Kids Play Plc

Consolidated financial statements

for the year ended 31 December 2009
Consolidated statement of comprehensive income
for the year ended 31 December 2009
Notes Year Year
ended ended
31 Dec 2009 31 Dec 2008

£m £m

Revenue 2 860 865

Cost of sales (534) (563)
Gross profit 326 302

Distribution costs (70) (68)

Administrative expenses (65) (70)
Restructuring costs (2) (16)
Profit from operations 3 189 148

Finance costs 4 (4) (4)

Income from associates 8 10
Profit before tax 193 154

Income tax expense 5 (47) (34)

Profit after tax 146 120

Net profit for the year 146 120

Consolidated statement of financial position
at 31 December 2015

31 Dec 2015 31 Dec 2014

Notes £m £m
ASSETS

Non-current assets
Property, plant and equipment 6 494 423
Investments in associates 7 92 77
586 500

Current assets
Inventories 8 38 16
Trade and other receivables 9 32 32
Bank balances and cash 9 14 3
84 51

Total assets 670 551

EQUITY AND LIABILITIES

Capital and reserves

Share capital 10 23 11
Share premium 11 53 63
Accumulated profits 12 547 401
623 475

Non-current liabilities
Bank loans due after one year 13 13 13
13 13

Current liabilities
Trade and other payables 14 12 28
Tax liabilities 20 30
Bank overdrafts and loans due within one year 14 0 2
Provisions 2 3
34 63

Total equity and liabilities 670 551

Changes in equity
for the year ended 31 December 2015

Share Share Accumulated

Notes capital premium profits Total

£'000 £'000 £'000 £'000

Balance at 1 January 2014 11,000 63,000 281,000 355,000

Transfers to income not recognised in the statement of comprehensive i 0 0 0 0

Net profit for the year 0 0 120,000 120,000
Preference share dividends 10 0 0 (150) (150)
Ordinary share dividends 0 0 0 0
Balance at 1 January 2015 11,000 63,000 400,850 474,850

Newly issued ordinary shares 10,11 2,000 0 0 2,000

Bonus issue 11 10,000 (10,000) 0 0
Transfers to income not recognised in the statement of comprehensive i 0 0 0 0
Net profit for the year 0 0 146,000 146,000
Preference share dividends 10 0 0 (150) (150)
Ordinary share dividends 0 0 0 0
Balance at 31 December 2015 12 23,000 53,000 546,700 622,700
Summary of significant accounting policies
for the year ended 31 December 2015

The financial statements have been prepared under consistent accounting policies for both years. There is no
significant differences between the accounting policies followed by the Company and those included in the
International Financial Reporting Standards (IFRS) apart from disclosure items. The financial statements have
been prepared on the historical cost basis, except for the revaluation of land and buildings and certain financial
instruments. The principal accounting policies adopted are set out below.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and enterprises
controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the
Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain
benefits from its activities. On acquisition, the assets and liabilities of a subsidiary are measured at their fair values
at the date of acquisition. Any excess (deficiency) of the cost of acquisition over (below) the fair values of the
identifiable net assets acquired is recognised as goodwill (negative goodwill). The interest of minority shareholders
is stated at the minority’s proportion of the fair values of the assets and liabilities recognised. The results of
subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive
income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where
necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used
into line with those used by other members of the Group. All significant intercompany transactions and balances
between group enterprises are eliminated on consolidation.

Revenue recognition

Sales of goods are recognised when goods are delivered and title has passed.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in
the statement of comprehensive income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for
current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of
financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax basis used in the computation of
taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be
utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the liability is
settled or the asset realised. Deferred tax is charged or credited in the statement of comprehensive income,
except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Summary of significant accounting policies (cont)
for the year ended 31 December 2015
Property, plant and equipment

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes,
are stated in the statement of financial position at their revalued amounts, being the fair value on the basis of their
existing use at the date of revaluation, less any subsequent accumulated depreciation and subsequent
accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying
amount does not differ materially from that which would be determined using fair values at the end of the reporting
period. Any revaluation increase arising on the revaluation of such land and buildings is credited to the properties
revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously
recognised as an expense, in which case the increase is credited to the statement of comprehensive income to
the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such
land and buildings is charged as an
expense to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a
previous revaluation of that asset. Depreciation on revalued buildings is charged to income. On the subsequent
sale or retirement of a revalued property, the attributable revaluation surplus remaining in the properties
revaluation reserve is transferred directly to accumulated profits.

