Kirk Kapital - Annual Report - 2018 by kirkkapital

CVR No 31 15 98 57

The Annual Report was presented and adopted at the Annual General Meeting of the Company on 9/4 2019

Torben Bang Chairman

KIRK KAPITAL A/S

Havneøen 1, DK-7100 Vejle

Annual Report for 1 January31 December 2018

Contents Page Company Information1 Management's Review2 Management's Statement5 Independent Auditor's Report6 Parent Company Statement of profit and loss9 Statement of comprehensive income9 Balance sheet10 Statement of changes in equity11 Cash flow statement12 Notes13 Group Financial highlights of the Group22 Consolidated statement of profit and loss23 Consolidated statement of comprehensive income24 Consolidated balance sheet25 Consolidated statement of changes in equity27 Consolidated cash flow statement28 Notes29

Management's Review

2018; a year with high activity

2018 was a year where KIRK KAPITAL completed a number of larger transactions and simultaneously delivered initial positive results from the strategic direction implemented 1.5 years ago.

In 2018, KIRK KAPITAL implemented the strategy laid out in 2017, which included a reorganization, a redeployment of a significant portion of our liquid portfolio as well as completing 6 larger direct transactions. Furthermore, there was a focus on strengthening our processes and procedures as well as automation of administrative tasks. These initiatives will enable better future investment decisions and support our mission of delivering robust long-term returns.

The equity markets generally had a challenging year in 2018, and OMX realized a price change of -13 % and MSCI World realized a price change of -6 %. While still being in a strategic transition period, we managed to deliver a satisfactory and positive financial result.

Within ‘Strategic Investments’, KIRK KAPITAL disposed our KIRK SHIPPING activities. This was in line with our communicated intention in the 2017 Annual Report. We further disposed of a 65% ownership stake in Exxit 59, a business park strategically located by highway exit 59 outside Vejle. We continue to own 25% of Exxit 59, in line with our strategy of being an active larger minority shareholder. In 2018, KIRK KAPITAL acquired a significant minority position in 3 new companies: Globeteam, a growing IT service consultancy firm, Beck Pack, the world leader in packaging for processing of frozen fish blocks, and TPS, a provider of end-to-end solutions of foldable IBC containers, Bag-In-Box liners / bags, container fittings, filling and emptying equipment. Furthermore, we provided additional equity capital in the form of a preference share to FMD, a provider of a haemostatic agent for surgery to control bleeding. We have owned a significant minority ownership interest in FMD since 2017. This brings our portfolio of companies in which we own larger minority positions up to 9. We continue to actively look for larger minority positions in medium and larger sized companies which have market leading positions in long-term growth industries.

Within ‘Financial Investments’ KIRK KAPITAL has a broad portfolio of quoted equities, fixed income investments, and other alternative investments. In addition to managing KIRK KAPITAL’s own investments, it also provides investment advice on its shareholders’ financial investments as well as to Edith & Godtfred Kirk Christiansens Foundation. In 2018, we carried out a larger redeployment of the liquid portion of our portfolio, executing on our investment strategy, asset allocation and risk review.

Within ‘Vejle Investments’, KIRK KAPITAL was pleased to see our new headquarter, Fjordenhus, completed. The building has been designed by the Danish-islandic artist Olafur Eliasson and presents pieces of art and new construction methods united into one building. Fjordenhus not only serves as the headquarter of KIRK KAPITAL, it has also very quickly become a landmark building and tourist attraction in the Vejle area. The ground floor is open to the public. Since the official opening in June, more than 180,000 have visited Fjordenhus. Fjordenhus is a testimony of our shareholders’ veneration and continued support to the area. Financially, ‘Vejle Investments’ have contributed negatively to our result mainly as a function of cautious valuation of Fjordenhus.

The 2018 result is in its totality considered satisfactory. Our ‘Strategic Investments’ delivered sound double digit returns while our ‘Financial Investments’ delivered a low single digit negative return, broadly in line with the general market. The reported results are further negatively impacted mainly by the cautious valuation of Fjordenhus.

Management's Review

Key activities

In summation the key activities of the Group include investments in manufacturing and business service companies, real estate as well as investment activities of any kind, both directly and/or through other companies, in Denmark and abroad. In addition, the Company provides administrative services to several companies and entities on an arms lengths basis.

Development in the year and expectations for the year ahead

The 2018 result for the Parent Company amount to DKK 163,814 and the Group to DKK 169,539 and at 31 December 2018 the balance sheet of the Parent Company and the Group shows equity of DKK 4,473,678k.

For the financial year 2019 a return in line with, or better than 2018, is expected. However, short-term movement in the financial markets can have a significant impact on the expected result.

Adoption of IFRS

The consolidated and separate financial statements for KIRK KAPITAL A/S have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU (”IFRS”). The adoption affects the financial statements from 1 January 2017. Impact of adoption on equity and comprehensive income is shown in note 21.

Special risks

The Company has not taken on any risks that could be referred to as special considering the nature and extent of the Group’s activities as an investment company.

For further risk descriptions we refer to note 20 regarding Financial risk management.

External enviroment

The Company has only a limited effect on the external environment, and consequently, no special measures have been implemented to prevent, reduce or rectify any damage.

Intellectual capital resources

The intellectual capital resources represented by the Company’s employees are maintained and improved through both internal and external development activities.

Research and development activities risks

Due to the scope of business KIRK KAPITAL A/S as parent company does not engage in any research and development activities. Where relevant affiliates carry out these activities.

Statement of corporate social responsibilities (CSR)

KIRK KAPITAL and its directly controlled subsidiaries conduct its operating activities in Denmark and under Danish legislation. The Company has only very limited risks of negatively impacting society. This includes the risks of impacts on the environment, climate change and human rights. Management do currently not see the need for formalised policies on HR and anti-corruption due to a very flat organisational structure and limited organizational size. Should such risks emerge, Management will deal with them on a case-by-case basis in line with the values of the company and its shareholders. In this connection we would like to point out that it is the Group’s clearly defined intention to run a responsible business, with a high ethical standard, in every respect and at any time.

KIRK KAPITAL's vision is to be a respected and well esteemed family owned investment company. In order for KIRK KAPITAL to fulfil this vision CSR has historically been a core consideration when carrying out its investment strategy and due diligence processes.

During 2018, KIRK KAPITAL has provided administration and financial services to Edith & Godtfred Kirk Christiansens Foundation as a donation. Edith & Godtfred Kirk Christiansens Foundation donates to local, national and international purposes. SOS Børnebyerne has been one of the major beneficiaries from the Foundation regarding establishment and operations of an SOS Children’s village in Jima, Ethiopie.

Management's Review

Statement of corporate social responsibilities (CSR) (continued)

In June 2018, KIRK KAPITAL anchored its strong local standing by completing its headquarter “Fjordenhus” where the ground floor and plaza in front of the building are open to the public to the benefit of the public.

Statement on gender composition

KIRK KAPITAL always selects candidates based on qualifications and suitability. This will also be the case in the future. The distribution of female/male members on the Parent Company’s Board of Directors is 20%/80%. This is below the definition of equal distribution of gender according to guidelines issued by the Danish Business Authority. The change in the distribution of genders in 2018 was due to an additional member of the Board of Directors being elected in 2018. It is Management’s expectation that the Company will obtain equal distribution again in 2019.

Due to the fact that KIRK KAPITAL during the financial year has had less than 50 employees, the company has not prepared a policy on the gender distribution on other management levels, in accordance with the rules.

Uncertainty relating to recognition and measurement

We refer to note 2 regarding Critical accounting estimates and judgements.

Unusual events

There have been no unusual events during the year.

Management's Statement

The Executive Board and Board of Directors have today considered and adopted the Annual Report of KIRK KAPITAL A/S for the financial year 1 January - 31 December 2018.

The Annual report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU, and further requirements in the Danish Financial Statements Act.

In our opinion, the Consolidated Financial Statements and the the Financial Statements of the Parent Company give a true and fair view of the financial position at 31 December 2018 of the Group and Parent Company and of the results of the Group and the Parent Company operations and cash flows for 2018.

In our opinion, Management’s Review includes a true and fair account of the development in the operations and financial circumstances of the Group and the Parent Company, of the results for the year and of the financial position of the Group and the Parent Company as well as a description of the most significant risks and elements of uncertainty facing the Group and the Parent Company.

We recommend that the Annual Report be adopted at the Annual General Meeting.

Vejle, 9 April 2019

Executive Board

Kim Gulstad

Board of Directors

Casper Kirk JohansenLeif Hasager Chairman

Birgitte NielsenJens Jørgen Madsen

Bjarne Graven Larsen

To the Shareholders of KIRK KAPITAL A/S

Opinion

In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group’s and the Parent Company’s financial position at 31 December 2018 and of the results of the Group’s and the Parent Company’s operations and cash flows for the financial year 1 January to 31 December 2018 in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.

We have audited the Consolidated Financial Statements and the Parent Company Financial Statements of KIRK KAPITAL A/S for the financial year 1 January - 31 December 2018, which comprise income statement and statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including a summary of significant accounting policies, for both the Group and the Parent Company (“financial statements”).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Statement on Management’s Review

Management is responsible for Management’s Review.

Our opinion on the financial statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.

Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financials Statements Act.

Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement in Management’s Review.

