LETT in briefLETT Law Firm

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About LETTLETT is a full-service law firm with a focus on providing high-quality legal advice to business clients as well as the public sector. We cover Denmark from our offices located in the centres of Copenhagen and Aarhus.

We create the best solutions for our clients – not only in the legal sense but also in terms of business, strategy and ethi-cal standards. We find that this is the best path to satisfied clients and long-term cooperative relations. And to being the obvious choice of lawyers for business clients and the Danish public sector.

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Our path to future growthIn LETT, 2014 was marked by a number of large and high-profile cases. In-house, we have worked actively on preparing for new growth.

Last year, when we published our annual report for the first time, our aim was to provide an insight into the legal market and our firm. Our choice was to put a particular focus on some of the practice areas and projects that were on top of the agenda at the turn of 2014.

This is our second annual report, in which we take stock of a changing legal market and provide our take on the path to success. And in which we, first and foremost, tell about LETT as a legal advisor in a number of the cases that seized great public interest in 2014 as well as LETT as a working place of highly specialised lawyers who every day put clients at the centre of their work.

Henrik SjørslevManaging Partner

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A market undergoing changes

For many years, law firms saw assignments flowing in irrespective of how the rest of society was develop-ing. Now, we are to work in a more client-oriented way and understand where our markets are heading. These are some of the themes in which we, in LETT, have been engaged in 2014.

Sector developmentIn 2013, the Danish legal industry recorded a revenue de-cline. The tendency went on during the first months of 2014, but was, during the summer, superseded by rev-enue growth. According to the most recent prognosis for 2014 made by the Association of Danish Law Firms, the legal market is in 2014 expected practically to be back on the 2012 level. Under these fluctuating market conditions, the Danish legal industry has, also this year, had huge focus on adapting to demand and using our resources ef-fectively.

Our focus and performanceWhile, in 2013, the Danish legal industry saw a con-siderable revenue decline, we maintained, in 2013, our 2012-level revenue. We take it that this is an indication that our business is composed of clients and specialities that make our business less sensitive to market fluctua-tions than the legal industry as such. We have also suc-ceeded in maintaining the revenue level in 2014. At the same time, we prepared for future growth.

Correct practice-area organisingIn the middle of 2014, we initiated a process to create optimum organising of our various practice areas. The rea-son is that, in several of our assignments, a number of various legal specialities are closely linked, and correct or-ganising will enable us, right from the start, to offer a fully integrated approach and provide the strongest team. This approach applies to eg infrastructure projects where the impact of environmental and planning law is increasing.

Management-structure adaptationTo ensure a strong and joint management direction, we have adjusted our management structure and, now, our heads of department have been given further managerial responsibilities for the day-to-day activities and, not least, the professional development and specialisation.

Specialising is becoming more and more vitalMore and more, the demand for legal advice concerns complex issues, whereas routine issues tend to be solved by enterprises at in-house levels. This means that speciali-sation of each individual lawyer is extremely important – a

lawyer will no longer be an all-area expert but has to be sharp within relatively few areas.

Alongside specialisation, we experience a clear tendency that, more and more often, our assignments are inter-national, such as disputes between Danish and foreign parties or business transactions where interests in Danish enterprises are transferred to foreign investors. In this re-spect, international experience is essential. And especially in these assignments – where stakes are high and where there is a need for highly-specialised services, a strong in-ternational network and tailor-made solutions – the value of large law firms will be most significant.

Outlook and actual developments in 2014Our 2013 annual report referred to a number of the prac-tice areas within which we, at the turn of 2014, expected increased activities for the years to come – M&A activities, insolvency and restructuring as well as PPP/PPC projects. Our expectations have proved to be true:

Over the year, we had a much higher activity level within the M&A area than during previous years, and, on the fol-lowing pages, various cases put a focus on these activities. We still experience, however, some "wait-and-see" within the business sector and therefore assess that an actual recovery is yet to arrive.

