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18 PANDORA ANNUAL REPORT 2009 | MANAGEMENT REPORT Australia, PANDORA also donated a total of AUD 828,000 (DKK 4.3 million) to the National Breast Cancer Foundation in Australia and the New Zealand Breast Cancer Foundation. In Denmark, PANDORA donated DKK 1.5 million to ‘Danmarks Indsamlingen’, an annual Danish national fundraising initiative. This donation was followed up by a further donation of DKK 2.0 million, in early 2010. The primary objective of ‘Danmarks Indsamlingen’ is to support various projects in Africa, targeting women in need and, secondarily in 2010, to support the victims of the earthquake disaster in Haiti. CORPORATE GOVERNANCE PANDORA’s Board of Directors and Executive Management strive to ensure that management structures and control systems remain appropriate and function satisfactorily. The foundation for organising management’s tasks includes Danish Companies Law, the Financial Statements Act, the Company’s Articles of Association as well as established governance practices for enterprises of the same size and with the same international range as PANDORA. Moreover, in June 2008, the Danish Venture and Private Equity Association (DVCA) published guidelines for responsible ownership and corporate governance for equity funds and their controlled enterprises. The recommendations contain guidelines on disclosure of a number of issues in the management report, including corporate governance, fi nancial risks, employees and strategy. As a company primarily owned by a private equity fund, PANDORA generally adheres to the recommendations. OWNERSHIP The following legal entities own indirectly through PANDORA Invest ApS more than 5% in PANDORA Holding A/S: • Axcel PANDORA Invest 2 ApS. • Wipec Holding ApS. • RSMLP Holding ApS. • PANDORA Leadership ApS The table below of the different investor groups are for informative purposes and does not refl ect the actual legal structure of the companies holding the shares. Axcel 59.3% Founding family – Enevoldsen 21.0% Other founders 18.5% Executive Management and Board of Directors 1.2% Compose MANAGEMENT AND BOARD OF DIRECTORS PANDORA’s Board of Directors consists of four directors elected by the shareholders at the Annual General Meeting. The majority owner, Axcel, is represented by Torben Ballegaard Sørensen (Chairman), Erik Danquard Jensen and Nikolaj Vejlsgaard. The PANDORA founders are represented by PANDORA’s co-founder, Per Algot Enevoldsen. The current Board members possess the fi nancial, strategic and business competencies required to serve on the board of an international, retail oriented company. In accordance with the Danish Companies Act, the Board of Directors has urged the employees of the company to establish a process for the election of employee representatives on the Board of Directors. The Board of Directors monitors the Executive Management’s observance of the objectives, strategies and business processes laid down by the Board of Directors. Communication from Executive Management takes place systematically by means of meetings as well as current oral and written report-
ing. This reporting comprises developments in the external environment, the company’s development and profi tability as well as the fi nancial position. The Board of Directors convenes at least fi ve times a year based on a predetermined meeting plan. The company usually holds a yearly strategy seminar at which its vision, objectives and strategy are reviewed. In the period between these meetings, the Board of Directors receives current written briefi ngs on the company’s results and fi nancial position, and extraordinary meetings are called if necessary. Also, the Chairman and Executive Management hold regular meetings as and when considered relevant. The Board of Directors can appoint committees for special tasks. By the end of 2009, the Board operated with a Risk Committee, which in 2010 also will function as Audit Committee. Committee members include Erik Danquard Jensen (Committee chairman) and Nikolaj Vejlsgaard. Henrik Holmark (Group CFO) is secretary for the Committee. The Risk Committee had three meetings during 2009 in addition to the ongoing communication on relevant issues between the committee members. In 2010, we intend to establish separate formal committees for audit, nomination and