% rela 1 form vera 87 co 89,83 gains a 448,35 ima 108.46p 107.50p ,4 d luer or le cti per e l b a e e s e r o f 7 9, by September est an Va 8 25,353, co l d ive e h nths mo s 3 t a 422,2 cost 30 est ix expenses n i s b as rge r ange. divid e nal inued ternat the the cha rtised al u c e r l 69) Exch For o t ing ndependent ,3 I amo cont being n Co mpa ny value exceptio at a y l e k as i l Stock of by Xnanc th e ed mit fair meaningfu ear (£6,8 19 e r a Li y of a es, to es h c i fe million s ight the und London ti on measured h w F in e ngs produced ovides charg the £1.5 and pr p y t So of op era ng a gs Son AV oi of f o values th e hl Hig incurred N s period erformance exclude assets osis ong p to fair tive to e s n e the Segment on ts, costs sed logues gn Hip of p x e re lat e on sed NAV Opera ta intangible e ba adjusted an annua li Ca ased as e s o h t Premium wh ich b are spect investmen e onal rati of s that 3)(4) e r a been ( th re are an d of s o tion ong t in ssiXed easur e: pe s e g has S (%) Operativ ce m cla of ed opinion O harge luation to r a h c share pri isposal gure c are he X re ven ue , g d t Xgure Migration or per are reva of amortisa ) ) ges ion/d IFRS. declar 2 2 g n i o g n e ( ( an sh Songs and O ar har V V l for RS Ongoin uisit Catalogues c remium ap ita l with et of perfo rmance c IF ility of e ) ia rics NA NA ng 1 acq es s ( to ve charges of idends ti Fac of l mark nc ogu s Directors ge d ongoi div value Met

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Key Fina 10 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Financial and Operational Highlights continued

Share Price plus Total Dividend (From IPO to 10 December 2019)

115

110

105

100

95

90 9 9 9 9 8 9 9 9 9 9 9 9 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 8 8 8 9 9 8 8 8 O 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 P I 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 0 5 6 7 2 1 7 8 8 1 2 3 0 1 0 8 9 9 9 0 0 1 3 4 4 4 5 6 2 0 9 1 2 1 7 8 1 0 0 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 1 0 0 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / 1 4 1 9 1 6 3 6 0 8 5 5 0 3 2 7 4 3 7 5 9 2 9 2 6 0 8 5 5 6 8 2 9 7 4 1 0 1 1 0 1 2 2 0 2 0 0 0 3 1 0 0 0 0 1 1 2 1 1 0 1 3 2 2 2 1 1 2 1 2 2 2

Share price + total dividend

Subsequent Events At the end of September 2019, Hipgnosis transferred its entire issued share capital to the Premium Listing Segment of the OZcial List of the FCA and to the London Stock Exchange’s Premium segment of the Main Market ahead of a successful C Share raise in October of £231.0 million. The total capital raised since launch now stands at over £625 million. 1

1 Overview Governance Financial Statements Other Information 9 0 5 29 47 44 90 48 42 108 75 103 109 298 164 109 188 122 436 201 n Total 1,85 Songs 3, o n lio r tembe Sep mil 30 6 % % % % % % % % % % % % % % % 99 ed end 100 100 100 100 100 100 100 100 100 100 100 100 100 100 £505. Interest Ownership nths mo ately ix s d 9 9 9 9 9 9 9 inued the en 019 019 019 019 019 Date 2019 2019 2019 2 2 201 201 2 2 2 201 201 201 201 201 For r r r r r r r cont od approxim er er er er er ber ber ber Acquisition ed mit yed peri Li o vembe vembe cembe cembe cembe cembe cembe Octo Octo Octo e 9 s ight und Novemb Novemb No No Decemb Decemb Decemb De De De De De th 17 17 F depl 5 7 5 9 9 15 25 10 10 10 10 10 to ad h gs Son hl Hig es osis Shar C equent gn Hip the Company to subs the onal rati ). s pe allocated 2019, en O Song be d 5 have 22 ns cquisitio mber an 1, A l ien* ce ues W* (1 ik* te Daid* ia er* De tt* O’Br da Smith* ono hiefs* Mal Mc ask T nc C 10 Catalog Boyer to Haynie* ar Newman l

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C A Fina Catalogue 1 C J J A F A K E J J E J B 12 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Investment Adviser’s Report

Introduction I created the Company to establish proven songs as an asset class and give the investment community access to the predictable and reliable revenues generated by these incredible Songs. I am delighted to report on our second interim period where we are seeing excellent returns being generated from the Catalogues that we have acquired. Since 31 March 2019, we have acquired a further 30 Catalogues which contain some of the most culturally important and commercially successful Songs of all time including Eurythmics’ ‘Sweet Dreams (Are Made of This)’, Journey’s ‘Don’t Stop Believin’’, The Chainsmokers’ ‘Closer’, Al Green’s ‘Let’s Stay Together’ and Ed Sheeran’s ‘Shape of You’ and ‘Castle On The Hill’ . I am thrilled that we now co-own Xve of the “Top 10 Songs of the Decade” as recently announced by Billboard Magazine. This includes the record breaking Number 1 hit of the decade ‘Uptown Funk’ which topped the singles charts in 19 countries including staying at Number 1 on the Billboard Hot 100 for 14 consecutive weeks making it one of the longest running Number 1 singles of the decade. It also broke the US and worldwide streaming record whilst being certiXed 11x platinum in the U S. I am delighted that we have transferred our entire share capital to the gold standard of stock exchanges, the Premium Listing Segment of the London Stock Exchange. By complying with the highest standards of corporate governance I hope Hipgnosis is more accessible for all investors who want exposure to our incredible portfolio of Songs . I must thank all of our Shareholders for their endorsement of our thesis and their continued support, particularly backing us with £282 .1 million of new equity capital in the last four months, taking our total funds raised since launch 16 months ago to over £625 million. We remain the only listed fund globally that exclusively oWers exposure to the uncorrelated returns generated from proven hit songs and we have lined up the Xnest available song Catalogues to quickly invest our remaining fund s.

Market Conditions The song and recorded music industry continues to grow driven by increasing streaming revenue as the number of paid subscribers to streaming platforms grows rapidly, both within the established platforms and with new entrants moving into the marketplace. Spotify recently announced that it had 113 million premium subscribers at 30 September 2019, up 31% year-on-year. Spotify’s total MAU (including paying and advertisement funded customers) in Q3 grew 30% year-on-year to 248 million. Apple Music, the other market leader, announced in June 2019 that it had passed 60 million paying subscribers, up from 50 million in June 2018 . We expect another big announcement from them soon. Whilst the U.S. remains the dominant territory in music streaming, accounting for 39% of global streaming revenue in 2019, Southeast Asia (excluding India) remains Spotify’s fastest growing regio n, whilst India outperformed their forecasts by 30% this third quarter 2019 . This continues to support the thesis that streaming will provide legitimate music revenues from emerging markets which were previously dominated by illegitimate consumption of music. 3

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Market B st Inve a a T n T s 14 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Investment Adviser’s Report continued