In the wake of the credit crunch, our activities within in-solvency and restructuring have increased during recent years. The number of bankruptcies declined in 2014, but we still experience intense activities within this area, in relation to the bankruptcies of O.W. Bunker, Danish con-struction group E. Pihl & Søn and Cimber Sterling, etc, as well as the problems faced by the Danish agricultural sec-tor, which is challenged by failing prices, high debts and Russia's boycott on pork.

Within construction, particularly Copenhagen and Aarhus have been at high speed in 2014. We have been very well represented within this area – as a legal advisor in devel-opment projects, as an advisor for a number of municipali-ties in tendering procedures of PPP/PPC projects and as a legal advisor for several winning consortiums.

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Major assignments in 2014

In 2014, we handled assignments within almost all legal specialities. No two clients are alike – and nor was our advising. We have combined profound specialist expertise and business sense and, together with the individual client, created high-quality results. Below is a selection of our most recent assignments.

CAPITAL INCREASE IN DONG ENERGYIn connection with the capital increase in DONG Energy in 2014, LETT represented the Danish investors ATP and PFA in the intensive negogiation process. Our advising to ATP and PFA included due diligence, bid submission, negotiations, contract drafting and closing, etc.

PENSION AND INSURANCEIn 2014, LETT conducted a number of leading cases concerning insurance companies' regulatory and fee-related matters for prominent players within life and pension insurance. We also worked on ensuring a so-lution of one of the so-far most complicated matters in relation to liabillity within the Danish consultancy busi-ness in respect of life and pension companies.

ACQUISITION OF NETSIn connection with the sale of Nets to a consortium con-sisting of US private-equity funds Advent International and Bain Capital and Danish ATP, LETT, in cooperation with the US law firm Weil Gotshal Manges etc, advised the consoritum on all aspects in connection with the financing of the acquisition.

EU AND COMPETITION LAWIn 2014, LETT represented a number of enterprises in cases concerning claims for damages due to competi-tion-law infringements in connection with illegal cartel activities of other enterprises etc. The claims for da-mages in two of the pending cases amount to several millions of Danish kroner.

ACQUISITION OF CHEMINOVAIn the sale of Cheminova A/S to the US chemical ma-nufacturing company FMC Corporation, LETT, together with US law firm Weil, Gotshal & Manges, advised the US investment bank Citibank, which provided acquisi-tion financing to FMC.

INSOLVENCY AND RESTRUCTURINGAs one of the trustees in the bankrupt estate of E. Pihl & Søn, we had particular focus in 2014 on avoidance and the handling of employees.

In connection with the bankruptcy of Cimber Sterling A/S, LETT participated in 2014 on behalf of the bank-rupt estate in the tripartite negotiations concerning the sale of the airline Cimber A/S, which was purchased by SAS in December 2014.

LISTING OF DANDRITIn close cooperation with US investment banks and law firms, LETT assisted DanDrit, which develops a vac-cine against colorectal cancer, in its listing on the OTC market in New York. Prior to the listing, LETT assisted DanDrit in a lengthy and extensive clearing up of the enterprise to get it ready for a stock listing and thereby obtain capital to continue the development of the can-cer vaccine.

INFRASTRUCTURE PROJECTS IN PPP AND PPCLETT assisted the Municipality of Frederiksberg in the tendering procedures and competitive dialogue concer-ning the conclusion of a PPP contract on the design, construction and operation of a new swimming facility.

In 2014, LETT assisted the consortium that won the tender for a 30-year PPP contract to construct and ope-rate the Court in Svendborg.

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Employees - our greatest asset

We take good care of our employees and work on promoting their very talents. Competencies, ambitions and professional interests vary from employee to employee, and, therefore, we base our approach on each individual employee.

About one year ago, we introduced LETT's career-trail model. Its purpose was to get a general picture of the various development opportunities that we offer our legal staff and the resulting requirements relating to competen-cies and performance.

Irrespective of the path on which a LETT lawyer wishes to focus, the resources for further development are a com-bination of:

• the type and complexity of the assignments in which a LETT lawyer is involved or for which he or she gets the responsibility

• instruction, coaching, sparring and feedback re-ceived from the partner in charge or from more experienced colleagues

• formal instruction by way of international studies, research and course activities

• secondments to international law firms and Dan-ish enterprises and authorities.

