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SUMMARY HISTORICAL FINANCIAL INFORMATION (CONTINUED)

6.

During the 2000 and 2001 periods the group entered into transactions with a related company, Pumpkin Patch Limited (UK). A summary of these transactions are presented below.

31 December 12 Months

2000

2001

$000

$000

1,678

6,621

-

301

37

630

3,948

7,737

Related party transactions

Statement of Financial Performance

Sale of inventory to Pumpkin Patch Limited (UK)

Franchise royalties charged to Pumpkin Patch Limited (UK)

Management fees charged to Pumpkin Patch Limited (UK)

Statement of Financial Position

Receivable from Pumpkin Patch Limited (UK)

7.

In 2001 the Group changed its accounting policy regarding fit-out contributions received from landlords. Prior to 2001 contributions were either capitalised and taken to income at a later date or taken to income in full upon receipt of the contribution. The new policy required that all contributions must be initially capitalised and then recognised in the statement of financial performance over the minimum period of the lease as a reduction in operating lease costs. The lease periods average 5 years.

The table below summarises the net impact on the reported results of the company resulting from the change in accounting policy.

31 July

31 January

7 Months

6 Months

31 December 12 Months

Net impact of change in policy

1999

2000

2001

2002

2003

2004

$000

$000

$000

$000

$000

$000

  • -

    (1,058)

318

(2)

(170)

(381)

8.

In 2002 the group acquired 100% of the shares in Pumpkin Patch Limited (UK) for cash consideration of $40,789. The table below details the transaction. The 2002 results not only include amortisation of goodwill of $307,577 but also a write-off of $1,230,309 relating to the balance of goodwill on the purchase of

Pumpkin Patch Limited (UK). The charge was deemed necessary by the Directors after they reviewed the carrying value of the subsidiary and recognising that the purchase was made primarily as part of overall restructuring of group ownership structures.

Acquisition of PPL (UK) NZ$’000

2002

Cash & bank Net current assets Fixed assets Borrowings Net Liabilities Acquired Cash consideration Goodwill on Acquisition

547

2,797

2,699

(7,540)

(1,497)

41

1,538

9.

The results include trading losses attributable to Pumpkin Patch Limited (UK).

2002

2003

2004

12 Months

7 Months

6 Months

$000

$000

$000

Trading losses attributed to Pumpkin Patch (UK)

1,445

1,958

599

10.

The growth in total assets and liabilities over the periods relate to growth in store numbers, their associated

working capital items (e.g. inventory, accounts payable), and use of debt to fund asset growth.

69

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