Portfolio (continued) The full list of Catalogues acquired subsequent to the period end is set out in the Financial and Operational Highlights on page 8. These newly acquired Catalogues include the diamond certiXed ‘Shape of You’ by Ed Sheeran, ‘Uptown Funk’ by Mark Ronson featuring Bruno Mars and ‘We Are Young’ by Fun featuring Janelle Monáe representing that each of these hits has sold over 10 million copies in the US alone. The new Catalogues also include the US or UK Number 1 or Platinum certiXed Songs: 'Promiscuous', 'Say It Right' and ‘Maneater’ by Nelly Furtado; ‘Sexy Back’, 'My Love', 'What Goes Around...Comes Around' and ‘Suit & Tie’ by Justin Timberlake; ‘ Holy Grail’ by Jay-Z featuring Justin Timberlake; 'Give It To Me' by Timbaland featuring Nelly Furtado and Justin Timberlake; 'Try Again' by Aaliyah; 'Apologize' by Timbaland featuring OneRepublic; ‘The Way I Are’ by Timbaland featuring Keri Hilson, D.O.E. vs. Sebastian; 'Talking To The Moon’, 'Power' and ‘Love Lockdown’ by Kanye West; ‘Amazing’ by Kanye West featuring Young Jeezy; ‘Runaway’ by Kanye West featuring Pusha T; 'All Of The Lights’ by Kanye West featuring Rihanna; ‘Monster’ by Kanye West featuring Jay-Z, Rick Ross, Nicki Minaj and Bon Iver; ‘Run This Town’ by Jay Z featuring Rihanna and Kanye West; ‘Kiss It Better’ by Rihanna; ‘Girl On Fire’ by Alicia Keys; ‘Love Me Again’ by John Newman; 'Locked Out Of Heaven’, ‘Young Girls’ and ‘Gorilla’ by Bruno Mars; ‘Summertime Sadness’ by Lana Del Rey; ‘Set Fire To The Rain’ by Adele; ‘Blinded By Your Grace, Pt. 2’ by Stormzy featuring MNEK, ‘Broken Strings’ by James Morrison featuring Nelly Furtado; ‘Number 1’ by Tinchy Stryder featuring N-Dubz; ‘Break Your Heart’ by Taio Cruz; ‘Just Give Me A Reason’ by Pink featuring Nate Ruess; ‘Headlights’ by Eminem featuring Nate Ruess; ‘Some Nights’ and ‘Carry On’ by Fun; ‘Look What You Made Me Do’ and ‘Out Of The Woods’ by Taylor Swift; ‘Green Light’ by Lorde; ‘Stand By You’ by Rachael Platten; Brave’ by Sara Bareilles; ‘Best Song Ever’, ‘Steal My Girl’ and ‘History’ by One Direction; ‘Sign Of The Times’ by Harry Styles; ‘All Time Low’ and ‘Glad You Came’ by The Wanted; ‘Black Magic’ by Little Mix; ‘Dear Darlin’’ by Olly Murs; ‘Rise’ by Jonas Blue featuring Jack & Jack; ‘Mama’ by Jonas Blue featuring William Single; ‘What About Us’ and ‘Beautiful Trauma’ by Pink; ‘Castle On The Hill’, ‘Photograph’, ‘Bloodstream’, ‘Tenerife Sea’, ‘What Do I Know’, ‘Supermarket Flowers’ and ‘Galway Girl’ by Ed Sheehan; ‘River’ by Eminem featuring Ed Sheehan; ‘Girls Like You’ by Jason Aldean; ‘Somewhere On A Beach’ by Dierks Bentley; and ‘Burning House’ by Cam. In addition the Catalogues include some of the most inYuential albums in the history of rock music with the Red Hot Chilli Peppers’ ‘Blood Sugar Sex Magik’, Pearl Jam’s ‘Vitology’, Rage Against the Machine’s ‘Evil Empire’ Stone Temple Pilots’ ‘Purple’, and Bruce Springsteen’s ‘The Rising’, ‘Devils and Dust’, ‘Magic’ and ‘Working on a Dream’ as well as the multi-platinum certiXed ‘Born to Die’ by Lana Del Rey and Kid Cudi’s ‘Man on the Moon: The End of Day’ and ‘Man on the Moon II: The Legend of Mr. Rager’ . We have also increased our exposure to arguably the most popular American band of the last 35 years with our Journey Catalogue acquisition, which includes the Songs ‘Don’t Stop Believin’’, the best-selling digital track from the 20th century with over seven million copies sold in the US alone, as well as ‘Anyway You Want It’, ‘Faithfully ’, ‘Wheels In The Sky’, ‘Open Arms’ , and ‘Who’s Crying Now’. 5

1 Overview Governance Financial Statements Other Information 9 s d o n i in in r k ck 17 ive on. a 1 the th e 1 Xrst 201 p o T als l a c i t i ‘Sick in “ Ro 2017 um ntries which in It 100. wee r c llbo were: p m r e b r ecut s of the n o became ou Bi m 32 w . c songs Hot “T o platin Performed albu charts n” u N Number and cons arguably 34 Biebe we ek the e song r tembe Sep weeks. end Songs e v i e c e r ard nine oming in f 5 11x an d th 30 16 sp e o 7 ng s a w their eks Most d n ‘ also llbo , h a r r a t S h a . The ed bec to s ng arts we i Bi e Justin rmi ve r iXed for li for y b t wrot X c i h llaboratio reached ed end It op es ’ r ch opp he w h secutive sp en t 100 ing H t t er afte 1. alon erfo ce Co s ard s s e c c t um” utive p e s equal hic p of ember. i fy US. gles gh er u s con aw ha s w Ho nths mo p land Alb hich r a M ad eatur sin ‘H i ix lo ks, f “To w c to co-own 12 s the poti Nov best onsec Hol B S n e t t i r w - o c dec ee e he i in l a i c r e o n u c in fo r Numb he t the record ovel w for e and t d th lboard r B on Halsey . am nkee la nd er , a N 16 at ctroni g” th ing ed s a w For S at Bil 14 f Card g Ya g n ng” US or s r 100 o Ho l was for m m o c h c Iv ich So n opp imes fo So ein the ounce 1 t t e/Ele Hipgnosis e eek ch the f e c includ b ed mit o i h w wh n Hot addy t o w th Li qualling Sa m in song ’, i r u t a e f n e ann featuring 100 , B D es se whi e d tinue Ro ck You’ illio n Danc tha Radi tri ory featuring nd by und mber b tive nd ived F ers p of u tho 5 i d r a was Hot cked med a ist o s n con N llboard cord n C i r e p x e To p h 1.1 of “ eeran rd ea Wi amo “To t coun “Top r Bi tist”. e re secu o R rece o t di hich gs Son proud 5 g n i a Sh str 41 th Ar he g”, nsmok Fonsi aroo w Shape the n t ‘ t ove i e u ott the n llboa con i . ic ai M Ed osis n for Xed on k r a M 7 Bi Sc co -w ri tte n for ti very S with r u t a e 0 ed Ch Luis by f by mos remained y b med aw ar de d ’ ng i t n o e 5 or Rep 10 the song t gn Hip cer ctron home c ing i di by are n amond re d ’ d the Th rea topp pe s’ , ‘Pray Decade” hart, You’ You s g streams Jamie be di C Sell st Hot ’ k n u F we as n by we Ho he took e/Ele of spen to by t and o er’s n o S gs Like where n toppe o o r a M nc secon r ns ng of album 2019. Awards: billio oard “Top es been ) rls r y b u o ri Da loser’ 2 ertiXed Son ‘H ig h itte Di sc US song of the ei and c Despacito Gi ludi p ‘ k ‘Shape ‘C ‘ e n w o t p U ‘ o i l y Billb mokers has th is – – 10. – – – inc th ’ u o Y the atin Songs ong quisitio is Adv “To 9 each 3 4 5 1 he onl Song”, announced Roc count L s inued e r nd co-wr t 0 for ri ti ng , and ’ Billboard t t ac a At 1 er Top w untries o f t r o p to k i L 10 rs ed and Chains c! 100 ks was Hot X US ame g of co luding d the Days r u o ynced (cont 2019 “Top hese t s t Hot s l r i G ‘ Album” Boy’ Pa ni The the countries Numb r e b m u N son topp in Number 19 wee Number Number inc over the an bec n me se io u o ti me the t o o o o o o o o most A Billboard At Work’. ‘The

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P F st Inve 16 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Investment Adviser’s Report continued

Portfolio (continued) • Nile Rodgers curated ‘Meltdown 2019’ where he performed songs co-written with Bernard Edwards as Chic. David A. Stewart also launched his live show “The Eurythmics Songbook” at Meltdown 2019 to a sold out audience. • Jason Aldean earned his 23rd career and fourth consecutive radio chart topper with ‘Rearview Town’ oW his Number 1 album ‘Rearview Town’ which was produced by Michael Knox. His new album ‘9’ which was included in the Michael Knox deal is currently the Number 1 album on the Billboard sales chart and Number 2 on the Billboard 200 which combines sales and streaming . In addition to the producer royalties it includes four songs we co-own written by Jaron Boyer. • In November, Journey and David A. Stewart were announced as nominees for the 2020 Songwriters Hall of Fame. • Nile Rodgers & Chic had an incredibly successful summer tour of the UK and Europe and now continue to tour the US with Cher performing numerous hits from our Bernard Edwards Catalogue. • Celine Dion’s new album ‘Courag e’ – including our single ‘Lying Down’ by Giorgio Tuinfort – is currently Top 5 all over the world and has just been Number 1 in the US. • Beyoncé’s ‘Homecomin g’ movie (and album) includes more than 14 of our songs and in addition to being a massive success has just been nominated for a 2020 Grammy Award. • Shawn Mend es continues his world tour – one of the most successful of 2019 globally – performing all of the songs we co-own via several of his co-writers. • Adele’s album ‘21’, which includes ‘Set Fire To The Rain’ co-written and produced by Fraser T. Smith, has reached 2.5 billion streams on Spotify alone. • Eurythmics – David A. Stewart and Annie Lennox reunited for the Xrst time in 14 years for Sting’s Rainforest Fund beneXt playing 3 Songs from our Portfolio.

