Order on Financial Reports for LD Fonde

Order on Financial Reports for LD Fonde

Pursuant to Section 8 l and Section 14 a, paragraph 2, of the Act on the Wage Earners' Price Compensation Fund, cf. Act Consolidation No. 1109 of 9 October 2014, the following is stipulated:

Section I Scope of Application Chapter 1 Covered Companies and Reports

Section 1. This Order applies to LD Fonde.

Section 2. LD Fonde shall prepare and publish an annual report, cf. Section 8 of the Act on the Wage Earners' Price Compensation Fund, and a half-year report for each financial year.

Paragraph 2. The annual and half-year reports shall be drawn up in Danish or English.

Section 3. A statement of accounts that LD Fonde prepares exclusively for its own use is not an annual report or a half-year report under this Order. If LD Fonde prepares a statement of accounts that is not an annual report or a half-year report under this Order, it must not be designated as an annual report or half-year report, and it must be presented in form and content in such a way that it cannot be confused with a statement of accounts prepared under this Order.

Section II The Annual Report Chapter 2 Classification and Presentation General Provisions

Section 4. The balance sheet and income statement shall be presented in tabular form in accordance with Appendices 2 and 3.

Paragraph 2. The items in the tables in Appendices 2 and 3 shall be listed separately and in the specified order. Provided that the structure of the presentation tables is maintained, a more detailed breakdown may be made if the amount in the new sub-item is material and if the nature or function of the sub-item differs from other sub-items. New items may be added if the amount for such an item is material and if the nature or function of the new item differs from the other items.

Paragraph 3. Items that contain only immaterial amounts may be aggregated with other items of the same nature or function.

Section 5. For each item in the balance sheet and income statement, the corresponding amounts for the preceding financial year shall be stated. If the items are not directly comparable with the preceding year's items, the latter shall be adjusted. However, LD Fonde may refrain from adjusting comparative figures if it is not practically possible. Lack of comparability or any adjustment made shall be stated and duly justified in the notes, cf. Section 52.

Paragraph 2. Items in the balance sheet and income statement that do not contain any amount shall only be included if the preceding year's financial statement contains such an item.

Paragraph 3. Paragraphs 1 and 2 apply mutatis mutandis to note disclosures, unless otherwise stated in this Order.

The Balance Sheet

Section 6. Under asset item II, "Tangible Fixed Assets," tangible fixed assets shall be listed, except for the registered office building, and assets held for sale, cf. Section 9. The item also includes assets arising from financial leasing contracts. Furthermore, the item includes capitalized costs for the fitting out of rented premises.

Section 7. Under asset items 2.2, "Loans to Affiliated Companies," and 2.4, "Loans to Associated Companies," subordinated loan capital and other long-term loans to the respective companies shall be listed. Other receivables from the respective companies shall be listed under asset item 4 or asset item 5 or under another item under which the receivable falls by its nature. If the assets include investments in affiliated or associated companies that are not listed under items 2, 4, or 5, this shall be disclosed in a note with the amount specified.

Section 8. Under asset item 6, "Receivables for Holiday Funds from Employers," LD Fonde's receivables from employers' reported claims on wage earners' receivables for holiday funds shall be listed, where the employer can only pay with releasing effect to LD Fonde, and where the wage earner can only direct their claim against LD Fonde. Receivables for holiday funds are adjusted for indexation, periodic adjustment of indexation, and payments from employers.

Official Gazette A 2019 Published on 30 November 2019 27 November 2019. No. 1245. Ministry of Business Affairs, Financial Supervisory Authority, file no. 1972-0001 CQ001058

Section 9. Under asset item 10, "Assets Held for Sale," tangible fixed assets or groups of tangible fixed assets as well as subsidiaries and associated companies that are only temporarily in the company's possession and are awaiting sale in the near future, where a sale is highly probable, shall be listed. A sale is highly probable if:

1. LD Fonde's management is actively seeking a buyer for the assets,
2. the assets are offered for sale at a price that is reasonable in relation to the assets' fair value, and
3. the assets are expected to be sold within 12 months.

