Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-31true0truetruetruetruetruetruetruetruetruetrue2023-01-01falseNo description of principal activity0true 00200130 2023-12-31 00200130 2023-01-01 2023-12-31 00200130 2022-01-01 2022-12-31 00200130 2022-12-31 00200130 2022-01-01 00200130 c:PriorPeriodIncreaseDecrease 2023-01-01 2023-12-31 00200130 1 2023-01-01 2023-12-31 00200130 1 2022-01-01 2022-12-31 00200130 e:CompanySecretary1 2023-01-01 2023-12-31 00200130 e:Director1 2023-01-01 2023-12-31 00200130 e:Director2 2023-01-01 2023-12-31 00200130 e:Director3 2023-01-01 2023-12-31 00200130 e:RegisteredOffice 2023-01-01 2023-12-31 00200130 c:Buildings 2023-01-01 2023-12-31 00200130 c:Buildings 2023-12-31 00200130 c:Buildings 2022-12-31 00200130 c:Buildings c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 00200130 c:CurrentFinancialInstruments 2023-12-31 00200130 c:CurrentFinancialInstruments 2022-12-31 00200130 c:Non-currentFinancialInstruments 2023-12-31 00200130 c:Non-currentFinancialInstruments 2022-12-31 00200130 c:CurrentFinancialInstruments c:WithinOneYear 2023-12-31 00200130 c:CurrentFinancialInstruments c:WithinOneYear 2022-12-31 00200130 c:Non-currentFinancialInstruments c:AfterOneYear 2023-12-31 00200130 c:Non-currentFinancialInstruments c:AfterOneYear 2022-12-31 00200130 c:ReportableOperatingSegment1 2023-01-01 2023-12-31 00200130 c:ReportableOperatingSegment1 2022-01-01 2022-12-31 00200130 c:ReportableOperatingSegment2 2023-01-01 2023-12-31 00200130 c:ReportableOperatingSegment2 2022-01-01 2022-12-31 00200130 c:ReportableOperatingSegment3 2023-01-01 2023-12-31 00200130 c:ReportableOperatingSegment3 2022-01-01 2022-12-31 00200130 f:UnitedKingdom 2023-01-01 2023-12-31 00200130 f:UnitedKingdom 2022-01-01 2022-12-31 00200130 f:RestEuropeOutsideUK 2023-01-01 2023-12-31 00200130 f:RestEuropeOutsideUK 2022-01-01 2022-12-31 00200130 f:RestWorldOutsideUK 2023-01-01 2023-12-31 00200130 f:RestWorldOutsideUK 2022-01-01 2022-12-31 00200130 c:UKTax 2023-01-01 2023-12-31 00200130 c:UKTax 2022-01-01 2022-12-31 00200130 c:ForeignTax 2023-01-01 2023-12-31 00200130 c:ForeignTax 2022-01-01 2022-12-31 00200130 c:ShareCapital 2023-12-31 00200130 c:ShareCapital 2022-12-31 00200130 c:ShareCapital 2022-01-01 00200130 c:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 00200130 c:RetainedEarningsAccumulatedLosses 2023-12-31 00200130 c:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 00200130 c:RetainedEarningsAccumulatedLosses 2022-12-31 00200130 c:RetainedEarningsAccumulatedLosses 2022-01-01 00200130 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2023-01-01 2023-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2023-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2022-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability2ComponentTotalProvisionsContingentLiabilities 2023-01-01 2023-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability2ComponentTotalProvisionsContingentLiabilities 2023-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability2ComponentTotalProvisionsContingentLiabilities 2022-12-31 00200130 e:OrdinaryShareClass1 2023-01-01 2023-12-31 00200130 e:OrdinaryShareClass1 2023-12-31 00200130 e:OrdinaryShareClass1 2022-12-31 00200130 e:FRS101 2023-01-01 2023-12-31 00200130 e:Audited 2023-01-01 2023-12-31 00200130 e:FullAccounts 2023-01-01 2023-12-31 00200130 e:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities c:PriorPeriodErrorIncreaseDecrease 2023-01-01 2023-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability2ComponentTotalProvisionsContingentLiabilities c:PriorPeriodIncreaseDecrease 2023-01-01 2023-12-31 00200130 c:PreviouslyStatedAmount 2022-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities c:PreviouslyStatedAmount 2022-12-31 00200130 c:FurtherSpecificTypeProvisionContingentLiability2ComponentTotalProvisionsContingentLiabilities c:PreviouslyStatedAmount 2022-12-31 00200130 g:PoundSterling 2023-01-01 2023-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 00200130









LADYBIRD BOOKS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
LADYBIRD BOOKS LIMITED
 
 
COMPANY INFORMATION


Directors
Francesca Dow 
Mark Gardiner 
Thomas Weldon 




Company secretary
Sinead Martin



Registered number
00200130



Registered office
20 Vauxhall Bridge Road

London

SW1V 2SA




Independent auditor
Grant Thornton UK LLP

Victoria House

199 Avebury Boulevard

Milton Keynes

MK9 1AU





 
LADYBIRD BOOKS LIMITED
 

CONTENTS



Page
Strategic Report
1 - 6
Directors' Report
7 - 9
Directors' Responsibilities Statement
10
Independent Auditor's Report
11 - 15
Statement of Comprehensive Income
16
Balance Sheet
17 - 18
Statement of Changes in Equity
19
Notes to the Financial Statements
20 - 38


 
LADYBIRD BOOKS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their Strategic Report of Ladybird Books Limited (“the Company”) for the year ended 31 December 2023.

Principal activities

The Company is a subsidiary of Penguin Books Limited, which is a subsidiary of Penguin Random House Limited, a company registered in the United Kingdom. The Company is domiciled and registered in the United Kingdom. The principal activity of the Company continues to be the publishing of children’s books and associated products.

