Annual Report 2014 - The LEGO Foundation · annual LEGO Idea Conference. Each spring, the LEGO Foundation hosts this conference in Billund, home of the LEGO Group, to bring together

Annual Report2014

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

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

Table of contents

Contents

Print: Rosendahls

Design: KIRK & HOLM

3

Our strategic approach

Transforming attitudes and behaviours towards learning through play


Build and share EVIDENCE to show value

Open minds to develop BUY-IN

Identify and support PROGRAMMES that demonstrate results

Our aim is to build a future in which learning throughplay empowers children to become creative, engaged,life-long learners. We do this by promoting systemic,scalable change in partnership with others bytransforming attitudes and behaviours to learningthrough play.

To do this, we:

Identify and support PROGRAMMES thatdemonstrate results



These three approaches are a foundational part of ourstrategic framework and what lies behind our current programme portfolio.

We believe that sustainable change happens when you transform attitudes and behaviours across society. That’s why we want to work with parents, caregivers, school systems, institutions and governments to make learning through play a reality in the lives of millions of children.


Our work is about challenging the status quo by re-defining play and re-imagining learning – changing the way people understand the importance of play, especially the value it has in helping children learn skills essential for life in the 21st century.

Our focus is on children aged 0–12, with a special emphasis on early childhood. At this age, children play naturally and there is widespread acceptance that they do so. However, play is widely under-appreciated for its role in enabling early learning. This is particularly critical for children aged 0–6 because this is when they develop most rapidly, both physically and mentally.

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 to demonstrate the value of hands-on, minds-on play from early childhood onwards – not only in enhancing traditional learning, but also in stimulating creative and critical thinking skills that impact lifelong learning.

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Our strategic approach Our strategic approach

Theory of change and current portfolio

Inspire and develop the builders of tomorrow

Re-define play and re-imagine learningBuild a future in which learning through play empowers children to becomecreative, engaged, life-long learners

Empowered by:

Our mission is to:

Our aim is to:

We will focus on:

So that:

Values and long-term focus from our founding family

80+ years of LEGO play experience and commitment in the DNA of our people

Financial resources from a 25% share in the LEGO Group

Instant recognition and credibility from the LEGO brand and brick

Children aged 0–12, especially in early childhood

Children benefit from the transformative power of learning through play to develop the social, cognitive, physical, emotional and creative skills to serve them, their communities and society throughout a lifetime.

Which requires that: Children

are engaged in learning through play

Parents are equipped and empowered to use learning through play

Teachers are equipped and empowered to use learn-ing through play

Systems such as schools, child care, etc. em-brace learning through play

Govern-ments resource policies that support learning through play

Promoting systemic, scalable change in partnership with others by transforming attitudes and behaviours to learning through play



Identify and support PROGRAMMES that demonstrate results

We will achieve this by: Strategic objective

Three mutually reinforcing approaches

Our current portfolio:

Five core programmes

Four enabling activities

Research network and evaluation capacity

Communication platform

Organisational development

Operational platform

Play based LearningMake Play based Learning a reality for millions of children

Sparking a Global DialogueSpark a Global Dialogue to make quality early learning a well-resourced priority in targeted countries

Re-imagine LearningInvest to Re-imagine Learning around the world

Local LEGO Community EngagementSupport LEGO Group employee commitment

Capital of ChildrenBuild the Capital of Children to create an exemplar that informs us and inspires others

6 7

Our programmes

Distribution policy

Sparking a Global DialogueRe-imagine Learning Capital of ChildrenLocal LEGO Community Engagement

Play based Learning

2345

1Distribution policyThe charter stipulates that the LEGO Foundation will provide

support for children and their development along with support

for general research and educational purposes. It also empha-

sises the close relationship between the LEGO Foundation

and the LEGO Group through the stipulation of the purpose to

ensure and support the ongoing existence and development of

the Group. In line with these purposes, the LEGO Foundation

supports Ole Kirk’s Foundation’s charitable activities and

interest in the Danish society, where the LEGO Foundation and

the LEGO Group have their headquarters.

With a starting point in the charter, our strategy – our Theory

of Change – defines our aim as to build a future where learning

through play empowers children become creative, engaged,

life-long learners.

Our board of directors lays down the framework for grants

as part of approving the yearly budget and plans. During the

year, the leadership team puts forward individual proposals for

distribution of grants within that framework, for board approval.

The core programmes and activities serve as our main

distribution categories:

Play based Learning

Sparking a Global Dialogue

Re-imagine Learning

Capital of Children

Local LEGO Community Engagement

Research network

Distribution guidelines• Every grant must be kept within the purposes mentioned in

our charter.

• Every programme and activity grant must be kept within the

agreed Theory of Change.

• The distribution framework must safeguard our obligations

by ensuring that sufficient funds are available to cover 3 years

of activity even without new income from the LEGO Group.

• When giving grants to third-party organisations, we agree

a budget for administration/overhead appropriate to the

purpose of the grant and the nature of the grantee.

• The LEGO Foundation does not consider unsolicited

grant applications.

Approved by the board of directors

8

The LEGO Foundation is working to make play based learning a reality for millions of children all over the world.

The Play based Learning programme is about bringing playful learning tools and activities to children and achieving measurable impact on their cognitive, emotional, social and creative skills in specific countries or regions.

Play based Learning1

Our programmes

It often involves product donations of LEGO play and learning materials as well as teaching the caregivers – parents, teachers, educators – about the importance of play and how to engage with children in a fun and dynamic way. Building strategic partnerships with local, regional and international organisations is also an important component. Through these partnerships we seek to reach and influence stakeholders such as governments, school systems and parents to embrace and use learning through play.

We work in South Africa and Ukraine, but will be adding more locations over time.

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The LEGO Foundation wants to promote quality play-based early childhood development, so that govern-ments recognise its value and make it a well-funded priority.

To do this, we will engage a diverse set of actors at two levels – globally and at the country level – where coordinated research and policies on scaling, measure-ment, and financing of quality early childhood learning will help to change mindsets amongst global leaders and policymakers.