Independent Auditors Report

Management’s Responsibilities for the Financial Statements

Management is responsible for the preparation of Consolidated Financial Statements and Parent Company Financial Statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• • •

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit 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 Group’s and the Parent Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

Independent Auditors Report

Auditor’s Responsibilities for the Audit of the Financial Statements (continue)

•

Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Vejle, 9 April 2019

PricewaterhouseCoopers

Statsautoriseret Revisionspartnerselskab

CVR No 33 77 12 31

• Claus Lyngsø Sørensen

Henrik Kragh

State Authorised Public AccountantState Authorised Public Accountant mne26783mne34539

Statement of profit and loss Parent

Statement of comprehensive income

Company Note20182017 DKK'000DKK'000 Netinvestmentresult 3 197,863 (186,024) Otheroperatingincome16,477 16,735 Expenses 4 (80,244)(76,285) Financialexpenses 8 (5,601)(2,381) Profit/lossbeforetax 128,495 (247,955) Incometax9 30,659 (19,183) Profit/lossfortheyear 159,154 (267,138)

Parent Company 20182017 DKK'000DKK'000 Profitfortheperiod 159,154 (267,138) Other comprehensive income Items that will be subsequently reclassified to profit or loss Exchangerateadjustmentsofforeignentities 25,006 (90,617) Fairvalueadjustmentofhedginginstruments (26,013)49,768 Incometaxrelatingtohedginginstruments 5,725 (10,222) Othercomprehensiveincomefortheperiod,netoftax 4,718 (51,071) Totalcomprehensiveincomefortheperiod 163,872 (318,209) 9

sheet Parent Company 31December31December 1January Notes201820172017 DKK'000DKK'000DKK'000 Property,plantandequipment 10 1,703 2,189 1,900 Investmentproperties 11 110,395 124,023 147,289 Investmentsinsubsidiaries 12 1,155,653 1,400,124 1,608,567 Investmentsinassociatesandjointventures atfairvalue 13 1,655,000 850,869 974,100 Investmentsinassociatesandjointventures atequitymethod 14 147,868 82,575 77,282 Otherequityinvestments 15 166,280 795,393 622,929 Noncurrentreceivables 37,814 67,019 58,309 Deferredtaxasset 16 18,911 0 0 Totalnon-currentassets 3,293,624 3,322,192 3,490,376 Tradereceivables 936 47 70 Receivablesfromgroupenterprises 472 2,860 78 Taxreceivables 4,963 20,000 0 Otherreceivables 17,748 33,727 29,127 CurrentAssetInvestments 1,539,879 1,581,469 1,599,715 Cashandcashequivalents 24,335 10,528 73,867 Totalcurrentassets 1,588,333 1,648,631 1,702,857 Totalassets 4,881,957 4,970,823 5,193,233 Sharecapital 17 100,000 100,000 100,000 Retainedearnings 4,328,678 4,209,807 4,571,015 Proposeddividendfortheyear 45,000 43,000 45,000 Totalequity 4,473,678 4,352,807 4,716,015 Creditinstitutions 20 300,000 400,000 400,000 Deferredtaxliabilities 16 0 10,225 10,441 Totalnon-currentliabilities 300,000 410,225 410,441 Creditinstitutions 20 0 164,836 0 Tradepayables 1,216 2,447 551 Payablestogroupenterprises 61 175 221 Taxpayables 0 0 4,224 Otherpayables 107,002 40,333 61,781 Totalcurrentliabilities 108,279 207,791 66,777 Totalliabilities 408,279 618,016 477,218 Totalequityandliabilities 4,881,957 4,970,823 5,193,233 10

Balance

Statement of changes in equity Parent Company

Share capital Retained earnings Proposed dividendTotal DKK'000DKK'000DKK'000DKK'000 Equity-accordingtotheDanishFinancial StatementsActat31.12.2016 100,000 4,435,801 45,000 4,580,801 ConversiontoIFRS,refertonote21 0135,214 0135,214 Equityat01.01.2017 100,000 4,571,015 45,000 4,716,015 0 Ordinarydividendpaid 0 0 (45,000)(45,000) Profitfortheperiod 0 (267,138)0 (267,138) Othercomprehensiveincome 0 (51,071)0 (51,071) Totalcomprehensiveincomefortheperiod 0 (318,209) (45,000) (363,209) Transactions with owners in their capacity as owners Dividend 0 (43,000)43,000 0 Equityat31.12.2017 100,000 4,209,806 43,000 4,352,806 Ordinarydividendpaid 0 0 (43,000)(43,000) Profitfortheperiod 0 159,154 0 159,154 Othercomprehensiveincome 0 4,718 0 4,718 Totalcomprehensiveincomefortheperiod 0 163,872 (43,000) 120,872 Transactions with owners in their capacity as owners Dividend 0 (45,000)45,000 0 Equityat31.12.2018 100,000 4,328,678 45,000 4,473,678 11

Cash flow statement Parent Company 20182017 DKK'000DKK'000 Profit/lossfortheyear159,154 (267,138) Adjustments(149,747)171,100 Changesinnetworkingcapital158,375 18,146 Interestsreceived 99,693 46,178 Interestspaid (61,176)(53,399) Incometaxespaid (38,412)(21,224) Netcashflowfromoperatingactivities 167,887 (106,337) Purchaseofproperty,plantandequipment (7,851)(557) Proceedsfromsaleofproperty,plantandequipment 16,000 42,013 Purchaseofnon-currentfinancialassets (609,700)(818,103) Saleofnon-currentfinancialassets 657,726 630,893 Dividendsreceived 372,095 68,962 Contributionsubsidiaries (274,400)0 Netcashflowfrominvestingactivities 153,870 (76,792) Proceedsfromcreditinstitutions 0 164,790 Repaymentofcreditinstitutions (264,950)0 Dividendpaid (43,000)(45,000) Cashflowfromfinancingactivities (307,950) 119,790 Netcashflowfortheyear 13,807 (63,339) Cashandcashequivalents,beginningoftheyear 10,528 73,867 Cashandcashequivalentsatendoftheyear 24,335 10,528 12

Parent Company 1Accounting policies 2Critical accounting estimates and judgements 3Net investment result 4Expenses 5Staff expenses 6Amortisation, depreciation and impairment losses 7Financial income 8Financial expenses 9Tax on profit for the year 10Property, plant and equipment 11Investment properties 12Investments in subsidiaries 13Investment in associates and joint ventures at fair value 14Investment in associates and joint ventures at equity method 15Other equity investments 16Deferred tax 17Share capital 18Related parties 19Commitments and contingent liabilities 20Financial risk management 21First time adoption of IFRS 22Events after the balance sheet date 13

Notes

ThefinancialstatementsarepresentedinDanishKroner(DKK),asthisistheCompany'sfunctional currency.Thefinancialstatementshavebeenroundedtothenearestthousand.

ThefinancialstatementsoftheParentCompanyhavebeenpreparedinaccordancewithInternational FinancialReportingStandards(IFRS)asadoptedbytheEUandadditionalDanishdisclosurerequirements.

TheaccountingpoliciesarethesameasfortheConsolidatedFinancialStatements,refertonote1forthe Group.

CriticalaccountingestimatesandjudgementsisspecifiedintheConsolidatedFinancialStatements,referto note2fortheGroup.

Notes Parent Company 1Accounting policies 2Critical accounting estimates and judgements Note20182017 DKK'000DKK'000 3 Net investment result Revenue 4,026 6,510 Valueadjustmentsofinvestments (5,793)31,136 Expensesforrawmaterialsandconsumables (3,310)(4,933) Amortisation,depreciationandimpairmentlosses6 (348)(268) Incomefromsubsidiaries 34,427 (255,846) Incomefrominvestmensinassociatesandjoint venturesatfairvalue 221,610 (145,973) Incomefrominvestmensinassociatesandjoint venturesatequitymethod 9,239 13,693 Financialincome7 160,419 259,290 Financialexpenses8 (222,407)(89,633) 197,863 (186,024) 4 Expenses Staffexpenses5 50,553 51,547 Otherexternalexpensesandotheroperatingexpenses 29,691 24,738 80,244 76,285 5 Staff expenses Wagesandsalaries 47,660 48,697 Pensions 1,542 1,053 Othersocialsecurityexpenses 198 113 Otherstaffexpenses 1,153 1,684 50,553 51,547 Averagenumberofemployees 26 24 KeyManagementCompensation KeyManagementCompensationisspecifiedintheConsolidatedFinancialStatements,refertonote4for theGroup.

Parent Company 20182017 DKK'000DKK'000 6 Amortisation, depreciation and impairment losses Depreciation (348)(268) (348) (268) 7Financial income Fairvalueadjustmentsofinvestments 92,779 157,727 Interestreceivedfromgroupenterprises 328 119 Interestincomefromfinancialassetsheldforcash managementpurposes 40,520 57,103 Foreignexchangerategains 26,792 44,341 160,419 259,290 8 Financial expenses Impairmentlossesonfinansialassets 153,654 20,241 Interestpaidtogroupenterprises 106 75 Interestandfinancechargespaid/payableforfinancialliabilities 52,184 66,823 Exchangeloss 22,064 4,875 228,008 92,014 Classifed in statement of profit and loss as: Financialexpenses(Netinvestmentresult)222,407 89,633 Financialexpenses5,601 2,381 228,008 92,014 9 Tax on profit for the year Currenttaxonprofitsfortheyear (10,688)41,445 Currenttaxonprofitsforpreviousyears 3,440 (11,825) Deferredtaxfortheyearandpreviousyears (29,136)(215) (36,384) 29,405 whichbreaksdownasfollows: Taxonprofit/lossfortheyear(30,659)19,183 Taxonchangesinequity(5,725)10,222 (36,384)29,405 Calculated22.0%taxonprofitfortheyear 28,269 (54,550) Taxeffectsof: Incomefromsubsidiariesandassociates (56,694)132,712 Adjustmentfrompreviousyears 3,440 (11,825) Incomefromotherinvestments 2,513 (46,836) Other(8,187)(318) (30,659) 19,183 Effectivetaxrate -24%-8% 15

Notes

Other fixtures and fittings, tools and equipment

Investmentpropertiesaremeasuredatfairvalue.Thefairvalueiscalculatedbyusinggenerallyaccepted valuationmethods.

Theaveragerateofreturnusedforvaluationofthecompany'sinvestmentproportiesisbasedonthe investmentproperties'locationandcondition.Thebuildingsaremeasuredatanaveragereturnof5.0% comparedto5.0%-5.8%lastyear.ThefairvalueoftheforrestandagriculturelandisestimatedatDKK 115,000perhectarecomparedtoDKK135,000perhectarelastyear.Achangeoftherateofreturnof 0.5%willimpactthevalueofinvestmentpropertyofapproxDKK5millionbeforetaxandachangeofthe priceperhectarof1%willimpactthevalueoftheforrestandagriculturelandofapproxDKK0,6million beforetax.