Business review
 
The Company's turnover for the year was £27,510,187 which was 28.4% higher compared to the previous year (2022: £21,420,369). This was driven by growth of Bluey book sales, in line with the growth of the Bluey brand in the wider market. In addition, there was strong growth within the Education business due to the launch of the Learn with Peppa series in 2023 and growth of the Read it Yourself series. Operating profit for the year increased by £2,106,109 to £2,773,973 (2022: £612,864). The gross profit margin was 41.1% (2022: 38.8%). The Children's publishing division benefited this year from falling paper, printing and binding costs resulting in increased gross profit margins. In addition, the division worked to avoid excess stock building up and therefore benefited from a reduced stock write-off. As a result, the Company saw an overall increase in profit for the financial year of £1,717,684 to £1,972,830 (2022: £255,146) and earnings before interest, tax, depreciation, amortisation and impairment of non-financial assets (EBITDA) has increased in the financial year by £2,389,961 to £3,086,003 (2022: £696,042). 

Page 1

 
LADYBIRD BOOKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Key performance indicators (‘KPI’s’)
 

The Company monitors progress and performance during the year and historical trend data which is set out in
the following KPI's:


2023
2022
Turnover
£27,510,187
£21,420,369
Gross profit margin
41.1%
38.8%
Earnings before interest, tax, depreciation, amortisation and impairment of non- financial assets (EBITDA)
£2,944,760
£696,042

The KPI's are in line with forecast expectations. Detailed explanations for the year on year movements are included in the business review section.
Management makes use of certain alternative performance measures (APMs) that are non-UK GAAP measures. The Board uses these to assess performance of the Company and considers them to provide useful supplementary information to the statutory results. The Board does not consider APMs to be more relevant or reliable than UK GAAP measures and notes that their definition and basis of calculation may differ from other companies. The Company’s APMs are defined and a reconciliation to the most directly comparable UK GAAP measure is shown below.
EBITDA is operating profit as measured using UK GAAP principles adjusted for the effects of depreciation, amortisation and impairment of non-financial assets. EBITDA is reported to the Board as management considers that it provides a useful proxy for the Company’s operating profit excluding non-cash items. It can be  reconciled to the operating profit measure reported in the Profit and Loss Account as shown below:


2023
2022
Operating profit
£2,773,973
£612,864
Depreciation 
£5,028
£5,028
Impairment of non-financial assets
£307,002
£78,153
EBITDA
£3,086,003
£696,042


Page 2

 
LADYBIRD BOOKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
The Company's operations expose it to a variety of commercial and financial risks. The Company is subject to
risk management procedures and an annual risk assessment implemented by the ultimate parent Company,
Bertelsmann SE & Co KGaA. The Company has procedures in place to make the directors aware of the various
risks to the Company’s business. The risks are monitored and reported to management.
Commercial risk
The changing book market and particularly the transition to digital is creating both challenges and opportunities
for the Company, notably regarding the latter in terms of new markets and sales channels. The Company is
facing increased pressure on margins. Other risks arise from the entry of non-traditional publishers into the
market, the decline in retail space in high street bookshops and economic uncertainty. The continuing
uncertainty in the global economy and high level of inflation in the UK presents ongoing pressure on costs and
margins. The Company actively monitors market trends and these are incorporated into the detailed commercial
plans of the business.
Price risk
The Company is exposed to commodity price risk as a result of its operations. The directors regularly review the
appropriateness of commodity purchasing policies, particularly in the event of changes to the size or nature of
the Company's operations in an attempt to mitigate the risk.
Credit risk
The Company may offer credit terms to its customers which allow payment of the debt after delivery of the
goods. The Company is at risk to the extent that a customer may be unable to pay the debt on the specified due
date. The Company has mitigated this risk of payment default by implementing policies which ensure that
appropriate checks on potential customers are performed before credit terms are granted. Where a customer or
group of customers is assessed to have a higher risk profile, these are included within the Company's credit
insurance programme.
Liquidity and cash flow risk
The objective of the Company in managing liquidity risk is to ensure that it can meet its financial obligations as
and when they fall due. The Company expects to meet its financial obligations through operating cash flows. The Company’s results, including cash flows, are reviewed by the Board on a monthly basis. Risks are further mitigated by the cash pooling arrangements in place across the Bertelsmann group, which ensures funds are available to the Company to meet all liabilities as and when they fall due.

Page 3

 
LADYBIRD BOOKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors’ section 172 statement

The Directors of the Company must act in accordance with a set of general duties, as detailed in section 172 of the UK Companies Act 2006, summarised as follows:
A director of a Company must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:
• the likely consequences of any decisions in the long-term;
• the interest of the Company’s employees;
• the need to foster the Company’s business relationships with suppliers, customers and others;
• the impact of the Company’s operations on the community and environment;
• the desirability of the Company maintaining a reputation for high standards of business conduct; and
• the need to act fairly as between the shareholders of the Company.
Examples of how the Directors have oversight of these stakeholder matters are included throughout the
Strategic and Director’s report as well as set out specifically below:

