PANDORA Annual Report 2017

P A N D O R A A N N U A L R E P O R T 2 0 1 7 P A R E N T C O M P A N Y C O N T E N T S 1 0 8 Investments in subsidiaries DKK million 2017 2016 Cost at 1 January 2,895 2,850 Additions 1 975 15 Disposals - -14 Disposals from Group internal merger - -6 Additions relating to share-based payments 44 50 Cost at 31 December 3,914 2,895 1 Of the addition, DKK 786 million relates to the acquisition of 100% of the share capital in City Time S.L. in Spain (changed to PANDORA Jewelry Spain S.L. post-acquisition). Refer to note 3.3 to the consolidated financial statements for further information on the acquisition. Subsidiaries Ownership Registered office PANDORA Jewellery Belgium NV 100% Belgium PANDORA do Brasil Participações Ltda. 100% Brazil PANDORA Jewelry Ltd. 100% Canada PANDORA Jewelry Chile SpA 100% Chile PANDORA Int. ApS 100% Denmark PANDORA Jewelry Central Western Europe A/S 100% Denmark PAN ME A/S 100% Denmark PANDORA Jewellery DMCC 100% Dubai PANDORA Finland Oy 100% Finland PANDORA France SAS 100% France PANDORA EMEA Distribution Center GmbH 100% Germany PANDORA Jewelry Asia-Pacific Limited 100% Hong Kong PANDORA Jewelry Mexico, S.A. de C.V. 100% Mexico PANDORA Jewelry Panama S.A. 100% Panama PANDORA Jewelry CEE Sp. z.o.o. 100% Poland PANDORA Jewelry Shared Services CEE Sp. z.o.o. 100% Poland PANDORA Jewelry Slovakia s.r.o. 100% Slovakia PANDORA Jewellery South Africa Pty Ltd. 100% South Africa PANDORA Jewellery Spain S.L. 100% Spain PANDORA Sweden AB 100% Sweden PANDORA Production Co. Ltd. 100% Thailand PANDORA Services Co. Ltd. 100% Thailand PANDORA Jewelry Mücevherat Anonim Ş irketi 100% Turkey PANDORA Jewellery UK Limited 100% England PANDORA Jewelry Inc. 100% USA The Company has two dormant companies, which have been omitted from the table above. NOTE 3.3 I NV E S TMENT I N SUB S I D I AR I E S AND BUS I NE S S COMB I NAT I ONS D I V I DEND R E C E I V ED In 2017 PANDORA A/S received a total of DKK 5.7 billion in dividend from subsidiaries in Thailand (DKK 3.0 billion), Denmark (DKK 1.0 billion), UK (DKK 0,9 billion), US (DKK 0,7 billion) and Hong Kong (DKK 0.1 billion). In 2016 the total amount of received dividend of DKK 0,9 bil- lion was paid from Thailand. BUS I NE S S COMB I NAT I ONS ACQUISITIONS IN 2017 On 30 June 2017, PANDORA A/S acquired the distribution in Belgium in an asset deal, when the previous distribution agreement with Gielen Trading BVBA ended. The acquisition comprised inventory and non-current assets relating to 13 concept stores and 3 shop-in-shops. DKK million 2017 2016 Property, plant and equipment 4 - Inventories 15 - Assets acquired 19 - Total identifiable net assets acquired 19 - Goodwill arising from the acquisitions 87 - Purchase consideration 106 - Net cash flows on acquisition for the period 106 - The purchase price was DKK 106 million. Based on the purchase price allocations, goodwill was DKK 87 million. Goodwill is mainly related to the synergies from converting the stores from distri- bution to PANDORA owned retail and wholesale. Cost relating to the acquisition of the distribution in Belgium was DKK 1 million and is recognised as operating expenses in the income statement. The goodwill, DKK 87 million, is expected to be deductible for income tax purposes. Following the acquisition, assets and inventories related to the acquired stores were transferred to the local subsidiary, increasing the investment equal to the fair value of the assets contributed. For this reason, there was no contribution to rev- enue and net earnings.