Annual Report 2014 Table of contents

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Contents

Our work Our strategic approach · 04 Distribution policy · 08 Our programmes · 09 Examples of our work · 16 Research network · 22 What does success look like? · 24 Our LEGO heritage · 29 Letter from our chairman and CEO · 30 Key figures · 32 Why play? · 37 Governance and leadership · 38 Board of directors · 40 Our team · 44

Financial statements Management’s review 2014 · 48 Management’s statement · 50 Independent auditor’s reports · 52 Income statement · 54 Activity reporting · 55 Balance sheet · 56 Statement of changes in equity · 58 Accounting policies · 59 Notes · 61 Ole Kirk’s Foundation · 64 Information about the LEGO Foundation · 66

Print: Rosendahls Design: KIRK & HOLM Our strategic approach Our strategic approach

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Transforming attitudes and behaviours Our strategic towards learning through play approach

Our aim is to build a future in which learning through Our work is about challenging the status quo by play empowers children to become creative, engaged, re-defining play and re-imagining learning – changing life-long learners. We do this by promoting systemic, the way people understand the importance of play, scalable change in partnership with others by especially the value it has in helping children learn skills transforming attitudes and behaviours to learning essential for life in the 21st century. through play. Our focus is on children aged 0–12, with a special To do this, we: emphasis on early childhood. At this age, children play Build and share Open minds naturally and there is widespread acceptance that they Identify and support PROGRAMMES that do so. However, play is widely under-appreciated for its EVIDENCE to show to develop BUY-IN demonstrate results role in enabling early learning. This is particularly critical value for children aged 0–6 because this is when they develop Build and share EVIDENCE to show value most rapidly, both physically and mentally.

Open minds to develop BUY-IN Investments that focus on children at an early age can create a solid foundation for their future potential as learners, and for their health and abilities. We intend These three approaches are a foundational part of our to demonstrate the value of hands-on, minds-on play strategic framework and what lies behind our current from early childhood onwards – not only in enhancing programme portfolio. traditional learning, but also in stimulating creative and critical thinking skills that impact lifelong learning. We believe that sustainable change happens when you transform attitudes and behaviours across society. Identify and support That’s why we want to work with parents, caregivers, school systems, institutions and governments to make PROGRAMMES that learning through play a reality in the lives of millions of demonstrate results children. Our strategic approach Our strategic approach

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We will achieve Theory of change this by: Promoting systemic, scalable change in partnership with others Strategic and current portfolio objective by transforming attitudes and behaviours to learning through play

Build and share Open minds EVIDENCE to show to develop BUY-IN value Empowered by: Values and 80+ years of LEGO Financial resources Instant recognition long-term play experience and from a 25% share in and credibility from Three mutually focus from our commitment in the the LEGO Group the LEGO brand reinforcing founding family DNA of our people and brick approaches Identify and support PROGRAMMES that Our mission is to: Inspire and develop the builders of tomorrow demonstrate results

Our aim is to: Re-define play and re-imagine learning Build a future in which learning through play empowers children to become creative, engaged, life-long learners Our current portfolio: Play based Sparking a Re-imagine Capital of Local LEGO Learning Global Learning Children Community We will Five core Make Play based Dialogue Invest to Build the Engagement focus on: Children aged 0–12, especially in early childhood programmes Learning a Spark a Global Re-imagine Capital of Support LEGO reality for Dialogue to Learning Children to Group So that: millions of make quality around the create an employee Children benefit from the transformative power of learning through play to children early learning a world exemplar that commitment develop the social, cognitive, physical, emotional and creative skills to serve well-resourced informs us and priority in them, their communities and society throughout a lifetime. inspires others targeted countries Which requires that: Children Parents Teachers Systems Govern- are engaged are equipped are equipped such as ments Research network and Communication in learning and and schools, child resource evaluation capacity platform through play empowered empowered care, etc. em- Four enabling policies that activities to use learning to use learn- brace learning support through play ing through through play learning Operational Organisational play through play platform development Distribution policy

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Our programmes

Distribution policy Play based The charter stipulates that the LEGO Foundation will provide The core programmes and activities serve as our main support for children and their development along with support distribution categories: 1 Learning for general research and educational purposes. It also empha- Play based Learning sises the close relationship between the LEGO Foundation Sparking a Global Dialogue and the LEGO Group through the stipulation of the purpose to Re-imagine Learning Sparking a ensure and support the ongoing existence and development of Capital of Children the Group. In line with these purposes, the LEGO Foundation Local LEGO Community Engagement Global Dialogue supports Ole Kirk’s Foundation’s charitable activities and Research network 2 interest in the Danish society, where the LEGO Foundation and the LEGO Group have their headquarters. Distribution guidelines Re-imagine • Every grant must be kept within the purposes mentioned in With a starting point in the charter, our strategy – our Theory our charter. Learning of Change – defines our aim as to build a future where learning • Every programme and activity grant must be kept within the 3 through play empowers children become creative, engaged, agreed Theory of Change. life-long learners. • The distribution framework must safeguard our obligations Capital by ensuring that sufficient funds are available to cover 3 years Our board of directors lays down the framework for grants of activity even without new income from the LEGO Group. of Children as part of approving the yearly budget and plans. During the • When giving grants to third-party organisations, we agree 4 year, the leadership team puts forward individual proposals for a budget for administration/overhead appropriate to the distribution of grants within that framework, for board approval. purpose of the grant and the nature of the grantee. • The LEGO Foundation does not consider unsolicited Local LEGO grant applications. 5 Community Approved by the board of directors Engagement Our programmes Our programmes

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Play based Sparking a 1 Learning 2 Global Dialogue

The LEGO Foundation is working to make play based It often involves product donations of LEGO play and The LEGO Foundation wants to promote quality play- This unique forum provides a strong stage for leading learning a reality for millions of children all over the learning materials as well as teaching the caregivers – based early childhood development, so that govern- academics, authors, researchers and innovators to world. parents, teachers, educators – about the importance ments recognise its value and make it a well-funded discuss, debate and co-create an actionable agenda for of play and how to engage with children in a fun and priority. changing the way we approach children's learning and The Play based Learning programme is about bringing dynamic way. development. The LEGO Prize, traditionally announced playful learning tools and activities to children and To do this, we will engage a diverse set of actors at at the LEGO Idea Conference, honours outstanding achieving measurable impact on their cognitive, Building strategic partnerships with local, regional two levels – globally and at the country level – where achievements in play and learning. Past winners include emotional, social and creative skills in specific countries and international organisations is also an important coordinated research and policies on scaling, measure- Astrid Lindgren, Nicholas Negroponte and Sir Ken or regions. component. Through these partnerships we seek to ment, and financing of quality early childhood learning Robinson. reach and influence stakeholders such as governments, will help to change mindsets amongst global leaders school systems and parents to embrace and use and policymakers. The 2015 conference is scheduled for 13–15 April. learning through play. One of our beacon activities in this programme is the We work in South Africa and Ukraine, but will be adding annual LEGO Idea Conference. Each spring, the LEGO more locations over time. Foundation hosts this conference in Billund, home of the LEGO Group, to bring together the world’s leading voices in the fields of play and learning. Participants gather to exchange ideas and unveil new insights about the power of play. Our programmes Our programmes

