One_Hasbro_UK_Holdings_Li - Accounts

The directors have complied with s414C of the Companies Act in preparing this strategic report.

During the period, the Company acquired Entertainment One US Holdings Inc. as part of a group reorganisation through a share issue to its parent company, Hasbro, Inc.

Furthermore, as part of this transaction, the Company settled an intercompany financing loan held by its subsidiary, Earl Street Capital Inc. by way of a share issue to its parent company, Hasbro, Inc.

The Company recorded a loss of £13,200 during the period.

Impact of COVID-19

The outbreak of COVID-19, which has been declared a pandemic by the World Health Organisation has led to the introduction of unprecedented measures, involving voluntary or enforced quarantines, restaurant, bar and shop closures, as well as restrictions on global movement.

While the Company operates as a Holding company and does not directly engage in operations, its subsidiary companies operate in the film distribution industry, which is impacted by the closure of cinemas. The Company’s subsidiaries aim to mitigate this impact by rescheduling film releases to later period, delaying any non-essential expenditure and maximising returns from secondary sales windows. The ongoing impact of the COVID-19 pandemic has continued to create challenges for the financial performance of the Company's subsidiaries.

The Company is a holding company for certain subsidiaries and the directors of One Hasbro UK Holdings Limited review the operations at a group level rather than at the individual Company level. For this reason the directors believe that an analysis of One Hasbro UK Holdings Limited's ("the Company") key performance indicators is not necessary or appropriate for an understanding of the development, performance and position of the business. The development, performance and positions of Hasbro, Inc. which included those of the Company are discussed in the group's Annual Report, which does not form part of this report.

The directors consider principal risks and uncertainties facing the Company to be consistent with those reported within the Annual Report of the parent undertaking, Hasbro, Inc., which are publicly available. The policies for managing these risks are reviewed and agreed annually by Hasbro, Inc..

On behalf of the board

The directors present their annual report and financial statements for the period ended 27 December 2020.

The principal activity of the Company is that of a holding company. The Company was incorporated on 11 February 2020 and began trading on the same day.

The results for the period are set out on page 7.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

The directors expect the shareholdings to perform well and will seek to enhance value on the investments where possible.

Saffery Champness LLP were appointed as auditor to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

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 company’s auditor 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 company’s auditor is aware of that information.

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 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 judgements 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; and

•     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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.

We have audited the financial statements of One Hasbro UK Holdings Limited (the 'company') for the period ended 27 December 2020 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 ‘Reduced Disclosure Framework’

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 27 December 2020 and of its loss for the period then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice including FRS 101; and

•     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 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.

Financial statements prepared on a basis other than going concern

We draw attention to Note 1.2 to the financial statements which explains that the directors do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis as described in Note 1.2. Our opinion is not modified in respect of this matter.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

Opinions 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 period 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.

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 and the directors' report.

We have nothing to report in respect of the following matters where 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 remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

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 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.

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.

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s member those matters we are required to state to them in an auditor's 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 member for our audit work, for this report, or for the opinions we have formed.

One Hasbro UK Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is 45 Warren Street, London, W1T 6AG. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and The Companies Act 2006 in accordance with applicable accounting standards. The accounting policies have been applied consistently, other than where new policies have been adopted.

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 £'000.

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

The Company meets the definition of a qualifying entity under FRS 100 'Application of Financial Reporting Requirements' issued by the FRC. Accordingly, these financial statements were prepared in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework'.

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 paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j), B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;

• the requirements of IFRS 7 Financial Instruments: Disclosures;

• the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;

• the requirements of paragraphs 10(d), 10(f), 39(c) and 134-136 of IAS 1 Presentation of Financial Statements;

• 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 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; and

• the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.

The Company has taken advantage of exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

One Hasbro UK Holdings Limited is a wholly owned subsidiary of Hasbro, Inc. and the results of One Hasbro UK Holdings Limited are included in the consolidated financial statements of Hasbro Inc. which are available from Corporate Finance, Hasbro, Inc., 200 Narrangansett Park Drive, P.O. Box 200, Pawtucket R.I. 02862-0200, United States of America.

Where required, equivalent disclosures are given in the group accounts of Hasbro, Inc.

The accounting period of the Company has been shortened in order to align with the accounting period of the ultimate controlling party Hasbro, Inc.

Due to planned legal entity restructuring activities by the Company’s ultimate controlling party, Hasbro, Inc., the financial statements are being prepared on a break-up basis. As a result assets have been stated at their net recoverable amount. As a result the going concern basis of preparation was not deemed appropriate and the financial statements have been prepared on a break-up basis.true

Investments are carried at cost less provision for impairment. Investments are tested for impairment when an event that might affect asset values has occurred. An impairment loss is recognised to the extent that the carrying amount cannot be recovered either by selling the asset or by the discounted future cash flows from the investment.

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.

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The company is exempt under FRS 101 from the disclosure requirements of IFRS 13. There was no impact on the company from the adoption of IFRS 13.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, except when it relates to items charged or credited directly to 'other comprehensive income', in which case the deferred tax is also dealt with in 'other comprehensive income'. Deferred tax assets and liabilities are offset when the company has 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.

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.

Impairment of Investments

The Company holds a large investment balance in Film & Television Companies operating in the United States. The Company determines whether these balances are impaired on an annual basis. The Company engaged third-party valuation experts to determine the fair value of the investments acquired as part of the Group’s restructuring activities subsequent to the acquisition of Entertainment One Ltd by Hasbro, Inc. Based upon the timing of the acquisition and the continued performance of the Company’s subsidiaries, there is no indicator of impairment in the current period.

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

The company acquired a 100% holding in Entertainment One US Holdings Inc on 2 March 2020 for a total consideration of £1,186,665,625 as part of a group reorganisation. This was settled by issuing 1 share to Hasbro, Inc. in exchange for the cancellation of a promissory note issued by the company to Entertainment One UK Holdings Limited, a fellow subsidiary of Hasbro, Inc.

The company also capitalised a loan as part of a inter-group settlement of financing loans issued by fellow group companies. The company settled an intercompany financing loan amounting to £22,182,246 held by a subsidiary by issuing 1 share to Hasbro, Inc.

Details of the company's subsidiaries at 27 December 2020 are as follows:

On incorporation 500 shares were issued at £1 per share.

On 2 March 2020, 1 share was issued at £1 with a premium of £1,186,665,625 in exchange for the cancellation of a promissory note issued by the company to Entertainment One UK Holdings Limited for the acquisition of Entertainment One US Holdings Inc.

On 29 May 2020, 1 share was issued at £1 with a premium of £22,182,246 in exchange for the settlement of an intercompany financing loan with Cooperative Entertainment One Finance U.A.

The company has taken advantage of the exemption from disclosing transactions entered into between two or more members of a group where any subsidiary undertaking which is party to the transaction is wholly owned by a member of that group.

The company is a wholly-owned subsidiary of Hasbro, Inc., which is the ultimate controlling entity as at 27 December 2020. The parent undertakings of the largest and smallest group of companies into which the results of the company are consolidated is Hasbro, Inc. a company incorporated in the United States of America.