Fixtures and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.

Depreciation is charged so as to write off the cost or valuation of assets, other than land, over their estimated
useful lives, using the straight-line method, on the following bases:

Buildings 4%
Fixtures and equipment 8% - 15%

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in income.

Investment in associate

An associate is an enterprise over which the Group is in a position to exercise significant influence, but not control,
through participation in the financial and operating policy decisions of the investee. The results and assets and
liabilities of associates are incorporated in these financial statements using the equity method of accounting.
Investments in associates are carried in the statement of financial position at cost as adjusted by post-acquisition
changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual
investments. Any excess (deficiency) of the cost of acquisition over (below) the Group’s share of the fair values of
the identifiable net assets of the associate at the date of acquisition is recognised as goodwill (negative goodwill).
Where a group enterprise transacts with an associate of the Group, unrealised profits and losses are eliminated to
the extent of the Group’s interest in the relevant associate, except to the extent that unrealised losses provide
evidence of an impairment of the asset transferred.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the weighted average method. Net realisable value
represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing,
selling and distribution.
Summary of significant accounting policies (cont)
for the year ended 31 December 2015
Financial assets and liabilities

Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the
Group becomes a party to the contractual provisions of the instrument.

Trade receivables
Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts.

Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on settlement or redemption, are accounted for on an accrual basis
and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which
they arise.

Trade payables
Trade payables are stated at their nominal value.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Provisions

Provisions for restructuring costs are recognised when the Group has a detailed formal plan for the restructuring
that has been communicated to affected parties.
 icies for both years. There is no
any and those included in the
s. The financial statements have
nd buildings and certain financial

he Company and enterprises

ear. Control is achieved where the
nvestee enterprise so as to obtain
iary are measured at their fair values
er (below) the fair values of the
The interest of minority shareholders
es recognised. The results of
lidated statement of comprehensive
osal, as appropriate. Where
o bring the accounting policies used
ompany transactions and balances

rred tax.

t differs from net profit as reported in

or expense that are taxable or
r deductible. The Group’s liability for
ely enacted by the statement of

between the carrying amount of

is used in the computation of
bility method. Deferred tax liabilities
x assets are recognised to the extent
e temporary differences can be
o the period when the liability is
ent of comprehensive income,
case the deferred tax is also dealt
cies (cont)

es, or for administrative purposes,

ng the fair value on the basis of their
reciation and subsequent
gularity such that the carrying
air values at the end of the reporting
uildings is credited to the properties
e for the same asset previously
ment of comprehensive income to
arising on the revaluation of such

s revaluation reserve relating to a

ed to income. On the subsequent
emaining in the properties

than land, over their estimated

d as the difference between the

ome.

significant influence, but not control,

stee. The results and assets and
e equity method of accounting.
cost as adjusted by post-acquisition
airment in the value of individual
e Group’s share of the fair values of
sed as goodwill (negative goodwill).
d profits and losses are eliminated to
nt that unrealised losses provide

rises direct materials and, where

n bringing the inventories to their
method. Net realisable value
nd costs to be incurred in marketing,
cies (cont)

ent of financial position when the

allowances for estimated

ved, net of direct issue costs.

re accounted for on an accrual basis
are not settled in the period in which

ived, net of direct issue costs.

ed formal plan for the restructuring

Notes to the financial statements
for the year ended 31 December 2015
1 General

Kids Play Group Plc (the "Company") is a limited company incorporated in the United Kingdom.
The principal activity of the Company and its associate is the production of children's toys. These
financial statements are presented in Pounds Sterling since that is the currency in which the
majority of the Company’s transactions and its associates' transactions are denominated.

2 Revenue

All revenue relates to continuing operations and to the principal activity of the Group. All sales and
production are in the United Kingdom.

3 Profits from operations

Profit from operations has been arrived at after charging (crediting): 2015 2014
£m £m
Cost of inventories recognised as an expense 496 513
Staff costs 15 15
Restructuring costs 2 16
Total depreciation 57 54

4 Finance costs 2015 2014

£m £m
Interest on bank overdrafts and loans 4 4

5 Income tax expense 2015 2014

£m £m
Current tax - domestic 47 34
Deferred tax 0 0
47 34

Domestic income tax is calculated at 30 per cent (2014: 30 per cent) of the estimated assessable
profit for the year.