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Re-imagine Capital 3 Learning 4 of Children

The Re-imagine Learning Programme identifies and To help identify innovation around the world, the LEGO Imagine a unique public-private partnership between a • Develop the town of Billund into a centre of excel- supports approaches to learning through play around Foundation has joined forces with Ashoka, the largest local authority and a corporate foundation with a shared lence that stimulates and fosters ground breaking the world that have the potential to re-define play and network of social entrepreneurs worldwide, in a three- ambition to develop a strong community in which learn- environments, making Billund the world’s playground re-imagine learning. year partnership designed to: ing through play is evident everywhere and all initiatives for children. aim to stimulate children's potential and creativity. We select partners based on their potential both to • Map the landscape of learning innovation Current projects include the International School of effect a deep and broad impact on children today, and to That’s exactly what’s happening in the Danish town of Billund, LEGO House, Children’s News Studio, LEGO influence the learning sector tomorrow. In particular, we • Identify patterns of solutions and interventions Billund, headquarters of the LEGO Group. Together, Education Innovation Studios at 14 local schools and seek out innovative and powerful approaches that can the LEGO Foundation and Billund Municipality aim to conferences about play and learning. be scaled, translated or amplified to promote the power • Recognise and support excellence within learning transform the area into an outstanding place where of learning through play on a global scale. through play children and their needs are firmly centre stage.

One key goal of the Ashoka partnership is to connect The programme works within four priorities. We want to: innovators with one another and provide space for global conversations and emerging communities • Make learning through play a part of everything of practice that can provide support, feedback and we do in Billund – from the approach to teaching learning to programmes around the world committed to in the local schools to how we engage with our learning through play. stakeholders

• Establish partnerships with organisations, institutions and companies that share our passion for play, learning and creativity

• Establish a global knowledge centre where researchers, universities and organisations develop and share cutting-edge knowledge relating to play, learning and creativity Our programmes

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Local LEGO 5 Community Engagement

The LEGO Group and the LEGO Foundation share the quality play experiences and creating opportunities for goal of building employee and community goodwill and access to play. and pride, and for the company to be recognised as a responsible corporate citizen in the countries where the So far, more than 2,000 LEGO colleagues have actively LEGO Group is based. engaged in one of the activities implemented locally and more than 50,000 children have been directly involved in Together, we support and engage employees and projects through this new programme. local communities through financial support to local causes, volunteer activities undertaken by employees, In 2015, we plan to support and grow this employee product donations and other means of establishing community still further. A new workshop programme and maintaining strong employee engagement and for 2015 is being developed to enable even more Play relationships locally. Children are always the target group Agents to go out and make a difference for both chil- for the activities with a special emphasis on promoting dren and colleagues using learning through play. We will increase the level of LEGO Charity donations and look for synergies with other LEGO Foundation programmes.

In the Billund area, we will investigate how to leverage the Capital of Children programme and in Monterrey, Mexico, we are looking for synergies with Play based Learning programme initiatives. Examples of our work

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Play based Learning programme Developing talents through creative play in South Africa

Children from 25 elementary schools in Pretoria’s Atteridgeville township are learning through play because of our work in training teachers and introducing creative tools into the classroom.

Having already reached as many as 40,000 elementary school students, this project’s long-term focus is on sparking creativity and enabling children to develop into critical thinkers and lifelong learners.

Project participants report a significant decrease in student absence, stronger communication and collaboration skills, and better performance in subjects such as maths and science. Feedback from teachers is that the project has rekindled their joy in their work. » The Play based Learning programme is about bringing playful learning tools and activities to children and achieving measurable impact on their intellectual, emotional, social, cognitive, physical, emotional and creative skills in specific countries or regions (page 10). Examples of our work

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Re-imagine learning programme Partnering for social impact

The LEGO Foundation has partnered with Ashoka, the largest network of social entrepreneurs worldwide. Together we created the global Re-imagine Learning Challenge, inviting submission of proven ideas and strategies for using play to enrich learning. More than 630 innovative projects participated. One of 10 selected Champions of Learning through Play was Skateistan. » They come for skateboarding – they stay to learn Skateistan uses skateboarding as a way to engage children and connect them to further education and leadership opportunities. The organisation has a strong focus on creative education, sports, youth ownership and empowerment. Because the programme doesn’t require literacy, it has attracted hundreds of children in Afghanistan, Cambodia and South Africa looking to build confidence and pick up practical life skills. Photo by: Ea Suzanne Akasha, Danish Red Cross

Examples of our work Lorem Ipsum

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LEGO Charity

LEGO Charity packs and delivers boxes with LEGO play materials to our core programmes while also supporting humanitarian organisations and aid agencies that share our aim of making a positive impact on children’s lives through play.

Over the years the LEGO Foundation has worked with different humanitarian organisations, such as UNHCR, SOS Children’s Villages, Red Cross and Save the Children, to provide quality play experiences for children affected by natural disasters, war or other emergencies through product donations and training of local staff.

LEGO Charity boxes are also used in the Local LEGO Community Engagement programme to demonstrate » the power of play and equip employees to conduct In psychosocial support work, it is common practice workshops in their communities. to use creative EXPRESSION AS A medium for talking about difficult subjects – especially when What is in the boxes? working with children. Using LEGO bricks or other LEGO Charity boxes consist of new LEGO or LEGO building materials adds an extra dimension, both DUPLO bricks and elements selected from unused literally and figuratively, to the process. return goods, faultily packaged goods, obsolete elements and more. The assortment of elements is A donation of 600 LEGO Charity boxes will be used for packed by 175 volunteers, retired LEGO employees and that purpose in Syria. The donation will allow children a professional team to provide the highest quality play and adults to describe, talk about and reflect upon experience. traumatic experiences through creativity and play.

In 2014, the total value of donations sent out from The bricks will also be used to strengthen the contact LEGO Charity exceeded DKK 44 million, and more than between parents and children, because any crisis 325,000 children in 94 countries were reached. negatively impacts relations and the social fabric of the community. Research network

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Research network

At the LEGO Foundation we support and share Research in the LEGO Foundation is used to inform ground-breaking research into the power of play and practice so that we base our projects on the latest creativity in learning, to act as a critical resource for thinking and evidence, so that we learn from what we thought leaders, influencers, educators and parents all do, and so that we share our knowledge and experience around the world. with others.

We have an extensive academic network and work with leading institutions including MIT in the United States and the University of Cambridge in the United Kingdom.