Long- term decision making
The Board operates a structured governance model which supports the Group in ensuring that decisions are
considered, documented and reported upon, and in alignment with our strategic plans. Detailed budgets and
forecasts are prepared which enable the Board to track performance and ensure that it is as expected, or that
mitigation steps are taken to deliver performance in line with, or close to, expectations. The Board and senior
management personnel operate within this structure, with the aim of promoting the success of the Company and
delivering long- term shareholder value.
The Board is presented with regular board packs and other information that it needs to fulfil its responsibilities.
During the period at Board meetings the Board have discussed and made decisions on a number of specific
issues including business priorities and strategy, capital investment and the ongoing management of the current economic situation.
The interest of the Company’s employees
The board recognises that employees are central to the long-term success of the Company. The Company
systematically provides employees with information on matters of concern to them, consulting them or their
representatives regularly, and providing forums and communication routes so that their views can be taken into
account when making decisions that are likely to affect their interests. Employee involvement in the Company is
encouraged, as achieving a common awareness on the part of all employees of the financial and economic
factors affecting the Company, plays a major role in maintaining its prosperity. The Company also regularly
informs staff and staff representatives of Company updates and activities to keep them informed of the
Company’s progress and performance.
The Company is committed to employment policies, which follow best practice, based on equal opportunities for
all employees, irrespective of sex, race, colour, disability or sexual orientation as well as providing various
employee networks to support the diverse and inclusive culture of the Company.
All staff receive regular performance reviews as well as opportunity for learning to support the development of all employees’ careers. This includes training programs and secondment opportunities for staff.
Engagement with customers, suppliers and other stakeholders
The directors appreciate the importance of fostering business relationships with key stakeholders, such as customers and suppliers, and focus on the maintenance and growth of these relationships in their decision- making and strategic planning. The company employs dedicated relationship managers to foster these
Page 4

 
LADYBIRD BOOKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

relationships which also ensures the board has a high degree of visibility to take stakeholder considerations into account.
Community impact and customer relations
The Board ensures significant consideration is given to the impact of the Company’s operations on the
community and their customers in their decision-making. The Company’s approach is to use its position of
strength to ensure it is an asset to the communities and people with which it interacts. The Company aim to
provide everyone equal access to books, working with a range of organisations to allow the opportunity to read
as many books as possible. As part of this, the Company actively invest in young people, partnering with schools and local community projects to nurture and create readers for the future.
The Company continues to make books for everyone ensuring the creators of books, including authors and
illustrators, represent the society we live in. In the year, we have continued our ‘WriteNow’ programme which
seeks and nurtures writers from under-represented communities as well as providing books in formats to support visually impaired readers. The Company continually strive to print and produce diverse, relevant, and accessible
content for all customers.
Environmental sustainability
The Company’s leadership team ensure environmental issues are managed effectively and considered in the
strategic decisions of the Company. The Company strives to create positive change in reducing the
environmental impact of its businesses whilst maintaining effective and continuing business practices. The
Company is key in the collaboration of the publishing industry in tackling climate action as part of their role within ‘Publishing Declares’. The Company consider sustainability, ethical and environmental issues when sourcing
core material for use in the printing of their books using the books created to provide a positive leverage for
behaviour change of our consumers. As part of the environmental strategy, the Company aims to be climate
neutral by 2030.
High standards of business conduct
The Company has a Code of Conduct setting out the behaviours and values expected of all of our employees,
which is communicated to all colleagues. Company processes ensure the Board and management are
continually updated on the operation of the code and an independent whistleblowing service enables employees
and third parties to anonymously raise concerns. Through its oversight and monitoring role, the Board requires
all of our people to work to the highest standards of business conduct.
 
Shareholders

The board recognises the importance of regular and open dialogue with the shareholders and the need to ensure the strategy and goals of the company are effectively communicated to them. Feedback on these plans and objectives is welcomed by the directors and major business decisions are made closely and with the approval of the shareholders.

General

The Company is presenting the financial statements in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101).

Page 5

 
LADYBIRD BOOKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


This report was approved by the board and signed on its behalf.



Mark Gardiner
Director

Date: 11 July 2024

Page 6

 
LADYBIRD BOOKS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Results and dividends

The profit for the year, after taxation, amounted to £1,972,830 (2022: £255,146).

Dividends of £3,000,000 were paid during the year (2022: £Nil).

Directors

The directors who served during the year were:

Francesca Dow 
Mark Gardiner 
Thomas Weldon 

Future developments

The Company will continue to seek suitable publishing opportunities to ensure growth. The directors do not anticipate any significant changes in the activities of the Company. 

Going concern

In preparing these financial statements, the directors have assessed the ability of the Company to continue to operate for a period of at least twelve months from the date of signing the financial statements. 
The Company has undertaken a risk assessment and forecasting exercise to assess the Company’s liquidity position. The forecast for the going concern period has been prepared using the three year plan approved by the Board and takes account of prior trends and expected titles to be published in the future and key cost drivers such as commodity prices and inflation.
For the purposes of the Company’s going concern assessment, the directors have performed sensitivity analysis on cashflows based on unforeseen changes in demand and the potential impact of increased inflationary pressures. In addition, reverse stress testing has been performed to establish the levels of performance where cash availability would be breached. The results of the analysis demonstrated that there was sufficient cash availability within the current intra group cash pooling facility to deal with all of the identified plausible scenarios.

The forecast is dependent on the group cash pooling facility being available for the going concern period and Bertelsmann UK Limited not seeing repayment of the amounts  currently due. The directors note that the terms of the facility state that that it can be terminated by either party with three days notice and, therefore, the Company has received written confirmation from Bertelsmann UK Limited that it will not seek repayment of the amounts currently due for the going concern period.
Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of no less than twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Streamlined energy and carbon reporting (SECR)

The Company has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as it satisfies the thresholds for exemption and its energy consumption in the United Kingdom for the year is 40,000kWh or lower.

Page 7

 
LADYBIRD BOOKS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Engagement with employees

The Company systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so that their views can be taken into account when making decisions that are likely to affect their interests.
Employee involvement in the Company is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the Company plays a major role in maintaining its prosperity.
The Company encourages the involvement of employees by means of regular meetings with staff and staff representatives to keep them informed of the Company’s progress. The Company operates a pension scheme for which all employees are eligible.
The Company is committed to employment policies, which follow best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or sexual orientation. The Company gives full and fair consideration to applications for employment from disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the Company. If members of staff become disabled the Company continues employment, either in the same or an alternative position, with appropriate retraining being given if necessary.