Section 10. Expenses incurred before the balance sheet date but relating to subsequent years shall be listed under prepayment items in assets. Income received before the balance sheet date but relating to subsequent years shall be listed under accrual items in liabilities.

Paragraph 2. Expenses that relate to the financial year but will only be paid in subsequent years shall be listed under liabilities. Income that relates to the financial year but is only paid after the balance sheet date shall be listed under receivables. Accrued, unpaid interest and earned, unpaid rental income shall, however, be listed under asset item 7, "Receivables for Interest and Earned Rent." Receivables for interest may, however, alternatively be posted as part of the value of the assets to which the interest relates.

Paragraph 3. If the expenses or income mentioned in paragraphs 1 and 2 are of significant importance, they shall be explained in the notes.

Section 11. Under liability item I, "Members' Equity, Total," under liability item 1, "Equity Attributed to Members," the total value of members' attributed receivables for the Wage Earners' Price Compensation and Wage Earners' Holiday Funds shall be listed. Under liability item 2, "Transferred Result," the amount that has not been attributed to the individual members for the Wage Earners' Price Compensation and Wage Earners' Holiday Funds shall be listed.

Section 12. Under liability item II, "Provisions, Total," liabilities that are uncertain with regard to size or timing of settlement shall be listed, cf. Sections 36, 37, and 39, paragraph 2.

Paragraph 2. Provisions may not be used to adjust the value of assets.

The Income Statement

Section 13. Under sub-item 1.1, "Interest Income and Dividends etc.," interest and interest-like income from bonds, other securities, loans, deposits, and receivables, including index adjustment of index bonds, shall be listed. Furthermore, dividends from capital shares shall be listed under this item, unless the amounts fall under items 1.4, "Income from Affiliated Companies," or 1.5, "Income from Associated Companies."

Paragraph 2. Under sub-item 1.2, "Indexation of Receivables for Holiday Funds from Employers," an annual adjustment of the receivables for holiday funds shall be listed, which LD Fonde notifies to employers who have retained receivables for holiday funds in the company. Ongoing income recognition of an expected or actual indexation is performed.

Paragraph 3. Under sub-item 1.3, "Valuation Adjustments," the total valuation adjustment, including exchange rate adjustment, as well as net gains and net losses on the sale of the registered office building and assets belonging to the group of investment assets in the balance sheet, shall be listed. Excluded from this are valuation adjustments relating to affiliated and associated companies, cf. paragraphs 4 and 5.

Paragraph 4. Under sub-item 1.4, "Income from Affiliated Companies," the income attributable to the capital shares from affiliated companies in the form of dividends and valuation adjustments shall be listed.

Paragraph 5. Under sub-item 1.5, "Income from Associated Companies," the income attributable to the capital shares from associated companies in the form of dividends and valuation adjustments shall be listed.

Paragraph 6. Under sub-item 1.6, "Income from Properties," profit or loss from the operation of LD Fonde's properties shall be listed. The amount shall be listed after deduction of expenses for property administration and before deduction of mortgage interest, which shall be listed under item 1.7, "Interest Expenses." Adjustment of the value of properties shall not be listed under item 1.6, "Income from Properties," but under item 1.3, "Valuation Adjustments."

Paragraph 7. Under sub-item 1.8, "Costs Related to Investment Activities," the costs that can be attributed to the trading and administration of LD Fonde's investment assets shall be listed, cf. however paragraph 6.

Section 14. Under main item 2, "Pension Return Tax," the pension return tax relating to the financial year shall be listed, regardless of whether the tax is current or is to be paid in later periods.

Section 15. Under main item 4, "Costs Related to Administration," the costs associated with administration shall be listed, including the corresponding share of personnel costs, commissions, marketing costs, rent, operating costs relating to the registered office building, expenses for office supplies and office maintenance, as well as depreciation and impairment of tangible and intangible assets. Furthermore, contributions to the Financial Supervisory Authority shall be listed.