Financial Review Net income for the portfolio increased to £22.6 million (Financial period from incorporation to 31 March 2019: £7.2 million ). The portfolio net income include some non-recurring revenues on Catalogues acquired during the period, most notably due to: - The right-to-income received as part of the Catalogue acquisition, which is typically dependent on the timing of the negotiations; - On acquisition, the Company is required to accrue for all revenues due to the Company for which PRO revenue statements have not yet been received, but where the Company is already entitled to the share . Due to the signiXcant timing diWerences inherent with PRO revenues, this one oW accrual can be material. 7

1 Overview Governance Financial Statements Other Information l , r 9 s g al of of of o to by ce ng d e d n nd he n on the t d n a a and a way was wa 201 it i ivi have have an r on n o i l l i b in e to p 9 1 . 3 of s l d l a t i p a C ll i 1.70%) t n e m g e S 2 the ta x idend iod ongoi is ogues date o t pe r valued mi cq ui s f o r ) e u g o l number return s a h c r u p w pi a div size u y f i t o p S performing to f pe as a t e r compared o In de pe nde nt perform r tembe Sep 2019: m u i m e r nt Catal forecasts g er , .O P revenue he 22 .3 a C red the t s g n i k r o W s t s a c i t NAV 30 be fo re al an m o r f o u changes compared £4 e h t c markets, ogues q greater S P E ng 2019 reased e r o Shur by e h t s t l o t ern Ad vi s f ri a March h c a e c ac total ng ed end of aming nitoring e h t atal o t er io d in wa s int si gn iX ca period. du f o world includ e u s e p 31 ve C re rgi Itaal r 5.03% Catalogues e c i s a b alf 9 a h t i w Exchange a the mo e f d he h st h h me nt i l to t t our y l mi ne d made , of ved me the 01 not g n i t a n o i t a r g i M of nths mo od th e an on e 2 r u O kers’ to on es t ix we 2019). s ion t h g as we l e r Xrst t s e t a l s eri do s e r i u q e r d n a with Stock p fo r nv recei er y de te r way I l and rati as ) mpany’s the Share i r y p smo y t i l i 1 s wo rk that the ( ts res g n i t i c x e ward he e h T addit a t . e r a h S t o c Co in For c a F th e ain orld In Ed relating reYecting osts . ngs Xgu nary ingful o w c t Ch . l l e w n eceived pr oX the ar ncorpo t s o M s e s n e p x e y r a n London wth i n streaming r So l a p i c n i r p Novemb are Se pt em ber o f l a t i p a C . ed mit . p s during ye he ese o illion ro Ordi m 0 u Sh Li r T g 29 mea ar ernard statemen the um 3 i d r O th m the g n i c u d e r er Po rt fo lio , ( d tinue B n d f fro s e % ye p e paid o r e und o .4 at of prio pa ya ble g n i m Western d h c i h w ( quisitio co mm en ced F an value p 3 h t g n i k r o W inary 15 remi th e IPO con s most £ p nd e ac u l a v rio the p as hon, es ase h op er at ing S R venue t c e the r the ent e h t fair art. t e l a n o i t p e c x e of tatements in 5 5 F I an d f r o f r e re co’ Ord pe of to s e Sc re f s in gs Son in e Y wit o t th st p n quality Shares h 3. od o he ue sinc e t inc e r la NA V egm othe v i r d th e per wt f o the eri half s B osis oth S ) the ary g n i t a va l Neal the o t p 1 an ( b r e d n u r 6% l e r pe ri od tems, at S .5p gro and period ti ve i ad ju st ed to hat 9 reased din n o i l l i m nny . ecasts, t 2 P ng Yect y r or Rep fa i e the gn Hip revenue (Financial 5 E vine, nt ve e r o f e r . g Or re inc Be 11 h t o b nc lu de for i ed ti . 1 r onl th e second pe ra Le rowth, pr io s d r a w n ence s e u g o l a t a C £ enue h Th e th ch Yecti e h t Outlook g O llion pe evabl after s e s n e p x e ame Premium d e t eas our and d r. are wi er’s re Ari the d e t s u otallin hi c rev 1.76% r u o mi , dilig pl ng w o d th e d t n (whi of n a beli costs) i he g (w test a l u c we Th e t j d a e. and 2.5p ye a paid f o sts o to re d our is , in n are t a un e d u l c n i a compara ami comparing . s due d nds of l a c ca 44.8 re n a to s ea a e i perio Sh ex pe ns es ition ed) (continu ci al l bas s i by 030 de ow n l a n o i t p e c x e ed £3 t o n o t ds d e s i t r o ah W the ase f is Adv Stre m 2 ry y n a m . Sha w Exchang is fore o ivi 2018 sh half wel s AV io n vents to V A quis t n d o d Va lu er ). on m a s e u n e v e r t ck by ina o s Xn an o N ur teri reas E N and nistratio sic. of t g n i d s ex pe nse s as ac , ur incre o gratio l rd in tual e b s ’ Sto inary Xrs f r non-recur o o i l l i m gues inc e dividen co mp ar ed en t a e l mu n O ngly e e s Mi o ac for 5 . Revie rd half o t well wel ni st ra t pr io r ent admi inue 1 e s e h T of d the g n o S d n me ing o t O £ tro r the per ondo Xgur s ial ea and nd L t i h increased these th e st ra ti on d u for Catalo a cont ad mi per n o i l l i m ing Operative es ah he perio

is it io ns to subscribers t e of cove er, y n a p m o C result excellent nsumes n lity icularly n second o r p bsequ In de pe nd a a our s e d u l c x E of 8.46p

qu owing ur u co ue atalogues . y n a p m o s e u g o l a t a ft er dm in i ppl alu e h f n .45% .25p 0 nd 1 . 4 1 aid art erformed rior ee n e v o r r aci osts n c harg s e r ) he ully nclud t p a A 1 t A p c C p p F C A g b c a a p T £ a (1

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Financ D st Inve f o I V C 1 i e o 7 18 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Investment Adviser’s Report continued

Subsequent Events and Outlook (continued) One step at a time, we are amassing the leverage and the support necessary to bring positive change to where the songwriter sits in the economic equation. The songwriter is more responsible than anyone for the success of an artist and the music industry in 2019 and they and their songs must be properly recognized. Import ant steps have been taken by the Copyright Board and with the Music Modernisation Act to acknowledge this but this is just the tip of the iceberg. We will use our leverage and support to positively impact where the songwriter sits which is not only important for the creative community but is in total alignment with the best interest of our investors. With investors needing uncorrelated assets more than ever , and proven Songs producing reliable and predictable income , the new asset class of proven Songs is , in our view, now more investible than gold and oil. With over £1 billion in our investment pipeline , the Songs and Catalogu es we are acquiring over the next days, weeks and months are just as impressive as what we have put together in our Xrst 16 months and will also skew the vintage of the overall portfolio older. We would like to thank all our Shareholders for supporting our thesis that songs are a new highly investible asset class and we look forward to updating them as we acquire some of the greatest songs of our time in the coming months. Equally well we would like to thank all of the incredible songwriters for entrusting us as custodians of these great songs which are not only the currency of the music industry but such a special and important part of everyone’s life.

Merck Mercuriadis Founder of Hipgnosis Songs Fund Limited and CEO of The Family (Music) Limited (Investment Adviser to Hipgnosis Songs Fund Limited) 10 December 2019 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 19

Investment Objective and Policy O

Investment Objective v e r v

The Company’s investment objectiv e is to provide Shareholders with an attractive and growing i e level of income, together with the potential for capital growth, from investment in a portfolio of w Songs and their associated musical intellectual property rights. The Portfolio has been created by investing in Catalogues of proven established Songs from well-known songwriters and recording artists. However, each Song will be considered to be a separate asset.

Investment Policy

The Company’s investment policy is to diversify risk through investment in a Catalogue of Songs G o

and associated musical intellectual property rights. The Company will seek, but is not required, to v e r

acquire 100 percent of a songwriter’s copyright interest in each song , which would comprise their n a songwriter’s share, their publisher’s share and their performance rights. In appropriate cases, n c however, the Company may not acquire all three elements of the songwriter’s interest and may e also acquire peripheral interests such as producer royalties on a songwriter’s copyright interest. The Company will acquire interests in Songs which are sole authored or co-authored. The Company may also acquire interests in Songs jointly with another purchaser. The Company will, directly or indirectly via collection agents, enter into licensing agreements, under which the Company will receive payments attributable to the copyright interests in the Songs which F i it owns. Such payments may take the form of royalties and/or licence fees, including: n a n c

• mechanical royalties – when a copy of a song is made, whether physical (e.g. CDs, DVDs) or i a l

digital (e.g. permanent downloads, streaming, webcast); S t a t • performance royalties – when a song is performed live or broadcast on TV or Radio, or when e m

a song is streamed online; and e n t • synchronisation fees – when a song is used in another form of media (e.g. movie, TV show, s video game, advertisement).