remuneration in line with the recommendations issued by the Committee on Corporate Governance in Denmark. REMUNERATION FOR MANAGEMENT In addition to a fi xed salary, remuneration for the Executive Management includes cash bonus and incentive pay. The incentive program contains an offer for executives to acquire shares in the parent company, PANDORA Invest ApS, as well as a current vesting of warrants to subscribe for the shares in PANDORA Holding A/S. The acquisition of shares in PANDORA Invest ApS took place on 7 October 2008. In 2008, warrants were granted to seven key people and two members of the Board of Directors, please see more information in note 7. The share investment and warrant program has been supplemented by normal performance-related bonus schemes for certain of the company’s employees. For more detailed information on the remuneration of the Executive Management and Board of Directors please see note 5. MANAGEMENT AND BOARD MEMBER SHAREHOLDINGS By the end of 2009, the members of the Board of Directors owned indirectly 0.13% of the aggregate share capital in PANDORA Holding A/S. Executive Management had 1.02% of the aggregate share capital of the company. DIVIDEND POLICY Distribution of dividends is made in due consideration of the necessary consolidation of the equity as a basis for the company’s continued expansion. In 2009, no dividend was paid to the shareholders. However, as part of the optimisation of PANDORA’s capital structure, a refi nancing of DKK 2,200 million was completed in February 2010. The proceeds were used to repay existing credit facilities, to repay the subordinated loan from parent company, PANDORA Invest ApS, and to pay DKK 113 million of a declared dividend to PANDORA Invest ApS. A dividend of DKK 1,000 million was declared, of which DKK 887 million remains to be paid to PANDORA Invest ApS. STAKEHOLDERS The company constantly strives to develop and maintain favourable relations with its stakeholders as such relations are considered to have a signifi cant and positive impact on the company’s development. Please refer to the section on corporate social responsibility for a review of how the interests and roles of our stakeholders are respected. 19 PANDORA ANNUAL REPORT 2009 | MANAGEMENT REPORT
Page 1 and 2: ANNUAL REPORT 2009 1 PANDORA ANNUAL
Page 3 and 4: ONE OF THE WORLD’S THREE LARGEST
Page 5 and 6: Hand fi nished 5 PANDORA ANNUAL REP
Page 7 and 8: HIGHLIGHTS 2009 PANDORA is a design
Page 9 and 10: Our former German distributor trans
Page 11 and 12: ADMINISTRATIVE EXPENSES Administrat
Page 13 and 14: Shades To develop our product colle
Page 15 and 16: INTELLECTUAL PROPERTY RIGHTS Intell
Page 17: MANUFACTURING IN THAILAND We believ
Page 21 and 22: MOMENTS A patented jewellery concep
Page 23 and 24: STATEMENT BY THE BOARD OF DIRECTORS
Page 25 and 26: INDEPENDENT AUDITORS’ REPORT, CON
Page 27 and 28: CONSOLIDATED BALANCE SHEET AT 31 DE
Page 29 and 30: CONSOLIDATED CASH FLOW STATEMENT DK
Page 31 and 32: NOTES NOTE 1. SIGNIFICANT ACCOUNTIN
Page 33 and 34: NOTES NOTE 2. OPERATING SEGMENT INF
Page 35 and 36: NOTES NOTE 3. BUSINESS COMBINATIONS
Page 41 and 42: NOTES NOTE 7. SHARE-BASED PAYMENTS
Page 43 and 44: NOTES NOTE 11. INCOME TAX DKK ‘00
Page 45 and 46: NOTES NOTE 14. IMPAIRMENT TEST, INT
Page 47 and 48: NOTES NOTE 16. DEFERRED TAX Deferre
Page 49 and 50: NOTES NOTE 20. FINANCIAL ASSETS AND
Page 51 and 52: NOTES NOTE 21. FINANCIAL RISKS, CON
Page 53 and 54: NOTES NOTE 23. CONTINGENT LIABILITI
Page 55 and 56: NOTES NOTE 26. SUMMARY OF SIGNIFICA
Page 63 and 64: NOTES NOTE 27. THE GROUP’S TRANSI
Page 65 and 66: NOTES NOTE 27. THE GROUP’S TRANSI
Page 67 and 68: 67 PANDORA ANNUAL REPORT 2009 | FIN
Page 69 and 70:
INCOME STATEMENT/ STATEMENT OF COMP
Page 71 and 72:
STATEMENT OF CHANGES IN SHAREHOLDER
Page 73 and 74:
NOTES NOTE 1. STAFF COSTS DKK ’00
Page 75 and 76:
NOTES NOTE 5. FINANCIAL EXPENSES DK
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NOTES NOTE 9. FINANCIAL ASSETS AND
Page 79 and 80:
NOTES NOTE 11. TRANSITION TO IFRS W
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NOTES NOTE 12. SUMMARY OF SIGNIFICA
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83 PANDORA ANNUAL REPORT 2009 | FIN
Page 85 and 86:
EXECUTIVE MANAGEMENT MIKKEL VENDELI
Page 87 and 88:
IN 2009 … EVERY SECOND, EVERY DAY
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