The most important tool for supporting and planning con-tinued employee development is our performance-review concept, which, in LETT, is called PPDR, because the con-cept is based on both performance and development. Be-

ing designed as a management and dialogue tool, this tool contributes to balancing development activities and pro-fessional performance as well as ensuring continued spe-cialisation within legal disciplines and/or industries that encounter special legal issues.

International experienceAlongside his or her specialisation, a young lawyer must learn to understand the international context which is the setting for a large number of our assignments. This re-quires international experience, and more and more of our young lawyers are getting this experience through se-condments to foreign law firms – perhaps even combined with international education, and this is exemplied on the following pages.

More and more often, the major assign-ments that we attend to in LETT have in-ternational aspects. These matters include disputes between Danish and foreign par-ties, international business transactions or cross-border reorganisations. This makes special demands on us as legal advisors –not only in terms of legal expertise but also as regards language and culture skills.

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Staff-composition development

Compared to 2013, there are no major changes in our staff composition in 2014. At the end of 2014, we had 287 staff members. Out of these 287, 146 held a Master of Law degree and 37 were law students.

Lawyers

Trainees/law students

Secretaries

Administration

Source: LETT, staff composition as at 31 December 2013 and 31 December 2014

Source: LETT

51%

12%

20%

17%

2013

51%

13%

20%

16%

Women37%

Men63%

2014

2014

Gender-distribution development

At the end of 2014, 37% of our legal staff were women. Compared to the end of 2013, this is a 1% decrease, which is not a satisfactory development, as our intention is to have an equal gender composition of our workforce. However, we are pleased that, at the end of 2014, more than half (52%) of our associates were women. This is very positive, as one of our declared goals is to retain a higher number of women lawyers throughout their entire careers, and this is ia to be supported by LETT's career-trail model.

This development will be crucial as to whether our goal can be achieved in terms of an executive committee con-sisting of 20% women in 2018 and 40% women in 2023.

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Our contribution to society

Responsibility, including social responsibility, represents one element in the way we run our business at LETT. We are proud to have joined Global Compact, however, our community engagement in and contribu-tion to Danish society extends much further.

As a law firm, we believe that we can make the greatest difference through efforts rooted in our specialist compe-tency – the law. Our CSR-strategy focuses on four areas – legal assistance, legal research and knowledge sharing, employee investment and environmental focus.

Our latest Global Compact reporting is available on www.unglobalcompact.org.

Legal assistanceThe legal CSR efforts of LETT are wide-ranging. We en-courage our lawyers to take part in established legal-aid schemes, and some of our lawyers are counsels appointed by the Danish Supreme Court, which implies that, follow-

ing public appointment, they take on cases before the Court. Furthermore, a number of the partners in LETT are actively involved in cultural forums within sports as well as the arts.

Research and knowledge sharingWe have huge focus on sharing our legal knowledge be-cause we wish to ensure and put our fingerprints on the ongoing development within legal professionalism. We write books and professional newsletters and hold a num-ber of different seminars and courses. We are lecturers at external events and lecture at relevant institutions of higher education. We take on positions of trust and are part of working committees in fora within our profession.

Involvement in the university law programme

Each year, nearly 300 universities participate in the world's largest international moot, Vis Moot. The competition puts international law on the sale and purchase of goods and arbitration on the agenda, and through a number of years, LETT has been the sponsor of and supervisor for the team of the University of Aarhus. LETT's involvement in Vis Moot enables us to contribute to shaping promising law students having an interest in litigation. The sponsorship also provides an opportunity to make relations to some of the most skillful law students in Denmark.

During the recent three years, LETT has been the main sponsor of the moot trial of Juridisk Diskussionsklub (the Copenhagen University debating society for law students) at the University of Copenhagen. The moot trial, which aims at law students having the courage to test their skills within litigation, reaches its peak at the finals before the Danish Supreme Court, where a winning team and the Litigator of the Year are named. All the participants are of-fered personal feedback from LETT on the basis of their performance.

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„Our accounts show that, compared to 2013, the 2014 revenue has remained largely unchanged. Meanwhile, 2014 was also a year when we made preparations for new growth.