One of our beacon activities in this programme is the annual LEGO Idea Conference. Each spring, the LEGO 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.

Sparking a Global Dialogue2

This unique forum provides a strong stage for leading academics, authors, researchers and innovators to discuss, debate and co-create an actionable agenda for changing the way we approach children's learning and development. The LEGO Prize, traditionally announced at the LEGO Idea Conference, honours outstanding achievements in play and learning. Past winners include Astrid Lindgren, Nicholas Negroponte and Sir Ken Robinson.

The 2015 conference is scheduled for 13–15 April.

Our programmes

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4

Our programmes

Imagine a unique public-private partnership between a local authority and a corporate foundation with a shared ambition to develop a strong community in which learn-ing through play is evident everywhere and all initiatives aim to stimulate children's potential and creativity.

That’s exactly what’s happening in the Danish town of Billund, headquarters of the LEGO Group. Together, the LEGO Foundation and Billund Municipality aim to transform the area into an outstanding place where children and their needs are firmly centre stage.

The programme works within four priorities. We want to:

• Make learning through play a part of everything we do in Billund – from the approach to teaching in the local schools to how we engage with our 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

• Develop the town of Billund into a centre of excel-lence that stimulates and fosters ground breaking environments, making Billund the world’s playground for children.

Current projects include the International School of Billund, LEGO House, Children’s News Studio, LEGO Education Innovation Studios at 14 local schools and conferences about play and learning.

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The Re-imagine Learning Programme identifies and supports approaches to learning through play around the world that have the potential to re-define play and re-imagine learning.

We select partners based on their potential both to effect a deep and broad impact on children today, and to influence the learning sector tomorrow. In particular, we seek out innovative and powerful approaches that can be scaled, translated or amplified to promote the power of learning through play on a global scale.

Re-imagine Learning3

To help identify innovation around the world, the LEGO Foundation has joined forces with Ashoka, the largest network of social entrepreneurs worldwide, in a three-year partnership designed to:

• Map the landscape of learning innovation

• Identify patterns of solutions and interventions

• Recognise and support excellence within learning through play

One key goal of the Ashoka partnership is to connect innovators with one another and provide space for global conversations and emerging communities of practice that can provide support, feedback and learning to programmes around the world committed to learning through play.

Capital of Children

Our programmes

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The LEGO Group and the LEGO Foundation share the goal of building employee and community goodwill and pride, and for the company to be recognised as a responsible corporate citizen in the countries where the LEGO Group is based.

Together, we support and engage employees and local communities through financial support to local causes, volunteer activities undertaken by employees, product donations and other means of establishing and maintaining strong employee engagement and relationships locally. Children are always the target group for the activities with a special emphasis on promoting

Local LEGO Community Engagement5

quality play experiences and creating opportunities for and access to play.

So far, more than 2,000 LEGO colleagues have actively engaged in one of the activities implemented locally and more than 50,000 children have been directly involved in projects through this new programme.

In 2015, we plan to support and grow this employee community still further. A new workshop programme for 2015 is being developed to enable even more Play Agents to go out and make a difference for both chil-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.

Our programmes

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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.

Play based Learning programme

Examples of our 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).

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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.

Re-imagine learning programme


They come for skateboarding – they stay to learnSkateistan 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.

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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 workshops in their communities.

What is in the boxes?LEGO Charity boxes consist of new LEGO or LEGO DUPLO bricks and elements selected from unused return goods, faultily packaged goods, obsolete elements and more. The assortment of elements is packed by 175 volunteers, retired LEGO employees and a professional team to provide the highest quality play experience.

In 2014, the total value of donations sent out from LEGO Charity exceeded DKK 44 million, and more than 325,000 children in 94 countries were reached.

In psychosocial support work, it is common practice to use creative EXPRESSION AS A medium for talking about difficult subjects – especially when working with children. Using LEGO bricks or other building materials adds an extra dimension, both literally and figuratively, to the process.

A donation of 600 LEGO Charity boxes will be used for that purpose in Syria. The donation will allow children and adults to describe, talk about and reflect upon traumatic experiences through creativity and play.

The bricks will also be used to strengthen the contact between parents and children, because any crisis negatively impacts relations and the social fabric of the community.

Photo by: Ea Suzanne Akasha, Danish Red Cross

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Research network

MIT MEDIA LAB, USA The LEGO Foundation hascollaborated with the MIT MediaLab and its Lifelong Kindergar-ten Group for almost 30 yearson designing new technologies and activities to engage children in playful, creative learning experiences.

THE UNIVERSITY OF CAMBRIDGE, UK

The LEGO Foundation is supporting the establishing of a research centre on play in education, development and learning at the University of Cambridge. Over the last decade, we have collaborated on a range of research projects about play.

TSINGHUA UNIVERSITY, CHINA In collaboration with MIT, we are taking the first steps in 2015 towards establishing a Lifelong Learning Lab at Tsinghua University to invite more partnerships to experi-ment with new tools and study children’s engagement in learning through play.

Over the last years, the annual LEGO Idea Conference in Billund, Denmark, has grown to become a global event. The conference brings together 200-300 international experts – including thought leaders, researchers, policy makers and international education 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.

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At the LEGO Foundation we support and share ground-breaking research into the power of play and creativity in learning, to act as a critical resource for thought leaders, influencers, educators and parents all around the world.

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.

Research network

Research in the LEGO Foundation is used to inform practice so that we base our projects on the latest thinking and evidence, so that we learn from what we do, and so that we share our knowledge and experience with others.

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What does success look like?

The LEGO Foundation has the ambitious goal of promoting systemic, scalable change in partnership with others by transforming attitudes and behaviours to learning through play.

Measuring the attitude and behaviour change of others is difficult. When attitudes in society change – whether towards wearing seatbelts in cars or the importance of learning through play – it is rarely because of one organisation or one campaign. We need metrics and data, not to be able to claim success ourselves, but to be able to refine our strategy and collaborate better with our partners, based on evidence.

Our understanding of success is tightly linked to our Theory of Change.