Parent Company 20182017 DKK'000DKK'000 10 Property, plant and equipment Costaf1January 4,375 4,072 Additionsduringtheyear 656 557 Disposalsduringtheyear(793)(254) Costaf31December 4,238 4,375 Depreciationandimpairmentat1January 2,187 2,172 Depreciationfortheyear 348 268 Impairmentfortheyear 0 (254) Depreciationandimpairmentat31December 2,535 2,186 Carryingamountat31December 1,703 2,189 11 Investment properties Cost: At1January 140,059 182,072 Additionsduringtheyear 7,205 0 Disposalsduringtheyear(21,915)(42,013) At31December 125,349 140,059 Valueadjustments: At1January (16,036)(34,783) Fairvalueadjustmentsduringtheyear (5,793)1,820 Reversalsregardingdisposals 6,875 16,927 Valueadjustmentsat31December (14,954)(16,036) Carryingamount31December 110,395 124,023

Notes

Equityinvestmentswithnegativenetassetvaluetransferredtoprovisions

InvestmentsinsubsidiariesarespecifiedintheConsolidatedFinancialStatements,refertonote24fortheGroup.

14 Investment in associates and joint ventures at equity method

Notes Parent Company 20182017 DKK'000DKK'000 12 Investments in subsidiaries Costat1January 2,676,067 2,492,067 Additionsfortheyear 273,990 184,000 Disposalsfortheyear (141,617)0 2,808,440 2,676,067 Valueadjustmentsat1January (1,275,943)(883,500) Adjustmentprioryear 0 (87,309) Exchangeadjustment 25,006 Disposalsfortheyear (100,110)0 Netprofit/lossfortheyear 34,427 (255,846) DividendtotheParentCompany (336,809)(53,647) FairValueadjustmentofhedginginstrumentsfortheyear 642 4,359 (1,652,787) (1,275,943) 0 0 Carryingamountat31December 1,155,653 1,400,124 Including goodwill 0 0 13 Investment in associates and joint ventures at fair value Nameofentity Placeofregistered office Natureof relationshipSharecapitalVotes Ownership Equityatlast reportingdate Netprofit/loss forthelast reportedyear Currency'000 Currency'000 Currency'000 PNOHoldingA/SCopenhagen, Denmark Associate 625DKK 48%48% 316,173DKK 51,703DKK P-AP2009A/SBrøndby,DenmarkAssociate 20,309DKK 40%67% 860DKK -179,002DKK KompanHoldingA/SOdense,DenmarkAssociate 51,800DKK 25%25% 630,900DKK 24,300DKK ActHoldingApSCopenhagen, Denmark Associate 100DKK 50%50%N/AN/A ApSFMD1 Søbrog,DenmarkAssociate 5,016DKK 30%30% 832,391DKK 9,570DKK WingmillingApSVejle,DenmarkAssociate 518DKK 67%67% 18,127DKK 5,900DKK SafewhereA/S Virum,DenmarkAssociate 1,351DKK 42%42% 1,163DKK -2,863DKK GlobeteamA/SVirum,DenmarkAssociate 1,450DKK 34%34% 29,452DKK 13,489DKK Virumgårdsvej17Virum,DenmarkAssociate 500DKK 50%50% 5,296DKK -168DKK ChangedriverA/SVirum,DenmarkAssociate 1,394DKK 15%15% 761DKK -775DKK BeckPackHoldningApSRønne,DenmarkAssociate 100DKK 40%40% N/A N/A TPSHoldingIIA/SGentofte,DenmarkAssociate 102EUR 35%35% 2,643EUR 328EUR P-A2017Holding1A/SBrøndby,DenmarkJointVenture 1,500DKK 50%50% N/A N/A

Nameofentity Placeofregistered office Natureof relationshipSharecapitalVotes Ownership Equityatlast reportingdate Netprofit/loss forthelast reportedyear Currency'000Currency'000Currency'000 Exxit59A/SHorsens,DenmarkAssociate 100,000DKK 25%25% 337,241DKK 24,613DKK K/SHøje-TaastrupApSBredsten,DenmarkAssociate 18,400DKK 31%31% 334,119DKK 35,749DKK Høje-TaastrupApSBredsten,DenmarkAssociate 128DKK 31%31% 106DKK -11DKK

Other equity investments

AllshareshavenominalvalueofDKK1,000.

Therehavebeennochangesinthesharecapitalduringthelast5years.

EachAsharehas10votesattheannualgeneralmeeting.EachBsharehas1voteattheannual generalmeeting.

Parent Company 15 Industryofinvestment Geography 20182017 DKK'000DKK'000 MultisectorGlobal 12,586 203,274 MultisectorNordic 19,716 59,494 Multisector Denmark 274 2,732 Multisector PanAsia 90,389 90,383 Technology Global0 388,000 RealEstate Global 43,314 51,509 Total portfolio166,280795,393 16 Deferred tax Deferredtaxat01.01 10,225 10,441 Deferredtaxreccognisedintheincomestatement (29,136)(216) Deferred tax at 31.12(18,911)10,225 Deferred tax relates to: Property,plantandequipment 10,457 10,225 Taxlosscarryforwards (29,368)0 (18,911)10,225 Ofwhichpresentedasdeferredtaxassets 18,911 0 Ofwhichpresentedasdeferredtaxliabilities 0 10,225 TheParentCompanydoesnothaveanyunrecognizedtaxlosscarryforwards. 17 Share capital

share capital comprise: Number of shares Nominal value (TDKK) Ashares 57,70957,709 Bshares 42,29142,291 Share capital100,000100,000

Notes

The

RelatedpartiesarespecifiedintheConsolidatedFinancialStatements,refertonote18fortheGroup.

Transactions with related parties:

Year-end balances arising from transactions with related parties: Subsidiaries

Other related parties

Nootheryear-endbalancesortransactionshavetakenplaceduringtheyearwiththeBoardofDirectors, theExecutiveManagement,majorshareholdersorotherrelatedparties.

Contingent liabilities

amaximumofDKK43,312k.

Ascollateralforbankdebt,DKK300,000kthebankisgivensecurityindepositarywithacarryingamount ofDKK656,126kat31December2018.

TheParentCompanyhasprovidedaguaranteeofamaximumofDKK213,572ktofinancialinstitutions inwhichtheCompany'ssubsidiariesandassociateshaveloansandotherengagements.

MinimumleasepaymentsontheGroup'soperatinglease obligationsamountto:

TheDanishgroupcompaniesarejointlyandseverallyliablefortaxonthejointlytaxedincomesetc.of theGroup.ThetotalamountofcorporationtaxpayablebytheGroupisdisclosedintheFinancial StatementsforKIRKKAPITALA/S,whichisthemanagementcompanyofthejointtaxation.TheDanish companiesarejointandseveralliableforthejointtaxationliability.Thejointtaxationliabilitycovers incometaxesandwithholdingtaxesondividends,royaltiesandinterest.

Parent Company 18 Related parties 20182017 DKK'000 DKK'000 Subsidiaries AdministrationandmanagementFeeIncome3,5633,719 Rentalexpenses 5,0910 Intercompanyinterestincome 309119 Intercompanyinterestexpenses 8875 Other related parties AdministrationandmanagementFeeIncome11,26312,453 Salaries 1,3771,003 Intercompanyinterestincome 1627 Intercompanyinterestexpenses 2656 Receivables4722,860 Payables61175 Receivables 8,35015,615 Payables 5,62423,387 19 Commitments and contingent liabilities 20182017 Operating leases DKK'000DKK'000 Lessthan1year 13,0351,533 1to5years 2730 Total13,3081,533 Joint taxation scheme Contingentliabilitiesandremainingcommitmentregardingparticipationininvestmentprojectsamountto

Notes

Financialriskfactors,marketrisk,creditrisksandliquidityriskarespecifiedintheConsolidatedFinancial Statements,refertonote20fortheGroup.

ThetablebelowanalysestheParentCompany’sfinancialliabilitiesintorelevantmaturitygroupingsbasedon theremainingperiodatthebalancesheetdatetothecontractualmaturitydate.Theamountsdisclosedinthe tablearethecontractualundiscountedcashflows.

Measurementandfairvaluehierarchy

MeasurementandfairvaluehierarchyisspecifiedintheConsolidatedFinancialStatements,refertonote20 fortheGroup.

Notes Parent Company 20 Financial risk management Financial risk factors Maturity analysis Lessthan1 year Between1 and5year Morethan5 years Total Non-derivatives DKK'000DKK'000DKK'000DKK'000 Asat31.12.2018 Creditinstitutions 0 300,000 0 300,000 Tradepayables 1,216 0 0 1,216 Payablestogroupenterprises 61 0 0 61 Otherpayables 107,002 0 0 107,002 108,279 300,000 0 408,279 Asat31.12.2017 Creditinstitutions 164,836 400,000 0 564,836 Tradepayables 2,447 0 0 2,447 Payablestogroupenterprises 175 0 0 175 Otherpayables 40,333 0 0 40,333 207,791 400,000 0 607,791 Financialassetsandliabilitiespermeasurementcategory 20182017 DKK'000 DKK'000 Financialassets Financial assets at amortised costs: Noncurrentreceivables 37,814 67,019 Tradereceivables 936 47 Otherloansandreceivables 17,748 33,727 Cashandcashequivalents 24,335 10,528 Financial assets at fair value through profit or loss (FVPL): Investmentsinassociatesandjointventure 1,655,000 850,869 CurrentAssetInvestments 1,539,879 1,581,469 Otherinvestments166,280 795,393 Financialliabilities Liabilitiesatamortisedcost: Tradeandotherpayables 1,216 2,447 Creditinstitutions 300,000 564,836 Otherpayables 107,002 40,333

TheCompanyhasadoptedIFRSforitsfinancialaccountswitheffectfrom1January2017.Thecomparative figuresfor2017havebeenrestated.

Belowisshowntheimpactonequityandcomprehensiveincome.

Firsttimeadoption

TheAnnualReportisthefirstAnnualReportthatispresentedinaccordancewithIFRS.Thefiguresfor2017 and2018intheincomestatementandthebalancesheetitemsasat1January2017,31December2017and 31December2018werepreparedaccordingtoIFRS.

ThedisclosuresrequiredbyIFRS1,First-timeAdoptionofInternationalFinancialReportingStandards, concerningthetransitionfromDanishGAAPtoIFRSareprovidedbelow.