The Company will focus on delivering income growth and capital growth by pursuing eZciencies in O t the collection of payments and active management of the Songs it owns. h e r I The Company may acquire Songs for consideration consisting of cash, Shares or a combination of n f o cash and Shares, and payment of part of the consideration may be on deferred terms. r m a t

Whilst the Company does not intend to sell the Songs it owns, it may make disposals of Songs where i o it considers such a disposal to be in the best interests of Shareholders. n 20 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Investment Objective and Policy continued

Investment restrictions The Company will at all times invest and manage its assets, mindful of spreading risk and in accordance with its published investment policy. The Company will invest its assets and manage the Songs it acquires with the objective of constructing a high quality and diversiXed Portfolio of Songs. The Company will acquire Catalogues from a number of diWerent songwriters, which will include Songs diversiXed across music genres and sung by numerous recording artists. The Company will be subject to the following investment restrictions: a) the Company will hold interests in a minimum of 300 Songs once fully invested; b) the value of any single Song will not represent more than 10 percent of the Company’s Gross Assets, calculated at the date of the acquisition of such Song (and re-calculated in the aggregate upon the acquisition of any additional interest in a Song). In the event this limit is breached at any point after the relevant investment has been made or added to (for example due to a change in valuation of any Song), there will be no requirement to sell any Song, in whole or in part; and c) the Company will not invest in closed-ended investment companies or other investment funds. The Company is fully compliant with these investment restrictions.

Cash management The Company’s uninvested capital may be invested in cash, cash equivalents, near cash instruments and money market instruments.

Hedging and derivatives The Company may utilise derivatives for eZcient portfolio management. In particular, the Directors may engage in full or partial foreign currency hedging and interest rate hedging. The Company will not enter into such arrangements for investment purposes.

Leverage The Company may incur indebtedness of up to a maximum of 20 percent of its Net Asset Value, calculated at the time of drawdown.

Amendments to and compliance with the Investment Objective and Policy Any material change to the Company’s Investment Objective and Policy will be made only with the prior approval of the Shareholders by ordinary resolution. In the event of a material breach of any of the investment restrictions applicable to the Company, Shareholders will be informed of the actions to be taken by the Company through an announcement issued via London Stock Exchange’s Regulatory News Service. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 21

Directors’ Responsibility Statement

The Directors are responsible for preparing this Interim Report in accordance with applicable laws O v e and regulations. The Directors conXrm that to the best of their knowledge: r v i e • The Condensed Consolidated Financial Statements have been prepared in accordance with w IAS 34 Interim Financial Reporting; and • The Chairman’s Statement and Investment Adviser’s Report include a fair review of the information required by: (i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the Xrst period of the Xnancial year; their

impact on the condensed set of consolidated Xnancial statements; and a description of G o v

the principal risks and uncertainties of the remaining six months of the year; and e r n a

(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party n c

transactions that have taken place in the Xrst period of the current Xnancial year and that e have materially aWected the Xnancial position or performance of the Company during that period. On behalf of the Board F i n a

Andrew Sutch n c i Chairman a l S t a

10 December 2019 t e m e n t s O t h e r I n f o r m a t i o n 22 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Condensed Consolidated Statement of Comprehensive Income For the six months ended 30 September 2019 (unaudited)

1 April 2019 to 8 June 2018 to 30 September 31 March 2019 2019 ££ Notes (Audited) Income Total revenue 8 22,641,230 7,218,852 Interest income 584,507 682,491 Foreign exchange gains on non-investments 281,461 104,773 Total income 23,507,198 8,006,116

Expenses Advisory fees 12 (1,781,447) (1,579,190) Amortisation of Catalogues of Songs 5 (5,995,918) (1,491,922) Performance fee — (429,054) Administration fees (344,918) (155,954) Directors’ remuneration (94,375) (121,936) Broker fees (31,289) (44,550) Audit fees (55,000) (110,000) Legal & professional fees (726,631) (813,714) Exceptional Costs 9(1,460,337 )— Loan interest (52,109) — Other operating expenses (333,258 ) (267,821) Total expenses (10,875,282 ) (5,014,141)

Operating proJt for the period before tax 12,631,916 2,991,975

Taxation 4(1,909,309 ) (632,521) ProJt for the period after tax 10,722,607 2,359,454

Total comprehensive income for the period 10,722,607 2,359,454

Basic Earnings per Share (pence) 13 3.19 1.17 Diluted Earnings per Share (pence) 13 3.19 1.17

All activities derive from continuing operations.

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 23

Condensed Consolidated Statement of Financial Position As at 30 September 2019 O v e

30 September 31 March r v i 2019 2019 e ££w Notes (Audited) Assets Catalogues of Songs 5 311,944,580 118,458,818 Cash and cash equivalents 66,235,378 108,483,752 Trade and other receivables 32,298,738 10,808,398

Total assets 410,478,696 237,750,968 G o v e r

Liabilities n a n

Bank loan 6 13,750,000 — c Other payables and accrued expenses 7,280,344 39,192,142 e Total liabilities 21,030,344 39,192,142 Net assets 389,448,352 198,558,826

Equity

Share capital 7 386,911,229 198,221,140 F i n

Retained earnings 2,537,123 337,686 a n c i a

Total equity attributable to the owners of the Company 389,448,352 198,558,826 l S t a t

Number of ordinary shares in issue at period end 7 389,356,341 202,176,800 e m e n t

Bridge to Operative NAV s

IFRS Net Asset Value per ordinary share (pence) 100.02 98.21

Adjustments for revaluation of Catalogues of Songs to O t fair value (pence) 6.51 4.32 h e r I n

Reversal of amortisation (pence) 1.93 0.74 f o r m a

Operative Net Asset Value per ordinary share (pence) 108.46 103.27 t i o n Approved and authorised for issue by the Board of Directors on 10 December 2019 and signed on their behalf by:

Andrew Sutch Andrew Wilkinson Chairman Director The accompanying notes form an integral part of these Condensed Consolidated Financial Statements. 24 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Condensed Consolidated Statement of Changes in Equity For the six months ended 30 September 2019 (unaudited)

Number Share Retained Total Notes of shares capital earnings equity £££ As at 1 April 2019 202,176,800 198,221,140 337,686 198,558,826 Shares issued 7 187,179,541 192,618,166 — 192,618,166 Share issue costs 7—(3,928,077 )—(3,928,077 ) Dividends paid 10 ——(8,523,170 )(8,523,170 ) ProXt for the period ——10,722,607 10,722,607 As at 30 September 2019 389,356,341 386,911,229 2,537,123 389,448,352

Number Share Retained Total of shares capital earnings equity £££ Notes (Audited) (Audited) (Audited) (Audited) As at 8 June 2018 ———— Shares issued 7 202,176,800 202,176,800 — 202,176,800 Share issue costs 7—(3,955,660) — (3,955,660) Dividends paid 10 ——(2,021,768) (2,021,768) ProXt for the period ——2,359,454 2,359,454 As at 31 March 2019 202,176,800 198,221,140 337,686 198,558,826

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 25

Condensed Consolidated Statement of Cash Flows For the six months ended 30 September 2019 (unaudited) O v e

1 April 2019 to 8 June 2018 to r v i 30 September 30 September e 2019 2018 w Notes ££ Net cash used in operating activities Operating proXt/(loss) for the period before taxation 12,631,916 (534,274) Adjustments for non-cash items: Movement in other receivables (21,490,340 ) (664,436) Movement in other payables and accrued expenses (33,768,998) 156,828 G

Amortisation of Catalogues of Songs 5 5,995,918 — o v e

Foreign exchange losses on non-investments (281,461 ) — r n a n

(36,912,965) (1,041,882) c Purchase of Catalogues of Songs 5(199,481,680 ) (18,016,923) e Net cash used in operating activities (236,394,645) (19,058,805)

Net cash generated from Jnancing activities Proceeds from issue of shares 7 192,618,166 202,176,800 Issue costs paid 7(3,928,077 ) (3,955,660) F i

Dividends paid 10 (8,523,170 ) — n a

Bank loan 6 13,697,891 — n c i a l

Net cash generated from Jnancing activities 193,864,810 198,221,140 S t a t

Net movement in cash and cash equivalents (42,529,835 ) 179,162,335 e m e n

Cash and cash equivalents at the start of the period 108,483,752 — t EWect of foreign exchange rate changes 281,461 195 s Cash and cash equivalents at the end of the period 66,235,378 179,162,530 O t h e r I n f o r m a t i o n

The accompanying notes form an integral part of these Condensed Consolidated Financial Statements. 26 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Notes to the Condensed Consolidated Financial Statements For the six months ended 30 September 2019

1. General information Hipgnosis Songs Fund Limited was incorporated and registered in Guernsey on 8 June 2018 with registered number 65158 and is governed in accordance with the provisions of the Companies Law. With eWect from 29 April 2019, the registered oZce address is Floor 2, PO Box 286, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY. The Company’s shares were admitted to the SFS of the Main Market of the London Stock Exchange on 11 July 2018. Subsequently, the Company’s shares were admitted to the Premium Listing Segment of the OZcial List of the FCA from 19 September 2019 . The Company makes its investments through its subsidiaries, which are registered in the UK as limited companies, in which the Company is the sole shareholder. The principal place of business of the subsidiaries is the UK. The Condensed Consolidated Financial Statements present the results of the Group for the six months ended 30 September 2019. The Group is principally engaged in investing in and managing music copyrights and associated musical intellectual property.