• Our impact is the difference that learning through play makes in the lives of children, their communities and society.

• The outcomes of our programmes are the changes in attitudes and behaviours among our key audiences – parents/families, teachers/carers, systems, governments – that are necessary to create impact.

• Our research work with practitioners and major universities, such as MIT and the University of Cambridge, helps us to better understand this impact.

Each of our five programmes targets one or more of our audiences and is made up of projects that deliver the

What does success look like?

outputs needed to change attitudes and behaviours. A change in attitude and behaviour – a government deciding to adopt and fund legislation on quality early childhood based on play or a teacher adopting a hands-on, play based approach to teaching basic maths – might have very different reach, scale and depth, but they both help us to achieve greater impact.

We are developing specific outcomes, outputs and metrics to measure success for each programme and we will undertake baseline measurement of attitudes towards learning through play in several of our projects. Collecting and monitoring metrics for our outcomes and outputs is essential if we are to understand the difference we are making, and to help us fine-tune our strategy in future years.

Developing our understanding of impact, outcomes, outputs, metrics and learning is so important to the LEGO Foundation that we have decided to work with Research for Development (R4D), a Washington based non-result that seeks to unlock solutions to tough development challenges that prevent people in low-and-middle-income countries from realising their full potential. R4D will fulfil the role of Learning Partner in LEGO Foundation programmes, allowing us and our partners to benefit from their considerable experience and the challenges provided by an external perspective.

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2014 highlights

More than DKK 44 million - the total value of product donations sent out from LEGO Charity.

2014 highlights

110,000 students benefited from outreach pro-grammes in South Africa, Mexico, Ukraine and India.

is the time it takes to watch our Re-imagine Learning Challenge video.LEGOFoundation.com

2 minutes and 15 seconds

during our best week ever on Twitter.

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.

2014 highlights

1,884,769 impressions

2726

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.

Our LEGO heritage

Ole Kirk Kristiansen, son Godtfred Kirk Christiansen and grandson Kjeld Kirk Kristiansen celebrating Ole Kirk´s 60th birthday in April, 1951.

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Letter from the chairman and CEO Letter from the chairman and CEO

Letter from the chairman and CEO

As a family and a foundation, we fundamentally believe that children are our role models because of their natural hands-on, minds-on approach to learning.

Children’s natural approach to learning is fundamental for them to become the best possible builders of our common future. They are curious, creative and imaginative. They embrace discovery and wonder. These precious qualities must be nurtured and stimulated throughout life.

That's why all the Kirk Kristiansen family enterprises share the mission “To inspire and develop the builders of tomorrow”. In the LEGO Foundation, this means that we aspire to:

• Be the leading authority on learning through play by showing the world the transformative power of play so every child and adult can find – or rediscover – the ability to play and its value throughout life.

• Ensure that the values of creativity, play and learning are demonstrated, documented, understood, embraced and acted upon.

We strongly believe in the LEGO Idea – that when we put things together and take them apart and then put them together again in different ways, we are not only creating, but also evaluating, reflecting and recreating to achieve new possibilities. In other words, play is learning.

Kjeld Kirk KristiansenChairman of the board

Kurt CarstensenInterim CEO

2014 has in many ways been a significant year in the history of the LEGO Foundation, and we would like to highlight a few of this year’s milestones:

• A new strategy for the LEGO Foundation The continued success of the LEGO Group has resulted in a significant contribution towards the LEGO Foundation in recent years due to the increased dividend flow. The LEGO Foundation now seeks to apply these resources in new and ambitious ways towards improving the lives of children using learning through play. Since 2013, the LEGO Foundation has been involved in a process of strategy development and during the summer of 2014, a new Theory of Change was approved – including a portfolio with five core programmes and four enabling activities (see page 6-7). The annual LEGO Idea Conference and our Developing Talents through Creative Play project in South Africa (see page 16) are just some of our flagship projects. We are scaling up our team to establish an organ-isation that is capable of developing and running initiatives that can deliver on our ambitious aims. This development will continue in 2015 where we also have Hanne Elisabeth Rasmussen joining the LEGO Foundation as new CEO from 1 March. Hanne has more than 20 years of experience with human-itarian and development work, and comes from a

position as Chief Operating Officer in SOS Children’s Villages International.

• Growing our academic network As part of the new strategy for the LEGO Foundation, we are expanding our research network and evaluation capacity to support our work with changing attitudes and behaviours towards learning through play. The network includes leading institutions like MIT, US, and University of Cambridge, UK, and in 2014 we also entered into a dialogue with Tsinghua University, ranked among the top three universities in China. Agreements have been finalised to launch a new Research Centre with a staff and Professor of Play in Education, Development and Learning at the University of Cambridge. The new centre will support high quality research to help change attitudes and behaviours towards learning through play. In collaboration with MIT, we are taking the first steps in 2015 towards establishing a Lifelong Learning Lab at Tsinghua University to invite more partnerships to experiment with new tools and study children’s engagement in learning through play.

• Building the Capital og Children Through the Capital of Children (CoC) vision, a solid foundation for this programme has grown over the last three years with the realisation of a range of engaging projects for children – including a television studio and the International School of Billund. In 2014, the existing strategy was further developed to strengthen the CoC profile and ensure a greater impact both locally and internationally. Billund Municipality and the LEGO Foundation have both dedicated more human resources and increased

their annual capital contribution. Also, in 2014, the six foundation stones for the LEGO House - representing the LEGO values – were laid by three generations of the Kirk Kristiansen family. The LEGO House will be an experience centre where LEGO fans of all ages can express their imagination and creativity, discover the amazing potential of learning through play and be challenged by meeting other LEGO builders from all over the world. The house is due to open to the public in 2017. We are very excited about the ambitious journey that the Foundation has embarked on and the following growth of both activities, donations and staff. We look very much forward to supporting its further achievements to make a continuous, positive difference for children around the world.