MIT MEDIA LAB, USA THE UNIVERSITY OF TSINGHUA UNIVERSITY, CHINA The LEGO Foundation has CAMBRIDGE, UK In collaboration with MIT, we are collaborated with the MIT Media The LEGO Foundation is taking the first steps in 2015 Lab and its Lifelong Kindergar- supporting the establishing of a towards establishing a ten Group for almost 30 years research centre on play in Lifelong Learning Lab at » Over the last years, the annual LEGO Idea Conference on designing new technologies education, development and Tsinghua University to invite in Billund, Denmark, has grown to become a global and activities to engage children learning at the University of more partnerships to experi- event. The conference brings together 200-300 in playful, creative learning Cambridge. Over the last ment with new tools and study international experts – including thought leaders, experiences. decade, we have collaborated children’s engagement in on a range of research projects learning through play. researchers, policy makers and international education about play. organisations – focusing on play and its critical link to learning. Together, they create new solutions and net- works for advancing play based quality early learning. What does success look like?

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What does success look like?

The LEGO Foundation has the ambitious goal of outputs needed to change attitudes and behaviours. promoting systemic, scalable change in partnership A change in attitude and behaviour – a government with others by transforming attitudes and behaviours to deciding to adopt and fund legislation on quality learning through play. early childhood based on play or a teacher adopting a hands-on, play based approach to teaching basic maths Measuring the attitude and behaviour change of others – might have very different reach, scale and depth, but is difficult. When attitudes in society change – whether they both help us to achieve greater impact. towards wearing seatbelts in cars or the importance of learning through play – it is rarely because of one We are developing specific outcomes, outputs and organisation or one campaign. We need metrics and metrics to measure success for each programme and data, not to be able to claim success ourselves, but to be we will undertake baseline measurement of attitudes able to refine our strategy and collaborate better with towards learning through play in several of our projects. our partners, based on evidence. Collecting and monitoring metrics for our outcomes and outputs is essential if we are to understand the Our understanding of success is tightly linked to our difference we are making, and to help us fine-tune our Theory of Change. strategy in future years.

• Our impact is the difference that learning through Developing our understanding of impact, outcomes, play makes in the lives of children, their communities outputs, metrics and learning is so important to the and society. LEGO Foundation that we have decided to work with • The outcomes of our programmes are the changes in Research for Development (R4D), a Washington attitudes and behaviours among our key audiences – based non-result that seeks to unlock solutions to parents/families, teachers/carers, systems, tough development challenges that prevent people in governments – that are necessary to create impact. low-and-middle-income countries from realising their • Our research work with practitioners and major full potential. R4D will fulfil the role of Learning Partner universities, such as MIT and the University of in LEGO Foundation programmes, allowing us and our Cambridge, helps us to better understand this impact. partners to benefit from their considerable experience and the challenges provided by an external perspective. Each of our five programmes targets one or more of our audiences and is made up of projects that deliver the 2014 highlights 2014 highlights

26 27 More than 2,000 LEGO colleagues have actively engaged in one of the activities executed locally and more than 50,000 children have been directly involved in projects through our Local LEGO Community Engagement programme. 1,884,769 impressions during our best week 2014 ever on Twitter. highlights More than DKK 44 million 2 minutes - the total value and 15 110,000 of product seconds students donations sent is the time it takes to watch benefited from outreach pro- our Re-imagine Learning grammes in South Africa, Mexico, out from LEGO Challenge video. Ukraine and India. LEGOFoundation.com Charity. Our LEGO heritage

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Our LEGO heritage

We benefit from more than 80 years of LEGO Group experience, the strong reputation of the LEGO® brand, and an unwavering focus on a positive impact on children and society.

We share a mission with the LEGO Group: inspire and develop the builders of tomorrow.

The story of the LEGO Group is also a story of family ownership. Ole Kirk Kristiansen, a carpenter, founded the company in 1932. He came up with the name LEGO from the Danish words ”leg godt” which means “play well” and the company grew to become the LEGO Group.

As part of the ongoing commitment to giving children better opportunities to reach their full potential, both the third and fourth generations of the LEGO Group owner family are actively engaged in the LEGO Foundation board of directors and have chosen to transfer ownership of 25% of the Group to the LEGO » Foundation. This is how we fund our activities. Ole Kirk Kristiansen, son Godtfred Kirk Christiansen and grandson Kjeld Kirk Kristiansen celebrating Ole Kirk´s 60th birthday in April, 1951. Letter from the chairman and CEO Letter from the chairman and CEO

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position as Chief Operating Officer in SOS Children’s their annual capital contribution. Also, in 2014, Letter from the Villages International. the six foundation stones for the LEGO House - representing the LEGO values – were laid by three chairman and CEO • Growing our academic network generations of the Kirk Kristiansen family. The LEGO As part of the new strategy for the LEGO Foundation, House will be an experience centre where LEGO we are expanding our research network and fans of all ages can express their imagination and evaluation capacity to support our work with creativity, discover the amazing potential of learning As a family and a foundation, we fundamentally believe 2014 has in many ways been a significant year in the changing attitudes and behaviours towards learning through play and be challenged by meeting other that children are our role models because of their history of the LEGO Foundation, and we would like to through play. LEGO builders from all over the world. The house is natural hands-on, minds-on approach to learning. highlight a few of this year’s milestones: due to open to the public in 2017. The network includes leading institutions like MIT, Children’s natural approach to learning is fundamental • A new strategy for the LEGO Foundation US, and University of Cambridge, UK, and in 2014 we We are very excited about the ambitious journey that for them to become the best possible builders of The continued success of the LEGO Group has also entered into a dialogue with Tsinghua University, the Foundation has embarked on and the following our common future. They are curious, creative and resulted in a significant contribution towards ranked among the top three universities in China. growth of both activities, donations and staff. imaginative. They embrace discovery and wonder. the LEGO Foundation in recent years due to the Agreements have been finalised to launch a new We look very much forward to supporting its further These precious qualities must be nurtured and increased dividend flow. The LEGO Foundation now Research Centre with a staff and Professor of Play achievements to make a continuous, positive stimulated throughout life. seeks to apply these resources in new and ambitious in Education, Development and Learning at the difference for children around the world. ways towards improving the lives of children using University of Cambridge. The new centre will support That's why all the Kirk Kristiansen family enterprises learning through play. high quality research to help change attitudes share the mission “To inspire and develop the builders and behaviours towards learning through play. In of tomorrow”. In the LEGO Foundation, this means that Since 2013, the LEGO Foundation has been involved collaboration with MIT, we are taking the first steps we aspire to: in a process of strategy development and during in 2015 towards establishing a Lifelong Learning Lab the summer of 2014, a new Theory of Change at Tsinghua University to invite more partnerships • Be the leading authority on learning through play by was approved – including a portfolio with five core to experiment with new tools and study children’s showing the world the transformative power of play programmes and four enabling activities (see page engagement in learning through play. so every child and adult can find – or rediscover – the 6-7). The annual LEGO Idea Conference and our ability to play and its value throughout life. Developing Talents through Creative Play project • Building the Capital og Children in South Africa (see page 16) are just some of our Through the Capital of Children (CoC) vision, a solid • Ensure that the values of creativity, play and learning flagship projects. foundation for this programme has grown over the are demonstrated, documented, understood, last three years with the realisation of a range of embraced and acted upon. We are scaling up our team to establish an organ- engaging projects for children – including a television isation that is capable of developing and running studio and the International School of Billund. We strongly believe in the LEGO Idea – that when we initiatives that can deliver on our ambitious aims. put things together and take them apart and then put This development will continue in 2015 where we In 2014, the existing strategy was further developed them together again in different ways, we are not only also have Hanne Elisabeth Rasmussen joining the to strengthen the CoC profile and ensure a greater creating, but also evaluating, reflecting and recreating LEGO Foundation as new CEO from 1 March. Hanne impact both locally and internationally. Billund to achieve new possibilities. In other words, play is has more than 20 years of experience with human- Municipality and the LEGO Foundation have both Kjeld Kirk Kristiansen Kurt Carstensen learning. itarian and development work, and comes from a dedicated more human resources and increased Chairman of the board Interim CEO Key figures Key figures

