Professor Puzzle Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 04398865 (England and Wales)
Professor Puzzle Limited
Company Information
Directors
Mr A Langley
Mr B Meldrum
Mrs R Meldrum
Company number
04398865
Registered office
The Puzzle Academy
Messom Mews
Twickenham
Middlesex
TW1 4DP
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Professor Puzzle Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 9
Group profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 31
Professor Puzzle Limited
Strategic Report
For the year ended 31 December 2023
Page 1

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

The Board is pleased to report turnover for the year of £22.8m. The Group has maintained its strong partnerships with major retailers in the UK, Europe and North America, as well as continuing to support the independent sector in the UK and the USA.

 

The business and results of the Group depend upon the appeal of our products and the ability to meet client expectation for product delivery, quality and value. It is key that we continue to invest in and renew our product range to meet the demands of our markets. The success of our business is a testament to the skill and dedication of our teams both in the UK and USA.

 

The Group sources its products from a select group of Chinese manufacturers. The directors are aware of the risks associated with this source of supply and have looked to balance the benefits of working closely with a few key suppliers while maintaining diversity and flexibility in its supply chain.

 

The directors carry out risk assessments and review both the Group’s short and long-term options to protect our people and ensure the continued viability of the business. The directors believe they have taken all appropriate steps to ensure that the business is best placed to adapt to and succeed in the changing environment we operate in.

 

The retail environment remains challenging for our customers. The Group has a robust credit control process to manage the associated credit risk and has put in place insurances wherever possible to mitigate that risk.

 

In recent years the toy and games industry has enjoyed an increase in demand for its products, likely due to the stay-at-home culture COVID induced. In 2023 however, many in our industry found themselves starting the year with higher than normal levels of inventory. This has led the Group to improve our stock control processes and investigate alternative sales distribution channels.

 

This excess of inventory in our marketplace has led to a reduced demand from our customers and hence a lower-than-expected sales value for the year.

 

A recent area of increased focus for the Group has been to review and reduce our purchase and operating costs, which we are happy to report has started to show an improvement to our underlying margins.

 

The Group has maintained its sources of funding and is monitoring the changes to inflation and interest rates, while actively working to minimise any impact these may have to its current and future cashflows.

 

The Group has an exposure to the US$ but the currency weighting between both its sales and purchase transactions means there is a natural hedge in its FX dealings. This helps stabilise our cashflow and we enter into FX forward contracts where appropriate. However, this weighting can change and the need to take further steps to hedge our risk remains under constant review.

 

As we grow, we continue to work on our environmental impact. We have focussed on reducing plastic packaging by using more sustainable materials and minimising single use plastic in our products and packaging. We aim to reduce box sizes and use an increasing proportion of FSC materials.

 

Employee engagement and satisfaction is closely monitored and the wellbeing and safety of workers at our suppliers is an area we review regularly.

Future development and performance

The directors are optimistic that the Group’s subsidiaries, along with its investment strategy in innovation and diversification, will provide the next stage of growth for the Group over the next few years. Further, the expectation is that the Group will be able to see sustainable organic growth in its existing markets.

Professor Puzzle Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2
Other performance indicators

The Group uses a range of KPIs to assist in monitoring its business, some of which are:

 

On behalf of the board

Mr B Meldrum
Director
23 September 2024
Professor Puzzle Limited
Directors' Report
For the year ended 31 December 2023
Page 3

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

Principal activities

The principal activity of the company and group continued to be that of producing and selling games and puzzles.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £959,590 (2022: £705,106). The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr A Langley
Mr B Meldrum
Mrs R Meldrum
Auditor

In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the group will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
Mr B Meldrum
Director
23 September 2024
Professor Puzzle Limited
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 4

The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

Professor Puzzle Limited
Independent Auditor's Report
To the Members of Professor Puzzle Limited
Page 5
Opinion

We have audited the financial statements of Professor Puzzle Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Group Profit And Loss Account, the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 group's and parent 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 auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Professor Puzzle Limited
Independent Auditor's Report (Continued)
To the Members of Professor Puzzle Limited
Page 6

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

 

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:

 

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement, 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 group's and parent 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 group or parent company or to cease operations, or have no realistic alternative but to do so.

Professor Puzzle Limited
Independent Auditor's Report (Continued)
To the Members of Professor Puzzle Limited
Page 7
Auditor's responsibilities for the audit of the financial statements

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

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

Professor Puzzle Limited
Independent Auditor's Report (Continued)
To the Members of Professor Puzzle Limited
Page 8

Explanation as to what extent the audit was considered capable of detecting irregularities, including

fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below.