Paragraph 2. If LD Fonde has performed administrative tasks for affiliated companies that are settled on a cost-recovery basis, the remuneration received may be listed as a deduction in the main item. The deduction shall be listed under a separate sub-item named "Reimbursement from Affiliated Companies."

Chapter 3 Recognition and Measurement The Balance Sheet General Provisions

Section 16. The balance sheet consists of recognized assets, recognized liabilities, including provisions, and members' equity, which constitutes the difference between recognized assets and other recognized liabilities. Liabilities are understood as the sum of members' equity and other recognized liabilities.

Section 17. An asset shall be recognized in the balance sheet when it is probable that future economic benefits will flow to LD Fonde, and the asset's value can be measured reliably.

Paragraph 2. A liability shall be recognized in the balance sheet when it is probable that future economic benefits will flow from LD Fonde, and the liability's value can be measured reliably.

Paragraph 3. In the recognition and measurement of assets and liabilities, information that emerges after the balance sheet date but before the financial statement is prepared shall be taken into account if the information confirms or refutes conditions that existed at the latest on the balance sheet date.

Section 18. The fair value of an asset or liability is the quoted price in an active market for the asset in question or the liability in question.

Paragraph 2. If there is no active market, the fair value shall be measured using a suitable valuation technique that incorporates all available data that market participants would be assumed to take into account in pricing. In such cases, the use of relevant observable data is maximized, and the use of unobservable data is minimized.

Section 19. Transactions carried out in a currency other than Danish kroner shall be converted to Danish kroner at the exchange rate on the transaction date.

Paragraph 2. Monetary items in a currency other than Danish kroner shall be converted to Danish kroner at the closing exchange rate for the currency on the balance sheet date.

Paragraph 3. Non-monetary items in a currency other than Danish kroner shall be converted to Danish kroner at the exchange rate on the transaction date if the item is recognized on the basis of historical cost.

Paragraph 4. Non-monetary items in a currency other than Danish kroner shall be converted to Danish kroner at the closing exchange rate on the balance sheet date if the item is recognized on the basis of fair value.

Paragraph 5. Exchange rate differences arising from the disposal of assets or settlement of liabilities covered by paragraphs 2-4 or conversion according to paragraphs 1-4 shall be recognized in the income statement.

Financial Instruments

Section 20. Financial assets and financial liabilities shall be recognized in the balance sheet when LD Fonde becomes subject to the contractual provisions of the financial instrument.

Section 21. A financial asset that has been sold or otherwise transferred to another party shall cease to be recognized in the balance sheet. A part of a financial asset shall cease to be recognized in the balance sheet if a uniquely defined share of the asset has been sold or transferred.

Paragraph 2. In the purchase or sale of financial assets under normal market conditions, LD Fonde shall recognize and cease to recognize the assets in the balance sheet on the trade date for all purchases and sales.

Paragraph 3. Simultaneously with the recognition of the purchased financial asset, cf. paragraph 2, a liability corresponding to the agreed price shall be recognized. Similarly, upon the sale of a financial asset, an asset corresponding to the agreed price shall be recognized simultaneously with the removal of the sold asset from the balance sheet. This liability or this asset, corresponding to the purchase price or sales price respectively, shall be removed from the balance sheet on the settlement date.

Paragraph 4. Notwithstanding paragraph 1, a financial asset that is transferred in a manner whereby LD Fonde substantially retains the risk and access to returns (cash flows) associated with the asset shall be retained in the balance sheet. Upon such a transfer, a financial liability corresponding to the payment received in connection with the transfer shall be recognized.

Section 22. Financial liabilities cease to be recognized in the balance sheet when the liability ceases, i.e., when the obligation stated in the contract is fulfilled or expires.

Section 23. Financial instruments shall be measured at fair value at the time of initial recognition.

