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Notes to the company financial statements


A. PRESENTATION OF FINANCIAL STATEMENTS AND RECOGNITION AND MEASUREMENT PRINCIPLES

The description of the activities of TomTom NV (the company) and the company structure, as included in the notes to the consolidated financial statements, also applies to the company financial statements.

The company has prepared its company financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code and, specifically, in accordance with section 362.8 of the Dutch Civil Code. In doing so, it has applied the principles of recognition and measurement as adopted in the consolidated financial statements (IFRS). Investments in subsidiaries are accounted for using the equity method. For more information on the accounting policy applied, and on the notes, please refer to the notes to the consolidated financial statements.

B. General and Administrative EXPENSES

The employees of the company comprise only the members of the Management Board. The General and Administrative expenses comprised mainly of the remuneration of the Management Board and the Supervisory Board and other general expenses such as the auditor's fees. For the remuneration of the Management Board and Supervisory Board, reference is made to note 33 in the consolidated financial statements. The auditor's fee is further disclosed in note 35 of the consolidated financial statements.

C. other intercompany income

Other intercompany income represents cost that have been recharged to the subsidiaries. Such recharges are no longer applicable in 2016.

D. INVESTMENTS IN SUBSIDIARIES

The movements in the 'Investments in subsidiaries' were as follows:

 

Table_70 Investments in subsidiaries

(€ in thousands) 2016 2015
BALANCE AS AT 1 JANUARY 2,972,475 2,936,534
Result of subsidiaries 23,278 25,229
Transfer to stock compensation reserve 2,344 2,335
Legal entity restructuring1 -19,260 -5,476
Currency translation differences -90 12,087
Other direct equity movements -82 1,766
BALANCE AS AT 31 DECEMBER 2,978,665 2,972,475
1. The legal entity restructuring in 2016 is a merger between the company and one of its subsidiaries resulting in a decrease in investment balance offset by a decrease of an intercompany payable towards the subsidiary.

A list of subsidiaries and affiliated companies prepared in accordance with the relevant legal requirements (the Dutch Civil Code Book 2, Part 9, sections 379 and 414) is deposited at the office of the Chamber of Commerce in Amsterdam, the Netherlands.

E. SHAREHOLDERS' EQUITY

For the statement of changes in consolidated equity for the year ended 31 December 2016, please refer to Consolidated statement of changes in equity in the consolidated financial statements. Additional information on the shareholders' equity is disclosed in note 24 of the consolidated financial statements.

F. OTHER RESERVES


Table_71 Other reserves

(€ in thousands) Legal reserve participations Cumulative translation adjustment Total Legal reserve Stock compensation reserve Total
BALANCE AS AT 31 DECEMBER 2014 162,213 10,671 172,884 29,405 202,289
Currency translation differences 0 12,087 12,087 0 12,087
Transfer from retained earnings 25,903 0 25,903 0 25,903
Stock compensation expenses 0 0 0 3,788 3,788
Transfer to retained earnings and share premium 0 0 0 -15,851 -15,851
BALANCE AS AT 31 DECEMBER 2015 188,116 22,758 210,874 17,342 228,216
           
Currency translation differences 0 -90 -90 0 -90
Transfer from retained earnings 9,505 0 9,505 0 9,505
Stock compensation expenses 0 0 0 3,275 3,275
Transfer to retained earnings and share premium 0 0 0 -6,404 -6,404
BALANCE AS AT 31 DECEMBER 2016 197,621 22,668 220,289 14,213 234,502
 

LEGAL RESERVES

Legal reserves are the non-distributable reserves that are recorded for an amount equal to the restricted reserves of the company's subsidiaries and the cumulative translation adjustment reserve.

STOCK COMPENSATION RESERVE

The stock compensation reserve represents the cumulative expense of issued stock options that have been granted but not exercised.

G. BORROWINGS

Please refer to note 27 in the consolidated financial statements.

H. intercompany payables

'Intercompany payable' comprises of loans provided by subsidiaries. The interest rate on the loan during 2016 is based upon the applicable inter-bank offered rate plus a margin of 0.4% (2015: 0.7%). Although no repayment period has been agreed the loan has a long-term nature.

I. DEFERRED TAXATION

As at 31 December 2016, the company had a deferred tax liability of €0.1 million (2015: €0.2 million). The deferred tax liability results from a temporary difference between the tax treatment and the accounting treatment of the borrowing cost. The movement of the deferred tax liability has been credited to the income statement.

J. OFF-BALANCE SHEET COMMITMENTS

The company has issued bank guarantees for a total amount of €12.4 million (31 December 2015: €14.0 million).

The company has also issued several declarations of joint and several liability for various group companies, in compliance with section 403 of Part 9 of Book 2 of the Dutch Civil Code. Besides these declarations, TomTom NV has given a guarantee as described in article 479C of the UK Companies Act for UK subsidiary TomTom Software Ltd.

In addition, a German subsidiary, TomTom Germany GmbH & Co. KG., applies the exemption as described in section 264b of the German Commercial Code (HGB) with regard to the publication of the annual financial statements.

The company forms a fiscal unity for corporate income tax and value added tax (VAT) purposes with several of its Dutch subsidiaries. Each company within the fiscal unity is jointly and severally liable for the fiscal liability of the fiscal unity.

K. STATUTORY PROVISION WITH RESPECT TO APPROPRIATION OF RESULTS

According to the company's Articles of Association, the company's result is freely at the disposal of the shareholders, provided that total shareholders' equity exceeds the called-up and paid-up capital of the company, increased by legal and statutory reserves.

L. SUBSEQUENT EVENTS

On 17 January 2017, the group acquired 100% of the shares of Autonomos GmbH for €26.2 million of which €24.8 million is paid in cash and the remainder in TomTom shares. The company is a Berlin-based Autonomous Driving start-up. We have acquired a vast amount of technical expertise that will be of value in the further development of our location technologies. Specifically, the acquisition will give us a fuller understanding of the Autonomous Driving stack and real-time computer vision technology and allow us to improve quality of our products such as TomTom HD map, RoadDNA localisation technology, navigation, traffic and other cloud services. Given the limited time frame between acquisition date and the finalisation of our financial statements further disclosures are not yet available.

There has been no other subsequent event from 31 December 2016 to the date of issue of these financial statements.

M. PROPOSED APPROPRIATION OF RESULT

The Management Board proposes to add the net result in full to the Accumulated deficit.

6.3.1

Amsterdam, 8 February 2017
 
The Management Board
Harold Goddijn
Taco Titulaer
Alain De Taeye
 
TomTom NV
Amsterdam
 

Amsterdam, 8 February 2017
 
The Supervisory Board
Peter Wakkie
Doug Dunn
Ben van der Veer
Jacqueline Tammenoms Bakker
Anita Elberse
Jack de Kreij