 

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

 

Our approach was as follows:

Ÿ

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Professor Puzzle Limited
Independent Auditor's Report (Continued)
To the Members of Professor Puzzle Limited
Page 9

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.

Joanna Cosgrove (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
23 September 2024
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Professor Puzzle Limited
Group Profit and Loss Account
For the year ended 31 December 2023
Page 10
2023
2022
Notes
£
£
Turnover
2
22,825,042
24,524,639
Cost of sales
(14,310,737)
(16,767,688)
Gross profit
8,514,305
7,756,951
Administrative expenses
(6,442,995)
(5,962,904)
Other operating income
10,494
265
Operating profit
4
2,081,804
1,794,312
Interest receivable and similar income
7
(1,235)
1,729
Interest payable and similar expenses
8
(16,371)
(23,208)
Amounts written off investments
(2,000)
(2,000)
Profit before taxation
2,062,198
1,770,833
Tax on profit
9
(494,610)
(351,232)
Profit for the financial year
1,567,588
1,419,601
Profit for the financial year is all attributable to the owners of the parent company.
Professor Puzzle Limited
Group Statement of Comprehensive Income
For the year ended 31 December 2023
Page 11
2023
2022
£
£
Profit for the year
1,567,588
1,419,601
Other comprehensive income
Currency translation gain/(loss) taken to retained earnings
2,649
(8,878)
Total comprehensive income for the year
1,570,237
1,410,723
Total comprehensive income for the year is all attributable to the owners of the parent company.
Professor Puzzle Limited
Group Balance Sheet
As at 31 December 2023
Page 12
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
116,449
147,153
Investments
13
1,335
3,335
117,784
150,488
Current assets
Stocks
15
1,589,088
2,546,747
Debtors
17
3,145,757
4,958,542
Cash at bank and in hand
3,733,670
1,027,256
8,468,515
8,532,545
Creditors: amounts falling due within one year
18
(2,449,447)
(3,031,828)
Net current assets
6,019,068
5,500,717
Total assets less current liabilities
6,136,852
5,651,205
Creditors: amounts falling due after more than one year
19
(156,250)
(281,250)
Net assets
5,980,602
5,369,955
Capital and reserves
Called up share capital
22
101
101
Other reserves
899
899
Profit and loss reserves
5,979,602
5,368,955
Total equity
5,980,602
5,369,955
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
23 September 2024
Mr B  Meldrum
Director
Professor Puzzle Limited
Company Balance Sheet
As at 31 December 2023
31 December 2023
Page 13
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
109,779
139,758
Investments
13
141,981
143,981
251,760
283,739
Current assets
Stocks
15
1,587,232
2,546,147
Debtors
17
3,221,304
4,956,761
Cash at bank and in hand
3,503,634
908,840
8,312,170
8,411,748
Creditors: amounts falling due within one year
18
(2,265,928)
(2,820,307)
Net current assets
6,046,242
5,591,441
Total assets less current liabilities
6,298,002
5,875,180
Creditors: amounts falling due after more than one year
19
(156,250)
(281,250)
Net assets
6,141,752
5,593,930
Capital and reserves
Called up share capital
22
101
101
Other reserves
899
899
Profit and loss reserves
6,140,752
5,592,930
Total equity
6,141,752
5,593,930

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,507,412 (2022 : £1,412,947 profit).