2. Accounting policies a) Basis of preparation The Condensed Consolidated Financial Statements included in this Interim Repor t have been prepared in accordance with IAS 34 ‘Interim Financial Reporting ’ and the Disclosure and Transparency Rules of the FCA. The Condensed Consolidated Financial Statements do not include all the information and disclosures required in the Annual Report and should be read in conjunction with the Company’s Annual Report for the year ended 31 March 2019, which are available on the Company’s website (www.hipgnosissongs.com). The Annual Report has been prepared in accordance with IFRS. The same accounting policies and methods of computation have been followed in the preparation of these Condensed Consolidated Financial Statements as in the Annual Report for the year ended 31 March 2019. The Company applied, for the Xrst time, certain standards and amendments, which are eWective for annual periods beginning on or after 1 January 2019. The new standards or amendments to existing standards and interpretations, eWective from 1 January 2019, did not have a material impact on the Company’s Condensed Consolidated Financial Statements. It is not anticipated that any standard which is not yet eWective, will have a material impact on the Company’s Xnancial position or on the performance of the Company’s statements. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 27

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019 O v e r 2. Accounting policies continued v i e w b) Group information As at 30 September 2019, the details of the Company’s subsidiaries are as follows: Place of incorporation % of voting Consolidation Name of the subsidiary and operation rights % Interest method Hipgnosis Holdings UK Limited UK 100 100 Full

Hipgnosis SFH I Limited UK 100 100 Full G o v

Hipgnosis SFH II Limited UK 100 100 Full e r Hipgnosis SFH III Limited UK 100 100 Full n a n

Hipgnosis SFH IV Limited UK 100 100 Full c Hipgnosis SFH V Limited UK 100 100 Full e Hipgnosis SFH VI Limited UK 100 100 Full Hipgnosis SFH VII Limited UK 100 100 Full Hipgnosis SFH VIII Limited UK 100 100 Full Hipgnosis SFH IX Limited UK 100 100 Full Hipgnosis SFH X Limited UK 100 100 Full F

Hipgnosis SFH XI Limited UK 100 100 Full i n a

Hipgnosis SFH XII Limited UK 100 100 Full n c i Hipgnosis SFH XIII Limited UK 100 100 Full a l S

Hipgnosis SFH XIV Limited UK 100 100 Full t a t

Hipgnosis SFH XV Limited UK 100 100 Full e m

Hipgnosis SFH XVI Limited UK 100 100 Full e n t

Hipgnosis SFH XVII Limited UK 100 100 Full s Hipgnosis SFH XVIII Limited UK 100 100 Full Hipgnosis SFH XIX Limited* UK 100 100 Full Hipgnosis SFH XX Limited UK 100 100 Full O t

*This subsidiary was dormant as at 30 September 2019 in anticipation of new Catalogues being acquired. h e r I n f

The subsidiaries of the Company are considered tax resident in the UK and are subject to UK o r corporation tax. m a t i o c) Going concern n The Directors monitor the capital and liquidity requirements of the Company and its subsidiaries on a regular basis. They have also reviewed cash Yow forecasts prepared by the Investment Adviser which are based in part on assumptions about the future purchase and returns from existing Catalogues of Songs and the annual operating cost. Based on these sources of information and their own judgement, the Directors believe it is appropriate to prepare the Condensed Consolidated Financial Statements of the Group on a going concern basis. 28 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019

2. Accounting policies continued d) Segmental reporting The chief operating decision maker is the Board of Directors. While the Company’s income is derived internationally, the Directors are of the opinion that the Group is engaged in a single segment of business, being the investment of the Group’s capital in the Portfolio, with an attractive and growing level of income, together with the potential for capital growth.

3. SigniJcant accounting judgements, estimates and assumptions The preparation of the Group’s Condensed Consolidated Financial Statements requires the application of estimates and assumptions which may aWect the results reported in the Xnancial statements. Uncertainty about these estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of the asset or liability aWected in future periods. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods aWected. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signiXcant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next Xnancial year, are discussed below. The Group based its assumptions and made estimates based on the information available when the Condensed Consolidated Financial Statements were prepared. However these assumptions and estimates may change based on market changes or circumstances beyond the control of the Group.

Critical estimates in applying the Group’s accounting policies – revenue recognition: Estimated royalty revenue receivable is accrued for on the basis of historical earnings for each catalogue, which incorporates an element of uncertainty. The estimated revenue accrual may not therefore directly equal the actual cash received in respect of each accounting period and adjustments may therefore be required throughout the Xnancial period when the actual revenue received is known, and these adjustments may be material. Net revenues also include an accrual for performance income, to account for the Writer’s Share of performance royalties which are subject to a signiXcant time lag in reporting in the industry, but which the Company is entitled to receive in due course. In recommending the estimate of this accrual to the Board of Directors and the auditors, the Investment Adviser used its analysis of each Catalogue’s revenue history as well its knowledge of the respective Catalogue performance trends to recommend the estimated accruals. The PRO income accrual is based on analysis of each Catalogue’s revenue history as well as knowledge of the respective Catalogue’s performance trends. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 29

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019 O v e r 3. SigniJcant accounting judgements, estimates and assumptions continued v i e w Assessment of useful life of intangible assets In order to calculate the amortised cost of the intangible assets it is necessary to assess the useful economic life of the copyright interests in Songs. This requires forecasts of the expected future revenue from the copyright interests, which contains signiXcant uncertainties as the ongoing popularity of a Song can Yuctuate unexpectedly. The actual useful life of a Catalogue depends on the Catalogue’s genre and listener demographic.

Analysis of earnings shows that payback periods of purchase prices at industry standard multiples G o generally range from 10-15 years. Additionally, the term of administration deals in the market v e r between songwriters and publishers are no longer than 25 years, and generally range from 15-20 n a n

years. This reYects the general consensus that the beneXts from exploiting revenues from the work c of Anglo-American music songwriters can be reliably estimated over a period of 10-20 years and e no longer, due to uncertainty in forecasting over a longer period of time and the level of technological disruption that the industry is subject to .

Calculation of Operative NAV In order to calculate the Operative NAV and Operative NAV per Share, the intangible assets are F

revalued to an estimate of fair value. The fair value estimates are also used to assess whether there i n a

is evidence that the intangible assets may be impaired. n c i a

Valuations of music publishing rights typically adopt the DCF valuation approach which measures l S t the present value of anticipated future revenues from acquiring the Catalogues, which are a t e discounted at a ‘market cost of capital’ and a terminal value in 10 years. This method is accepted m e

as an objective way of measuring future beneXts; taking into account income projections from n t various music industry sources across various revenue Yows whilst also factoring in the associated s cost of capital. Catalogues of Songs are valued on an ongoing basis using a DCF valuation methodology which is O

consistent with the Independent Valuers . t h e r I

Assessment of impairment n f o

Intangible assets with an indeXnite useful life are subject to annual impairment review which relies r m on assumptions made by the Board. Assumptions are updated annually, speciXcally those relating a t i o

to future cash Yows and discount rates. n 30 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019

4. Taxes The Company is exempt from taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 2008 and is charged an annual fee of £1,200. The Directors have been advised that following certain changes to the United Kingdom tax rules regarding “alternative investment funds” implemented by the Finance Act 2014 and contained in section 363A of the Taxation (International and other Provisions) Act 2010 the Company should not be resident in the United Kingdom for United Kingdom tax purposes. Accordingly, and provided that the Company does not carry on a trade in the UK (whether or not through a branch, agency or permanent establishment situated therein), the Company will not be subject to UK income tax or corporation tax other than on any UK source income. The UK subsidiaries of the Company are tax resident in the UK and are subject to UK corporation tax.