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Activities 2010–2015 (mill. DKK)

Key figures Administration costs 421 Programme costs Donations

37 Ole Kirk's Foundation The continued success of the LEGO Group has resulted in that is capable of developing and running initiatives that can a significant contribution towards the LEGO Foundation in deliver on our ambitious aims. This development will continue recent years. This allows us to work consistently and commit in the coming years. ourselves to a range of activities over a number of years and thereby maximise our impact on the lives of more children. The LEGO Foundation is a Danish foundation with corporate interests, registered with the Danish Business Authority In 2013 and 2014, the LEGO Foundation has been deeply (registration number 12 45 83 39). A corporate foundation has involved in a process of strategy development. We are similarities to the concept defined as a trust under US law. continuously growing our team to establish an organisa­tion 262 118

29 Programme costs and donations 2014 Key ratios excluding Ole Kirk's Foundation 2010 2011 2012 2013 2014 2015 B

Capital of Children Administration cost share: 55 8 M 22% of total activities, 163 DKK including Ole Kirk's Foundation 16% 11% 19% 13% 11% 9% 24 M DKK Play based Learning of total activities, 22 15 M DKK 21% excluding Ole Kirk's Foundation 16% 16% 25% 19% 21% 11% 53 Local LEGO Community 17 M DKK 23 M DKK Engagement Programme cost share: 36 18% of total poliofolio costs, including Ole Kirk's Foundation 19% 22% 39% 25% 24% 31% 80 Sparking a Global Dialogue 191 of total portfolio costs, 70 19 M DKK 16% excluding Ole Kirk's Foundation 19% 32% 57% 37% 51% 38% 8 15 Re-imagine Learning 13 60 15% 25 22 Research network 3 29 19 4 8% 15 20 20 45 125 75 2010 2011 2012 2013 2014 2015 Budget

Geographic reach Geographic reach

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Geographic reach

Afghanistan Brazil China Czech Republic Denmark France Germany Haiti Hungary India Kenya Mexico Nicaragua South Africa Uganda »Build a future in which learning through Ukraine play empowers children to become United Kingdom creative, engaged, life-long learners. USA Why play?

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Why play?

Play is the natural hands-on, minds-on approach by The challenge which children learn. In the LEGO Foundation we believe The world finds itself in a crucial paradox: school that children’s uniquely curious, creative and imagina- enrolment is rising, but there is growing doubt about tive approach makes them role models for all of us. Play whether we are actually equipping our children with is the most effective and inspiring way for children to the right skills. There is also an accelerating awareness acquire the skills needed to create new possibilities and about the need to develop stronger life skills, including meet the many challenges of the future. critical thinking, creativity and collaboration.

For both children and adults, play is one of our favourite Creativity is one of the skills most sought after by today’s ways of learning. Play enables us to explore, practice business leaders, but instead of increasing our creativity and try out ways of tackling similar challenges in the real diminishes steadily over the course of our lifetimes. world. Playing involves a constant process of "try, fail and try again" – helping us develop and fine-tune our Play is a meaningful way to equip children for the creative and critical thinking skills. challenges they’ll face, yet over the past half century there has been a sharp decline in how much children Play has a key role in establishing the vital early learning simply play with other children. In addition, there is a skills that underpin all other learning throughout our lives. widespread lack of understanding about the impact and benefits of play activities, and about how these can be made a natural part of the learning process.

Play activities help children develop skills for the job of living Cognitive and socio-emotional development, combined with practical learning skills, fundamental know-how and physical well-being, lay the foundation for skills that last a lifetime. »Children benefit from the transformative power of learning through play. Play helps children develop the social, cognitive, Skills like problem-solving, creativity, empathy, physical, emotional and creative skills that are of lifelong communication and teamwork all have their foundations benefit to them and their communities. in play. Governance and leadership Governance and leadership

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Governance and leadership

The LEGO Foundation is managed by a board of 1. Distribution Policy, which defines the focus of that the board serves its purpose to the benefit of The LEGO Foundation Annual Report is in compliance directors composed of six members elected according distribution in accordance with the LEGO Foundation the LEGO Foundation. Each board member is entitled with the recommendations for best practice in Danish to its charter. charter and strategy. to recommend a new member, and a simple majority Foundations. A compliance status reported by the board of will then decide the recommendation / election. No directors can be found on LEGOfoundation.com. The board defines the strategy of the LEGO Foun- 2. Communication Policy, which defines who can speak member who has turned 75 years of age can be elected dation and makes decisions of major significance in on behalf of the Foundation in different matters and or re-elected. addition to final decisions about grants and donations. how these mandates are given. Furthermore, the board supervises the organisation Independent members of the board are remunerated by and makes sure that the LEGO Foundation is managed 3. General Diversity Policy, which defines the gender a fixed fee that does not depend on the financial results. appropriately and in accordance with applicable law and and general diversity guidelines of the Foundation, The remuneration of each member is specified in the its charter. The board does not participate in the day- i.e. “we strive for a balance between the genders and annual report. There was no extraordinary remunera- to-day management of the Foundation, but it appoints are committed to keeping the minority gender at tion for special tasks paid to the board in 2014. the CEO, who is in charge of the day-to-day operations. 25% or higher.“ The LEGO Foundation wants to ensure transparency in There are a minimum of five physical board meetings The official policies of the LEGO Foundation can respect of all of its activities. This is done through a high each year and in addition there are conference call be found on the LEGO Foundation website – level of information on the LEGO Foundation website meetings when necessary. LEGOfoundation.com. and a detailed description of the activities of the year in the annual review and report. The work of the board is regulated in its Rules of Proce- The six members of the board are elected for a period dure. The Rules of Procedure are drawn up to describe of two consecutive years, taking into consideration the In 2014, the board of directors initiated a process to the guidelines for the responsibilities of the board of need for continuity in the board’s work. Two members ensure that the foundation is compliant with and follows directors, and how the board's work is to be organised. shall be independent in accordance with the foundation the spirit of recommendations for good governance. charter. This means that these recommendations are integrated The board of the LEGO Foundation reviews the into the Foundation's Rules of Procedure, and that Foundation's strategy on an annual basis, and reviews In accordance with the board's Rules of Procedure, the the board of directors in February 2015 approved and a number of policies and procedures to ensure good board of directors shall evaluate the competences and published a number of formal policies – "Diversity Policy", governance: know-how of the board on an ongoing basis to ensure "Communication Policy" and "Distribution Policy". Board of directors Board of directors