Matters covered in the Strategic Report

Details on engagement with customers, suppliers and other stakeholders, and financial risk management policy
sections are not included within the Directors Report as they are considered to be of strategic importance to the
Company and, as allowed under the Companies Act 2006 s.414C(11), they have instead been included in the
Strategic Report.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

The auditor, Grant Thornton UK LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 8

 
LADYBIRD BOOKS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

This report was approved by the board and signed on its behalf.
 





Mark Gardiner
Director

Date: 11 July 2024

20 Vauxhall Bridge Road
London
SW1V 2SA

Page 9

 
LADYBIRD BOOKS LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 10

 
LADYBIRD BOOKS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LADYBIRD BOOKS LIMITED
 

Opinion


We have audited the financial statements of Ladybird Books Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).


In our opinion:


the financial statements give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Page 11

 
LADYBIRD BOOKS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LADYBIRD BOOKS LIMITED (CONTINUED)


Conclusions relating to going concern


We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the Company's
business model including effects arising from macro-economic uncertainties such as the cost of living crisis and
the impact of the war in Ukraine, we assessed and challenged the reasonableness of estimates made by the
directors and the related disclosures and analysed how those risks might affect the Company's financial
resources or ability to continue operations over the going concern period.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual reportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 12

 
LADYBIRD BOOKS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LADYBIRD BOOKS LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the Company and its environment obtained in the course of
the audit, we have not identified material misstatements in the Strategic report or the Directors’ report.


Matters on which we are required to report by exception
 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 10, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 13

 
LADYBIRD BOOKS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LADYBIRD BOOKS LIMITED (CONTINUED)


Auditor's responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
We obtained an understanding of the legal and regulatory frameworks applicable to the Company and
industry in which it operates through our general commercial and sector experience, discussions with
management and review of board minutes. We determined that the following laws and regulations were
most significant: United Kingdom Accounting Standards, including Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice), the
Companies Act 2006 and the relevant tax compliance regulations in the UK. In addition, we concluded that
there are certain laws and regulations that may have an effect on the determination of the amounts and
disclosures in the financial statements such as health and safety and employee matters.
 
We enquired of management concerning the Company’s policies and procedures relating to:
the identification, evaluation and compliance with laws and regulations;
the detection and response to the risks of fraud; and
the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations.
 
We enquired of management and those charged with governance, whether they were aware of any
instances of non-compliance with laws and regulations or whether they had any knowledge of actual,
suspected of alleged fraud.
 
We assessed the susceptibility of the Company’s financial statements to material misstatement, including
how fraud might occur and the risk of management override of controls. Audit procedures are performed by
the engagement team included:
 
identifying and assessing the design effectiveness of controls management has in place to
prevent and detect fraud;
challenging assumptions and judgements made by management in its significant accounting
estimates;
identifying and testing journal entries, in particular journal entries posted with unusual account
combinations that increased revenues or that reduced costs in the Profit and loss account; and
assessing the extent of compliance with the relevant laws and regulations as part of our
procedures on the related financial statement item.
 
In addition, we completed audit procedures to conclude on the compliance of disclosures in the Annual
report and financial statements with applicable financial reporting requirements.
 
These audit procedures were designed to provide reasonable assurance that the financial statements were
free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk
 
Page 14

 
LADYBIRD BOOKS LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LADYBIRD BOOKS LIMITED (CONTINUED)


of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
 
The assessment of the appropriateness of the collective competence and capabilities of the engagement team including consideration of the engagement team’s:
understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation;
knowledge of the industry in which the client operates; and
understanding of the legal and regulatory requirements specific to the entity including, the provisions of the applicable legislation and the applicable statutory provision.
 
We communicated relevant laws and regulations and potential fraud risks to all engagement team members. We remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.



A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Abigail Towers 
Senior statutory auditor
  
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
 

11 July 2024
Page 15

 
LADYBIRD BOOKS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Revenue
 4 
27,510,187
21,420,369

Cost of sales
  
(16,195,560)
(13,114,851)

Gross profit
  
11,314,627
8,305,518

Distribution costs
  
(1,650,798)
(1,302,155)

Administrative expenses
  
(6,889,856)
(6,390,499)

Operating profit
 5 
2,773,973
612,864

Interest payable and similar expenses
 8 
(191,958)
(293,073)

Profit before tax
  
2,582,015
319,791

Tax on profit
 9 
(609,185)
(64,645)

Profit for the financial year
  
1,972,830
255,146

  

Other comprehensive income
  
-
-

Total comprehensive income for the year
  
1,972,830
255,146

All activities derive from continuing operations.
There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

The notes on pages 20 to 38 form part of these financial statements.

Page 16

 
LADYBIRD BOOKS LIMITED
REGISTERED NUMBER: 00200130

BALANCE SHEET
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

  

Fixed assets
  

Tangible assets
 11 
47,760
52,788

  
47,760
52,788

Current assets
  

Stocks
 12 
4,671,178
5,797,200

Debtors: amounts falling due within one year
 13 
15,064,954
15,925,073

  
19,736,132
21,722,273

Creditors: amounts falling due within one year
 14 
(14,329,962)
(15,688,254)

Net current assets
  
 
 
5,406,170
 
 
6,034,019

Total assets less current liabilities
  
5,453,930
6,086,807

  

Creditors: amounts falling due after more than one year
 15 
(477,125)
(112,694)

  
4,976,805
5,974,113

Provisions for liabilities
  

Discounts provision
 16 
(60,052)
(30,190)

  
 
 
(60,052)
 
 
(30,190)

  