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Key figuresKey figures

2013 2014 2015 Budget2010 2011 2012

45

36

22

60

125

53

55

29

262

75

191

118

37

421

163

19

25

15

80

2020154

322

70

29

138

Administration costs

Programme costs

Donations

Ole Kirk's Foundation

Activities 2010–2015 (mill. DKK)

Key ratios2010 2011 2012 2013 2014 2015 B

Administration cost share:

of total activities, including Ole Kirk's Foundation 16% 11% 19% 13% 11% 9%

of total activities, excluding Ole Kirk's Foundation 16% 16% 25% 19% 21% 11%

Programme cost share:

of total poliofolio costs, including Ole Kirk's Foundation 19% 22% 39% 25% 24% 31%

of total portfolio costs, excluding Ole Kirk's Foundation 19% 32% 57% 37% 51% 38%

The continued success of the LEGO Group has resulted in a significant contribution towards the LEGO Foundation in recent years. This allows us to work consistently and commit ourselves to a range of activities over a number of years and thereby maximise our impact on the lives of more children.

In 2013 and 2014, the LEGO Foundation has been deeply involved in a process of strategy development. We are continuously growing our team to establish an organisa tion

that is capable of developing and running initiatives that can deliver on our ambitious aims. This development will continue in the coming years.

The LEGO Foundation is a Danish foundation with corporate interests, registered with the Danish Business Authority (registration number 12 45 83 39). A corporate foundation has similarities to the concept defined as a trust under US law.

Capital of Children 22%

Play based Learning 21%

Local LEGO Community Engagement

18%

Sparking a Global Dialogue 16%

Re-imagine Learning 15%

Research network 8%

Programme costs and donations 2014excluding Ole Kirk's Foundation

Key figures

24 M DKK

23 M DKK17 M DKK

15 M DKK

8 M DKK

19 M DKK

32 33

Geographic reach Geographic reach

Geographic reach

AfghanistanBrazilChinaCzech Republic DenmarkFranceGermanyHaitiHungaryIndiaKenyaMexicoNicaraguaSouth AfricaUgandaUkraineUnited KingdomUSA

Build a future in which learning through play empowers children to becomecreative, engaged, life-long learners.

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34 35

Play is the natural hands-on, minds-on approach by which children learn. In the LEGO Foundation we believe that children’s uniquely curious, creative and imagina-tive approach makes them role models for all of us. Play is the most effective and inspiring way for children to acquire the skills needed to create new possibilities and meet the many challenges of the future.

For both children and adults, play is one of our favourite ways of learning. Play enables us to explore, practice and try out ways of tackling similar challenges in the real world. Playing involves a constant process of "try, fail and try again" – helping us develop and fine-tune our creative and critical thinking skills.

Play has a key role in establishing the vital early learning skills that underpin all other learning throughout our lives.

The challengeThe world finds itself in a crucial paradox: school enrolment is rising, but there is growing doubt about whether we are actually equipping our children with the right skills. There is also an accelerating awareness about the need to develop stronger life skills, including critical thinking, creativity and collaboration.

Creativity is one of the skills most sought after by today’s business leaders, but instead of increasing our creativity diminishes steadily over the course of our lifetimes.

Play is a meaningful way to equip children for the challenges they’ll face, yet over the past half century there has been a sharp decline in how much children simply play with other children. In addition, there is a 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 livingCognitive 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.

Skills like problem-solving, creativity, empathy, communication and teamwork all have their foundations in play.

Why play?

Why play?

Children benefit from the transformative power of learning through play. Play helps children develop the social, cognitive, physical, emotional and creative skills that are of lifelong benefit to them and their communities.

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Governance and leadership

The LEGO Foundation is managed by a board of directors composed of six members elected according to its charter.

The board defines the strategy of the LEGO Foun-dation and makes decisions of major significance in addition to final decisions about grants and donations. Furthermore, the board supervises the organisation and makes sure that the LEGO Foundation is managed appropriately and in accordance with applicable law and its charter. The board does not participate in the day-to-day management of the Foundation, but it appoints the CEO, who is in charge of the day-to-day operations.

There are a minimum of five physical board meetings each year and in addition there are conference call meetings when necessary.

The work of the board is regulated in its Rules of Proce-dure. The Rules of Procedure are drawn up to describe the guidelines for the responsibilities of the board of directors, and how the board's work is to be organised. The board of the LEGO Foundation reviews the Foundation's strategy on an annual basis, and reviews a number of policies and procedures to ensure good governance:

1. Distribution Policy, which defines the focus of

distribution in accordance with the LEGO Foundation charter and strategy.

2. Communication Policy, which defines who can speak on behalf of the Foundation in different matters and how these mandates are given.

3. General Diversity Policy, which defines the gender and general diversity guidelines of the Foundation, i.e. “we strive for a balance between the genders and are committed to keeping the minority gender at 25% or higher.“

The official policies of the LEGO Foundation can be found on the LEGO Foundation website – LEGOfoundation.com. The six members of the board are elected for a period of two consecutive years, taking into consideration the need for continuity in the board’s work. Two members shall be independent in accordance with the foundation charter.

In accordance with the board's Rules of Procedure, the board of directors shall evaluate the competences and know-how of the board on an ongoing basis to ensure



that the board serves its purpose to the benefit of the LEGO Foundation. Each board member is entitled to recommend a new member, and a simple majority will then decide the recommendation / election. No member who has turned 75 years of age can be elected or re-elected. Independent members of the board are remunerated by a fixed fee that does not depend on the financial results. The remuneration of each member is specified in the annual report. There was no extraordinary remunera-tion for special tasks paid to the board in 2014.

The LEGO Foundation wants to ensure transparency in respect of all of its activities. This is done through a high level of information on the LEGO Foundation website and a detailed description of the activities of the year in the annual review and report.

In 2014, the board of directors initiated a process to ensure that the foundation is compliant with and follows the spirit of recommendations for good governance. This means that these recommendations are integrated into the Foundation's Rules of Procedure, and that the board of directors in February 2015 approved and published a number of formal policies – "Diversity Policy", "Communication Policy" and "Distribution Policy".

