Strategic Case Study

Practice Exam Pre-seen

Reference material 14

Fashionstore Group
Extracts from financial statements

Fashionstore Group
Consolidated Statement of Profit or Loss
for the year ended 31 March 2015 2014
Notes $m $m
Revenue 8,788 7,489
Cost of sales (6,480) (5,677)
Gross profit 2,308 1,812
Distribution costs (587) (496)
Administration expenses (613) (518)
Operating profit [1] 1,108 798
Finance costs (4) (4)
Profit before taxation 1,104 794
Taxation [4] (257) (248)
Profit for the year 847 546

Fashionstore Group
Consolidated Statement of Changes in Equity
for the year ended 31 March 2015

Share Share Retained

capital premium earnings Total
$m $m $m $m
Opening balance 300 350 237 887
Profit for year - - 847 847
Dividend - - (819) (819)
Closing balance 300 350 265 915

© Chartered Institute of Management Accountants 2014

Strategic Case Study
Practice Exam Pre-seen
Reference material 14

Fashionstore Group
Consolidated Statement of Cash flows
For the year ended 31 March 2015 2014
$m $m
Cash flows from operating activities
Cash receipts from customers 8,819 7,568
Cash paid to suppliers and employees (7,626) (6,325)
Cash generated from operations 1,173 1,243
Income taxes paid (245) (242)
Net cash from operating activities 928 1,001

Cash flows from investing activities

Purchase of property, plant and
(109) (87)
equipment
Proceeds from disposal of property, plant
17 12
and equipment
Purchase of non-current intangibles (10) -
Net cash used in investing activities (102) (75)

Cash flows from financing activities

Interest paid (4) (4)
Dividend paid (819) (920)
Net cash from financing activities (823) (924)

Net increase/(decrease) in cash and cash

3 2
equivalents

Cash and cash equivalents at beginning of

4 2
period

Cash and cash equivalents at end of

7 4
period

© Chartered Institute of Management Accountants 2014

Strategic Case Study
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Reference material 14

Fashionstore Group
Consolidated Statement of Financial Position
as at 31 March 2015 2014
Notes $m $m
ASSETS
Non-current assets
Intangible [4] 250 245
Property, plant and equipment [5] 787 897

Current assets
Inventories 612 497
Trade receivables 343 312
Cash and short term deposits 7 4
962 813

TOTAL ASSETS 1,999 1,955

EQUITY
Share capital 300 300
Share premium 350 350
Retained earnings 265 237
915 887

LIABILITIES
Non-current liabilities
Deferred tax 9 7
Debenture loans 300 300
309 307
Current liabilities
Trade payables 521 517
Current tax 254 244
775 761

TOTAL EQUITY + LIABILITIES 1,999 1,955

© Chartered Institute of Management Accountants 2014

Strategic Case Study
Practice Exam Pre-seen
Reference material 14

Note 1 - Operating profit

Year ended 31 Year ended 31
March 2015 March 2014
$m $m
Operating profit is stated after charging:
Depreciation of property, plant and equipment 195 164
Loss on disposal of property, plant and
7 4
equipment
Amortisation of intangible non-current assets 5 5
Cost of inventory recognised as an expense 3,740 3,260
Operating leases 8 7
External auditor’s remuneration 2 2

Note 2 – Staff costs including directors’ remuneration

Year ended 31 Year ended 31
March 2015 March 2014
Number of Number of
employees employees
By activity:
Distribution 1,006 953
Information technology 247 238
Administration 209 206
1,462 1,397

Employee costs, including directors’ remuneration:

Year ended 31 Year ended 31
March 2015 March 2014
$m $m
Wages and salaries 51 45
Pension costs 6 5
Total 57 50

Aggregate compensation paid to board members, including pension costs:

Year ended 31 Year ended 31
March 2015 March 2014
$m $m
Total 12 10

© Chartered Institute of Management Accountants 2014

Strategic Case Study
Practice Exam Pre-seen
Reference material 14

Note 3 – Tax expense

Year ended 31 Year ended 31
March 2015 March 2014
$m $m
Tax on current year’s profit 251 239
Adjustment in respect of prior year 4 6
255 245
Increase/(decrease) in deferred tax 2 3
Tax on profit 257 248

Note 4 – Intangible non-current assets

Goodwill Software Total

$m $m $m
Cost at 1 April 2014 50 288 338
Additions - 10 10
Cost at 31 March 2015 50 298 348

Accumulated amortisation at 1 April 2014 - 93 93

Charge for year - 5 5
Accumulated amortisation at 31 March 2015 - 98 98

Net book value at 31 March 2015 50 200 250

Net book value at 1 April 2014 50 195 245

Note 5 - Property, plant and equipment

Plant and
Property Total
equipment
$m $m $m
Cost at 1 April 2014 400 792 1,192
Additions - 109 109
Disposals - (36) (36)
Cost at 31 March 2015 400 865 1,265

Accumulated depreciation at 1 April 2014 60 235 295

Charge for year 8 187 195
Disposals - (12) (12)
Accumulated depreciation at 31 March 2015 68 410 478

Net book value at 31 March 2015 332 455 787

Net book value at 1 April 2014 340 557 897

© Chartered Institute of Management Accountants 2014