Pandora_Annual_Report_2018

TO THE SHAREHOLDERS OF PANDORA A/S OUR OPINION We have audited the consolidated financial state- ments and the parent company financial statements of Pandora A/S for the financial year 1 January – 31 December 2018, which comprise statement of comprehensive income, balance sheet, statement of changes in equity, statement of cash flows and notes, including accounting policies, for the Group and the Parent Company. The consolidated finan- cial statements and the parent company financial statements are prepared in accordance with Inter- national Financial Reporting Standards as adopted by the EU and additional requirements of the Dan- ish Financial Statements Act. In our opinion, the consolidated financial state- ments and the Parent Company financial state- ments give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2018 and of the results of the Group's and the Parent Company's operations and cash flows for the financial year 1 January – 31 De- cember 2018 in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Fi- nancial Statements Act. Our opinion is consistent with our long-form audit report to the Audit Committee and the Board of Directors. BASIS FOR OPINION We conducted our audit in accordance with In- ternational Standards on Auditing (ISAs) and ad- ditional requirements applicable in Denmark. Our responsibilities under those standards and require- ments are further described in the "Auditor's re- sponsibilities for the audit of the financial state- ments” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. INDEPENDENCE We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Ac- countants (IESBA Code) and additional require- ments applicable in Denmark, and we have ful- filled our other ethical responsibilities in accordance with these rules and requirements. To the best of our knowledge, we have not pro- vided any prohibited non-audit services as de- scribed in article 5(1) of Regulation (EU) no. 537/2014. APPOINTMENT OF AUDITOR Subsequent to Pandora A/S being listed on Nasdaq OMX Copenhagen, EY was appointed auditors of Pandora A/S on 8 April 2011. We were re-appoint- ed annually at the general meeting for a total pe- riod of eight years up to and including the financial year 2018. KEY AUDIT MATTERS Key audit matters are those matters that, in our pro- fessional judgement, were of most significance in our audit of the financial statements for the financial year 2018. These matters were addressed during our audit of the financial statements as a whole and in forming our opinion thereon. We do not provide a separate opinion on these matters. For each mat- ter below, our description of how our audit ad- dressed the matter is provided in that context. We have fulfilled our responsibilities described in the "Auditor's responsibilities for the audit of the financial statements" section, including in relation to the key audit matters below. Our audit includ- ed the design and performance of procedures to respond to our assessment of the risks of material misstatement of the financial statements. The re- sults of our audit procedures, including the pro- cedures performed to address the matters below, provide the basis for our audit opinion on the fi- nancial statements. REVENUE AND SALES RETURN Revenue is recognised when control of the goods have been transferred to the buyer and it is meas- ured at fair value of the expected consideration to be received, less rebates, discounts, sales taxes, duties and expected sales returns. Revenue rec- ognition and measurement of the related expected sales returns was a matter of most significance in our audit due to the inherent risk in the estimates and judgements which Management makes in the normal course of business as to timing of revenue and measurement of expected sales returns. De- tails on revenue recognition and expected sales returns are provided in sections 2.1 and 3.7 of the consolidated financial statements and in section 3.6 of the Parent Company financial statements, to which we refer. Our procedures in relation to revenue recognition and measurement of expected sales returns includ- ed considering the Group’s accounting policies for revenue recognition, including those related to expected sales returns, and assessing compli- ance of policies with applicable accounting stand- ards. We identified and assessed internal controls related to the timing of revenue recognition and measurement of expected sales returns. We tested the effectiveness of the Group’s internal controls in relation to calculation of expected sales returns and timing of revenue recognition. On a sample basis, we tested sales transactions taking place at either side of the balance sheet date as well as credit notes issued after the balance sheet date to assess whether those transactions were recognised in the correct period. We assessed the key assump- tions applied by Management regarding expected sales returns based on our knowledge of the busi- ness and by reviewing the supporting documen- tation prepared by Management. Furthermore, we evaluated the disclosures provided by Manage- ment in the consolidated financial statements and the Parent Company financial statements to appli- cable accounting standards. Independent auditors' report P A N D O R A A N N U A L R E P O R T 2 0 1 8 C O N T E N T S S T A T E M E N T S 1 1 3