LETT in figures

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Financial highlights

Key financial figures

ResultsNet turnoverProfit from ordinary operating activitiesProfit before financial income and expenses, netProfit from financial income and expenses, netNet profit for the year

2014

DKK´000

363,97710,60310,603-3,1847,419

2013

DKK´000

367,28617,98517,985-4,30213,684

Balance seetBalance sheet totalEquity

269,35380,867

326,14076,192

Cash flowCash flows from:- operating activities - investing activities

of which investment in tangible fixed assets- financing activitiesChange in cash and cash equivalents for the year

Average number of full-time staff members

-23,384-4,386-3,804

-57,909-85,680

253

28,017-1,267

-506-12,97513,775

256

Financial ratios in %Gross margin ratioProfit marginReturn on capital employedSolvency ratioReturn on equity

78.7%2.9%3.9%

30.0%9.4%

78.0%4.9%5.5%

23.4%19.7%

The limited partnership company was founded in the spring of 2013 by a conversion of LETT Law Firm (partnership) with effect from 1 January 2013. As a result of the conversion, the reporting class of the company changed from "A" to "C", resulting in the company's work in progress being measured according to the percentage-of-completion method and not, as previously, according to the completed-contract method. In connection with the conversion, the office in Kolding and its owners left LETT Law Firm.

The management of LETT has not been able to procure the necessary data to adjust the key and financial ratios for the period 2010 - 2012.

Over a 2-year period, the following key and financial ratios describe our development:

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Profit and loss account 1 January – 31 December

2014 2013

DKK DKK

Net revenue 363,977,166 367,286,213

Other external expenses -77,445,298 -80,632,768

Gross profit 286,531,868 286,653,445

Staff costs -274,022,640 -266,460,301

Depreciation, amortisation and write-downs on tangible as well as intangible fixed assets -1,906,604 -2,207,763

Profit before financial income and expenses, net 10,602,624 17,985,381

Financial income 99,507 255,348

Financial expenses -3,283,348 -4,557,177

Pre-tax profit 7,418,783 13,683,552

Tax on profit or loss for the year 0 0

Net profit for the year 7,418,783 13,683,552

Distribution of the profit for the year

Proposal for distribution of the profit for the year

Proposed dividend for the financial year 0 0

Retained profit 7,418,783 13,683,552

7,418,783 13,683,552

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Balance sheet as at 31 December – Assets

2014 2013

DKK DKK

Other fixtures and fittings, tools and equipment 3,596,462 1,297,569

Leasehold improvements 855,984 1,257,376

Tangible fixed assets 4,452,446 2,554,945

Other debtors 7,405,740 6,823,769

Fixed asset investments 7,405,740 6,823,769

Fixed assets 11,858,186 9,378,714

Trade debtors 170,354,056 148,125,172

Contract work in progress 77,167,374 72,092,060

Other debtors 672,033 2,595,369

Prepayments and accrued income 5,558,456 4,526,523

Debtors 253,751,919 227,339,124

Cash at bank and in hand 3,742,418 89,422,281

Current assets 257,494,337 316,761,405

Assets 269,352,523 326,140,119

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Balance sheet as at 31 December – Equity and liabilities

