Playmates Toys : ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

PLAYMATES TOYS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code：869)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2018

RESULTS

The directors of the Company are pleased to announce the audited consolidated results of the Group for the year ended 31 December 2018 as follows:

Consolidated Income Statement

For the year ended 31 December 2018

2018	2018	2017
Note	US$'000	HK$'000	HK$'000
(Note 11)
3	758,329
		Revenue	60,793	474,182
Cost of sales	(28,627)	(223,293)	(347,003)
Gross profit	32,166	250,889	411,326
Marketing expenses	(14,053)	(109,613)	(187,346)
Selling and distribution expenses	(3,475)	(27,108)	(30,627)
Administration expenses	(15,668)	(122,199)	(119,222)
Impairment loss on trade receivables	(678)	(5,287)	-
Operating (loss)/profit	(1,708)	(13,318)	74,131
Other net income	4	20,263
			2,669	20,822
Finance costs	(401)	(3,130)	(5,735)
Share of loss of an associated company	-	-	(133)
5	88,526
		Profit before income tax	560	4,374
6	(32,762)
		Income tax expense	(489)	(3,812)
Profit for the year attributable to owners
of the Company	71	562	55,764

Earnings per share

Other comprehensive income, including reclassification adjustments:

Item that may be reclassified subsequently to profit or loss:

Exchange differences arising on translation of foreign subsidiaries

Profit for the year

2018	2017
HK cents	HK cents
0.05	4.63
0.05	4.61
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018
2018	2017
HK$'000	HK$'000
562	55,764
-	4,722
562	60,486

2018

Note 8

US cents (Note 11)

Basic

Diluted

0.01 0.01

2018

US$'000 (Note 11)

71

-

Total comprehensive income for the year attributable to owners of the Company

71

Consolidated Statement of Financial Position

As at 31 December 2018

2018	2018	2017
Note	US$'000	HK$'000	HK$'000
(Note 11)
Non-current assets
Property, plant and equipment	868	6,773	10,799
Interest in an associated company	759	5,920	5,920
Deferred tax assets	4,163	32,472	27,871
5,790	45,165	44,590
Current assets
Inventories	3,107	24,237	22,728
Trade receivables	9	169,379
			17,949	140,005
Deposits paid, other receivables
and prepayments	1,917	14,952	12,104
Taxation recoverable	349	2,720	16,114
Financial assets at fair value
through profit or loss	-	-	18,595
Cash and bank balances	129,248	1,008,131	1,021,159
152,570	1,190,045	1,260,079
Current liabilities
Trade payables	10	24,387
			4,668	36,411
Deposits received, other payables
and accrued charges	14,459	112,779	151,690
Loan from an associated company	748	5,831	5,831
Provisions	5,979	46,637	42,157
Taxation payable	2,027	15,813	15,858
27,881	217,471	239,923
Net current assets	124,689	972,574	1,020,156
Net assets	130,479	1,017,739	1,064,746
Equity
Share capital	1,513	11,800	11,958
Reserves	128,966	1,005,939	1,052,788
Total equity	130,479	1,017,739	1,064,746

Notes:

• 1. Basis of preparation

  The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs"), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. The financial statements also include the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

  The financial statements have been prepared under the historical cost basis, except for financial assets at fair value through profit or loss which are stated at fair values.

  The accounting policies used in the preparation of the financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2017, except for the adoption of the new or amended HKFRSs which are relevant to and effective for the Group's financial statements for the annual period beginning on 1

• January 2018. Details of these changes in accounting policies are set out in Note 2.

• 2. Changes in accounting policies

  The HKICPA has issued a number of new standards, amendments and interpretations to HKFRSs that are first effective for the current accounting period of the Group. Of these, the following developments are relevant to the Group's financial statements:

  • • HKFRS 9, Financial instruments

  • • HKFRS 15, Revenue from contracts with customers and related amendments

  • • HK(IFRIC) 22, Foreign currency transactions and advance consideration

  The Group has not applied any new standard, amendment or interpretation that is not yet effective for the current accounting period.

  Upon initial application of the above new standards, amendments and interpretations, there is no significant impact to the Group's financial statements and accordingly no adjustment to the opening balance of equity at 1 January 2018 and no restatement to the comparative information are required.

  (a) HKFRS 9, Financial instruments

HKFRS 9 replaces HKAS 39, Financial instruments: recognition and measurement. It sets out the requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.

(i) Classification of financial assets and financial liabilities

HKFRS 9 categorises financial assets into three principal classification categories: measured at amortised cost, fair value through other comprehensive income ("FVOCI") and fair value through profit or loss ("FVPL"). These supersede HKAS 39's categories of held-to-maturity investments, loans and receivables, available-for-sale financial assets and financial assets measured at FVPL. The classification of financial assets under HKFRS 9 is based on the business model under which the financial asset is managed and its contractual cash flow characteristics.

The Group's financial assets measured at amortised cost and FVPL continue with their respective classification and measurements upon initial application of HKFRS 9. The Group does not have any financial assets classified as FVOCI.

The classification and measurement requirements for financial liabilities under HKFRS 9 are largely unchanged from HKAS 39, except that HKFRS 9 requires the fair value change of a financial liability designated at FVPL that is attributable to changes of that financial liabilities' credit risk to be recognised in other comprehensive income (non-recycling).

The Group does not have any financial liabilities designated at FVPL and therefore the new requirement on financial liabilities does not have any impact on the Group.

(ii) Impairment

HKFRS 9 replaces the "incurred loss" model in HKAS 39 with the expected credit losses ("ECL") model. The ECL model requires an ongoing measurement of credit risk associated with a financial asset and therefore recognises ECLs earlier than under the "incurred loss" accounting model in HKAS 39.

The Group applies the new ECL model to financial assets measured at amortised cost. Financial assets measured at fair value through profit or loss are not subject to the ECL assessment.

As a result of this change in accounting policy on financial assets impairment, there is no significant impact to the Group's financial statements and accordingly no adjustment to the opening balance of equity at 1 January 2018 and no restatement to the comparative information are required.

(b) HKFRS 15, Revenue from contracts with customers and related amendments

HKFRS 15 establishes a comprehensive framework for recognising revenue and some costs from contracts with customers. HKFRS 15 replaces HKAS 18, Revenue, which covered revenue arising from sale of goods and rendering of services.

HKFRS 15 also introduces additional qualitative and quantitative disclosure requirements which aim to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

(i) Timing of revenue recognition

Previously, revenue arising from provision of services was recognised over time, whereas revenue from sale of goods was generally recognised at a point in time when the risks and rewards of ownership of the goods had passed to the customers.

Under HKFRS 15, revenue is recognised when the customer obtains control of the promised goods or service in the contract. This may be at a single point in time or over time. HKFRS 15 identifies the following three situations in which control of the promised goods or service is regarded as being transferred over time:

A - When the customer simultaneously receives and consumes the benefits provided by the entity's performance, as the entity performs;