The LEGO Foundation Annual Report is in compliance with the recommendations for best practice in Danish Foundations. A compliance status reported by the board of directors can be found on LEGOfoundation.com.

38 39

Chairman of the boardKjeld Kirk Kristiansen (1947)

Education: Holds an MBA from IMD, Lausanne, Switzerland.

Year appointed: Appointed to the LEGO Foundation board of directors in 2000.

End of term: 2015

Short bio: Third generation of the LEGO ownership family and the principal shareholder of the family-owned LEGO Group through KIRKBI A/S. Former President and CEO of the LEGO Group. Appointed a Knight of The Order of Dannebrog in 1994 and a Knight 1st Degree in 2008. Appointed Chamberlain in 2012.

Special competences: Business development, sales, marketing, production and board work.

Serves on the boards of: Chairman of Koldingvej 2, Billund A/S, Ole Kirk’s Foundation, INTERLEGO AG, KIRKBI A/S, KIRKBI Invest A/S, LEGO Juris A/S, Schelenborg Gods ApS, Lundhøjgård ApS, Klinkbygård ApS and Blue Hors A/S. Vice 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

Independence of board member: Evaluated as not being independent.

Board member Sofie Kirk Kristiansen (1975)

Education: Educated Wildlife Manager with a bachelor’s degree in Ethnography and Social anthropology.


End of term: 2015

Short bio: Forestry owner, dedicated to working with nature conservation and biodiversity, establishing a nature reserve in the southern part of Denmark. Fourth generation of the LEGO Family and a shareholder in KIRKBI A/S, the family’s holding and investment company whose assets include the majority shareholding in LEGO A/S.

Special competences: Family owned companies.

Annual remuneration 2014 within the LEGO Foundation: DKK 0

Independent/not independent board member: Evaluated as not being independent.

Board of directors

1st Deputy chairman of the boardThomas Kirk Kristiansen (1979)

Education: Holds a degree in marketing.


End of term: 2016

Short bio: Active as fourth generation representative in the Kirk Kristiansen family businesses. Shareholder in KIRKBI A/S, the family’s holding and investment company whose assets include the majority shareholding in LEGO A/S.

Special competences: Family owned companies and boardwork.

Serves on the boards of: Chairman of the Board of KIRKBI AG. Chairman of the Board of Great Northern A/S. Member of the Board of KIRKBI A/S, LEGO A/S, LEGO Juris A/S, Klinkbygård ApS, Schelenborg Gods ApS and INTERLEGO AG.


Dependence of board member: Evaluated as not being independent.

Board of directorsBoard of directors

2nd Deputy chairman of the board Jørgen Vig Knudstorp (1968)

Education: Master of Economics and PhD from the University of Aarhus. Executive MBA from Cranfield School of Management.


End of term: 2015

Short bio: CEO of the LEGO Group. Former McKinsey & Company consultant. Prior positions in the LEGO Group include Vice President, Strategic Development.

Special competences: Business development, sales , marketing and production.

Serves on the boards of: Chairman of the Board in LEGO System A/S. Member of The IMD Foundation Board.


Independent/not independent board member: Evaluated as not being independent.

40 41

Board member (independent)Mette Morsing (1963)

Education: PhD at Copenhagen Business School


End of term: 2016

Short bio: PhD and Professor at Copenhagen Business School 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: Leadership, corporate social responsibility, and public-private research collaborations.

Serves on the boards of: Claus Meyer Melting Pot Foundation, 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: DKK 200,000

Independent/not independent board member: Evaluated as being independent.

Board of directors

Board member (independent)William E. Hoover (1949)

Education: MBA from Harvard Business School


End of term: 2016

Short bio: Previously director of McKinsey & Company – 30 years in total, of which 27 years in Scandinavia.

Special competences: Strategy, organisation, supply chain, M&A and performance transformation.

Serves on the boards of: Danfoss A/S, Neopost S/A, GN Great Nordic, Sanistål, and working chairman of R&D Associates.

Annual remuneration 2014 within the LEGO Foundation: DKK 200,000

Independent/not independent board member: Evaluated as being independent.

42

We are a Danish corporate foundation working out of Billund, Denmark, Baar, Switzerland and Kiev, Ukraine. Our core team of dedicated employees has several nationalities but one shared passion: to make children’s lives better – and communities stronger – by making 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

Our team

Our team

Our passion: to make children’s lives better – and communities stronger – by making sure the fundamental value of play is understood, embraced and acted upon.

Number of employeesHeads, end of year

Denmark 69%

Switzerland 28%

Ukraine 3%

People per office geography (% of total in 2014)

2010

10 1215

2832

51

2011 2012 2013 2014 2015 Est.

Foundation as new CEO from 1 March. Hanne has more than 20 years of experience with humanitarian and development work and comes from a position as Chief Operating Officer (COO) in SOS Children’s Villages International.

44

632 entries from 63 countries in the LEGO Foundation and Ashoka Re- imagine Learning Challenge

2014 highlights

educators, innovators, thought-leaders and entrepreneurs from all over the world joined our 2014 LEGO Idea Conference to discuss play and its critical link to learning.

children in vulnerable conditions reached through LEGO Charity.

325,000

270

children enrolled in the International School of Billund.

donated to Ole Kirk’s Foundation (page 65).

DKK 125 million

130 of our Cultures of Creativity video.

LEGOFoundation.com

+4,500 views

2014 highlights2014 highlights

46 47

Management’s review 2014


Income statementThe LEGO Foundation’s annual result for 2014 amount-ed to DKK 1,734 million against DKK 1,529 million in 2013. The huge contribution to this result is the result from subsidiaries of DKK 1,804 million where the 25% share of the result in the LEGO Group amounted to DKK 1,756 million.

The result for the year is considered highly satisfactory and has exceeded the level of expectation before the financial year.

Activity statementThe activities for the LEGO Foundation amounted in 2014 to DKK 262 million against DKK 163 million in 2013. The increase in activities is in accordance with the implementation of the Foundation’s strategy, Theory of Change, with focus on the three mutually reinforcing approaches:

• Build and share EVIDENCE to show value• Open minds to develop BUY-IN• Identify and support PROGRAMMES that

demonstrate results

As part of working with these three approaches, the foundation currently focuses on five main programmes mentioned separately in the annual report in specific sections.