Net assets
  
4,916,753
5,943,923

Page 17

 
LADYBIRD BOOKS LIMITED
REGISTERED NUMBER: 00200130
    
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

Capital and reserves
  

Called up share capital 
 17 
2,000,000
2,000,000

Profit and loss account
 18 
2,916,753
3,943,923

  
4,916,753
5,943,923


Prior year balances have been restated as detailed in note 20.
The notes on pages 20 to 38 form part of these financial statements.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Mark Gardiner
Director

Date: 11 July 2024



Page 18

 
LADYBIRD BOOKS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
2,000,000
3,688,777
5,688,777


Comprehensive income for the year

Profit for the year
-
255,146
255,146



At 1 January 2023
2,000,000
3,943,923
5,943,923


Comprehensive income for the year

Profit for the year
-
1,972,830
1,972,830

Dividends: Equity capital
-
(3,000,000)
(3,000,000)


At 31 December 2023
2,000,000
2,916,753
4,916,753


The notes on pages 20 to 38 form part of these financial statements.

Page 19

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Ladybird Books Limited (“the Company”) is a book publisher. The Company is a private company limited by shares and incorporated in the United Kingdom. The Company sells its books globally with the majority of the sales in the UK and Ireland. The address of its registered office is 20 Vauxhall Bridge Road, London, SW1V 2SA.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework'  and the Companies Act 2006.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted international accounting standards (“UK-adopted IFRS”), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.
The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based payment
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
 - paragraph 79(a)(iv) of IAS 1;
 - paragraph 73(e) of IAS 16 Property, Plant and Equipment;
 - paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of the following paragraphs of IAS 1, 'Presentation of Financial Statements':
     - 10(d) statement of cash flows;
     - 10(f) statement of financial position as at the beginning of the preceding period when              retrospective restatement or reclassifications apply;
     -  16 statement of compliance with all IFRS;
     - 38A requirement for minimum of two primary financial statements, including cash flow
  statements;
     - 38B, 38C, 38D additional comparative information;
     - 40A, 40B, 40C, 40D requirements to provide additional statements in respect of
  retrospective restatements and reclassifications;
     - 111 statement of cash flows information; and
     - 134 - 136 capital management disclosures.
Page 20

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.2
Financial Reporting Standard 101 - reduced disclosure exemptions (continued)

the requirements of IAS 7 Statement of Cash Flows
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member

This information is included in the consolidated financial statements of Bertelsmann SE & Co KGaA
as at 31 December 2023 and these financial statements may be obtained from Bertelsmann SE &
Co KGaA, Corporate Communications, Carl Bertelsmann Strasse 270, Postfach 111, D-33311
Gütersloh, Germany.

 
2.3

Going concern

In preparing these financial statements, the directors have assessed the ability of the Company to continue to operate for a period of at least twelve months from the date of signing the financial statements. 
The Company has undertaken a risk assessment and forecasting exercise to assess the Company’s liquidity position. The forecast for the going concern period has been prepared using the three year plan approved by the Board and takes account of prior trends and expected titles to be published in the future and key cost drivers such as commodity prices and inflation.
For the purposes of the Company’s going concern assessment, the directors have performed sensitivity analysis on cashflows based on unforeseen changes in demand and the potential impact of increased inflationary pressures. In addition, reverse stress testing has been performed to establish the levels of performance where cash availability would be breached. The results of the analysis demonstrated that there was sufficient cash availability within the current intra group cash pooling facility to deal with all of the identified plausible scenarios.
The forecast is dependent on the group cash pooling facility being available for the going concern period and Bertelsmann UK Limited not seeing repayment of the amounts  currently due. The directors note that the terms of the facility state that that it can be terminated by either party with three days notice and, therefore, the Company has received written confirmation from Bertelsmann UK Limited that it will not seek repayment of the amounts currently due for the going concern period.
Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of no less than twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Page 21

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The  Company recognises revenue when performance obligations have been satisfied and for the Company this is when the goods (books) have transferred to the customer and the customer has control of these. The Company’s activities are described in detail below. The Company bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Sale of books
Revenue from the sale of books is recognised at the point in time when title passes. This is generally at the point of delivery when title passes to the customer and a present right to payment occurs. A liability for anticipated returns is made based primarily on historical return rates. If these estimates do not reflect actual returns in future periods, then revenue could be understated or overstated for a particular period. This estimate of anticipated returns is recognised in creditors in the balance sheet. 
Digital sales
Revenue from the sale of Ebooks and audio sales are recognised at a point in time when the content is delivered. This is commonly when the customer has access to the download and a present right to payment occurs.
Principal v agent considerations
The Company may enter contracts with another party in addition to the customer in the arrangement. An assessment is made for each such contract as to who understands the related good or service prior to the transfer to the end customer to determine if revenue should be recognised on a gross or net basis. Where the Company acts as agent, revenue represents any commissions and fees receivable for such services rendered. Any third-party costs incurred on behalf of the principal that are rechargeable under the contractual arrangement are included in turnover with a corresponding expense recognised in the income statement.
Income from subrights
Revenue from licensing and subrights, including film, overseas and electronic, is recognised when the performance obligation under the agreement has been satisfied. This is at the point in time when the Company has transferred the associated material and collectability is probable.
An assessment is made on each contract as to the relevant performance obligations to assess whether the customer receives a right to access or use the Company’s intellectual property. Where the performance obligation is deemed over time, an appropriate recognition framework is created based on the consumption and provision of the goods or service in question.
For related sales-based royalties of license of Company’s intellectual property, the income is recognised as the subsequent sale occurs. Where the third party sales information is not readily available at the reporting date, an estimation is made based on the information available to hand. An adjusting post balance sheet adjustment is made where subsequent information is received post year end but before the date of approval of the financial statements. 