Reconciliationofequity

Reconciliationoftotalcomprehensive incomefor2017

Totalcomprehensiveincome

DanishFinancialStatementsAct

Thecomparativefiguresintheprofit&lossstatementandthebalancesheethasbeenadjustedwiththefigures statedabove.

Measurementofstrategicinvestmentsinassociatesandjointventureshavechangedfromequityvaluetofair valuewitheffectfrom1January2017.

NoeventsmateriallyaffectingtheassessmentoftheAnnualReporthaveoccurredafterthebalancesheetdate.

Parent Company

time

31December 2017 1January2017 (dateoftransition toIFRS) DKK'000DKK'000 Equity-accordingtotheDanishFinancialStatementsAct 4,296,631 4,580,801 Adjustments Investmentsinassociates56,176 135,214 Equity1January2017-accordingtoIFRS 4,352,807 4,716,015 2017 DKK'000 (235,865) Adjustments Fairvalueadjustmentsofinvestmentsinassociates (82,344) Totalcomprehensiveincome-IFRS(318,209) Adjustments

Notes

21 First

adoption of IFRS

22 Events after the balance sheet date

Financial highlights of the Group

*)ThecompanyhasimplementedIFRSon01.01.2017.Thecomparativefiguresfor2014,2015and2016arepresented accordingtoDanishGAAP.

**)Inconnectionwithchangestoaccountingpoliciesin2016,thecomparativefiguresintheperiod2014havenotbeen restated.Thechangedaccountingpoliciesregardsmeasurementofinvestmentsproperties.

Thecomparativefiguresintheperiod2015-2014havenotbeenrestatedwithdiscontinuingactivities.

ThefinancialratioshavebeencalculatedinaccordancewiththerecommendationsoftheAssociationofDanishFinancial Analysts(2015).

201820172016*20152014** DKK'000DKK'000DKK'000DKK'000DKK'000 Financialhighlights Profitandlossaccounts Revenue 216,711 121,317 125,118 334,494 326,553 Grossprofit/loss 110,154 119,043 132,324 203,787 97,318 Operatingprofit/loss (35,386)(43,168)20,406 42,216 (57,708) Netfinancials (66,264)372,364 179,028 140,640 46,624 Profit/lossfromcontinuingactivities 149,233 (40,948)155,785 145,281 (25,965) Profit/lossfromdiscontinuingactivities 14,581 (223,729)(2,745)0 0 Profit/lossfortheyear 163,814 (264,677)153,040 145,281 (25,965) Comprehensiveincome168,532 (315,264)169,890 176,315 105,407 Balancesheet Totalassets5,159,849 6,216,091 6,643,436 6,643,105 5,659,163 Investmentsinintangibleandtangible fixedassets 110,971 142,150 127,655 533,652 232,456 Totalequityattributabletoownersofthe parentcompany 4,473,678 4,386,530 4,611,580 4,486,891 4,251,235 KeyRatios Returnonequity(%) 3.8%-5.9%3.4%3.3%-0.6% Solvencyratio(%) 86.7%70.6%69.4%67.5%75.1%

Consolidated statement of profit and loss Group

Note 2018 2017 DKK'000DKK'000 Revenue3 216,711 121,317 Valueadjustmentsofinvestments 27,925 1,714 Otheroperatingincome 25,334 45,860 Expensesforrawmaterialsandconsumables(128,443)(10,989) Otherexternalexpenses(31,373)(38,859) Grossprofit/loss 110,154 119,043 Staffexpenses 4 (53,590)(55,087) Amortisation,depreciationandimpairmentlosses 5 (90,344)(83,904) Otheroperatingexpenses (1,606)(23,220) Operatingprofit/loss (35,386) (43,168) Incomefrominvestmentsinassociatesandjointventures235,866 (336,391) Financialincome6 181,667 499,670 Financialexpenses7 (247,931)(127,306) Profit/lossbeforetax 134,216 (7,195) Incometax8 15,017 (33,753) Profit/lossforcontinuingoperations 149,233 (40,948) Profitfromdiscontinuedoperation9 14,581 (223,729) Profit/lossfortheyear 163,814 (264,677) Profit/lossfortheyearisattributableto: OwnersofKIRKKAPITALA/S159,154 (267,138) Non-controllinginterests 4,660 2,461 163,814 (264,677) 23

Consolidated statement of comprehensive income Group

2018 2017 DKK'000DKK'000 Profitfortheperiod 163,814 (264,677) Other comprehensive income Items that will be subsequently reclassified to profit or loss Exchangerateadjustmentsofforeignentities 25,006 (90,617) Fairvalueadjustmentofhedginginstruments (26,013)50,252 Incometaxrelatingtohedginginstruments 5,725 (10,222) Othercomprehensiveincomefortheperiod,netoftax 4,718 (50,587) Totalcomprehensiveincomefortheperiod 168,532 (315,264) Totalcomprehensiveincomefortheperiodisattributableto: OwnersofKIRKKAPITALA/S163,872 (318,209) Non-controllinginterests 4,660 2,945 168,532 (315,264) 24

Consolidated balance sheet Group

31December 31December 1January Notes 2018 2017 2017 DKK'000DKK'000DKK'000 Goodwill 2,554 3,757 5,613 Property,plantandequipment 10 769,388 730,510 844,674 Investmentproperties 11 120,395 985,875 987,761 Investmentsinassociatesandjointventuresat fairvalue 12 1,655,000 850,869 974,100 Investmentsinassociatesandjointventuresat equitymethod 13 193,480 259,220 178,442 Otherequityinvestments 14 166,410 796,763 629,652 Noncurrentreceivables 251,278 408,503 520,553 Deferredtaxasset 15 18,911 0 437 Totalnon-currentassets 3,177,416 4,035,497 4,141,232 Inventories 16 230,113 0 0 Tradereceivables 936 1,033 1,622 Receivablesfromassociates 0 100 35 Taxreceivables 11,563 20,688 7,149 Prepayments 0 1,954 2,303 Assetsheldforsale 9 11,846 472,027 801,308 Otherreceivables 41,987 49,944 31,737 CurrentAssetInvestments 1,539,878 1,581,469 1,599,715 Cashandcashequivalents 146,110 53,379 193,549 Totalcurrentassets 1,982,433 2,180,594 2,637,418 Totalassets 5,159,849 6,216,091 6,778,650 25

31December 31December 1January Note 2018 2017 2017 DKK'000DKK'000DKK'000 Sharecapital 17 100,000 100,000 100,000 Retainedearnings 4,328,678 4,209,806 4,571,015 Proposeddividendfortheyear 45,000 43,000 45,000 Totalequityattributabletoownersofthe parentcompany 4,473,678 4,352,806 4,716,015 Non-controllinginterests 0 33,724 30,779 Totalequity 4,473,678 4,386,530 4,746,794 Creditinstitutions 20 354,328 950,434 1,104,811 Deferredtaxliabilities 15 35,282 108,804 143,668 Deposits 20 0 10,356 9,833 Otherpayables 0 0 68,592 Totalnon-currentliabilities 389,610 1,069,594 1,326,904 Creditinstitutions 20 108,657 296,057 141,905 Prepaymentsfromcustomers 0 13,566 15,129 Tradepayables 20 9,789 10,883 18,384 Taxpayables 16,403 40,698 19,892 Liabilitiesrelatedtoassetsheldforsale 9 3,632 264,307 324,276 Deposits 20 1,304 0 0 Otherpayables 20 156,776 134,456 185,366 Totalcurrentliabilities 296,561 759,967 704,952 Totalliabilities 686,171 1,829,561 2,031,856 Totalequityandliabilities 5,159,849 6,216,091 6,778,650 26

Consolidated balance sheet Group

Consolidated statement of changes in equity Group

Share capital Retained earnings Proposed dividend Totalequity attributableto ownersof KIRK KAPITALA/S Noncontrolling interests Total DKK'000DKK'000DKK'000DKK'000DKK'000DKK'000 Equity-accordingtothe DanishFinancialStatements Actat31.12.2016 100,000 4,435,801 45,000 4,580,801 30,779 4,611,580 ConversiontoIFRS,refertonote 22 0135,214 0135,214 0135,214 Equityat01.01.2017 100,000 4,571,015 45,000 4,716,015 30,779 4,746,794 Ordinarydividendpaid 0 0 (45,000)(45,000)0 (45,000) Profitfortheperiod 0 (267,138)0 (267,138)2,461 (264,677) Othercomprehensiveincome 0 (51,071)0 (51,071)484 (50,587) Totalcomprehensiveincome fortheperiod 0 (318,209)(45,000)(363,209)2,945 (360,264) Transactions with owners in their capacity as owners Dividend 0 (43,000)43,000 0 0 0 Equityat31.12.2017 100,000 4,209,806 43,000 4,352,806 33,724 4,386,530 Ordinarydividendpaid 0 0 (43,000)(43,000)0 (43,000) Profitfortheperiod 0 159,154 0 159,154 4,660 163,814 Othercomprehensiveincome 0 4,718 0 4,718 0 4,718 Saleofsubsidiaries 0 0 0 0 (38,384)(38,384) Totalcomprehensiveincome fortheperiod 0 163,872 (43,000)120,872 (33,724)87,148 Transactions with owners in their capacity as owners Dividend 0 (45,000)45,000 0 0 0 Equityat31.12.2018 100,000 4,328,678 45,000 4,473,678 0 4,473,678 27

Group 20182017 DKK'000DKK'000 Profit/lossfortheyear163,814 (264,677) Adjustments(103,692)424,119 Changesinnetworkingcapital104,281 (27,972) Interestsreceived 129,025 122,143 Interestspaid (72,436)(46,006) Incometaxespaid (15,171)(60,713) Netcashflowfromoperatingactivities 205,821 146,894 Purchaseofproperty,plantandequipment (110,971)(142,150) Proceedsfromsaleofproperty,plantandequipment 16,000 145,137 Purchaseofnon-currentfinancialassets (609,700)(818,106) Saleofnon-currentfinancialassets 592,025 630,899 Businessacquisitions (176,488)0 Businesssales 178,200 0 Cashfrombusinessacquisitionsandsales 211,412 0 Proceedsfromsaleofdiscontinuedoperations 440,967 0 Dividendsreceivedfromassociates 36,583 8,400 Netcashflowfrominvestingactivities 578,028 (175,820) Repaymentofcreditinstitutions (639,236)(78,597) Dividendpaid (43,000)(45,000) Cashflowfromfinancingactivities (682,236) (123,597) Netcashflowfortheyear 101,613 (152,523) Cashandcashequivalents,beginningoftheyear 45,723 198,246 Cashandcashequivalentsatendoftheyear 147,336 45,723 28

Consolidated cash flow statement

Notes Group 1Accounting policies 2Critical accounting estimates and judgements 3Revenue 4Staff expenses 5Amortisation, depreciation and impairment losses 6Financial income 7Financial expenses 8Tax on profit for the year 9Discontinued operations 10Property, plant and equipment 11Investment properties 12Investment in associates and joint ventures at fair value 13Investment in associates and joint ventures at equity method 14Other equity investments 15Deferred tax 16Inventories 17Share capital 18Related parties 19Commitments and contingent liabilities 20Financial risk management 21Fee to auditors appointed at the general meeting 22First time adoption of IFRS 23Events after the balance sheet date 24List of group companies 29

1Accounting policies

The Consolidated Financial Statements are presented in Danish Kroner (DKK), as this is the Group's functional currency. The Consolidated Financial Statements have been rounded to the nearest thousand.