Paragraph 2. Financial liabilities as well as loans and receivables, which are subsequently measured at amortized cost, cf. Sections 25 and 26, shall, however, at initial recognition be measured at fair value plus transaction costs and minus fees and commissions received that are directly attributable to the acquisition or issuance of the financial instrument.

Section 24. Financial instruments shall be subsequently measured at fair value after initial recognition.

Paragraph 2. Unquoted capital shares shall, if their fair value cannot be measured reliably, however, be measured at cost minus impairments, cf. paragraph 3. The same applies to derivative financial instruments if their value is derived from such capital shares.

Paragraph 3. If there is objective evidence of impairment, financial assets covered by paragraph 2 shall be written down by the difference between the carrying amount and the present value of expected future payments discounted at the prevailing market interest rate for similar financial assets. Such write-downs may not be reversed.

Section 25. Non-derivative financial liabilities may, notwithstanding Section 23, paragraph 1, be subsequently measured at amortized cost after initial recognition, provided that it is not a case of:

1. measurement at fair value significantly eliminating or reducing a measurement or recognition inconsistency that would otherwise arise due to measurement or recognition on different bases,
2. the liabilities in question being part of a risk management system or investment strategy that is based on fair values and is included on this basis in the company's internal management reporting, or
3. the liabilities in question containing an embedded derivative financial instrument that significantly alters the cash flows of the liabilities in question and alternatively would have to be separated and measured separately at fair value.

Paragraph 2. Financial liabilities that are measured at amortized cost according to paragraph 1 may not subsequently be measured at fair value.

Section 26. Loans and receivables may, notwithstanding Section 23, paragraph 1, be subsequently measured at amortized cost after initial recognition, provided that it is not a case of:

1. measurement at fair value eliminating or significantly reducing a measurement or recognition inconsistency that would otherwise arise due to measurement or recognition on different bases,
2. the loans and receivables in question being part of a risk management system or investment strategy that is based on fair values and is included on this basis in the company's internal management reporting, or
3. the loans and receivables in question containing an embedded derivative financial instrument that significantly alters the cash flows of the liabilities in question and alternatively would have to be separated and measured separately at fair value.

Paragraph 2. Loans and receivables that are measured at amortized cost according to paragraph 1 may not subsequently be measured at fair value.

Paragraph 3. If there is objective evidence of impairment, loans and receivables covered by paragraph 1 shall be written down by the difference between the carrying amount and the present value of expected future payments discounted at the original effective interest rate of the loan or receivable. If a subsequent event causes the impairment to be reduced wholly or partly, the write-down shall be reversed correspondingly. Reversal shall be recognized in the income statement.

Tangible Fixed Assets

Section 27. Tangible fixed assets held for use by LD Fonde or for leasing, and which are expected to be used for more than one financial year, shall be measured at cost at the time of initial recognition.

Paragraph 2. The cost includes all costs incurred in connection with the acquisition until the time when the asset is ready for use, or which can be directly attributed to the manufactured asset.

Section 28. Tangible fixed assets, except for investment properties and the registered office building, cf. Sections 29 and 30, shall be subsequently measured at cost minus accumulated depreciation and accumulated impairment losses.

Paragraph 2. Depreciation is recognized in the income statement. Depreciation is the systematic allocation over the asset's expected useful life of the asset's cost minus the residual value that the asset is expected to yield at the end of its useful life. The depreciable base shall be measured at the time of commissioning and at subsequent changes in the elements that make up the depreciable base.

Paragraph 3. Write-down for impairment losses shall be made if it is assessed that the asset's recoverable amount is lower than the carrying amount after depreciation. Write-downs shall be reversed if there is no longer a basis for the write-down.

Section 29. Investment properties and other tangible fixed assets that are not held for LD Fonde's own use shall be subsequently measured at fair value.

Paragraph 2. The fair value shall be determined in accordance with Appendix 4.

Section 30. The registered office building shall be subsequently measured according to the rules in Section 29.