Page 22

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.5

Royalty advances

Advances of royalties paid to authors are included within debtors and are recognised once a
signature advance has been paid or manuscript has been accepted or marked as future accepted on
the title. Advances of royalties paid to authors under licensing agreements are recognised based on
the related performance obligation identified in the contract. Where the advance is not linked to any
further obligations by the proprietor, the advance is recognised upon signing of the contract or a
specific date identified in the contract.
Advances are presented at their net realisable value, being the advance less any write down or
valuation allowance. Management apply judgement in their bi-annual assessment to unpublished
books as to whether the book will sustain economic loss based on the future projections of revenues
and associated costs. For published titles, a quarterly assessment determines whether the unearned
royalty advances of a particular title is recoverable based on the projected future sales of the title
and the related royalty income.
Once the author advance is earned out, future author payments are expensed at the contracted or
effective royalty rate as the related turnover is earned.

 
2.6

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

Items included in the financial statements are measured using the currency of the primary economic
environment in which the entity operates. The financial statements are presented in pound sterling,
which is also the functional currency of the Company.
At each period end foreign currency monetary items are translated using the closing rate.
Management assess the underlying asset and liability in the transaction to determine the nature of
the foreign exchange gains and losses. As this results from operating activities gains and losses
resulting from the settlement of transactions and from the translation at period end exchange rates of
monetary assets and liabilities denominated in foreign currencies, are recognised in the profit and
loss account within ‘Administrative expenses’.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currencies that are stated at fair value are retranslated to the
functional currency at foreign exchange rates ruling at the dates the fair value was determined.
Foreign exchange differences arising on translation are recognised in the profit and loss account
under administrative expenses.

Page 23

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Current and deferred taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the
profit and loss account except to the extent that it relates to items recognised directly in equity or
other comprehensive income, in which case it is recognised directly in equity or other
comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to
tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other than in a business
combination, and differences relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using
tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will
be available against which the temporary difference can be utilised.

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes expenditure that is
directly attributable to bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by management.

At each reporting date the company assesses whether there is any indication of impairment by
applying the indicators set out in IAS 36. If such indication exists, the recoverable amount of the
asset is determined which is the higher of its fair value less costs to sell and its value in use. An
impairment loss is recognised where the carrying amount exceeds the recoverable amount and is
charged to the profit and loss.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Artwork
-
between 3 and 20 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, or if there is an indication of a significant change since the last reporting
date. Management applies judgement in determining both the residual value and economic life of the
asset.

Gains and losses on disposals of assets are determined by comparing the proceeds with the
carrying amount of the asset and are recognised in profit or loss.

Page 24

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Stocks

Stocks mainly comprise finished goods and work in progress in respect of books and are stated at
the lower of cost and net realisable value. Cost is determined using FIFO method.
Cost includes the direct costs of paper, printing and binding incurred on a title-by-title basis. Plant
costs, which do not vary with the number of copies printed (for example typesetting, origination and
illustration), are charged to the income statement in full on publication.
A provision is made for excess, obsolete and slow-moving stocks by considering the future expected
sales and comparing to the current quantity held. Any provision for obsolete stock is charged to the
profit and loss and included in the value of Inventory as shown in note 12.
Net realisable value is calculated as the estimated selling price in the ordinary course of business
less applicable variable selling expenses.

 
2.10

Financial assets

The Company classifies it's financial assets in the following categories:
- Amortised cost
- Fair Value through profit or loss (FVTPL)
- Fair Value through other comprehensive income (FVOCI)
The classification depends on the purpose for which the financial assets were acquired i.e. the
entity's business model for managing the financial assets and/or the contractual cash flow
characteristics of the financial asset. Financial assets are not reclassified subsequent to their initial
recognition unless the Company changes its business model for managing financial assets in which
case all affected financial assets are reclassified on the first reporting period following the change in
the business model.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

Subsequent to initial recognition these are measured at amortised cost using the effective interest
method. Interest income from these financial assets is included in finance income using the effective
interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss
and presented in other (expenses)/income together with foreign exchange gains and losses.
Impairment losses are presented as a separate line item in the profit or loss under 'net impairment
losses on financial and contract assets'.

On initial recognition of any equity investment that is not held for trading, the Company may
irrevocable elect to present subsequent changes in the investment's fair value in OCI. This election
is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative financial assets. The Company does not have any
assets classified at FVOCI nor FVTPL.
Page 25

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.10
Financial assets (continued)


The Company assesses at the end of each reporting period whether there is objective evidence that
one or more event has occurred which has impacted on the estimated cash flows of the financial
asset.
Financial assets are impaired and impairment losses are incurred only if such objective evidence of
impairment can be reliably measured.

 
2.11

Trade debtors and amounts owed by group undertakings

Trade debtors and amounts owed by group undertakings are stated at amortised cost after provision
for bad and doubtful debts.
The Company applies IFRS 9 when using the expected credit loss model. Management adopts the
“simplified approach” to determine an amount equal to the lifetime expected credit losses for
insignificant trade debtors and a risk score on an individual basis for significant trade debtors. To
measure the expected credit losses, trade debtors are grouped based on shared credit risk
characteristics and the balance of uninsured debt across the Company.

 
2.12

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short- term
highly liquid investments with original maturities of three months or less, and bank overdrafts. In the
balance sheet, bank overdrafts are shown within borrowings in creditors: amounts falling due within
one year.

 
2.13

Creditors including group undertakings

Trade and other creditors are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course
of business from suppliers or a commitment to provide goods and services where monies have been
receipted.