5. Catalogues of Songs £ Cost At 1 April 2019 119,950,740 Addition 199,481,680 At 30 September 2019 319,432,420

Amortisation and impairment At 1 April 2019 1,491,922 Amortisation 5,995,918 Impairment — At 30 September 2019 7,487,840

Net book value At 1 April 2019 118,458,818 At 30 September 2019 311,944,580

Fair value as at 30 September 2019 344,786,060 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 31

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019 O v e r 5. Catalogues of Songs continued v i e £ w (Audited) Cost At 8 June 2018 — Additions 119,950,740 At 31 March 2019 119,950,740 G o

Amortisation and impairment v e

At 8 June 2018 — r n a

Amortisation 1,491,922 n c Impairment — e At 31 March 2019 1,491,922

Net book value At 8 June 2018 —

At 31 March 2019 118,458,818 F i n a n

Fair value as at 31 March 2019 128,694,535 c i a l S t

The Group amortises Catalogues of Songs with a limited useful life using the straight-line method a t e of 20 years (other than in exceptional circumstances for speciXc Catalogues of Songs). Useful life m e

is separately considered for each Catalogue of Songs and is reviewed at the end of each n t reporting period. s The Board engaged an Independent Valuer, Massarsky Consulting, Inc., to value the Catalogues as at 30 September 2019. Each income type from each Catalogue was analysed and forecasted to O

derive the fair value of the Catalogues by adopting a DCF valuation methodology. Income was t h analysed and forecast at the level of each individual Catalogue and by income type. Future revenues e r I were also estimated, often at the level of individual Songs, and incorporated into their valuation. n f o r

Massarsky Consulting has also taken into consideration macro factors including the growth of m a

streaming revenue and the global growth of the recorded music industry in their analysis. The Board t i o

has approved and adopted the valuations prepared by the Independent Valuer. n 32 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019

6. Bank loan On 29 August 2019, the Company signed a Revolving Credit Facility of £65 million with JPMorgan Chase Bank. The facility is available for three years and the Company may request to increase the commitment by a further £35 million, subject to certain conditions. On 30 September 2019, principal of £13,750,000 remained outstanding, which was initially drawn down on 30 August 2019. This was subsequently repaid on 31 October 2019. Interest in the amount of £52,109 was paid on 30 September 2019.

7. Share capital and capital management The share capital of the Company may consist of an unlimited number of: (i) ordinary shares of no par value which upon issue the Directors may classify as Ordinary Shares; and (ii) C Shares denominated in such currencies as the Directors may determine.

Ordinary Shares of no par value No. Issued and fully paid Shares issued on 11 July 2018 202,176,800 Shares issued on 17 April 2019 138,750,000 Shares issued on 29 August 2019 48,429,541 Shares as at 30 September 2019 389,356,341

£ Issued and fully paid Proceeds from s hares issued on 11 July 2018 202,176,800 Proceeds from s hares issued on 17 April 2019 141,525,000 Proceeds from s hares issued on 29 August 2019 51,093,166 Share issue costs (7,883,737 ) Shares as at 30 September 2019 386,911,229 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 33

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019 O v e r 7. Share capital and capital management continued v i e No. w Issued and fully paid Shares issued on 11 July 2018 202,176,800 Shares as at 31 March 2019 202,176,800

£ (Audited) G o

Issued and fully paid v e r

Proceeds from s hares issued on 11 July 2018 202,176,800 n a n

Share issue costs (3,955,660) c e Shares as at 31 March 2019 198,221,140

Under the Company’s Articles of Incorporation, each Shareholder present in person or by proxy has the right to one vote at general meetings. On a poll, each Shareholder is entitled to one vote for every Ordinary Share held. F

Shareholders are entitled to all dividends paid by the Company and, on a winding up, provided the i n a

Company has satisXed all of its liabilities, the Shareholders are entitled to all of the residual assets n c i of the Company. a l S t a t e

8. Revenue m e

1 April 2019 to 8 June 2018 to n t

30 September 30 September s 2019 2018 ££

Mechanical income 1,391,295 21,249 O t Performance income 4,201,061 33,925 h e r

Digital downloads income 1,028,665 27,674 I n f Streaming income 4,653,236 74,614 o r Synchronization income 2,030,838 41,795 m a t i

Writer’s Share income 8,189,913 119,591 o Producer royalties 577,165 — n Masters income 32,336 — Other income 536,721 66,166 Total revenue 22,641,230 385,014 34 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019

9. Exceptional Costs Included within exceptional costs of £1.5 million are non-recurring amounts relating to the arrangement of the Company’s Revolving Credit Facility with JP Morgan Chase Bank.

10. Dividends A summary of the dividends is set out below: Dividend Total per share dividend 1 April 2019 to 30 September 2019 Pence £ Interim dividend in respect of period ended 31 March 2019 1.25 4,261,585 Interim dividend in respect of period ended 30 June 2019 1.25 4,261,585 2.50 8,523,170

Dividend Total per share dividend 8 June 2018 to 31 March 2019 Pence £ Interim dividend in respect of period ended 30 September 2018 0.50 1,010,884 Interim dividend in respect of period ended 31 December 2018 0.50 1,010,884 1.00 2,021,768

The Company announced its third interim dividend for the previous Xnancial year, for the period from 1 January to 31 March 2019 of 1.25 pence per Ordinary Share. The interim dividend was paid to Shareholders on the register at the close of business on 3 May 2019 on 31 May 2019. The Company announced its Xrst interim dividend for the current Xnancial year, for the period from 1 April to 30 June 2019, of 1.25 pence per Ordinary Share. The interim dividend was paid to Shareholders, on the register at the close of business on 2 August 2019, on 30 August 2019. Subsequent to the period end, the Company announced its second interim dividend for the period from 1 July 2019 to 30 September 2019 of 1.25 pence per Ordinary Share. The dividend was paid to Shareholders, on the register at the close of business on 1 November 2019, on 29 November 2019. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 35

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019 O v e r 11. Financial Risk Management v i e w Financial Risk Management Objectives The Company’s activities expose it to various types of Xnancial risk, principally market risk, credit risk, and liquidity risk. The Board has overall responsibility for the Company’s risk management and sets policies to manage those risks at an acceptable level. The Company’s principal risk factors are fully discussed in the Company’s Prospectus, available on the Company’s website (www.hipgnosissongs.com) and should be reviewed by Shareholders. G o v e

12. Related Party Transactions and Directors’ Remuneration r n a

Parties are considered to be related if one party has the ability to control the other party or exercise n c signiXcant inYuence over the party in making Xnancial or operational decisions. e

Directors As at 30 September 2019 the Company has four Directors (31 March 2019: four). Directors’ fees for the period to 30 September 2019 amounted to £94,375 (30 September 2018: £43,603), of which £nil (31 March 2019: £nil) was outstanding at the period end. F i n a

Investment Adviser n c i The Company has entered into an Investment Advisory Agreement with the Investment Adviser a l S pursuant to which the Investment Adviser will source Songs and provide recommendations to the t a t

Board on acquisition and disposal strategies, manage and monitor royalty and/or fee income due e m

to the Company from its copyrights and collection agents, and develop strategies to maximise the e n t

earning potential of the Songs in the portfolio through improved placement and coverage of Songs. s Investment Adviser fees for the period were £1,781,447 (30 September 2018: £500,500) with £305,897 (31 March 2019: £nil) outstanding at the reporting date. O t h e r I n f o r m a t i o n 36 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Notes to the Condensed Consolidated Financial Statements continued For the six months ended 30 September 2019

13. Earnings per share 30 September 2019 30 September 2018 Basic Diluted Basic Diluted

ProXt/(Loss) for the period (£) 10,722,607 10,722,607 (736,322) (736,322) Weighted average number of Ordinary Shares in issue 336,506,009 336,506,009 202,176,800 202,176,800 Earnings/(Loss) per Share (pence) 3.19 3.19 (0.36) (0.36)

The earnings per share is based on the proXt or loss of the Group for the period and on the weighted average number of Ordinary Shares for the period.