The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
23 September 2024
Mr B  Meldrum
Director
Company Registration No. 04398865 (England and Wales)
Professor Puzzle Limited
Group Statement of Changes in Equity
For the year ended 31 December 2023
Page 14
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
101
899
4,663,338
4,664,338
Year ended 31 December 2022:
Profit for the year
-
-
1,419,601
1,419,601
Other comprehensive income:
Currency translation differences on overseas subsidiaries
-
-
(8,878)
(8,878)
Total comprehensive income for the year
-
-
1,410,723
1,410,723
Dividends
11
-
-
(705,106)
(705,106)
Balance at 31 December 2022
101
899
5,368,955
5,369,955
Year ended 31 December 2023:
Profit for the year
-
-
1,567,588
1,567,588
Other comprehensive income:
Currency translation differences on overseas subsidiaries
-
-
2,649
2,649
Total comprehensive income for the year
-
-
1,570,237
1,570,237
Dividends
11
-
-
(959,590)
(959,590)
Balance at 31 December 2023
101
899
5,979,602
5,980,602
Professor Puzzle Limited
Company Statement of Changes in Equity
For the year ended 31 December 2023
Page 15
Share capital
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
101
899
4,885,089
4,886,089
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
1,412,947
1,412,947
Dividends
11
-
-
(705,106)
(705,106)
Balance at 31 December 2022
101
899
5,592,930
5,593,930
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,507,412
1,507,412
Dividends
11
-
-
(959,590)
(959,590)
Balance at 31 December 2023
101
899
6,140,752
6,141,752
Professor Puzzle Limited
Group Statement of Cash Flows
For the year ended 31 December 2023
Page 16
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
4,711,685
119,276
Interest paid
(16,371)
(23,208)
Income taxes paid
(401,232)
(342,913)
Net cash inflow/(outflow) from operating activities
4,294,082
(246,845)
Investing activities
Purchase of tangible fixed assets
(11,957)
(24,895)
Proceeds from disposal of tangible fixed assets
1,333
-
Interest received
(1,235)
1,729
Net cash used in investing activities
(11,859)
(23,166)
Financing activities
Repayment of bank loans
(125,000)
(93,750)
Dividends paid to equity shareholders
(959,590)
(705,106)
Net cash used in financing activities
(1,084,590)
(798,856)
Net increase/(decrease) in cash and cash equivalents
3,197,633
(1,068,867)
Cash and cash equivalents at beginning of year
533,031
1,612,292
Effect of foreign exchange rates
3,006
(10,394)
Cash and cash equivalents at end of year
3,733,670
533,031
Relating to:
Cash at bank and in hand
3,733,670
1,027,256
Bank overdrafts included in creditors payable within one year
-
(494,225)
Professor Puzzle Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 17
1
Accounting policies
Company information

Professor Puzzle Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Puzzle Academy, Messom Mews, Twickenham, Middlesex, TW1 4DP.

 

The group consists of Professor Puzzle Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.2
Basis of consolidation

The consolidated financial statements incorporate those of Professor Puzzle Limited and its subsidiary companies (Subsidiaries are entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 December 2023. 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 intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.3
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue to trade in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
25% Reducing balance
Computers
25% Reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 19
1.6
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.7
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 20
1.9
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.11
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.12
Taxation

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

Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 21
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.16
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 22
2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of games and puzzles
22,825,042
24,524,639
2023
2022
£
£
Turnover analysed by geographical market
UK
8,033,626
8,659,676
Europe
2,210,234
2,844,489
North America
11,877,938
12,505,282
Rest of the world
703,244
515,192
22,825,042
24,524,639
3
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
31,200
28,400
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
30,353
(339,594)
Depreciation of owned tangible fixed assets
37,780
45,509
Loss on disposal of tangible fixed assets
3,191
161
Cost of stocks recognised as an expense
14,390,088
16,623,176
Stocks impairment losses recognised or reversed
(79,351)
144,512
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 23
5
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
83
83
77
77

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,765,034
3,601,046
3,326,511
3,204,715
Social security costs
383,382
380,338
342,838
341,677
Pension costs
105,233
97,695
93,190
86,736
4,266,787
4,079,079
3,775,677
3,633,128
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
191,011
217,785
Company pension contributions to defined contribution schemes
22,282
23,603
213,293
241,388

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
170,262
Company pension contributions to defined contribution schemes
n/a
1,321

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 24
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
(1,235)
1,729
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
16,371
23,208
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
494,610
351,232

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
2,062,198
1,770,833
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
485,029
336,458
Tax effect of expenses that are not deductible in determining taxable profit
16,701
12,646
Tax effect of utilisation of tax losses not previously recognised
(14,153)
(1,264)
Deferred tax not accounted for
7,033
3,392
Taxation charge for the year
494,610
351,232
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 25
10
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Fixed asset investments
13
2,000
2,000
Stocks
15
(79,351)
144,512
Recognised in:
Cost of sales
(79,351)
144,512
Amounts written off investments
2,000
2,000