Balance sheetAt the end of the year, the assets totalled DKK 7,821 million against DKK 6,313 million in 2013. The increase is primarily due to the increase in the value of the subsidiary Koldingvej 2, Billund A/S where the value has increased by DKK 1,719 million. The book value of the equity is DKK 7,459 million against DKK 6,265 million. The equity ratio is 95% compared to 99% in 2013.

Cash flowsThe significant contribution to the LEGO Foundation’s cash flow is the dividend from the LEGO Group to the LEGO Foundation’s 100% owned subsidiary Koldingvej 2, Billund A/S. In 2014 the 25% share of dividend amounted to DKK 1,250 million.

Development in the LEGO Foundation's activities and financial positionThe highly satisfactory financial result for the year is due to the continuing positive development for the LEGO


Group that had yet another successful year in 2014. The LEGO Group's net revenue increased by 13% to DKK 28,578 million. Earnings also improved significantly as result before tax was DKK 9,491 million against DKK 8,239 million in 2013.

Knowledge resourcesIn the LEGO Foundation’s activities, employees are the single most critical resource. The LEGO Foundation’s activities and results are accomplished thanks to the motivation and commitment of the employees.

As part of the plan of implementing the Theory of Change, employees and management work together to continuously secure job satisfaction and a strong working environment.

In 2014, the total number of full-time employees at the end of year in Billund (DK), Baar (CH) and Kiev (UKR) was 32 compared to 28 in 2013.

RisksThe LEGO Foundation’s risks primarily relate to devel-opments within the global markets where the LEGO Group is active and the financial markets.

Expectations for 2015Based on a good start to 2015 for the LEGO Group and expected continuous growth in activities in the LEGO Foundation, the overall result for 2015 is expected to be satisfactory.

The LEGO Foundation Annual Report is in compliance with the recommendations for best practice in Danish Foundations. A compliance status reported by our board of directors can be found on LEGOfoundation.com.

Financial Statements

48 49

Management’s statementManagement’s statement

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 CarstensenInterim CEO

Board of directors Kjeld Kirk KristiansenChairman of the board

Sofie Kirk KristiansenBoard member

Thomas Kirk Kristiansen1st deputy chairman of the board Mette Morsing Board member

Jørgen Vig Knudstorp2nd deputy chairman of the board

William E. HooverBoard member

50

Independent auditor’s reportIndependent auditor’s report

Independent auditor’s report

To the Board of Directors and Executive Management of the LEGO Foundation Report on the financial statements We have audited the financial statements of the LEGO Foundation for the financial year 1 January–31 Decem-ber 2014, which comprise accounting policies, income statement, balance sheet, statement of changes in equity and notes. The financial statements are prepared in accordance with the Danish Financial Statements Act.

Responsibility of the Board of Directors and Execu-tive Management for the financial statementsThe board of directors and executive management are responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act. Further, the board of directors and executive management are responsible for such internal control as the board of directors and executive management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards

on Auditing and additional requirements under Danish audit regulations. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the financial state-ments are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the board of directors and executive management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn 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 for the financial year 1 January–31 December 2014 in accordance with the Danish Financial Statements Act.

Statement on the management’s reviewIn accordance with the Danish Financial Statements Act, we have read the management’s review. We have not performed any further procedures in addition to the audit of the financial statements. On this basis, it is our opinion that the information provided in the management’s review is consistent with the Danish Financial Statements Act. Aarhus, 23 February 2015 Deloitte Thomas Rosquist Andersen State Authorised Public Accountant

5352

Activity ReportingIncome statement

(tDKK) Note 2014 2013

Net result from subsidiaries 1,804,126 1,561,543

Other operating income 1,038 943

Financial income 26,993 40,490

Financial expenses (14,241) (16,144)

Total net income 1,817,916 1,586,832

Expenses related to projects and donations

Employee expenses 1 (24,259) (16,020)

Operating expenses 2 (30,426) (19,684)

(54,685) (35,704)

Expenses related to administration

Employee expenses 1 (11,343) (9,069)

Operating expenses 2 (17,553) (12,446)

Depreciation 3 (419) (419)

(29,315) (21,934)

Total expenses (84,000) (57,638)

Result before tax 1,733,916 1,529,194

Tax on result for the year (344) (109)

Result for the year 1,733,572 1,529,085

Distribution of result

Donations committed in 2014 for activities in 2014 150,715 96,499

Donations committed in 2014 for activities in 2015 and forward 321,627 32,088

Adjustment to previous years' donations 0 (2,444)

Reserved for future donations 500,000 0

Reserve from the use of the equity method 1,804,126 1,561,543

Retained earnings (1,042,896) (158,601)

1,733,572 1,529,085

Income statement1 January–31 December

(tDKK) 2014 2013

Donations

Donation activities Ole Kirk's Foundation 125,000 45,000

Donation activities other programmes, commited current year 25,715 51,499

Donation activities other programmes, committed previous years 27,158 8,585

Current year's donation activity in total 177,873 105,084

Expenses

Expenses related to donations and projects 54,685 35,704

Expenses related to administration 29,315 21,934

Current year's expenses in total 84,000 57,638

Total activities 261,873 162,722

Activity reporting 1 January–31 December

Activity reporting

The LEGO Foundation measures the "activities" as a sum

of donation activities, expenses related to projects and

donations and administration expenses. The total activities

for the year cannot be seen directly in the income statement

in the annual report.

The income statement for the LEGO Foundation is prepared

in accordance with the provisions of the Danish Act on

Corporate foundations and is presented in accordance with

the provisions of the Danish Financial Statements Act per-

taining to reporting class B enterprises (Danish GAAP).

As a part of the Danish GAAP, the donations decided by

the board of directors are taken from the result distribution

and as such not expensed as part of the Foundation's

income statement. At the same time, the donations are

taken from the result distribution in the year of board

decision - and not in the periods where the donations are

paid.