The consolidated and separate financial statements for KIRK KAPITAL A/S have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union as well as additional Danish disclosure requirements applying to entities of reporting class C for large enterprises.

First time adoption

The Annual Report is the first Annual Report that is presented in accordance with IFRS. The figures for 2017 in the income statement and the balance sheet items as at 1 January 2017 and 31 December 2017 were restated according to IFRS. The accounting policies applied are based on the standards and interpretations effective for 2018. No standards or interpretations which are not yet effective have been adopted.

The disclosures required by IFRS 1, First-time Adoption of International Financial Reporting Standards, concerning the transition from Danish GAAP to IFRS are provided in note 22.

Exemptions applied

IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS. The Company has opted not to apply IFRS's requirements to business combinations that took place before the transitation date. The Company has not applied any other exemptions.

Adoption of new and amended standards

The IASB has issued a number of new or amended standards and interpretations effective for financial years beginning after 31 December 2018. Some of these have not yet been endorsed by the EU. Most relevant to the Group is the following:

IFRS 16 "Leasing" was issued in January 2016. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The standard is effective for annual periods beginning on or after 1 January 2019. Management has not yet completed the assessment, but expects some impact as the company currently have operational leases, cf. note 19, with significant extension options.

There are no other IFRSs or IFRIC interpretations that are not yet effective which are expected to have a material impact on the Company.

Notes Group

1Accounting policies (continued)

Basis of consolidation

The Consolidated Financial Statements comprise the Parent Company, KIRK KAPITAL A/S, and subsidiaries in which the Parent Company directly or indirectly holds more than 50 % of the votes or in which the Parent Company, through share ownership or otherwise, exercises control. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

On consolidation, elimination is made of intra-group income and costs, shareholdings, intragroup balances and dividend and realized and unrealized profits or losses on transactions between the consolidated companies.

Elimination is made of intercompany income and expenses, shareholdings, dividends and accounts as well as of realised and unrealised profits and losses on transactions between the consolidated enterprises.

Foreign currency translation

Transactions and balances

Transactions in currencies other than the entity's functional currency are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.

Revenue

Rental income under operating leases is recognised straight line over the term of the contract. Revenue from sale of apartments are recognised at a point in time when control of the apartment is transferred.

Revenue is measured as the fair value of the consideration received or receivable. Revenue is measured exclusive of VAT, taxes etc.

Value adjustments of investments

The value adjustment of investments in associates and portfolio companies comprises value adjustment realized from sale and unrealised value adjustments from any revaluation or impairment of investments in portfolio companies at fair value. Dividend received from investments are included in value adjustments.

Expenses for raw materials and consumables

Expenses for raw materials and consumables comprise the raw materials and consumables consumed to achieve revenue for the year.

Other external expenses

Other external expenses comprise expenses for premises, office expenses, etc.

Staff expenses

Staff expenses comprise wages and salaries as well as payroll expenses.

1Accounting policies (continued)

Other operating income and expenses

Other operating income and other expenses comprise items of a secondary nature to the main activities of the Company, including gains and losses on the sale of intangible assets and property, plant and equipment.

Special Items

Special items comprise items which are unusual or expected to be non-recurring. They have in the Income statement been isolated in order to give a more true and fair reflection on underlying business activities. Such costs are typically restructuring, impairment losses, discontinuing operations and similar.

Financial income and expenses

Financial income and expenses include interest, financial gains and expenses with respect to finance leases, debt, realised and unrealised exchange adjustments, price adjustment of securities, amortisation of mortgage loans as well as additional payments and repayment under the tax prepayment scheme.

Income tax and deferred tax

The company is jointly taxed with Danish Group enterprises. The Danish income tax payable is allocated between the jointly taxed Danish companies based on their proportion of taxable income (full absorption including reimbursement of tax deficits). The jointly taxed companies are taxed under the Danish Tax Payment Scheme. Additions, deductions and allowances are recognised under financial income or financial costs.

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available, against which the temporary differences can be utilised.

Notes Group

1Accounting policies (continued)

Income tax and deferred tax (continued)

Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Intangibles

On initial recognition, goodwill is measured and recognised as the excess of the cost of the acquired company over the fair value of the acquired assets, liabilities and contingent liabilities, as described under Business Combinations.

On recognition of goodwill, the goodwill amount is allocated to those of the Group’s activities that generate separate cash flows (cash-generating units). The determination of cash-generating units is based on the Group’s management structure and internal financial management and reporting.

Goodwill is not amortised, but is tested for impairment at least once a year.

Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

Cost comprises the purchase price and any costs directly attributable to the acquisition until the time when the asset is available for use.

Borrowing costs that are attributable to the construction of property, plant and equipment are added to the costs of the assets during the period that is required to complete and prepare the asset for its intended use.

Expenditures for repairs and maintenance of property, plant and equipment is charged to the profit and loss of the year in which they were incurred. The cost of major renovations and other subsequent expenditure are included in the carrying amount of the asset or recognised as a separate asset, as appropirate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values over their estimated useful lives, as follows:

Goodwill Buildings

Aircraft

10-50 years

10-20 years

Vessels20 years

Other fixtures and fittings, tools and equipment3-6 years

Notes Group

Notes

Group

1Accounting policies (continued)

Property, plant and equipment (continued)

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Items of property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Gains and losses arising from disposal of property, plant and equipment are calculated as the difference between the sales price less sales costs and the carrying amount at the time of sale.

Gains and losses are recognised in the profit and loss as other income or operating expenses.

Investment properties

Investment properties are measured at cost comprising the acquisition price and costs of acquisition. The cost of own constructed investment proporties comprises the acquisition price and expenses directly related to the acquisition, including costs of acquisition and indirect expenses for labour, materials, components and subsuppliers up until the time when the asset is ready for use.

After the initial recognition the investment proporties are measured at fair value.

Investments in subsidiaries

Investments in subsidiaries are recognised and measured under the equity method, which is at the proportionale share of the net asset values in the subsidiaries.

The total net revaluation of investments in subsidiaries is transferred upon distribution of profit to "Reserve for net revaluation under the equity method" under equity. The reserve is reduced by dividend distributed to the Parent Company and adjusted for other equity movements in the subsidiaries.

The carrying amount of equity-accounted investments is tested for impairment if indications of impairment exists.

Investments in portfolio companies etc.

Investments in associates and joint venture at fair value and other equity investments comprise investments in portfolio companies and are measured at fair value on the balance sheet date. Value adjustments are recognised in the income statement.

Investments in associates and joint ventures at equity method

Investments in associates and joint ventures at equity are recognised and measured under the equity method, which is at the proportionale share of the net asset values in the associates and joint ventures.

The total net revaluation of the investments is transferred upon distribution of profit to "Reserve for net revaluation under the equity method" under equity. The reserve is reduced by dividend distributed to the Parent Company and adjusted for other equity movements in the investments.

The carrying amount of equity-accounted investments is tested for impairment if indications of impairment exists.

1Accounting policies (continued)

Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets traded in active markets (such as publicity traded derivatives and equity securities publicly traded on a stock exchange) are based on quoted market prices at the close of trading on the reporting date.

Investments in portfolio companies traded in an active market are measured on the basis of the last market price. Unlisted portfolio companies are valued either by way of a capital increase round or part sale based on the value of comparable companies as well as by applying traditional measurement methods.

Fair value for unlisted equity securities are determined by management using valuation techniques. Such valuation techniques may include earnings multiples and discounted cash flows. The valuation models are adjusted as deemed necessary for factors such as nonmaintainable earnings, tax risk, growth stage and cash traps.

Fair value of certain financial investments are measured at values as communicated by fund management. In determining fair value for other financial investments, the management relies on the financial data of investee portfolio companies or on estimates by the management of the investee portfolio companies as to the effect of future developments. Although management uses its best judgement, and cross-references results of primary valuation models against secondary models in estimating the fair value of investments, there are inherent limitations in any estimation techniques.

The fair value estimates presented herein are not necessarily indicative of an amount the Group could realise in a current transaction. Future confirming events will also affect the estimates of fair value. The effect of such events on the estimates of fair value, including the ultimate liquidation of investments, could be material to the financial statements.

Leases

Finance lease

Leases in terms of which the Group assumes sub-stantially all the risks and rewards of ownership (finance leases) are recognised in the balance sheet at the lower of the fair value of the leased asset and the net present value of the lease payments computed by applying the interest rate implicit in the lease or an approximated value as the discount rate. Assets acquired under finance leases are depreciated and written down for impairment under the same policy as determined for the other fixed assets of the Group.

Leases in which more than an insignificant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the period of the lease.

Notes Group

1Accounting policies (continued)

Operating lease

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the period of the lease.

Impairment of non-current assets

The carrying aomunts of intangible assets and property, plant and equipment are written down immediately to the recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. An impairment loss is recognised in the income statement when the impairment is identified. The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level at which cash flows are separately identifiable (cash-generating units).