14. Subsequent events On 22 October 2019 the Company issued 231 million new C Shares. These shares were issued at a price of 100 pence per C Share, raising gross proceeds of £231 million. Following the issue, there are 389,356,341 Ordinary Shares and 231,000,000 C Shares in issue. The C Shares carry the right to receive notice of, attend and vote at general meetings of the Company. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights of the Company will be 620,356,341 and this Xgure may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest, or a change to their interest in, the Company under the FCA’s Disclosure Guidance and Transparency Rules. Following the issue of C Shares on 22 October 2019, Andrew Sutch purchased 20,000 C Shares. Paul Burger, Andrew Wilkinson and Simon Holden each purchased 10,000 C Shares on the same day. On 24 October 2019 the Company announced its second interim dividend for the period from 1 July 2019 to 30 September 2019 of 1.25 pence per Ordinary Share. The dividend was paid to Shareholders, on the register at the close of business on 1 November 2019, on 29 November 2019. Further catalogues were acquired after the period ended 30 September 2019 , as set out on Page 11 . There were no other material events after the period end to the date on which these Condensed Consolidated Financial Statements were approved. Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 37

Glossary of Capitalised DeJned Terms

“Administrator” means Estera International Fund Managers (Guernsey) Limited; O v e r v

“Admission” means admission, on 11 July 2018, to trading on the SFS of the London Stock i e Exchange, of the Ordinary Shares becoming eWective in accordance with the Listing Rules and/or w the LSE Admission Standards; “AIC” means the Association of Investment Companies; “AIC Code” means the AIC Code of Corporate Governance; “AIC Guide” means the AIC Corporate Governance Guide for Investment Companies;

“Annual General Meeting” or “AGM” means the annual general meeting of the Company; G o v e

“Annual Report ” means the annual publication of the Company provided to the Shareholders to r n a

describe their operations and Xnancial conditions, together with their Consolidated Financial n c

Statements; e “Apple Music” means the music and video streaming service developed by Apple Inc.; “Articles of Incorporation” or “Articles” means the articles of incorporation of the Company; “Asset Management Committee” means a committee which considers the ongoing management and revenue maximisation of the Catalogues of Songs; F i n

“Audit and Risk Management Committee” means a formal committee of the Board with deXned a n terms of reference; c i a l S

“Board” or “Directors” means the Directors of the Company; t a t e

“BMI” means Broadcast Music, Inc.; m e n t

“C Shares” means a temporary and separate class of shares which are issued at a Xxed price s determined by the Company; “Catalogue” means one or more Songs acquired from a single songwriter or artist; O t

“CD” means compact disc; h e r I

“CEO” means Chief Executive OZcer ; n f o r

“Companies Law” means the Companies (Guernsey) Law, 2008, (as amended); m a t i “Company” means Hipgnosis Songs Fund Limited. References to the Company are also o n considered to be references to the Group, where applicable; “Company Secretary” means Estera International Fund Managers (Guernsey) Limited; “Condensed Consolidated Financial Statements” means the unaudited Xnancial statements of the Company, including the Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Cash Flows, the Statement of Changes in Equity and associated notes; 38 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Glossary of Capitalised DeJned Terms continued

“Corporate Broker” means Nplus1 Singer Advisory LLP (N+1 Singer) and J.P. Morgan Securities plc (JPM) ; “DCF” means discounted cash Yow; “Disclosure Guidance and Transparency Rules” or “DTRs” mean the disclosure guidance published by the FCA and the transparency rules made by the FCA under section 73A of FSMA; “Discount to Operative NAV” means the situation where the Ordinary Shares of the Company are trading at a price lower than the Company’s Operative NAV; “Downloads” means royalties for the permanent digital mechanical transfer of music; “DSP” means Digital Service Providers ; “Earnings per Share ” or “EPS” means the Earnings per Ordinary Share and is expressed in pounds Sterling; “EU ” means European Union; “FCA” means the UK Financial Conduct Authority (or its successor bodies); “FRC” means Financial Reporting Council; “FSMA” means the UK Financial Services and Markets Act 2000; “GFSC” or “Commission” means the Guernsey Financial Services Commission; “GFSC Code” means the GFSC Finance Sector Code of Corporate Governance; “Grammy” means an award presented by the Recording Academy to recognise achievements in the music industry; “Group” means Hipgnosis Songs Fund Limited and its subsidiaries; “IAS” means international accounting standards as issued by the Board of the International Accounting Standards Committee; “IFPI” means International Federation of the Phonographic Industry; “IFRS” means the International Financial Reporting Standards, being the principles-based accounting standards, interpretations and the framework by that name issued by the International Accounting Standards Board; “IFRS NAV” means the value of the Gross Assets of the Company less its liabilities (including accrued but unpaid fees) in accordance with the accounting policies adopted by the Directors; “Independent Valuer” means Massarsky Consulting, Inc., appointed by the Board to independently value the Company’s Catalogues within the Portfolio; “Interim Report” means the Company’s half yearly report and unaudited condensed consolidated Xnancial statements for the period ended 30 September; Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 39

Glossary of Capitalised DeJned Terms continued

“Investment Adviser” means The Family (Music) Limited; O v e r v

“Investment Advisory Agreement” means the investment advisory agreement dated 27 June i e 2018 between The Family (Music) Limited, the Company and Hipgnosis SFH I Limited; w “IPO” means the initial public oWering of shares by a private company to the public; “ISIN” means an International Securities IdentiXcation Number; “Listing Rules” means the listing rules made by the UK Listing Authority under section 73A FSMA; “London Stock Exchange” or “LSE” means London Stock Exchange Plc; G

“Main Market” means London’s Yagship market for larger, more established companies, and is o v e

home to some of the world’s largest and most well-known companies; r n a n

“MAR” means EU regulation 596/2014 on market abuse; c e “MAU ” means Monthly Active Users ; “Mechanical” means royalties for reproducing music, for example CD, vinyl, etc. (excluding mechanical downloads and mechanical streaming); “NAV per Share” means the Net Asset Value attributable to the Ordinary Shares in issue divided

by the number of Ordinary Shares in issue (excluding any Shares held in treasury) at the relevant F i n

time and expressed in Sterling; a n c i “Net Asset Value” or “NAV” means the value of the assets of the Company less its liabilities as a l S calculated in accordance with the Company’s valuation policy and expressed in pounds Sterling; t a t e

“Nomination Committee” means a formal committee of the Board with deXned terms of m e reference; n t s “OKcial list” means the list maintained by the Financial Conduct Authority (acting in its capacity as the UK Listing Authority) in accordance with Section 74(1) of the Financial Services and Markets Act 2000 (the Act) for the purposes of Part VI of the Act; O t h

“Operative NAV” means NAV as adjusted for the fair value of Catalogues of Songs; e r I n

“Ordinary Shares” means redeemable ordinary shares of no par value in the capital of the Company f o r issued and designated as “Ordinary Shares” and having the rights, restrictions and entitlements set m a out in the Articles; t i o n “Other income” means any income not covered by the other income types, for example sheet income and lyric exploitation; “Performance” means royalties for playing music in public, for example TV/radio broadcasts, live performance, etc. and paid through to the publisher; 40 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Glossary of Capitalised DeJned Terms continued

“Performance Right Organisations” or “PROs” means a performing rights organisation, such as PRS or BMI, which represents and collects performance royalties for and on behalf of each of its members; “Portfolio” means the portfolio of Songs (whether organised into Catalogues or otherwise) held by the Company directly or indirectly from time to time; “Portfolio Committee” means a committee which approves all purchases of Catalogues of Songs; “Preferred Portfolio Administrator” means the portfolio administrators appointed by the Company in order to assist with the administration of the Portfolio including Kobalt Music Services Limited, the Company’s preferred portfolio administrator; “Premium Listing” means the Premium Listing Segment of the London Stock Exchange; “Premium to Operative NAV” means the situation where the Ordinary Shares of the Company are trading at a price higher than the Company’s Operative NAV; “Prospectus” means the prospectus issued by the Company on 27 June 201 8, and as amended and restated on 27 September 2019 ; “PRS” mean s Performing Rights Society ; “RCIS Rules” means the Registered Collective Investment Scheme Rules 2018 ; “Recording Academy” means a U.S. academy of musicians, producers, recording engineers and other musical professionals; “Registrar” means Computershare Investor Services (Guernsey) Limited; “Remuneration Committee” means a formal committee of the Board with deXned terms of reference; “Revolving Credit Facility” means a line of credit that is arranged between a bank and a business. It has an established maximum amount, where the business has access to the funds at any time when needed; “SFS” means London Stock Exchange’s specialist fund segment of the main market for listed securities; “Shareholder” means the holder of one or more Ordinary Shares; “Song” means a songwriter’s and/or publisher’s share of copyright interest in a song, being a musical composition of words and/or music and the songwriter’s proportion of the publishing rights of a single musical track, and when construction permits, the collection of words and/or music as purchased by consumers; “Streaming” means performance and mechanical royalties for digitally playing music in real-time, for example through Spotify; Hipgnosis Songs Fund Limited For the six months ended 30 September 2019 41