Page 26

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.14

Provisions for liabilities and onerous contracts

Provisions are made where an event has taken place that gives the Company a legal or constructive
obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate
can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware
of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure
required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance
Sheet.
If the Company considers a contract has become onerous, whereby the unavoidable costs of
meeting the obligations under the contract exceed the economic benefits expected to be received
from it, an onerous contract provision is recognised for the present obligations under the contract.
Onerous contract provisions which arise on advances paid on unpublished manuscripts which have
not yet been delivered, are utilised on various timescales based on manuscript delivery and
performance. Management estimates the future recoverability based on performance within the
contract.


 
2.15

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 27

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in note 2, the directors are
required to make judgements, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates, underlying assumptions and
judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable and relevant under the circumstances.
Key accounting estimates and assumptions
(i) Advances
Advances of royalties paid to authors are recognised once a contract has been signed or manuscript has
been accepted on the title.
Unpublished titles:
In the case of advances on books not yet published, management may anticipate that the book may
sustain an economic loss. The significant titles when unpublished are assessed twice a year for onerous
losses, and provisions on a contract level are created as per IAS 37.
The realisable value of royalty advances relies on a degree of management judgement in determining the
profitability of individual author contracts. The recoverability of royalty advances is based upon a detailed
management review of the age of the advance, the future sales projections for new authors and prior
sales history of repeat authors. Future sales projections are normally upto one year for domestic sales
and upto two years for international sales, and for licensing agreements, varies as per the terms of the
agreement.
Published titles:
Upon publication, the realisable value for significant titles will then be adjusted on a title by title basis
basis recoverability of the unearned royalty advances on quarterly basis i.e. advance paid less royalty
earnings and sub rights income, basis future sales of the titles as per IAS 36. The royalty advance is
expensed at the contracted or effective royalty rate as the related turnover is earned. The carrying
amount of royalty advances (net of provision) are included in advance royalties, see note 13 for
reference.
(ii)Returns liabilities
The Company has agreements in place to allow customers to return books. As a result the Company
makes an estimate of future returns based on historic data, the ageing of sales and business experience.
This liability is included within accruals and the value at the year end is £560,300 (2022: £537,605)
(iii) Stock provisioning
The Company publishes books and is subject to changing customer demands. As a result it is necessary
to consider the recoverability of the cost of stock. When calculating the stock provision, management
considers the ageing of the stock as well as predicted future sales based on historical sales data by
publishing imprint.

Page 28

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


As restated
2023
2022
£
£

Sale of books
24,260,264
20,543,727

Digital sales
648,960
517,645

Subrights income
2,600,963
358,997

27,510,187
21,420,369


Analysis of turnover by destination:

As restated
2023
2022
£
£

United Kingdom
19,425,573
14,297,914

Europe
1,425,731
1,231,955

North America
596,560
479,550

South America
101,986
49,232

Asia
4,337,899
3,709,239

Africa
479,072
480,381

Oceania
1,143,366
1,172,098

27,510,187
21,420,369


Prior year balances have been restated as detailed in note 20.


5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Inventories recognised as an expense
11,561,407
9,140,503

Impairment of inventory
307,002
78,153

Depreciation of tangible fixed assets
5,028
5,028

Auditor's remuneration (Audit services)
44,500
30,000




 
Page 29

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
6.
Employees


2023
2022

£
£

Wages and salaries
1,020,143
937,262

Social security costs
105,738
99,713

Cost of defined contribution scheme
72,563
70,438


1,198,444
1,107,413

Employees of the Company are legally contracted with and paid by the parent company, The Random House Group Limited. The amounts shown above represent recharges from the parent company for employment services performed wholly relating to the principal activities of Ladybird Books Limited.
The average monthly number of employees legally contracted with the parent company whose staff
costs were recharged to the Company during the year was 20 (2022: 20).



7.
Directors' emoluments

Although the directors of the Company have service contracts with Penguin Books Limited and The Random House Group Limited, a proportion of their time and efforts relating to the Company, and therefore their emoluments, have been included in these financial statements.


2023
2022

£
£

Directors' remuneration:

Aggregate emoluments
121,822
123,259

Amounts receivable under long term incentives
2,469
16,356

Company pension contributions to money purchase schemes
13,364
12,639


137,655
152,254

Administrative expenses include the above remuneration to directors of the Company in respect of their services to the Company.


Page 30

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022

£
£

Highest paid director:

Emoluments
79,847
76,452

Defined benefit pension scheme accrued
9,626
13,962

Amounts receivable under long term incentives
-
9,150


89,473
99,564

All directors who have authority and responsibility for planning, directing and controlling the activities of the Company are considered to be key management personnel. Total remuneration in respect of these individuals was £137,655 (2022: £152,254).



8.


Interest payable and similar expenses

2023
2022
£
£


Interest payable on intercompany cash pooling
191,958
293,073

191,958
293,073

Further details regarding cash pooling arrangements are included in note 14.

Page 31

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
606,774
60,760

Adjustments in respect of prior years
(1,474)
1,822


605,300
62,582


Double taxation relief
(15,542)
(8,254)


589,758
54,328

Foreign tax


Foreign tax on income for the year
19,427
10,317

19,427
10,317

Total current tax
609,185
64,645


Taxation on profit on ordinary activities
609,185
64,645

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,582,015
319,791


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
606,774
60,760

Effects of:


Withholding tax not creditable
3,885
2,063

Adjustments to tax charge in respect of prior periods - current tax
(1,474)
1,822

Total tax charge for the year
609,185
64,645

Page 32

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.Taxation (continued)


Factors that may affect future tax charges

An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. Deferred taxes at the balance sheet date have been measured using this enacted rate.


10.


Dividends

2023
2022
£
£


Dividends paid on Ordinary Shares
3,000,000
-

3,000,000
-


11.