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Board of directors

Chairman of the board 1st Deputy chairman of the board 2nd Deputy chairman of the board Board member Kjeld Kirk Kristiansen (1947) Thomas Kirk Kristiansen (1979) Jørgen Vig Knudstorp (1968) Sofie Kirk Kristiansen (1975)

Education: Holds an MBA from IMD, Lausanne, Switzerland. Education: Holds a degree in marketing. Education: Master of Economics and PhD from the University Education: Educated Wildlife Manager with a bachelor’s degree of Aarhus. Executive MBA from Cranfield School of Management. in Ethnography and Social anthropology. Year appointed: Appointed to the LEGO Foundation board of Year appointed: Appointed to the LEGO Foundation board of Year appointed: Appointed to the LEGO Foundation board of Year appointed: Appointed to the LEGO Foundation board of directors in 2000. directors in 2013. directors in 2008. directors in 2012. End of term: 2015 End of term: 2016 End of term: 2015 End of term: 2015 Short bio: Third generation of the LEGO ownership family and Short bio: Active as fourth generation representative in the Kirk Short bio: CEO of the LEGO Group. Former McKinsey & Short bio: Forestry owner, dedicated to working with nature the principal shareholder of the family-owned LEGO Group Kristiansen family businesses. Shareholder in KIRKBI A/S, the Company consultant. Prior positions in the LEGO Group include conservation and biodiversity, establishing a nature reserve in through KIRKBI A/S. Former President and CEO of the LEGO family’s holding and investment company whose assets include Vice President, Strategic Development. the southern part of Denmark. Fourth generation of the LEGO Group. Appointed a Knight of The Order of Dannebrog in 1994 the majority shareholding in LEGO A/S. Family and a shareholder in KIRKBI A/S, the family’s holding and a Knight 1st Degree in 2008. Appointed Chamberlain in 2012. and investment company whose assets include the majority shareholding in LEGO A/S. Special competences: Business development, sales, Special competences: Family owned companies and board Special competences: Business development, sales , marketing Special competences: Family owned companies. marketing, production and board work. work. and production. Serves on the boards of: Chairman of Koldingvej 2, Billund Serves on the boards of: Chairman of the Board of KIRKBI AG. Serves on the boards of: Chairman of the Board in LEGO A/S, Ole Kirk’s Foundation, INTERLEGO AG, KIRKBI A/S, Chairman of the Board of Great Northern A/S. Member of the System A/S. Member of The IMD Foundation Board. KIRKBI Invest A/S, LEGO Juris A/S, Schelenborg Gods ApS, Board of KIRKBI A/S, LEGO A/S, LEGO Juris A/S, Klinkbygård Lundhøjgård ApS, Klinkbygård ApS and Blue Hors A/S. Vice ApS, Schelenborg Gods ApS and INTERLEGO AG. chairman of the Board of LEGO A/S. Member of the Board of Capital of Children Office A/S, K&C Holding A/S, KIRKBI AG, KGH Holding Grindsted A/S and the KG Foundation. 2014 annual remuneration within the LEGO Foundation: DKK 0 Annual remuneration 2014 within the LEGO Foundation: DKK 0 Annual remuneration 2014 within the LEGO Foundation: DKK 0 Annual remuneration 2014 within the LEGO Foundation: DKK 0

Independence of board member: Evaluated as not being Dependence of board member: Evaluated as not being Independent/not independent board member: Evaluated as Independent/not independent board member: Evaluated as independent. independent. not being independent. not being independent. Board of directors

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Board member (independent) Board member (independent) William E. Hoover (1949) Mette Morsing (1963)

Education: MBA from Harvard Business School Education: PhD at Copenhagen Business School Year appointed: Appointed to the LEGO Foundation board of Year appointed: Appointed to the LEGO Foundation board of directors in 2010. directors in 2010. End of term: 2016 End of term: 2016 Short bio: Previously director of McKinsey & Company – 30 Short bio: PhD and Professor at Copenhagen Business School years in total, of which 27 years in Scandinavia. and Co-Director of CBS Sustainability Platform. From 2002 till 2012, she was the Founding Director of CBS Centre for Corporate Social Responsibility (cbsCSR). Special competences: Strategy, organisation, supply chain, Special competences: Leadership, corporate social responsibility, M&A and performance transformation. and public-private research collaborations. Serves on the boards of: Danfoss A/S, Neopost S/A, GN Great Serves on the boards of: Claus Meyer Melting Pot Foundation, Nordic, Sanistål, and working chairman of R&D Associates. N. Zahle School and editorial board member of the ”Business, Society and Value Creation” series for Cambridge University Press. Annual remuneration 2014 within the LEGO Foundation: Annual remuneration 2014 within the LEGO Foundation: DKK 200,000 DKK 200,000 Independent/not independent board member: Evaluated as Independent/not independent board member: Evaluated as being independent. being independent. Our team

44

Our team

We are a Danish corporate foundation working out of Foundation as new CEO from 1 March. Hanne has more Billund, Denmark, Baar, Switzerland and Kiev, Ukraine. than 20 years of experience with humanitarian and Our core team of dedicated employees has several development work and comes from a position as Chief nationalities but one shared passion: to make children’s Operating Officer (COO) in SOS Children’s Villages lives better – and communities stronger – by making International. sure the fundamental value of play is understood, embraced and acted upon.

Through 2014, we have continued to build up and strengthen our team and its competences. We have grown from 10 people in 2010 to 32 people in 2014. This process will continue in 2015 where we also have Hanne Elisabeth Rasmussen joining the LEGO

Number of employees People per office geography Heads, end of year (% of total in 2014)

Denmark 69% 51 Switzerland 28%

32 Ukraine 28 3% Our passion: to make children’s lives better

15 – and communities stronger – by making sure 12 10 the fundamental value of play is understood, embraced and acted upon. 2010 2011 2012 2013 2014 2015 Est. 2014 highlights 2014 highlights

46 47

+4,500 views 632 entries from of our Cultures of Creativity video. 130 LEGOFoundation.com children enrolled in the 63 countries in the International School of Billund. LEGO Foundation and Ashoka Re- 325,000 imagine Learning children in vulnerable conditions reached Challenge through LEGO Charity. 270 educators, innovators, thought-leaders and entrepreneurs from all over the world joined DKK 125 our 2014 LEGO Idea 2014 million Conference to discuss donated to Ole Kirk’s Foundation play and its critical link highlights (page 65). to learning. Management’s review 2014 Management’s review 2014