Inventories

Inventories comprise property held for sale in the ordinary course of business. They are measured at the lower of cost under the FIFO method and net realisable value. The net realisable value of inventories is calculated at the amount expected to be generated by sale in the process of normal operations with deduction of selling expenses and costs of completion. The net realisable value is determined allowing for marketability, ob-solescence and development in expected sales sum. The cost of goods for resale, raw materials and consumables equals landed cost.

Receivables

On initial recognition, receivables are measured at fair value, and subsequently they are measured at amortised cost. Receivables are written down for expected credit losses.

Prepayments

Prepayments comprise prepaid expenses relating to rent, insurance premiums, subscriptions and interests.

Current Asset Investments

Current Asset Investments, which consists of listed bonds and other investments, are measured at fair value.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand.

Equity

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deductions, net of tax, from the proceeds.

Dividend distribution

Proposed dividends are disclosed as a separate item under equity and recognised as a liability when declared

Notes Group

1Accounting policies (continued)

Financial liabilities

Financial liabilities, including bank and financial loans, trade and other payables, are on initial recognition measured at fair value. The liabilities are subsequently measured at amortised cost.

Cash flow statement

The cash flow statement shows the Group's cash flows for the year broken down by operating, investing and financing activities, changes for the year in cash and cash equivalents as well as the Company’s cash and cash equivalents at the beginning and end of the year.

Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for changes in working capital and non-cash operating items such as depreciation, amortisation and impairment losses, and provisions. Working capital comprises current assets less short-term debt excluding items included in cash and cash equivalents.

Cash flows from investing activities comprise cash flows from acquisitions and disposals of intangible assets, property, plant and equipment as well as fixed asset investments.

Cash flows from financing activities comprise cash flows from the raising and repayment of long term debt as well as payments to and from shareholders.

Financial Highlights

Explanation of financial ratios:

Solvency ratio =

Return on equity =

Equity at year-end x 100

Total assets at year-end

Net profit for the year x 100 Average equity

The financial ratios have been computed in accordance with the latest Guidelines issued by the Danish Finance Society.

Critical accounting estimates and judgements

In the preparation of the consolidated financial statements according to IFRS, Management is required to make certain estimates as some financial statement items cannot be reliably measured, but must be estimated as the value of assets and liabilities often depends on future events that are somewhat uncertain.

The judgments, estimates and assumptions made are based on historical experience and other factors that Management considers to be reliable, but which by their very nature are associated with uncertainty and unpredictability. These assumptions may prove incomplete or incorrect, and unexpected events or circumstances may arise. The most critical judgments, estimates and assumptions for the individual items are described below.

Critical accounting estimates

Most of the investments in associates and other investments are measured at fair value on the balance sheet date. When management does not have access to fair values from an active market or from portfolio managers the values are estimated by using multiple factors from similar investments. These investments amount to DKK 1.655 million in 2018 (DKK 851 million in 2017).

Notes Group

Group 20182017 DKK'000DKK'000 3 Revenue Revenuerecognizedovertime 106,831 121,317 Revenuerecognizedatapointintime 109,880 0 216,711 121,317 Revenue - 2018 RentalpropertyAircraftleasingSaleofproperty 2018 DKK'000DKK'000DKK'000DKK'000 Revenue 51,577 55,254 109,880 216,711 Total 51,577 55,254 109,880 216,711 Revenue - 2017 RentalpropertyAircraftleasingSaleofproperty 2017 DKK'000DKK'000DKK'000DKK'000 Revenue 58,739 62,578 0 121,317 Total 58,739 62,578 0 121,317 Theentirerevenuein2017and2018isearnedinDenmark. 20182017 DKK'000DKK'000 4 Staff expenses Wagesandsalaries 50,526 52,018 Pensions 1,684 1,233 Othersocialsecuritycosts 220 142 Otherstaffcosts 1,160 1,694 53,590 55,087 Averagenumberofemployees 29 27 KeyManagementCompensation 20182017 ExecutiveBoard: DKK'000DKK'000 Salariesandotherremuneration 5,966 5,295 Short-termincentiveplans 2,714 2,433 Long-termincentiveplans 8,830 867 Severancepaymentsandotherone-offs 8,230 16,508 Total 25,740 25,103 BoardofDirectors: Boardfee1,312 1,250 Total1,312 1,250 Totalcompensationofkeymanagementpersonnel27,052 26,353 5 Amortisation, depreciation and impairment losses Depreciation 37,110 37,904 Impairmentloss 53,234 46,000 90,344 83,904 KeyManagementconsistsofExecutiveBoardandBoardofDirectors.Thecompensationpaidorpayablestokey managementforemployeeservicesisshownbelow: 38

Notes

Notes Group 20182017 DKK'000DKK'000 6Financial income Fairvalueadjustmentsofinvestments 90,691 363,105 Interestincomefromfinancialassets 62,355 91,715 Foreignexchangerategains 28,621 44,850 181,667 499,670 7 Financial expenses Impairmentlossesonfinansialassets 158,348 20,080 Interestandfinancechargespaid/payableforfinancialliabilities 66,017 100,367 Exchangeloss 23,566 6,859 247,931 127,306 8Tax on profit for the year Currenttax: Currenttaxonprofitsfortheyear (751)82,502 Currenttaxonprofitsforpreviousyears 3,343 (11,801) Deferredtaxfortheyearandpreviousyears (23,334)(26,726) (20,742) 43,975 whichbreaksdownasfollows: Taxonprofit/lossfortheyear(15,017)33,753 Taxonchangesinequity(5,725)10,222 (20,742) 43,975 Calculated22.0%taxonprofitfortheyearbeforeincometax 29,528 (1,583) Taxeffectsof: Incomefromassociatesandjointventure (51,891)82,865 Non-deductibleexpenses 463 47 Adjustmentoftaxrelatingtopreviousyears 3,343 (11,801) Incomefromotherinvestments 2,513 (46,836) Exchangeadjustment (1,152)7,416 Other2,180 3,645 (15,017) 33,753 Effectivetaxrate -11%-469% 39

Discontinuedoperationscomprisethegroup'ssaleofitsshippingactivitiesin2018.Followingthestrategic reviewfrom2017,allvesselshavebeensoldduring2018.

Cashflowfromdiscontinuedoperationsareincluded inthe cashflowstatementasfollows:

Notes Group 9 Discontinued operations 20182017 DKK'000DKK'000 Revenue 154,306 232,278 Expensesforrawmaterialsandconsumables (132,650)(203,715) Otheroperatingincome 3,252 0 Otherexternalexpenses5,089 (1,335) Grossprofit/loss 29,997 27,228 Impairment,depreciationandamortisation (6,886)(243,513) Otheroperatingexpenses (1,652)0 Operatingprofit/loss 21,459 (216,285) Financialincome 152 133 Financialexpenses (4,918)(7,932) Profit/lossbeforetax 16,693 (224,084) Incometax (2,112)355 Profit/lossfordiscontinuedoperations 14,581 (223,729) Thecarryingamountsofassetsandliabilities: Otherinvestments7,922 22,348 Property,plantandequipment0 416,610 Corporationtax268 334 Tradereceivables2,430 21,791 Cashatbankandinhand1,226 10,944 Totalassets 11,846 472,027 Creditinstitutions0 245,204 Tradepayables3,306 18,300 Otherliabilities326 803 Totalliabilities 3,632 264,307 Netassets 8,214 207,720 Cashflowfromoperatingactivities 19,760 42,350 Cashflowfrominvestingactivities 440,967 0 Cashflowfromfinancingactivities (245,204)(75,571)

Notes Group 10 Property, plant and equipment Landand buildings Otherfixturesand fittings,toolsand equipmentAirplanes Property, plantand equipmentin progessTotal DKK'000DKK'000DKK'000DKK'000DKK'000 Cost: At01.01.2018 0 5,830 533,862 627,255 1,166,947 Exchangeadjustment 0 0 26,807 0 26,807 Additionsduringtheyear 0 656 0 102,454 103,110 Disposalsduringtheyear0 (2,248)0 0 (2,248) Transfers484,709 0 0 (729,709)(245,000) At31.12.2018 484,709 4,238 560,669 0 1,049,616 Depreciationandimpairment: At01.01.2018 0 2,893 227,544 206,000 436,437 Exchangeadjustment 0 0 11,425 0 11,425 Depreciationfortheyear 5,958 348 32,766 0 39,072 Impairmentfortheyear 0 0 0 39,000 39,000 Reversalsregardingdisposals 0 (706)0 0 (706) Transfers0 0 0 (245,000)(245,000) At31.12.2018 5,958 2,535 271,735 0 280,228 Carryingamount31.12.2018 478,751 1,703 288,934 0 769,388 Cost: At01.01.2017 0 5,724 804,017 505,829 1,315,570 Exchangeadjustment 0 0 (96,342)0 (96,342) Additionsduringtheyear 0 1,041 0 141,109 142,150 Disposalsduringtheyear0 (935)(173,813)0 (174,748) Transfersfortheyear0 0 0 (19,683)(19,683) At31.12.2017 0 5,830 533,862 627,255 1,166,947 Depreciationandimpairment: At01.01.2017 0 3,255 307,641 160,000 470,896 Exchangeadjustment 0 0 (36,864)0 (36,864) Depreciationfortheyear 0 454 33,474 0 33,928 Impairmentfortheyear 0 (254)21,838 46,000 67,584 Reversalsregardingdisposals 0 (562)(98,545)0 (99,107) At31.12.2017 0 2,893 227,544 206,000 436,437 Carryingamount31.12.2017 0 2,937 306,318 421,255 730,510 41

Theaveragerateofreturnusedforvaluationofthecompany'sinvestmentproportiesisbasedontheinvestmentproperties'locationand condition.Thebuildingsaremeasuredatanaveragereturnof5.0%comparedto5.0%-5.8%lastyear.Thefairvalueoftheforrestand agriculturelandisestimatedatDKK115,000perhectarecomparedtoDKK135,000perhectarelastyear.Achangeoftherateofreturnof 0.5%willimpactthevalueofinvestmentpropertyofapproxDKK5millionbeforetaxandachangeofthepriceperhectareof1%willimpactthe valueoftheforrestandagriculturelandofapproxDKK0,6millionbeforetax.