As a supplement to the income statement, an activity

reporting statement is made in which the donations

relevant for the period are shown as activities together

with the expenses for projects and donations and the

administration expenses.

The board has decided to reserve DKK 500 million to

future donations. During 2015 or later the Board will

decide which projects should receive donations.

5554

(tDKK) Note 2014 2013

ASSETS

Non-current assets

Land and buildings 3 6,988 7,407

Antique collection 3,000 3,000

Property, plant and equipment 9,988 10,407

Investments in subsidiaries 4 5,730,648 5,511,522

Other non-current assets 5,730,648 5,511,522

Total non-current assets 5,740,636 5,521,929

Current assets

Receivables subsidiaries 1,500,344 -

Other receivables 21,736 11,486

Securities 554,147 757,802

Cash 3,965 21,828

Total current assets 2,080,192 791,116

Total assets 7,820,828 6,313,045

(tDKK) Note 2014 2013

EQUITY AND LIABILITIES

Equity

Basic capital 262,453 262,453

Reserve from the use of the equity method 5,071,656 4,852,530

Reserved for future donations 500,000 -

Retained earnings 1,625,237 1,150,121

Total equity 7,459,346 6,265,104

Liabilities

Non-current liabilities

Committed donations 332,298 37,829

Total non-current liabilities 332,298 37,829

Current liabilities

Trade payables 3,033 2,151

Other payables 26,151 7,961

Total current liabilities 29,184 10,112

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

Balance sheetat 31 December

Balance sheetat 31 December

Balance sheetBalance sheet

5756

Accounting policiesStatement of changes in equity

(tDKK) Note 2014 2013

Basic capital

Balance at 1 January 262,453 262,453

Basic capital at 31 December 262,453 262,453

Reserve from the use of the equity method

Balance at 1 january 4,852,530 3,391,737

Income from subsidiaries 1,804,126 1,561,543

Dividend distributed (1,518,000) (18,000)

Other comprehensive income/(expenses) (67,000) (82,750)

Reserve from the use of the equity method at 31 December 5,071,656 4,852,530

Reserved for future donations

Balance at 1 january - -Change for the year 500,000 -Reserved for future donations at 31 December 500,000 -

Retained earnings

Balance at 1 January 1,150,121 1,290,722

Dividend recieved 1,518,000 18,000

Transferred in the year ( 1,042,896 ) (158,601)

Currency translation 12 -Retained earnings at 31 December 1,625,237 1,150,121

Total equity 7,459,346 6,265,104

Statement of changes in equity Accounting policies

The accounting policies applied to the annual report in general are desribed below.

LegislationThe LEGO Foundation’s annual report for 2014 has been prepared in accordance with the provisions of the Danish Act on Corporate foundations and presented in accordance with the provisions of the Danish Financial Statements Act pertaining to reporting class B enterprises.

The income statement presents "expenses related to projects and donations" and "expenses related to administration" in order to give a fair and true view of the Foundation's acitivities. The clarification has no impact of the result for the year or the equity at the beginning or the end of the year.

Consistency with prior years reportingThe accounting policies are consistent with those of prior years.

Consolidated financial statementsNo consolidated financial statements have been prepared, see section 110 of the Danish Financial Statements Act, which concerns small groups.

Reporting currencyThe annual report is presented in Danish kroner.

Translation of foreign currencyTransactions in foreign currencies are translated into Danish kroner using the foreign exchange rates applicable at the transaction date. Monetary assets and liabilities in foreign currencies are translated into Danish kroner using the foreign exchange rates applicable at the balance sheet date. Realised and unrealised foreign exchange gains and losses are recognised in the income statement under net financials.

Recognition and measurement in generalIncome is recognised in the income statement as earned. Furthermore, all expenses incurred to generate the year’s earnings, including depreciation and amortisation, impairment losses and write-downs and provisions, are recognised in the income statement.

Assets are recognised in the balance sheet when it is probable that future economic benefits will flow to the entity, and the value of such assets can be measured reliably. Liabilities are recognised in the balance sheet when it is probable that future economic benefits will flow from the entity and the value of such liabilities can be measured reliably. Upon initial recognition, assets and liabilities are measured at cost.

On recognition and measurement, allowance is made for foreseeable losses and risks arising before the time at which the annual report is presented and proving or disproving matters arising on or before the balance sheet date.

Income statementInvestments in subsidiariesIncome from investments in subsidiaries consists of the proportional share of its result after tax and any adjustment of internal result/loss and deduction of amortisation of goodwill on consolidation.

DepreciationDepreciation of and impairment losses on property, plant and equipment are based on an ongoing assessment of the useful lives of the entity’s assets. Non-current assets are depreciated on a straight-line basis based on cost, based on the following estimated useful lives and residual value of the assets:

Useful lifeBuildings 25 yearsAntique collection Infinity

Gains and losses from the disposal of non-current assets are recognised in the income statement under other operating income and expenses.

Financial income and expensesFinancial income and expenses are recognised in the income statement with the amounts related to the financial year. Financial income and expenses include interest income and in-terest expenses, realised and unrealised capital gains and losses on securities, payables and transactions in foreign currencies.

5958

Accounting policies

TaxThe LEGO Foundation has opted to use section 3(4) of the Danish Corporation Tax Act. Under these rules, the taxable income of Koldingvej 2, Billund A/S is considered to have been earned by the LEGO Foundation if the taxable income is distributed as dividends to the LEGO Foundation. Since the LEGO Foundation's taxable in-come is regularly offset against grants for the year and provisions for future grants, no current or deferred tax is recognised.

DonationsDonations are recognised when they are committed before the end of the financial year. Non-disbursed committed donations are recognised as non-current liabilities.

Balance Sheet Property, plant and equipmentProperty, plant and equipment are measured at cost plus any revaluations and less accumulated depreciation and impair-ment losses. Cost comprises the acquisition price and directly related costs up until such time as the asset is ready for use.