48 49

Financial Statements Management’s review 2014

Income statement As part of working with these three approaches, the Group that had yet another successful year in 2014. Expectations for 2015 The LEGO Foundation’s annual result for 2014 amount- foundation currently focuses on five main programmes The LEGO Group's net revenue increased by 13% to Based on a good start to 2015 for the LEGO Group and ed to DKK 1,734 million against DKK 1,529 million in mentioned separately in the annual report in specific DKK 28,578 million. Earnings also improved significantly expected continuous growth in activities in the LEGO 2013. sections. as result before tax was DKK 9,491 million against DKK Foundation, the overall result for 2015 is expected to be 8,239 million in 2013. satisfactory. The huge contribution to this result is the result from Balance sheet subsidiaries of DKK 1,804 million where the 25% share At the end of the year, the assets totalled DKK 7,821 Knowledge resources The LEGO Foundation Annual Report is in compliance of the result in the LEGO Group amounted to DKK 1,756 million against DKK 6,313 million in 2013. The increase In the LEGO Foundation’s activities, employees are the with the recommendations for best practice in Danish million. is primarily due to the increase in the value of the single most critical resource. The LEGO Foundation’s Foundations. A compliance status reported by our subsidiary Koldingvej 2, Billund A/S where the value has activities and results are accomplished thanks to the board of directors can be found on The result for the year is considered highly satisfactory increased by DKK 1,719 million. The book value of the motivation and commitment of the employees. LEGOfoundation.com. and has exceeded the level of expectation before the equity is DKK 7,459 million against DKK 6,265 million. financial year. The equity ratio is 95% compared to 99% in 2013. As part of the plan of implementing the Theory of Change, employees and management work together Activity statement Cash flows to continuously secure job satisfaction and a strong The activities for the LEGO Foundation amounted in The significant contribution to the LEGO Foundation’s working environment. 2014 to DKK 262 million against DKK 163 million in cash flow is the dividend from the LEGO Group to the 2013. The increase in activities is in accordance with the LEGO Foundation’s 100% owned subsidiary Koldingvej 2, In 2014, the total number of full-time employees at the implementation of the Foundation’s strategy, Theory Billund A/S. In 2014 the 25% share of dividend amounted end of year in Billund (DK), Baar (CH) and Kiev (UKR) was of Change, with focus on the three mutually reinforcing to DKK 1,250 million. 32 compared to 28 in 2013. approaches: Development in the LEGO Foundation's activities and Risks • Build and share EVIDENCE to show value financial position The LEGO Foundation’s risks primarily relate to devel- • Open minds to develop BUY-IN The highly satisfactory financial result for the year is due opments within the global markets where the LEGO • Identify and support PROGRAMMES that to the continuing positive development for the LEGO Group is active and the financial markets. demonstrate results Management’s statement Management’s statement

50

Management’s statement

The board of directors and executive management have today considered and adopted the annual report for the LEGO Foundation for the financial year 1 January–31 December 2014.

The annual report is presented in accordance with the provisions of the Danish Financial Statements Act.

In our opinion, the financial statements give a true and fair view of the Foundation’s assets, equity and liabilities and financial position at 31 December 2014 and of the results of the Foundation’s activities in the financial year 1 January–31 December 2014.

We believe that the management’s review gives a true and fair review of the matters dealt with in the review.

Billund, 23 February 2015

Executive management Kurt Carstensen Interim CEO

Board of directors Kjeld Kirk Kristiansen Thomas Kirk Kristiansen Jørgen Vig Knudstorp Chairman of the board 1st deputy chairman of the board 2nd deputy chairman of the board

Sofie Kirk Kristiansen Mette Morsing William E. Hoover Board member Board member Board member Independent auditor’s report Independent auditor’s report

52 53

Independent auditor’s report

To the Board of Directors and Executive Management on Auditing and additional requirements under Danish Opinion of the LEGO Foundation audit regulations. This requires that we comply with In our opinion, the financial statements give a true ethical requirements and plan and perform the audit to and fair view of the Foundation’s assets, equity and Report on the financial statements obtain reasonable assurance that the financial state- liabilities and financial position at 31 December 2014, We have audited the financial statements of the LEGO ments are free from material misstatement. and of the results of the Foundation’s activities for Foundation for the financial year 1 January–31 Decem- the financial year 1 January–31 December 2014 in ber 2014, which comprise accounting policies, income An audit involves performing procedures to obtain accordance with the Danish Financial Statements Act. statement, balance sheet, statement of changes in audit evidence about the amounts and disclosures in equity and notes. The financial statements are prepared the financial statements. The procedures selected Statement on the management’s review in accordance with the Danish Financial Statements Act. depend on the auditor’s judgement, including the In accordance with the Danish Financial Statements assessment of the risks of material misstatement in the Act, we have read the management’s review. We have Responsibility of the Board of Directors and Execu- financial statements, whether due to fraud or error. In not performed any further procedures in addition to tive Management for the financial statements making those risk assessments, the auditor considers the audit of the financial statements. On this basis, The board of directors and executive management are internal control relevant to the preparation of financial it is our opinion that the information provided in the responsible for the preparation of financial statements statements that give a true and fair view in order to management’s review is consistent with the Danish that give a true and fair view in accordance with the design audit procedures that are appropriate in the Financial Statements Act. Danish Financial Statements Act. Further, the board of circumstances, but not for the purpose of expressing directors and executive management are responsible an opinion on the effectiveness of the Foundation’s Aarhus, 23 February 2015 for such internal control as the board of directors and internal control. An audit also includes evaluating the executive management determine is necessary to appropriateness of accounting policies used and the Deloitte enable the preparation of financial statements that are reasonableness of accounting estimates made by the free from material misstatement, whether due to fraud board of directors and executive management, as well Thomas Rosquist Andersen or error. as evaluating the overall presentation of the financial State Authorised Public Accountant statements. Auditor’s responsibility Our responsibility is to express an opinion on the We believe that the audit evidence we have obtained financial statements based on our audit. We conducted is sufficient and appropriate to provide a basis for our our audit in accordance with International Standards audit opinion. Income statement Activity Reporting

54 55

Income statement Activity reporting 1 January–31 December 1 January–31 December

(tDKK) Note 2014 2013 (tDKK) 2014 2013

Net result from subsidiaries 1,804,126 1,561,543 Donations Other operating income 1,038 943 Donation activities Ole Kirk's Foundation 125,000 45,000 Financial income 26,993 40,490 Donation activities other programmes, commited current year 25,715 51,499 Financial expenses (14,241) (16,144) Donation activities other programmes, committed previous years 27,158 8,585 Total net income 1,817,916 1,586,832 Current year's donation activity in total 177,873 105,084

Expenses related to projects and donations Employee expenses 1 (24,259) (16,020) Expenses Operating expenses 2 (30,426) (19,684) Expenses related to donations and projects 54,685 35,704 (54,685) (35,704) Expenses related to administration 29,315 21,934 Current year's expenses in total 84,000 57,638 Expenses related to administration

