Section 8 – Other notes Income Statement

8.1. Standard consolidated income statement

and relate to:

Other current and non-current liabilities mainly relates to the LEGO Group and comprises wage related debt, VAT, other indirect taxes and sales incentives.

Accounting policies

Other liabilities are measured at amortised cost unless specifically stated otherwise.

Borrowings are initially recognised at fair value, net of transaction expenses incurred. Borrowings are subsequently measured at amortised cost. Any differences between the proceeds and the redemption value are recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the KIRKBI Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

The KIRKBI Group presents its consolidated income statement, as an alternative performance measure (APM) as management believes that a standard consolidated income statement does not give the most accurate picture of the company’s holding and investment activities. KIRKBI’s activites includes ownership of LEGO branded entities as well as operation of a large diversified investment portfolio. Management does not believe that a standardised consolidated income statement will give a transparent and clear picture of profitability, development and direction of the KIRKBI Group’s activities. The income statement presented is therefore based on the internal management reporting for the KIRKBI Group presented as an APM.

To fulfill IFRS requirements of presenting a standardised consolidated income statement, it is presented below without further descriptions or notes.

8.2. Group revenue

8.3. Group expenses by nature

Accounting policies

Expenses by nature discloses information about expenses arising from the main inputs that are consumed in order to accomplish the KIRKBI Group’s activities.

Accounting policies

Revenue is recognised when the KIRKBI Group fulfils its contractual performance obligations towards the buyer, at the transaction price to which the

KIRKBI Group expects to be entitled. Transaction price includes rebates, sales incentives and provisions for returned products.

8.4. Group employee expenses

Since the Executive Management only consists of one member, the remuneration of the Executive Management and the Board of Directors is disclosed collectively with reference to § 98b (3) of the Danish Financial Statements Act.

Accounting policies

Wages, salaries, social security cost, leave and sick leave, bonuses and non-monetary employee benefits are recognised in the financial year in which

Incentive plans comprise a short-term incentive plan based on yearly performance and a long-term incentive plan related to long-term goals regarding value creation.

8.5. Auditor’s fee

the services are rendered. Whenever the KIRKBI Group provides long-term employee benefits, the costs are accrued to match the rendering of the services by the employees.

Fee to Deloitte included under Other services comprises primarily IT consultancy services to the LEGO Group audited by PWC.