Impairment testing of property, plant and equipment is performed if indications of impairment exist. The impairment test is performed for each individual asset or group of assets. Assets are impaired to the higher of the capital value of the individual asset or asset group and the net sales price (recoverable amount) if this is lower than the carrying amount.

Investments in subsidiariesInvestments in subsidiaries are measured according to the equity method based on the proportionally owned share of the subsid-iaries equity plus any consolidated goodwill and less intra-group gains and negative goodwill. Entities with negative equity are recognised at zero with the negative value corresponding to the proportionate share being offset against any receivables. Any amounts over and above this are recognised under provisions if a legal obligation or other obligation to cover the deficit exists.

SecuritiesSecurities are measured at fair value. For listed equities at market value and at estimated fair value for unlisted equities.

Other receivablesOther receivables are measured at amortised cost, which usually corresponds to nominal value. The value is reduced by provisions for expected losses.

CashCash comprises cash at bank and in hand.

LiabilitiesLiabilities are measured at amortised cost, which usually corresponds to nominal value.

Committed donationsCommitted donations are binding commitments made by the board of directors.

Definitions, key figures and ratios

Activities: Administration + Programme costs + Donations related to the

financial year

Portfolio: Programme costs + Donations related to the

financial year

Key figures and ratios have been calculated in accordance with descriptions below:

DISTRIBUTION RATE: ActivitiesDividend from the LEGO Group

ADMINISTRATION COST SHARE: AdministrationActivities

PROGRAMME COST SHARE: Programme costsPortfolio

Notes

Note 1. Employee expenses

(tDKK) 2014 2013

Employee expenses related to projects and donations 24,259 16,020

Employee expenses related to administration 11,343 9,069

Total employee expenses 35,602 25,089

Which can be split into:

Wages and salaries 29,672 22,603

Pension costs 1,983 415

Other staff and social security expenses 3,947 2,071

Total employee expenses 35,602 25,089

Salaries and remuneration for executive management and board of directors amount to 3,729 4,171

Average number of employees 28 19

NOTE 2. OPERATING EXPENSES

(tDKK) 2014 2013

Operating expenses related to projects and donations 30,426 19,684

Operating expenses related to administration 17,553 12,446

Total operating expenses 47,979 32,130

Notes

6160

Notes

Note 3. Property, plant and equipment

(tDKK) 2014 2013

Cost

Cost at 1 January 10,885 10,885

Cost at 31 December 10,885 10,885

Depreciation

Balance at 1 January 3,478 3,059

Depreciation for the year 419 419

Depreciation at 31 December 3,897 3,478

Carrying amount at 31 December 6,988 7,407

Notes

Information about subsidiaries:

Name Municipality OwnershipKoldingvej 2, Billund A/S Billund 100%

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

Note 6. Related party transactionsTransactions with related parties have been conducted at arm's length.

Note 4. Investments in subsidiaries

(tDKK) 2014 2013

Cost

Cost at 1 January 658,992 658,992

Cost at 31 December 658,992 658,992

Value adjustment

Value adjustment at 1 January 4,852,530 3,391,737

Share of result for the year 1,804,126 1,561,543

Dividend distributed (1,518,000) (18,000)

Other comprehensive income/(expenses) (67,000) (82,750)

Value adjustment at 31 December 5,071,656 4,852,530

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

NotesNotes

62 63

Ole Kirk´s Foundation

donated by Ole Kirk’s Foundation in 2014.

DKK 143million

Ole Kirk’s Foundation is a charitable foundation that mainly supports social, cultural and educational purposes in Denmark. Ole Kirk's Foundation

was established in 1964 in memory of the founder of the LEGO Group.

65

Impact of the LEGO Foundation

www.olekirksfond.dk

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 for children, youth and families.

64 65

Ole Kirk´s Foundation

6564

LEGO Foundation legal structure

Information about the LEGO Foundation

LEGO Foundation legal structure

Legal name LEGO FondenAddress Koldingvej 2, 7190 BillundCountry Denmark Registration number 12 45 83 39 Branch LEGO Foundation, Baar, Switzerland Executive management Kurt Carstensen (Interim CEO until 1 March 2015) Board of directors Kjeld Kirk Kristiansen (chairman of the board) Thomas Kirk Kristiansen (1st deputy chairman of the board) Jørgen Vig Knudstorp (2nd deputy chairman of the board) Sofie Kirk Kristiansen (board member) William E. Hoover (board member) Mette Morsing (board member)

Leadership team Kurt Carstensen, Interim CEO Andrew Bollington, Vice President, Research and Learning Hanne Træholt Odegaard, Senior Director, Capital of Children Mirjam Schöning, Vice President, Programmes and Partnerships Carsten Klokkerholm Wammen, Vice President, Operations

Koldingvej 2, Billund A/S Koldingvej 2, Billund A/S is a 100% owned subsidiary of the LEGO Foundation. The most significant asset in Koldingvej 2, Billund A/S is the 25% shareholding 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 2017. Koldingvej 2, Billund A/S is investing surplus liquidity in financial assets.

CoC Office A/S CoC Office A/S is an independent public limited company, in which the LEGO Foundation and Billund Municipality each own 50% of the shares. The LEGO Foundation and Billund Municipality founded the company on 1 January 2012.

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 children, play, learning and creativity, to benefit everyone who lives in Billund Municipality and children all over the world.

The LEGO GroupThe LEGO Group is owned 25% by LEGO Foundation through Koldingvej 2, 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.

Information about the LEGO Foundation

LEGO Foundation

Koldingvej 2, Billund A/S

100%

CoC Office A/S 50%

LEGO A/S25%

66 67

68

Together, we can champion learning through play

Get to know us better at LEGOFoundation.comFollow us on Twitter @LEGOFoundationE-mail us at [email protected]

The LEGO FoundationKoldingvej 27190 Billund, Denmark

Documents

Annual Report 2014 - The LEGO Foundation · annual LEGO Idea Conference. Each spring, the LEGO Foundation hosts this conference in Billund, home of the LEGO Group, to bring together