Paragraph 2. A calculated market rent of the premises that LD Fonde itself uses shall be included under income item 1.6, "Income from Properties." A corresponding amount shall be included under expenses as rent, cf. Section 15.

Section 31. Tangible fixed assets covered by Section 9 regarding assets held for sale shall be measured at the lower of carrying amount and fair value minus costs of sale.

Paragraph 2. No depreciation shall be made on tangible fixed assets covered by paragraph 1.

Intangible Assets

Section 32. Intangible assets held for use by LD Fonde shall be measured at cost at the time of initial recognition, cf. however paragraphs 2 and 3.

Paragraph 2. Development costs may only be recognized as an intangible asset if there is documentation that:

1. there is technical feasibility to complete the intangible asset so that it can be used,
2. LD Fonde intends to complete the intangible asset,
3. LD Fonde is able to use the intangible asset,
4. the intangible asset will generate probable future economic benefits that correspond at least to the costs incurred, and
5. LD Fonde can reliably measure the costs that can be attributed to the intangible asset during its development.

Paragraph 3. Internally generated brand names, customer lists, and similar items, research costs, incorporation and establishment costs, training costs, marketing costs, relocation and reorganization costs, and internally generated goodwill shall not be recognized as assets.

Section 33. Intangible assets shall be subsequently measured at cost minus accumulated depreciation if the asset is assessed to have a finite useful life, and minus accumulated impairment losses, cf. Section 28, paragraphs 2 and 3.

Leasing

Section 34. LD Fonde shall recognize a leased asset and a lease liability at the time when LD Fonde obtains the right to use the asset. At initial recognition, the asset shall be measured at the present value of the lease liability including costs. Simultaneously, the present value of the agreed lease payments shall be recognized as a liability. In calculating the present value, the internal interest rate of the lease contract shall be used if it is possible to determine this. Otherwise, the lessee's marginal borrowing rate shall be used. LD Fonde may choose, but is not obliged, to recognize lease contracts regarding intangible assets. Assets leased under short-term contracts and leased assets with low value may be excluded.

Paragraph 2. After initial recognition, financially leased assets shall be measured according to the principles in Sections 27-33 according to the nature of the leased asset. Leased assets shall be presented in the balance sheet under the same item as corresponding owned assets. The breakdown shall be specified in a note.

Members' Equity

Section 35. An obligation to pay members for the Wage Earners' Price Compensation as well as wage earners' receivables for holiday funds shall be removed from the balance sheet when it has ceased. This is the case when the obligation has been fulfilled.

Provisions

Section 36. Provisions, guarantees, and other liabilities that are uncertain with regard to size or timing of settlement shall be recognized as provisions when it is probable that the obligation will result in a drain on LD Fonde's financial resources, and the obligation can be measured reliably.

Paragraph 2. Onerous contracts, i.e., contracts where the unavoidable costs associated with fulfilling the contractual obligations exceed the expected economic benefits, shall also be recognized as provisions.

Paragraph 3. Provisions shall be measured at the best estimate of the costs necessary to fulfill the current obligation on the balance sheet date.

Paragraph 4. If discounting is of significant importance for the size of a provision, it shall be measured at the present value of the costs expected to be necessary to fulfill the obligation.

Paragraph 5. The discount rate used to measure the present value shall correspond to the current risk-free market interest rate adjusted such that it reflects the risks specifically associated with the obligation. The discount rate must not reflect risks that are adjusted for in the estimate of the costs necessary to fulfill the obligation, cf. paragraph 3.

Paragraph 6. Guarantees, however, may not be recognized or measured at a lower value than the premium or commission that LD Fonde has received for assuming the guarantee, systematically depreciated over the risk period.

Section 37. Provisions shall be reviewed at each financial reporting and adjusted so that they reflect the best current estimate. If it is no longer probable that fulfillment will result in a drain on LD Fonde's financial resources, the obligation shall be reversed.