Employee expenses 1 (11,343) (9,069) Total activities 261,873 162,722 Operating expenses 2 (17,553) (12,446) Depreciation 3 (419) (419)

(29,315) (21,934) Activity reporting The LEGO Foundation measures the "activities" as a sum income statement. At the same time, the donations are Total expenses (84,000) (57,638) of donation activities, expenses related to projects and taken from the result distribution in the year of board donations and administration expenses. The total activities decision - and not in the periods where the donations are for the year cannot be seen directly in the income statement paid. Result before tax 1,733,916 1,529,194 in the annual report. Tax on result for the year (344) (109) As a supplement to the income statement, an activity Result for the year 1,733,572 1,529,085 The income statement for the LEGO Foundation is prepared reporting statement is made in which the donations in accordance with the provisions of the Danish Act on relevant for the period are shown as activities together Distribution of result Corporate foundations and is presented in accordance with with the expenses for projects and donations and the Donations committed in 2014 for activities in 2014 150,715 96,499 the provisions of the Danish Financial Statements Act per- administration expenses. Donations committed in 2014 for activities in 2015 and forward 321,627 32,088 taining to reporting class B enterprises (Danish GAAP). The board has decided to reserve DKK 500 million to Adjustment to previous years' donations 0 (2,444) As a part of the Danish GAAP, the donations decided by future donations. During 2015 or later the Board will Reserved for future donations 500,000 0 the board of directors are taken from the result distribution decide which projects should receive donations. Reserve from the use of the equity method 1,804,126 1,561,543 and as such not expensed as part of the Foundation's Retained earnings (1,042,896) (158,601) 1,733,572 1,529,085 Balance sheet Balance sheet

56 57 Balance sheet Balance sheet at 31 December at 31 December

(tDKK) Note 2014 2013 (tDKK) Note 2014 2013

ASSETS EQUITY AND LIABILITIES Non-current assets Equity Land and buildings 3 6,988 7,407 Basic capital 262,453 262,453 Antique collection 3,000 3,000 Reserve from the use of the equity method 5,071,656 4,852,530 Property, plant and equipment 9,988 10,407 Reserved for future donations 500,000 - Retained earnings 1,625,237 1,150,121 Investments in subsidiaries 4 5,730,648 5,511,522 Total equity 7,459,346 6,265,104 Other non-current assets 5,730,648 5,511,522 Liabilities Total non-current assets 5,740,636 5,521,929 Non-current liabilities Committed donations 332,298 37,829 Current assets Total non-current liabilities 332,298 37,829 Receivables subsidiaries 1,500,344 - Other receivables 21,736 11,486 Current liabilities Securities 554,147 757,802 Trade payables 3,033 2,151 Cash 3,965 21,828 Other payables 26,151 7,961 Total current assets 2,080,192 791,116 Total current liabilities 29,184 10,112

Total assets 7,820,828 6,313,045 Total liabilities 361,482 47,941

Total equity and liabilities 7,820,828 6,313,045

Contingent liabilities and other obligations 5 Related party transactions 6 Statement of changes in equity Accounting policies

58 59 Statement of changes in equity Accounting policies

(tDKK) Note 2014 2013 The accounting policies applied to the annual report in general Assets are recognised in the balance sheet when it is probable are desribed below. that future economic benefits will flow to the entity, and the value of such assets can be measured reliably. Liabilities Basic capital Legislation are recognised in the balance sheet when it is probable that Balance at 1 January 262,453 262,453 The LEGO Foundation’s annual report for 2014 has been future economic benefits will flow from the entity and the prepared in accordance with the provisions of the Danish value of such liabilities can be measured reliably. Upon initial Basic capital at 31 December 262,453 262,453 Act on Corporate foundations and presented in accordance recognition, assets and liabilities are measured at cost. with the provisions of the Danish Financial Statements Act pertaining to reporting class B enterprises. On recognition and measurement, allowance is made for Reserve from the use of the equity method foreseeable losses and risks arising before the time at which Balance at 1 january 4,852,530 3,391,737 The income statement presents "expenses related to projects the annual report is presented and proving or disproving Income from subsidiaries 1,804,126 1,561,543 and donations" and "expenses related to administration" matters arising on or before the balance sheet date. in order to give a fair and true view of the Foundation's Dividend distributed (1,518,000) (18,000) acitivities. The clarification has no impact of the result for the Income statement Other comprehensive income/(expenses) (67,000) (82,750) year or the equity at the beginning or the end of the year. Investments in subsidiaries Income from investments in subsidiaries consists of the Reserve from the use of the equity method at 31 December 5,071,656 4,852,530 Consistency with prior years reporting proportional share of its result after tax and any adjustment of The accounting policies are consistent with those of prior years. internal result/loss and deduction of amortisation of goodwill Reserved for future donations on consolidation. Consolidated financial statements Balance at 1 january - - No consolidated financial statements have been prepared, Depreciation Change for the year 500,000 - see section 110 of the Danish Financial Statements Act, which Depreciation of and impairment losses on property, plant and concerns small groups. equipment are based on an ongoing assessment of the useful Reserved for future donations at 31 December 500,000 - lives of the entity’s assets. Non-current assets are depreciated Reporting currency on a straight-line basis based on cost, based on the following The annual report is presented in Danish kroner. estimated useful lives and residual value of the assets: Retained earnings

Balance at 1 January 1,150,121 1,290,722 Translation of foreign currency Useful life Dividend recieved 1,518,000 18,000 Transactions in foreign currencies are translated into Danish Buildings 25 years kroner using the foreign exchange rates applicable at the Antique collection Infinity Transferred in the year ( 1,042,896 ) (158,601) transaction date. Monetary assets and liabilities in foreign Currency translation 12 - currencies are translated into Danish kroner using the Gains and losses from the disposal of non-current assets are foreign exchange rates applicable at the balance sheet date. recognised in the income statement under other operating Retained earnings at 31 December 1,625,237 1,150,121 Realised and unrealised foreign exchange gains and losses are income and expenses. recognised in the income statement under net financials. Total equity 7,459,346 6,265,104 Financial income and expenses Recognition and measurement in general Financial income and expenses are recognised in the income Income is recognised in the income statement as earned. statement with the amounts related to the financial year. Furthermore, all expenses incurred to generate the year’s Financial income and expenses include interest income and in- earnings, including depreciation and amortisation, impairment terest expenses, realised and unrealised capital gains and losses losses and write-downs and provisions, are recognised in the on securities, payables and transactions in foreign currencies. income statement. Accounting policies Notes