Glossary of Capitalised DeJned Terms continued

“Synchronisation” means royalties for playing music in connection with visual media (for example O v e

Xlm, TV, advertisements); r v i e “TV” means television; w “UK” or “United Kingdom” means the United Kingdom of Great Britain and Northern Ireland; “U.S.” or “United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; “Writer’s Share” means performance royalties collected by a Performance Rights Organisation and paid through directly to the songwriter as opposed to the publisher share of performance; G o

“YouTube” means the U.S. video-sharing website; v e r n a

“£” or “Pounds Sterling” or “Sterling” means British pound sterling and “pence” means British n c pence; e “$” or “USD” means United States dollars and “cents” means United States cent s. F i n a n c i a l S t a t e m e n t s O t h e r I n f o r m a t i o n 42 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Directors and General Information

Board of Directors Remuneration Committee Andrew Sutch (Chairman) (established 9 September 2019) Paul Burger (Senior Independent Director Simon Holden (Chairman) from 9 September 2019) Paul Burger Andrew Wilkinson Sylvia Coleman (appointed 21 November) Simon Holden Andrew Sutch Sylvia Coleman (appointed 21 November) Andrew Wilkinson Audit and Risk Management Committee Advisory Board Andrew Wilkinson (Chairman) Nile Rodgers Paul Burger The-Dream Sylvia Coleman (appointed 21 November ) Giorgio Tuinfort Simon Holden Starrah Andrew Sutch Nick Jarjour David Stewart Portfolio Committee Bill Leibowitz Paul Burger (Chairman) Ian Montone Sylvia Coleman (appointed 21 November) Jason Flom Simon Holden Andrew Sutch Registered OKce Andrew Wilkinson E&ective from 29 April 2019 Floor 2 Asset Management Committee PO Box 286 Andrew Sutch (Chairman) Trafalgar Court Paul Burger Les Banques Sylvia Coleman (appointed 21 November) St Peter Port Simon Holden Guernsey Andrew Wilkinson GY1 4LY Nomination Committee Prior to 29 April 2019 (established 9 September 2019) Heritage Hall Paul Burger (Chairman) PO Box 225 Sylvia Coleman (appointed 21 November) Le Marchant Street Simon Holden St Peter Port Andrew Sutch Guernsey Andrew Wilkinson GY1 4HY 3

4 Overview Governance Financial Statements Other Information 9 201 o t r tembe Sep as y y l 30 19) LLP l 20 C vard mpan mpan ed end r c LLP Counse Wharf pl Co Co ls mbe LLP Boule nths mo the the ry LLP ix Legal rities ane s to to Canary L iso e akes Freehil Septe ey) Auditor the L use dv 0 lace splanade 2 ew Secu e ns ith ous 1 inued A Brokers P E nt treet For . Law Avenue Ho H rhouseCoopers 32 S visers visers Port Port Street, Sm nc e te ont I ey ey ank 33 t Specialist c 2AX e 2EG Ad Ad (Guer ende B Sunris 302 orate lian’s ed mit 1WA 4ND Singer 5JP da Morgan 0 hange er Li ABL 1 1 Bank erns erns Ju Peter Peter ite nris 6 imros icewa Bartholom Glategny on und London EC2A Legal Gu GY Exc Pr Redwood St St Corp N+1 1 London EC2N J.P. (Appointed Su Su Flori Guernsey Ogi USA Legal 25 London E14 Indep Pr Royal 1 Gu GY Music CT 94 Herber St F gs Son ati orm osis Inf gn Hip retary rs rs ge ge ces Sec rvi al ner ana ana M M Se 19 Ge mpany 20 mited il Fund Fund s.com Co estor Li 19 Apr Lane nal nal Inv and ic) eet e and y 20 t 29 Str Adviser l t t t Mus Limited Limited Limited ( t April ors Hous rom Cour ant Hal f Por Por Por 225 286 29 Internatio Internatio 1QS Chancer ipgnosissong House

2 r on nsey nsey nsey to Wing 1DB 4HY 4LY Family Banques Floor Floor Box Box

estmen or Bordage March ritage ective Peter Peter Peter -64 ior C2A uer Y1 uer Y1 uer Y1 e ww.h omputershare hancery dministrator udo rafalgar he egistrar O O t t t stera stera ast r st th 3 e e es ond & lo Guernsey) Guernsey) Guernsey)

nv ct Dire S G T L ( 1 G ( H P L S G S R C T L E G G P P A ( F G L W E E w E C T 4 5 I 44 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Directors and General Information continued

Principal Banker Barclays Bank PO Box 41 Le Marchant House St Peter Port Guernsey GY1 3BE Preferred Portfolio Administrator Kobalt Music Services Limited The River Building 1 Cousin Lane London EC4R 3TE IdentiJers ISIN: GG00BFYT9H72 Ticker: SONG SEDOL: BFYT9H7 Website: www.hipgnosissongs.com LEI: 213800XJIPNDVKXMOC11 GIIN: 5XGPC8.99999.SL.831 Managing your account online The Company’s registrar, Computershare Investor Services (Guernsey) Limited, allows you to manage your shareholding online. If you are a direct investor you can view your shareholding, change the way the registrar communicates with you and buy and sell shares. If you haven’t used this service before, all you need to do is enter the name of the Company and register your account at https://www-uk.computershare.com/investor. You’ll need your Investor code (IVC) printed on your share certiXcate in order to register. 5

4 Overview Governance Financial Statements Other Information 9 y or to b on the lt 201 m o r tect oper f r 40 of please p t otential pro u r e s 20 co me p o diZcu a o i v d He lp li ne can a them of r tembe Sep 12 3 al s and without n a ment 30 00 they st ca n risks avoid e s u e 03 ed end to h inve t t ’ n that Co ns um er k on perating an histicated o d r o how so co nt ac t nths mo red chec sop be d n a th ei ix s and e bu t Fr au d ious to to t ng oWe the c i v on ca ll ams List it cau d a For sc l a reasingly been known true be Ac ti u co ld e port inc is i t r a co nt ac ti y yo ed mit be to am. av re Li h m Warning rm. by to sc to p m i Xr su al l a fo estment und u come ious, you F co nt ac t CA t e g or FCA If inv F the be t good if g n i ve orting the gs Son e available oo th e suspic a t . t s e it h sc am , se about rep Shareholders stmen to osis eminar. Use o are a v n i s t oWer on ve – Sc am me rs ne ur mart s. a n e i in o ey – sound about : you gn Hip y gn scams at th onli .uk. sc am e List If at all si isk by r r or e r o f e B ne y ed g mon ng ce th ei search els or – ki in s nformati quickl lat oI er s oli th i you. mo blue high rning re ma your also a e scams Xr m e c i v ing est yone warn mouth ly pful t wa Warning th to f return lo st us nv d a an it’s i ec te d o l can l on a.org.uk/scams hel th e of ks the p nfraud.p or d ng ntacted to : tel FCA are rt ou io ris are ation. co Y e out ha ve ther wor ure 768 spot ers rehold Sha ften un ex not th t investmen t, the 6 ur www.fc o re po f investmen therefore tempti w.act a i t r a p m i they you that to ess ances yo u e t and to pos u will pr 111 , For ww If visit ch are authoris ca n years stment. g n i t that Xrm yo avoid ers e ej ec ti ng We • ask say downplay promis contac apply 0800 th Yo u blue, inve FCA t e G Checking email R

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I ice Adv 46 Hipgnosis Songs Fund Limited For the six months ended 30 September 2019

Cautionary Statement

The Chairman’s Statemen t and the Investment Adviser’s Repor t have been prepared solely to provide additional information for shareholders to assess the Company’s strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any other purpose. The Chairman’s Statemen t and Investment Adviser’s Repor t may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identiXed by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs or current expectations of the Directors and the Investment Adviser, concerning, amongst other things, the investment objectives and investment policy, Xnancing strategies, investment performance, results of operations, Xnancial condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company’s actual investment performance, results of operations, Xnancial condition, liquidity, distribution policy and the development of its Xnancing strategies may diWer materially from the impression created by the forward-looking statements contained in this document. Subject to their legal and regulatory obligations, the Directors and the Investment Adviser expressly disclaim any obligations to update or revise any forward-looking statement contained herein to reYect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. Hipgnosis Songs Fund Limited Floor 2, PO Box 286 Trafalgar Court, Les Banques, St Peter Port Guernsey GY1 4LY Further information available online: www.hipgnosissongs.com