Notes Group 2018 2017 DKK'000DKK'000 11 Investment properties Cost: At1January 1,066,643 1,087,503 Additionsduringtheyear 7,205 1,546 Disposalsduringtheyear (934,196) (42,089) Transfersduringtheyear 0 19,683 At31December 139,652 1,066,643 Valueadjustments: At1January (80,768) (99,742) Fairvalueadjustmentsduringtheyear (4,747) 1,714 Reversalsregardingdisposals 66,258 17,260 Valueadjustmentsat31December (19,257) (80,768) Carrying amount 31 December 120,395 985,875 12 Investment in associates and joint ventures at fair value NameofentityPlaceofregisteredoffice Natureof relation-shipSharecapitalVotes Ownership Equityatlast reportingdate Netprofit/loss forthelast reportedyear Currency'000Currency'000Currency'000 PNOHoldingA/SCopenhagen,DenmarkAssociate 625DKK 48%48% 316,173DKK 51,703DKK P-AP2009A/SBrøndby,DenmarkAssociate 20,309DKK 40%67% 860DKK -179,002DKK KompanHoldingA/SOdense,DenmarkAssociate 51,800DKK 25%25% 630,900DKK 24,300DKK ActHoldingApSCopenhagen,DenmarkAssociate 100DKK 50%50%N/AN/A ApSFMD1 Søbrog,DenmarkAssociate 5,016DKK 30%30% 832,391DKK 9,570DKK WingmillingApSVejle,DenmarkAssociate 518DKK 67%67% 18,127DKK 5,900DKK SafewhereA/S Virum,DenmarkAssociate 1,351DKK 42%42% 1,163DKK -2,863DKK GlobeteamA/SVirum,DenmarkAssociate 1,450DKK 34%34% 29,452DKK 13,489DKK Virumgårdsvej17Virum,DenmarkAssociate 500DKK 50%50% 5,296DKK -168DKK ChangedriverA/SVirum,DenmarkAssociate 1,394DKK 15%15% 761DKK -775DKK BeckPackHoldningApSRønne,DenmarkAssociate 100DKK 40%40% N/A N/A TPSHoldingIIA/SGentofte,DenmarkAssociate 102EUR 35%35% 2,643EUR 328EUR P-A2017Holding1A/SBrøndby,DenmarkJointVenture 1,500DKK 50%50% N/A N/A 13 Investment in associates and joint ventures at equity method NameofentityPlaceofregisteredoffice Natureof relation-shipSharecapitalVotes Ownership Equityatlast reportingdate Netprofit/loss forthelast reportedyear Currency'000Currency'000Currency'000 Exxit59A/SHorsens,DenmarkAssociate 100,000DKK 25%25% 337,241DKK 24,613DKK K/SHøje-TaastrupApSBredsten,DenmarkAssociate 18,400DKK 31%31% 334,119DKK 35,749DKK Høje-TaastrupApSBredsten,DenmarkAssociate 128DKK 31%31% 106DKK -11DKK HafniaManagementA/SHellerup,DenmarkAssociate 500DKK 20%20% 19,034DKK -92DKK HavneøenE+GA/SVejle,DenmarkJointVenture 2,000DKK 50%50% N/A N/A K/SJoinflightIVBillund,DenmarkJointVenture 40,000DKK 49%49% 37,572DKK -2,428DKK JFIVApSBillund,DenmarkJointVenture 800DKK 50%50% 753DKK -47DKK KNOperatingLtdLimerick,IrelandJointVenture 100USD 50%50% 18,271USD 14,485USD

Investmentpropertiesaremeasuredatfairvalue.Thefairvalueiscalculatedbyusinggenerallyacceptedvaluationmethods.

AllshareshavenominalvalueofDKK1,000.

Therehavebeennochangesinthesharecapitalduringthelast5years.

EachAsharehas10votesattheannualgeneralmeeting.EachBsharehas1voteattheannualgeneralmeeting.

Notes Group 14 Other equity investments IndustryofinvestmentGeography 20182017 DKK'000DKK'000 MultisectorGlobal 12,586 203,272 MultisectorNordic 19,716 59,494 MultisectorDenmark 274 2,732 MultisectorPanAsia 90,389 90,383 TechnologyGlobal - 388,000 RealEstate Global 43,314 51,509 RealEstate Denmark 131 126 ShippingGlobal - 1,246 Total portfolio 166,410 796,763 15 Deferred tax Deferredtaxat01.01 108,804 143,231 Deferredtaxreccognisedintheincomestatement (23,334)(34,427) Derecognisedaspartofsaleofsubsidiary (69,099)0 Deferred tax at 31.12 16,371 108,804 Deferred tax relates to: Property,plantandequipment (1,223)34,115 Financialcontracts 46,962 74,689 Taxlosscarryforwards (29,368)0 16,371 108,804 Ofwhichpresentedasdeferredtaxassets 18,911 0 Ofwhichpresentedasdeferredtaxliabilities 35,282 108,804 TheGroupdoesnothaveanyunrecognizedtaxlosscarryforwards. 16 Inventories Workinprogress 47,945 0 Finishedgoodsandgoodsforresale 182,168 0 Total inventories 230,113 0 17 Share capital The share capital comprise: Number of shares Nominal value (TDKK) Ashares 57,70957,709 Bshares 42,29142,291 Share capital 100,000 100,000

KIRKKAPITALA/S’relatedpartiescompriseGunhildKirkJohansen,CasperKirkJohansen,MortenKirkJohansen, AndersKirkJohansenandclosefamlilymembersandtheBoardofDirectorsandtheExecutiveManagementofKIRK KAPITAL.Relatedpartiesalsocomprisesubsidiariesandassociates.Relatedpartiesfurthercomprisecompanies wherethementionedshareholdershavesignificantinfluence:SelmontA/S,M.KIRKA/S,A.KIRKA/S,C2A/S,CKKJ CosmoApS,JKJCosmoApS,BMBillundApS,Edith&GodtfredKirkChristiansensFondandsubsidiaries.

GunhildKirkJohansen,CasperKirkJohansen,MortenKirkJohansen,AndersKirkJohansenhaveasshareholders significantinfluenceinKIRKKAPITALA/S.

Inthefinancialyear,alimitednumberoftransactionsrelatedtoservicestookplacebetweentheownersofKIRK KAPITALA/SandtheKIRKKAPITALGroup.Theseserviceswerepaidonnormalmarketterms.

TherewerenotransactionswiththeBoardofDirectorsortheExecutiveManagementbesidestransactionsrelatedto theemployment.

ForinformationaboutremunerationtotheBoardofDirectorsandtheExecutiveManagement,seenote4.

Transactions with related parties: Contingent liabilities

Contingentliabilitiesandremainingcommitmentregardingparticipationininvestmentprojectsamounttoamaximum ofDKK43,312k.

Ascollateralforbankdebt,DKK300,000kthebankisgivensecurityindepositarywithacarryingamountofDKK 656,126kat31December2018.

TheGrouphasprovidedaguaranteeofamaximumofDKK160,930ktofinancialinstitutionsregardingloansand otherengagements.

TheGrouphasprovidedaguaranteeofamaximumofDKK52,642ktofinancialinstitutionsinwhichtheGroup's associateshaveloansandotherengagements.

Ascollateralforbankdebttofinancialinstitution,DKK162,985k,thesharesandaccompanyingrightsinthe subsidiaryKKAGAviationA/Shavebeenplacedassecurity(thecarryingamountofwhichamountstoDKK283,436k at31December2018).Further,ascollateralforthebankdebt,thebankhasbeengivensecurityinKKAGAviation A/S´sharesandrightsinKA1P/S,withacarryingamountofDKK318,273kat31December2018.Furthermore, KIRKKAPITALA/S,KIRKAviationA/SandKKAGAviationA/Shaveguaranteedpaymenttothebankandisjointly andseverallyliablefortheunpaidbankdebt.

RestrictedcashamountstoDKK69,238k.

Notes Group 18 Related parties 20182017 DKK'000 DKK'000 Other related parties AdministrationandmanagementFeeIncome11,26312,453 Salaries 1,3771,003 Intercompanyinterestincome1627 Intercompanyinterestexpenses 26 56 Year-end balances arising from transactions with related parties: Other related parties Receivables 8,350 15,615 Payables 5,624 23,387 19 Commitments and contingent liabilities 20182017 Operating leases DKK'000DKK'000 MinimumleasepaymentsontheGroup'soperatingleaseobligationsamountto: Lessthan1year13,0351,533 1to5years2730 Total 13,308 1,533 Nootheryear-endbalancesortransactionshavetakenplaceduringtheyearwiththeBoardofDirectors,the ExecutiveManagement,majorshareholdersorotherrelatedparties.

TheDanishgroupcompaniesarejointlyandseverallyliablefortaxonthejointlytaxedincomesetc.oftheGroup.The totalamountofcorporationtaxpayablebytheGroupisdisclosedintheFinancialStatementsforKIRKKAPITALA/S, whichisthemanagementcompanyofthejointtaxation.TheDanishcompaniesarejointandseveralliableforthejoint taxationliability.Thejointtaxationliabilitycoversincometaxesandwithholdingtaxesondividends,royaltiesandinterest.

TheGroup’sfinancialriskmanagementismainlymanagedbyitstwoinvestmentdepartmentssincefinancialrisk exposureiscenteredaroundtheGroup’sstrategicandfinancialinvestments.Overallriskanalysisisperformedin connectionwithsettingtheGroup’sinvestmentstrategywhichisdiscussedwithandapprovedbytheBoard.

TheGroup’sfinancialriskprofileismainlydominatedbymarketriskwheretheGrouphashighexposuretosecurity pricesandmoderateexposuretointerestratesandcurrencyrates.ToalesserextendtheGroupisalsoexposedto CreditriskandLiquidityrisk.

Derivativesfinancialinstrumentsismainlyusedtoreducefinancialriskexposure.Whereallrelevantcriteriaaremet, hedgeaccountingisappliedtoremovetheaccountingmismatchbetweenthehedginginstrumentandthehedgeditem. Thiswilleffectivelyresultinrecognizinginterestexpenseatafixedinterestrateforthehedgedfloatingrateloansor contractsandinvestmentinforeigncurrencyatthefixedforeigncurrencyrateforthehedgedinvestments.Theyare presentedascurrentassetsorliabilitiestotheextenttheyareexpectedtobesettledwithin12monthsaftertheendofthe reportingperiod.

