XSLT to transform a flat XML to a tree-like XML using grouping

grouping_xslt.xsl

<?xml version="1.0" encoding="UTF-8" ?>

<xsl:stylesheet version="2.0"
                xmlns:tns="your_default_target_namespace"
                xmlns:xsl="http://www.w3.org/1999/XSL/Transform"           
                xmlns:xsd="http://www.w3.org/2001/XMLSchema"
                xmlns:soap="http://schemas.xmlsoap.org/wsdl/soap/"
                xmlns:ns0="your_webservice_namespace"
                xmlns:db="oracle_db_adapter_namespace"
                xmlns:wsdl="http://schemas.xmlsoap.org/wsdl/"
>
    <xsl:template match="/">
        <ns0:getToysCollectionResponse>
            <return>
                <xsl:for-each-group select="//db:toy"
                                    group-by="db:category">
                    <toys>
                        <category>
                             <xsl:value-of select="db:category"/>  
							 <!--alternatively you can use <xsl:value-of select="current-grouping-key()"/>-->
                        </category>
                        <members>
                            <xsl:for-each select="current-group()">
                                <name>
                                    <xsl:value-of select="db:name"/>                                      
                                </name>
                            </xsl:for-each>
                        </members>
                    </toys>
                </xsl:for-each-group>
            </return>
        </ns0:getToysCollectionResponse>
    </xsl:template>
</xsl:stylesheet>