Tangible fixed assets





Owned artwork

£



Cost or valuation


At 1 January 2023
87,980



At 31 December 2023

87,980



Depreciation


At 1 January 2023
35,192


Charge for the year
5,028



At 31 December 2023

40,220



Net book value



At 31 December 2023
47,760



At 31 December 2022
52,788

Page 33

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Stocks

As restated
2023
2022
£
£

Work in progress
1,264,724
1,611,133

Finished goods and goods for resale
3,406,454
4,186,067

4,671,178
5,797,200


The cost of stock is recognised in cost of sales. Stocks are stated after provisions for impairment of £1,732,751 (2022: £1,425,749). No inventories have been pledged as security for liabilities.

Prior year balances have been restated as detailed in note 20. 



13.


Debtors

As restated
2023
2022
£
£


Trade debtors
6,949
7,579

Advance royalties
1,143,673
346,983

Amounts owed by group undertakings
12,718,216
15,492,874

Other debtors
47,353
77,637

Prepayments and accrued income
1,148,763
-

15,064,954
15,925,073


Amounts owed by group undertakings are unsecured, repayable on demand and interest free.
Included in amounts owed by group undertakings is £12,519,390 (2022 £14,988,637) owed from The Book Service Limited (“TBS”), principally representing trade debtors receivable in TBS on behalf of the Company. As of 31 December 2023, impairment reviews were undertaken and no provision was required for the amounts owed by group undertakings (2022: £Nil).
Advance royalties are stated after a provision for impairment of £1,275,663 (2022: £1,252,373). 
Prior year balances have been restated as detailed in note 20. 

Page 34

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Creditors: Amounts falling due within one year

As restated
2023
2022
£
£

Trade creditors
919,839
818,964

Royalty creditors
1,475,801
1,285,586

Amounts owed to group undertakings
8,130,813
11,232,740

Corporation tax
591,231
52,507

Other creditors
19,004
27,822

Accruals and deferred income
3,193,274
2,270,635

14,329,962
15,688,254


Amounts owed to group undertakings (excluding amounts owed to Bertelsmann UK Limited) are unsecured and repayable on demand. Included within this is £6,817,715 owed to Bertelsmann UK Limited (2022: £9,163,234) in respect of a cash pooling agreement which is unsecured and has no fixed repayment date but can be terminated by either party giving three days notice. These amounts incur interest on a monthly basis; the average interest rate for the year was 4.44% (2022: 1.23%).
Corporation tax represents amounts payable to fellow UK subsidiaries of the Bertelsmann group in respect of current year tax losses surrendered in the UK.

Prior year balances have been restated as detailed in note 20. 


15.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Royalty creditors
477,125
112,694

477,125
112,694


Page 35

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Provisions





Returns provision
Discounts provision
Total

£
£
£





At 1 January 2023 (as previously stated)
537,605
-
537,605


Prior year adjustment
(537,605)
30,190
(507,415)


At 1 January 2023 (as restated)
-
30,190
30,190


Charged to profit or loss
-
60,052
60,052


Utilised in year
-
(30,190)
(30,190)



At 31 December 2023
-
60,052
60,052

Discounts provision:
The Company has agreements in place to offer discounts on goods offered to customers, usually as a reward for repeated business. The provision is expected to be utilised within 12 months from the balance sheet date.
Prior year balances have been restated as detailed in note 20. 


17.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



2,000,000 (2022 - 2,000,000) Ordinary shares of £1.00 each
2,000,000
2,000,000

There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital. 



18.


Reserves

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses. All reserves
in respect of profit and loss are distributable reserves.


19.


Commitments

There were commitments to authors for the payment of royalty advances amounting to £222,004 at 31 December 2023 (2022: £118,834).

Page 36

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Prior year adjustment

The Company identified the following reclassification restatements to the prior year during the course of preparing these financial statements.

a) Reclassification of accruals
The Company has restated the comparative year to include the returns accrual within creditors rather than provisions. The impact of this adjustment is to increase creditors by £537,605 and decrease provisions by the same amount. There was no impact on the Company's net assets or profit after tax at 31 December 2022.
b) Analysis of stock
The company has restated the stock disclosure note to correct the allocation between finished goods and work in progress. The impact of this is to decrease finished goods by £558,162 and increase work in progress by the same amount. There was no impact on the Company's net assets or profit after tax at 31 December 2022.  
c) Reclassification of discounts provision 
The Company has restated the comparative year to include the discounts provision within provisions rather than other debtors. The impact of this adjustment is to increase provisions by £30,190 and increase debtors by the same amount. There was no impact on the Company's net assets or profit after tax at 31 December 2022. 
d) Analysis of revenue
The Company has restated the revenue disclosure in order to disaggregate by class of business and by destination. The restated disclosure is in note 4 of these financial statements.

Page 37

 
LADYBIRD BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Related party transactions

As the Company is a wholly owned subsidiary of Penguin Books Limited ("PBL), who is a wholly owned subsidiary of Penguin Random House Limited ("PRHL"), the Company is exempt from the requirement, under International Accounting Standard 24 ‘Related party disclosures’, to disclose transactions with entities that are wholly owned by PRHL. The Company has taken advantage of this exemption.
During the year the Company entered into the following transactions with related parties not wholly owned by the group:



2023
2022

£
£


Sales

Penguin Books, S.A
9,467
15,150

Penguin Random House India Private Limited 
527,689
497,098

Debtors

Childrens Character Books Limited
146,866
332,482


22.


Controlling party

The Company's immediate parent company is Penguin Books Limited ("PBL"). The Company’s ultimate
controlling party is Bertelsmann SE & Co KGaA, which is incorporated in Germany. Copies of
Bertelsmann SE & Co KGaA’s consolidated financial statements (the smallest and largest financial
statements in which the Company is consolidated) can be obtained from:
Bertelsmann SE & Co KGaA
Corporate Communications
Carl Bertelsmann Strasse 270
33311 Gütersloh, Germany

Page 38