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

11
Dividends
2023
2022
£
£
Final dividend paid
959,590
705,106
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 26
12
Tangible fixed assets
Group
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
215,379
269,538
484,917
Additions
3,815
8,142
11,957
Disposals
(779)
(17,459)
(18,238)
Exchange adjustments
(550)
(240)
(790)
At 31 December 2023
217,865
259,981
477,846
Depreciation and impairment
At 1 January 2023
165,168
172,596
337,764
Depreciation charged in the year
13,103
24,677
37,780
Eliminated in respect of disposals
(593)
(13,121)
(13,714)
Exchange adjustments
(327)
(106)
(433)
At 31 December 2023
177,351
184,046
361,397
Carrying amount
At 31 December 2023
40,514
75,935
116,449
At 31 December 2022
50,211
96,942
147,153
Company
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
205,137
263,943
469,080
Additions
2,105
6,871
8,976
Disposals
(779)
(14,714)
(15,493)
At 31 December 2023
206,463
256,100
462,563
Depreciation and impairment
At 1 January 2023
159,276
170,046
329,322
Depreciation charged in the year
11,677
23,845
35,522
Eliminated in respect of disposals
(593)
(11,467)
(12,060)
At 31 December 2023
170,360
182,424
352,784
Carrying amount
At 31 December 2023
36,103
73,676
109,779
At 31 December 2022
45,861
93,897
139,758
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 27
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
140,646
140,646
Unlisted investments
1,335
3,335
1,335
3,335
1,335
3,335
141,981
143,981
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 January 2023 and 31 December 2023
3,335
Impairment
At 1 January 2023
-
2,000
At 31 December 2023
2,000
Carrying amount
At 31 December 2023
1,335
At 31 December 2022
3,335
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 January 2023 and 31 December 2023
140,646
3,335
143,981
Impairment
At 1 January 2023
-
-
-
-
2,000
2,000
At 31 December 2023
-
2,000
2,000
Carrying amount
At 31 December 2023
140,646
1,335
141,981
At 31 December 2022
140,646
3,335
143,981
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 28
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Professor Puzzle USA, Inc.
United States
Sale of games and puzzles
Ordinary
100.00
-
Professor Puzzle Europe Limited
Ireland
Dormant
Ordinary
100.00
-
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods and goods for resale
1,589,088
2,546,747
1,587,232
2,546,147
16
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,526,217
4,424,030
2,763,064
4,464,660
Carrying amount of financial liabilities
Measured at amortised cost
2,059,422
2,801,128
1,875,903
2,589,500
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 29
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,436,371
4,350,103
1,632,894
3,398,078
Amounts owed by group undertakings
-
-
648,854
581,014
Other debtors
89,846
73,927
88,620
72,400
Prepayments and accrued income
619,540
534,512
458,240
492,101
3,145,757
4,958,542
2,828,608
4,543,593
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
392,696
413,168
Total debtors
3,145,757
4,958,542
3,221,304
4,956,761
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
125,000
619,225
125,000
619,225
Trade creditors
782,389
849,239
745,138
804,276
Corporation tax payable
344,610
251,232
344,610
251,232
Other taxation and social security
201,665
260,718
201,665
260,825
Other creditors
268,288
174,084
266,522
172,400
Accruals and deferred income
727,495
877,330
582,993
712,349
2,449,447
3,031,828
2,265,928
2,820,307

At the year end there were fixed and floating charges over the assets of the company held by HSBC Bank Plc and HSBC Invoice Finance (UK) Limited.

19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
156,250
281,250
156,250
281,250
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 30
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
281,250
406,250
281,250
406,250
Bank overdrafts
-
0
494,225
-
0
494,225
281,250
900,475
281,250
900,475
Payable within one year
125,000
619,225
125,000
619,225
Payable after one year
156,250
281,250
156,250
281,250
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
105,233
97,695

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

22
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
76
76
76
76
Ordinary A Shares of £1 each
25
25
25
25
101
101
101
101
23
Operating lease commitments

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
286,543
330,057
280,751
324,128
Between two and five years
255,355
470,249
255,355
470,249
541,898
800,306
536,106
794,377
Professor Puzzle Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 31
24
Related party transactions

Professor Puzzle Limited has taken the exemption to disclose related party transactions under the same 100% control in accordance with FRS102 - Section 33 "Related Party Disclosures".

 

During the year dividends amounting to £959,590 (2022: £705,106) were declared to the directors of the company

25
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
1,567,588
1,419,601
Adjustments for:
Taxation charged
494,610
351,232
Finance costs
16,371
23,208
Investment income
1,235
(1,729)
Loss on disposal of tangible fixed assets
3,191
161
Depreciation and impairment of tangible fixed assets
37,780
45,509
Amounts written off investments
2,000
2,000
Movements in working capital:
Decrease/(increase) in stocks
957,659
(744,486)
Decrease/(increase) in debtors
1,812,785
(1,345,610)
(Decrease)/increase in creditors
(181,534)
369,390
Cash generated from operations
4,711,685
119,276
26
Analysis of changes in net funds - group
1 January 2023
Cash flows
Exchange rate movements
31 December 2023
£
£
£
£
Cash at bank and in hand
1,027,256
2,703,408
3,006
3,733,670
Bank overdrafts
(494,225)
494,225
-
-
0
533,031
3,197,633
3,006
3,733,670
Borrowings excluding overdrafts
(406,250)
125,000
-
(281,250)
126,781
3,322,633
3,006
3,452,420
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