The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:

2015 2014
£m £m
Profit before tax 193 154

Tax at the domestic income tax rate of 30% (2014: 30%) 58 46

Tax effect of utilisation of tax losses not previously recognised (11) (12)
47 34

Preference share dividends (see Note 10) are deductible for tax purposes, but are immaterial for
the purposes of the reconciliation above.
Notes to the financial statements (continued)
for the year ended 31 December 2015
6 Property, plant and equipment
Land and Fixtures and
buildings equipment Total
Cost
At 1 January 2015 80 554 634
Additions 0 100 100
Disposals 0 (70) (70)
At 31 December 2015 80 584 664

Accumulated depreciation
At 1 January 2015 8 203 211
Charge for the year 7 50 57
Eliminated on disposals 0 (98) (98)
At 31 December 2015 15 155 170

Carrying amount
At 31 December 2015 65 429 494
At 31 December 2014 72 351 423

7 Investments in associates 2015 2014

£m £m
Cost of investment 58 58
Share of post-acquisition profits, net of dividends received 27 19
92 77

Details of the Group’s associates at 31 December 2015 are as follows:

Place of Proportion of Proportion

Name of incorporation ownership of voting Principal
subsidiary and operation interest power held activity
Big Toys Ltd England 30% 30% Manufacturing toys
Tumble Tots Ltd Wales 42% 42% Distributing toys

8 Inventories 2015 2014

£m £m
Raw materials 18 10
Work-in-progress 12 2
Finished goods 8 4
38 16

9 Other financial assets

Trade and other receivables at the statement of financial position date comprise amounts
receivable from the sale of goods of £32m (2014: £32m). The average credit period taken on sales
of good is 23 days. The directors consider that the carrying amount of trade and other receivables
approximates their fair value.

Bank balances and cash comprise cash held by the Group.

Notes to the financial statements (continued)
for the year ended 31 December 2015
10 Share capital 2015 2014
£m £m
Authorised:
50,000,000 ordinary shares of par value £1 each 50 50
1,000,000 £1 15% preference shares 1 1
51 51

Issued and fully paid:

22,000,000 (2014: 10,000,000) ordinary share of par value £1 each 22 10
1,000,000 £1 15% preference shares 1 1
23 11

On 5 November 2015, a capitalisation issue of 1 bonus ordinary share for every 1 ordinary shares
in issue resulted in an increase in issued share capital of £10m, and an equivalent reduction in the
share premium account (see note 11).

On 1 December 2015, the Company issued 2,000,000 £1 ordinary shares in settlement for a £2m
loan. The loan settlement date was 20 December 2013.

There were no movements in the share capital of the Company in the 2014 reporting period.

The Company has one class of ordinary shares which carry no right to fixed income.

The Company has 1,000,000 £1 15% preference shares. Interest paid was £150,000 in 2015
(2014: £150,000). Preference share dividends are tax deductible.

11 Share premium
£m
Balance at 1 January 2015 63
Bonus issue (see note 10) (10)
Balance at 31 December 2015 53

12 Accumulated profits
£m
Balance at 1 January 2014 281
Dividends paid 0
Net profit for the year 120
Balance at 1 January 2015 401
Dividends paid 0
Net profit for the year 146
Balance at 31 December 2015 547

13 Bank overdrafts and loans 2013 2014

£m £m
Bank loans 13 15
13 15

The borrowings are repayable as follows:

On demand or within one year 0 2

In the second year 3 0
In the third to fifth years inclusive 9 9
After five years 1 4
13 15

Less: Amount due for settlement within 12months (in current liabilities) 0 (2)
Amount due for settlement after 12months 13 13
Notes to the financial statements (continued)
for the year ended 31 December 2015
13 Bank overdrafts and loans (continued)

All borrowings are denominated in Pounds Sterling. The average interest rate paid during 2015
was 15% (2014: 18%). The directors estimate that the fair value of the Company's borrowings is
the same as the carrying value.

The Group has a 6 year bank loan of £13million (2014: £13million) repayable by four annual £3m
instalments commencing 1 January 2015 and a final £1m instalment payable 1 January 2016.

The Group had a £2m private loan which was settled on 20 December 2015 in the form of
2,000,000 £1 new shares issued (see note 10).

14 Other financial liabilities

Trade and other payables principally comprise amounts outstanding for trade purchases and
ongoing costs. The average credit period taken on trade purchases is 37 days.

The directors consider that the carrying amount of trade payables approximates to their fair value.

Provisions relate to redundancy payments as part of restructuring plans in place at the year end.

15 Approval of financial statements

The financial statements were approved by the board of directors and authorised for issue on 12
February 2015.