Forhedgesofnetinvestmentsinforeigncurrenciesandofhedgesoffinancialasssetdenominatedinforeigncurrencies, thegroupentersintohedgerelationshipswherethecriticaltermsofthehedginginstrumentmatchexactlywiththeterms ofthehedgeditem.Thegroupthereforeperformsaqualitativeassessmentofeffectiveness.

TheGroupusesforeigncurrencyforwardstohedgeitsexposuretoforeigncurrencyrisk.UndertheGroup'spolicythe criticaltermsoftheforwardsmustalignwiththehedgeditems.

Share price risk

TheGroup'scurrentassetsinvestmentsisdirectlyexposedtomovementinsecuritypricessince13%ofcurrentassets investmentsislistedequitiesandvaluedusingtheobservablepricesonstock-exchanges.10%inshort-termmovement instockpriceswouldaffecttheportfoliowith12%intheshortterm,duetoahighervolatilityincomparisontothemarket.

Investmentsinassociatesandjointventuresismeasuredatfairvalueusingnon-observabledata,butdatawhichto someextendisrelatedtolong-termmarketconditions.Investmentsinassociatesandjointventuresisthusnotdirectly exposedtoshorttermstockpricemovement,butriskisrelatedtoLong-termconditionsinthemarket.

Foreign exchange risk

TheGroup’scurrencyexposurecanbedividedintwocategoriesofexposureandrisks.

OnecategoryisinvestmentsdenominatedincurrenciesotherthatDKK/EUR.Asper31December2018investments denominatedincurrencyotherthanDKK/EURamounttoDKK1,138millionandtheexposureismainlyrelatedtoUSD andGBP.DerivativesisusedtohedgethecurrencyriskandthenetexposureisreducedtoDKK471millionforUSD accountforDKK438millionandGBPaccountforDKK23million.ThehedgingrateinUSDandGBPisper31December 2018,53%and88%respectively.TheaveragehedgingrateinUSDandGBPfortheyearwas64%and90% respectively.Thedurationofthehedgingcontractsallhaveamaturityoflessthanthreemonthsaftertheendofthe reportingperiod.

Achangeof10%inUSDandGBPexchangewouldhaveshort-termeffectonthetotalcomprehensiveincomeby RespectivelyDKK44millionandDKK2million.

ThesecondcategoryistheunderlyingcurrencyriskininvestmentdenominatedinDKK/EURwheretheinvestmentsis operatinginaglobalmarket.Someoftheinvestmentshavecurrencyexposuresduetoimbalancesinrevenueand expensesgeneratedinforeigncurrenciesmostlyrelatedtoUSDandGBP.Theriskismanagedbytheinvestments.

Group 19 Commitments and contingent liabilities (continued) Joint taxation scheme 20 Financial risk management Financial risk factors Market risk

Notes

Interest rate risk

TheGroup’sinterestrateriskismainlyrelatedtothegroupsfixedincomeinvestmentsandtheGroupsdebtinstruments.

Anincreaseininterestrateof1%wouldnegativelyaffectthefixedincomeinvestmentswith0,7%andincreasethe Groupsinterestexpenseswith0,9%ofthedebtburden.Theinterestrateriskisconsideredmoderate.

TheGroup’sprimarycreditexposureisrelatedtofixedincomeinvestments,financialinstrument,receivablesregarding financeleasesandcashpositions.Majorsingleexposuresareeitherexposurestocounterpartswithgoodcreditratings and/orothersupportingsecuritymeasuresisinplace.Theoverallcreditriskisconsideredlow.

Liquidity risk

TheGroupmanagesitsliquidityriskbycontiguouslymonitoringandassessingtheliquiditypositions.Basedonthe relativelyliquidCurrentAssetsInvestmentsandrelativelylowlevelofborrowingsandliabilitiestheliquidityriskis consideredlow.

ThetablebelowanalysestheGroup’sfinancialliabilitiesintorelevantmaturitygroupingsbasedontheremainingperiod atthebalancesheetdatetothecontractualmaturitydate.Theamountsdisclosedinthetablearethecontractual undiscountedcashflows.

Notes Group 20 Financial risk management (continued) Credit risks Maturity analysis Lessthan1 year Between1 and5year Morethan5 years Total Non-derivatives DKK'000DKK'000DKK'000DKK'000 As at 31.12.2018 Creditinstitutions108,657 354,328 0 462,985 Tradepayables9,789 0 0 9,789 Deposits1,304 0 0 1,304 Otherpayables156,776 0 0 156,776 276,526 354,328 0 630,854 As at 31.12.2017 Morgageloans9,159 36,581 312,812 358,552 Creditinstitutions286,898 601,041 0 887,939 Tradepayables10,883 0 0 10,883 Deposits0 10,356 0 10,356 Otherpayables134,456 0 0 134,456 441,396 647,978 312,812 1,402,186 20182017 Financial assets and liabilities per measurement category DKK'000DKK'000 Financial assets Financial assets at amortised cost: Noncurrentreceivables251,278 408,503 Tradereceivables936 1,033 Receivablesfromassociates0 100 Otherloansandreceivables41,987 49,944 Cashandcashequivalents146,110 53,379 Financial assets at fair value through profit or loss (FVPL): Investmentsinassociatesandjointventure 1,655,000 850,869 CurrentAssetInvestments 1,539,878 1,581,469 Otherinvestments166,410 796,763

TheGroup’sfinancialassetsareeithermeasuredatamortizedcostorfairvaluethroughprofitandloss.Theabove specifiedfinancialassetsandliabilitiesatfairvalueshavebeenmeasuredusingeitherfromthebelowthreelevelsoffair valuehierarchy:

-Level1:Quotedpricesinactivemarketsforidenticalmarkets

-Level2:Inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetseitherdirectlyor indirectly

-Level3:Inputfortheliabilitiesandassetsthatarenotbasedonobservablemarketdata.Thesefairvalue measurementsisformeitherexternalportfoliomanagersorbymanagementestimatesusingmultiplesfromsimilar investmentsorusingfairvaluecalculationsmodelssuchasDCFmodels.

TheCompanyhasadoptedIFRSforitsfinancialaccountswitheffectfrom1January2017.Thecomparativefiguresfor 2017havebeenrestated.

Belowisshowntheimpactonequityandcomprehensiveincome.

First time adoption

TheAnnualReportisthefirstAnnualReportthatispresentedinaccordancewithIFRS.Thefiguresfor2017and2018in theincomestatementandthebalancesheetitemsasat1January2017,31December2017and31December2018 werepreparedaccordingtoIFRS.

ThedisclosuresrequiredbyIFRS1,First-timeAdoptionofInternationalFinancialReportingStandards,concerningthe transitionfromDanishGAAPtoIFRSareprovidedbelow.

Reconciliation of equity

Notes Group 20182017 DKK'000DKK'000 20 Financial risk management (continued) Financial liabilities Liabilitiesatamortisedcost: Tradeandotherpayables 9,789 10,883 Creditinstitutions462,985 1,246,491 Deposits1,304 10,356 Otherpayables156,776 134,456 Measurement and fair value hierarchy 20182017 DKK'000DKK'000 21 Fee to auditors appointed at the general meeting AuditfeetoPwC 688 726 Otherassuranceengagements 90 174 Taxadvisoryservices 966 978 Non-auditservices 761 986 2,505 2,864 22 First time adoption of IFRS 31 December 2017 1January 2017(dateof transitionto IFRS) Equity-accordingtotheDanishFinancialStatementsAct 4,330,354 4,611,580 Adjustments Goodwill0 0 Property,plantandequipment0 0 Investmentsinassociates56,176 135,214 Deferredtax0 0 Equity1January2017-accordingtoIFRS 4,386,530 4,746,794

Reconciliationoftotalcomprehensiveincomefor2017

Totalcomprehensiveincome DanishFinancialStatementsAct

Thecomparativefiguresintheprofit&lossstatementandthebalancesheethasbeenadjustedwith thefiguresstatedabove.

Measurementofstrategicinvestmentsinassociatesandjointventureshavechangedfromequity valuetofairvaluewitheffectfrom1January2017.

NoeventsmateriallyaffectingtheassessmentoftheAnnualReporthaveoccurredafterthebalance sheetdate.

Notes Group 22 First time adoption of IFRS (continued) 2017 DKK'000 (232,920) Adjustments Amortisationofgoodwillreversed 0 Fairvalueadjustmentsofinvestmentsinassociates (82,344) Capitalizedborrowingcosts0 Changetodeferredtax 0 Totalcomprehensiveincome-IFRS (315,264) Adjustments 23 Events after the balance sheet date 24 List of group companies Name Placeof RegisteredOfficeShareCapital Votesand Ownership Currency'000 Subsidiaries: KIRKFarmA/S Vejle,Danmark 500DKK 100% KIRKShippingA/S Vejle,Danmark 95USD 100% GunhildKirkA/S Vejle,Danmark 85USD 100% EdithKirkA/S Vejle,Danmark 99USD 100% MarieKirkA/S Vejle,Danmark 274USD 100% MarianneKirkA/S Vejle,Danmark 94USD 100% AnjaKirkA/S Vejle,Danmark 94USD 100% KIRKAviationA/S Vejle,Danmark 1,892DKK 100% KKAGAviationA/S Vejle,Danmark 177USD 100% KKAGKomplementarselskabApS Vejle,Danmark 14USD 100% KA1P/S Vejle,Danmark 575USD 100% KIRKPropertyA/S Vejle,Danmark 600DKK 100% Havneøen1P/S Vejle,Danmark 176,138DKK 100% Havneøen2P/S Vejle,Danmark 500DKK 100% Havneøen3P/S Vejle,Danmark 500DKK 100% KomplementarselskabetHavneøen1ApS Vejle,Danmark 50DKK 100% KomplementarselskabetHavneøen2ApS Vejle,Danmark 50DKK 100% KomplementarselskabetHavneøen3ApS Vejle,Danmark 50DKK 100%