2014 2013

DKK DKK

Share capital 4,100,000 4,100,000

Retained profit 76,767,374 72,092,060

Equity 80,867,374 76,192,060

Subordinate loan capital 33,578,571 36,255,714

Long-term liabilities other than provisions 33,578,571 36,255,714

Trade creditors 6,003,946 5,078,057

Amounts owed to partners 92,389,611 147,196,619

Other creditors 56,513,021 61,417,669

Current liabilities other than provisions 154,906,578 213,692,345

Creditors 188,485,149 249,948,059

Equity and liabilities 269,352,523 326,140,119

Balance sheet as at 31 December – Assets

2014 2013

DKK DKK

Other fixtures and fittings, tools and equipment 3,596,462 1,297,569

Leasehold improvements 855,984 1,257,376

Tangible fixed assets 4,452,446 2,554,945

Other debtors 7,405,740 6,823,769

Fixed asset investments 7,405,740 6,823,769

Fixed assets 11,858,186 9,378,714

Trade debtors 170,354,056 148,125,172

Contract work in progress 77,167,374 72,092,060

Other debtors 672,033 2,595,369

Prepayments and accrued income 5,558,456 4,526,523

Debtors 253,751,919 227,339,124

Cash at bank and in hand 3,742,418 89,422,281

Current assets 257,494,337 316,761,405

Assets 269,352,523 326,140,119

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Our management structure

LETT Law Firm P/S is owned and operated by its partners. Our management structure comprises a group of owners, an executive committee and a managing partner, who is in charge of the day-to-day management. The management structure also includes a number of heads of legal departments in charge of expertise as well as budget and resources relating to the department in question. Our management is supported by a staff including the staff functions of Business Development, Finances, IT, HR and Operations and Service.

Owners

Artur Bugsgang Henrik Puggaard John Bjerre Andersen Per Astrup Madsen Søren Jenstrup

Carsten Henriksen Henrik Sjørslev Jørgen Flodgaard Per Vestergaard Pedersen Søren Zinck

Carsten Lorentzen Jacob Christiansen Kurt Bardeleben Pernille Sølling Thomas Bang

Finn Overgaard Jan Bech Line M. Pedersen Peter Rønnow Torben Mauritzen

Flemming Kragh Hansen Jan Børjesson Marlene Winther Plas Peter Schäfer Torkil Høg

Georg Lett Jan Snogdal Martin Lavesen Rasmus Nørgaard Bek

Gert Nissen Jens Krogh Petersen Michael Holsting René Offersen

Hans Madsen Jes A. Rosenvinge N.E. Nielsen Sebastian Ingversen

Executive Commitee

Flemming Kragh Hansen

(chairman)

Henrik Puggaard

Jan Børjesson

Kurt Bardeleben

Martin Lavesen

Managing Partner

Henrik Sjørslev

Legal departments

Corporate M&A Insolvency and restruc-

turing

Pension and insurance Real estate Competition, procure-

ment, public law and

natural resources

M&A Insolvency Pension and insurance Commercial Real Estate Procurement law

Capital markets, banking and Restructuring The law of damages Construction law Public law

finance Estates of deceased persons Lease law EU and competition law

Taxes Debt collection Mortgage debt collection Natural resources

Employment law Infrastructure

IT PPP/PPC

Intellectual Property Energy and utilities

Environmental law

Finn Overgaard Jan Bech Henrik Sjørslev Line M. Pedersen Torkil Høg

Carsten Lorentzen Henrik Puggaard

Staff functions

HR, IT and Operations

and Service

Finances Business Development

Thomas Munk-Larsen Tine Thornval Charlotte Sørrig Zahll Larsen

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Art at LETT

For a number of years, LETT has participated in cultural events within sports, culture and the arts – for instance as the commercial manager of the Copenhagen artists' cooperative Grønningen, as a consultant to the arts foundation Charlottenborg Fonden and as the administrative manager of Queen Margrethe II’s Archaeological Foundation. We also contribute actively to public debate on culture and its conditions through our recurring participation in the annual Copenhagen Culture Night, which, in 2014, offered a talk on the media's impact on lawsuits and a photo series from an airbase ruin by Ismar Cirkinagic.

Art also features prominently in LETT with permanent room decorations in our meeting and front-desk facilities in Co-penhagen and Aarhus. In addition, there are monthly exhibitions in LETT's art society, and its members have the op-portunity to buy the exhibited works of art, of which some are also bought by the society for the members to win by lot at its general meeting.

The illustrations in this annual report are close-up studies of the sculpture Legeskulptur (Play sculpture) by sculptor Peter Bonnén. Peter Bonnén was educated at the Danish Experimental Art School in 1961-62 and is an ever experimenting artist, who, for many years, has concentrated on minimalist sculptures of one or several parts. Alongside his sculpting activities, he works with conceptual photography and is a member of the Copenhagen artists cooperative Grønningen.

LETT Law FirmCopenhagen • Aarhus • lett.dk