60 61 Notes

Tax Other receivables Note 1. Employee expenses The LEGO Foundation has opted to use section 3(4) of the Danish Other receivables are measured at amortised cost, which Corporation Tax Act. Under these rules, the taxable income of usually corresponds to nominal value. The value is reduced by (tDKK) 2014 2013 Koldingvej 2, Billund A/S is considered to have been earned by the provisions for expected losses. LEGO Foundation if the taxable income is distributed as dividends Employee expenses related to projects and donations 24,259 16,020 to the LEGO Foundation. Since the LEGO Foundation's taxable in- Cash come is regularly offset against grants for the year and provisions Cash comprises cash at bank and in hand. Employee expenses related to administration 11,343 9,069 for future grants, no current or deferred tax is recognised. Total employee expenses 35,602 25,089 Liabilities Donations Liabilities are measured at amortised cost, which usually Donations are recognised when they are committed before corresponds to nominal value. Which can be split into: the end of the financial year. Non-disbursed committed Wages and salaries 29,672 22,603 donations are recognised as non-current liabilities. Committed donations Committed donations are binding commitments made by the Pension costs 1,983 415 Balance Sheet board of directors. Other staff and social security expenses 3,947 2,071 Property, plant and equipment Property, plant and equipment are measured at cost plus any Definitions, key figures and ratios Total employee expenses 35,602 25,089 revaluations and less accumulated depreciation and impair- ment losses. Cost comprises the acquisition price and directly Activities: Administration Salaries and remuneration for executive management and related costs up until such time as the asset is ready for use. + Programme costs board of directors amount to 3,729 4,171  + Donations related to the Impairment testing of property, plant and equipment is financial year performed if indications of impairment exist. The impairment Average number of employees 28 19 test is performed for each individual asset or group of assets. Portfolio: Programme costs Assets are impaired to the higher of the capital value of  + Donations related to the the individual asset or asset group and the net sales price financial year (recoverable amount) if this is lower than the carrying amount. Key figures and ratios have been calculated in accordance with NOTE 2. OPERATING EXPENSES Investments in subsidiaries descriptions below: Investments in subsidiaries are measured according to the equity (tDKK) 2014 2013 method based on the proportionally owned share of the subsid- DISTRIBUTION RATE: iaries equity plus any consolidated goodwill and less intra-group Activities gains and negative goodwill. Entities with negative equity are Dividend from the LEGO Group Operating expenses related to projects and donations 30,426 19,684 recognised at zero with the negative value corresponding to the Operating expenses related to administration 17,553 12,446 proportionate share being offset against any receivables. Any ADMINISTRATION COST SHARE: Total operating expenses 47,979 32,130 amounts over and above this are recognised under provisions if a Administration legal obligation or other obligation to cover the deficit exists. Activities

Securities PROGRAMME COST SHARE: Securities are measured at fair value. For listed equities at Programme costs market value and at estimated fair value for unlisted equities. Portfolio Notes Notes

62 63 Notes Notes

Note 4. Investments in subsidiaries Note 3. Property, plant and equipment (tDKK) 2014 2013 (tDKK) 2014 2013

Cost Cost Cost at 1 January 658,992 658,992 Cost at 1 January 10,885 10,885 Cost at 31 December 658,992 658,992 Cost at 31 December 10,885 10,885

Value adjustment Depreciation Value adjustment at 1 January 4,852,530 3,391,737 Balance at 1 January 3,478 3,059 Share of result for the year 1,804,126 1,561,543 Depreciation for the year 419 419 Dividend distributed (1,518,000) (18,000) Depreciation at 31 December 3,897 3,478 Other comprehensive income/(expenses) (67,000) (82,750) Value adjustment at 31 December 5,071,656 4,852,530 Carrying amount at 31 December 6,988 7,407

Carrying amount at 31 December 5,730,648 5,511,522

Information about subsidiaries:

Name Municipality Ownership Koldingvej 2, Billund A/S Billund 100%

Note 5. Contingent liabilities and other obligations The Foundation has lease obligations of tDKK 1,627

Note 6. Related party transactions Transactions with related parties have been conducted at arm's length. Ole Kirk´s Foundation Impact of Olethe LEGOKirk´s Foundation

64 65 In 2014, the LEGO Foundation donated DKK 125 million to Ole Kirk’s Foundation. Ole Kirk’s Foundation prioritises activities that promote both physical and psycho­ logical quality of life Ole Kirk’s Foundation for children, youth and families. is a charitable foundation that mainly supports social, cultural and educational purposes in Denmark. Ole Kirk's Foundation was established in DKK 143 1964 in memory of million the founder of the donated by Ole Kirk’s LEGO Group. Foundation in 2014. www.olekirksfond.dk Information about the LEGO Foundation LEGO Foundation legal structure

66 67

Information about LEGO Foundation the LEGO Foundation legal structure

Legal name LEGO Fonden Address Koldingvej 2, 7190 Billund LEGO Foundation Country Denmark Koldingvej 2, Billund A/S Koldingvej 2, Registration number 12 45 83 39 Koldingvej 2, Billund A/S is a 100% owned subsidiary of the LEGO Foundation. Billund A/S The most significant asset in Koldingvej 2, Billund A/S is the 25% shareholding 100% Branch LEGO Foundation, Baar, Switzerland of the LEGO Group. Another significant asset in the company will be the LEGO House, construction initiated in 2014 and expected open to the public Executive 2017. Koldingvej 2, Billund A/S is investing surplus liquidity in financial assets. management Kurt Carstensen (Interim CEO until 1 March 2015) CoC Office A/S Board of directors Kjeld Kirk Kristiansen (chairman of the board) CoC Office A/S CoC Office A/S is an independent public limited company, in which the Thomas Kirk Kristiansen (1st deputy chairman of the board) 50% LEGO Foundation and Billund Municipality each own 50% of the shares. Jørgen Vig Knudstorp (2nd deputy chairman of the board) The LEGO Foundation and Billund Municipality founded the company on Sofie Kirk Kristiansen (board member) 1 January 2012. William E. Hoover (board member) Mette Morsing (board member) The project is a unique partnership between a local authority and a company, which have a common desire to develop Billund into an outstanding place for Leadership team Kurt Carstensen, Interim CEO children, play, learning and creativity, to benefit everyone who lives in Billund Andrew Bollington, Vice President, Research and Learning Municipality and children all over the world. Hanne Træholt Odegaard, Senior Director, Capital of Children Mirjam Schöning, Vice President, Programmes and Partnerships The LEGO Group Carsten Klokkerholm Wammen, Vice President, Operations LEGO A/S The LEGO Group is owned 25% by LEGO Foundation through Koldingvej 2, 25% Billund A/S. The remaining 75% is owned through KIRKBI A/S by the Kirk Kristiansen family, who founded the company in 1932.

The LEGO Group is engaged in the development of children's creativity through play and learning. Based on the world-famous LEGO® brick, the company today provides toys, experiences and teaching materials for children in more than 130 countries. The head office is in Billund, Denmark. 68 Together, we can champion learning through play

Get to know us better at LEGOFoundation.com Follow us on Twitter @LEGOFoundation E-mail us at [email protected]

The LEGO Foundation Koldingvej 2 7190 Billund, Denmark