Page 1

ILLUSTRATION: BARKARBY GATE, RETAIL PARK Stockholm, Sweden

TK Development A/S | CVR nO. 24256782 COMPANY ANNOUNCEMENT no. 16/2013 | 21 JUNe 2013

INTERIM REPORT Q1

2013/14


Ta b l e o f contents

Page

3 Summary 5

Consolidated financial highlights and key ratios

6 Results in Q1 2013/14 and outlook for 2013/14 12 Market conditions 13 Property development 17

Asset management

22

Discontinuing activities

23 Other matters 24

Statement by the Board of Directors and Executive Board on the Interim Report

25

Consolidated financial statements

34

Company information

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S ummary

R e s u lt s fo r t h e f ir s t q u arter o f 2 0 1 3 / 1 4 TK Development’s results for the first quarter of 2013/14 amounted to DKK -19.0 million before tax, compared to DKK

PHoto: FASHION ARENA OUTLET CENTER PRAGUE, CZECH REPUBLIC

-6.9 million in the same period the year before. The results after tax amounted to DKK -16.2 million against DKK -154.9 million in the same period the year before. The balance sheet total amounted to DKK 3,957.9  million at 30 April 2013 against DKK 4,009.3 million at 31 January 2013. Consolidated equity totalled DKK 1,370.9 million, and

A s s et m a n age m e n t

the solvency ratio stood at 34.6 %.

The total portfolio of own properties under asset manage Cash flows for the period amounted to DKK -4.5 million

ment, which thus generates cash flow, comprised 138,250

against DKK -12.9 million in the same period the year before.

m² and amounted to DKK 1,938.7 million at 30 April 2013,

Net interest-bearing debt amounted to DKK 2,195.7 million

of which investment properties accounted for DKK 314.0

at 30 April 2013 against DKK 2,206.1 million at 31 January

million. The annual net rent from the current leases corre-

2013.

sponds to a return on the carrying amount of 6.7 %. Based on full occupancy, the return on the carrying amount is ex-

P RO P E RT Y D E V E LO Pm e n t

pected to reach 7.9 %.

In the municipality of Danderyd near Stockholm, TK Development handed over the first 13,000 m² phase of a retail

The operation of these properties is generally proceeding

park to an investor in 2010/11. Construction of the second

satisfactorily, and overall the footfall and revenue in the

phase of about 1,800 m² was completed in March 2013, and

centres are developing positively.

the retail park was handed over to the investor in the first quarter of 2013/14. The total project has been sold to the German investment fund Commerz Real on the basis of forward funding.

Market c o n diti o n s In Management’s opinion, the market conditions have not changed appreciably during the past months.

In January 2013, construction of the first phase of 7,850 m²,

The main challenge currently facing the property sector is

a total of 136 units, of TK Development’s residential project

the difficult access to financing. Uncertainty on the inter-

in Bielany, Warsaw, Poland, was completed. The first units

national financial markets continues to adversely affect the

were handed over to the buyers in February 2013 and 50 %

property sector, leading to consistently long decision-mak-

of all units were handed over in the first quarter of 2013/14.

ing processes among financing sources, tenants and inves-

In total, 76 % of the first-phase units have been sold.

tors alike.

After the reporting date, TK Development has sold a 20,000

The Group will make the startup of major new projects con-

m² retail park project in Barkarby, Stockholm, Sweden, to a

tingent on obtaining either full or partial financing for them

fund managed by Cordea Savills. The sale is based on for-

and on freeing up cash resources from the sale of several

ward funding. 73 % of the project premises have been let.

major completed projects.

The option to purchase land for the project will be exercised simultaneously with construction startup, scheduled for August 2013. Earnings from the sale are expected to be recognized in the 2014/15 financial year.

Fi n a n c ial i s s u e s At the Company’s Annual General Meeting on 22 May 2013, the Board of Directors was authorized to carry out a capital increase with gross proceeds of about DKK 210-231 million.

The Group’s project portfolio in the property development

The capital increase will help generate the cash resources

area comprised 456,000 m² at 30 April 2013 (31 January

required to underpin future operations and project flow, and

2013: 452,000 m²).

thus long-term earnings. The capital increase has been dis-

S u m m ary | I n t e r i m R e p o rt Q 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n t A / S | 3 / 3 4


S ummary

cussed with the Group’s major shareholders, who, together

Management anticipates positive results before tax for the

with a few major private and institutional investors, have giv-

continuing activities for the 2013/14 financial year. The

en conditional subscription and underwriting commitments

timing and progress of the phase-out of the discontinuing

for the total capital increase.

activities are subject to major uncertainty, and the results of these activities are therefore not included in the outlook

The Board of Directors has appointed Nordea Bank Danmark

for the 2013/14 financial year.

A/S to be the Manager of the offering. The more specific terms and conditions governing the capital increase have

As mentioned previously, Management has revised the sales

not yet been determined. The prospectus currently being

strategy for the Group’s projects and chosen to accept re-

prepared will set out the detailed terms and conditions of

duced prices for selected project sales. Thus, Management

the capital increase. TK Development expects to publish the

considers it important for the Group to sell some of its com-

prospectus in the first half of August 2013 and expects the

pleted projects and plots of land in the 2013/14 financial

capital increase to be completed in early September 2013.

year.

A substantial portion of the proceeds from the capital in-

The expectations mentioned in this Interim Report, including

crease will be used to reduce the debt to credit institutions,

earnings expectations, are naturally subject to risks and un-

including project finance loans of DKK 68.5 million granted

certainties, which may result in deviations from the expected

by a number of the Company’s major shareholders and mem-

results. Various factors may impact on expectations, as out-

bers of Management.

lined in the section “Risk issues” in the Group’s Annual Report for 2012/13, particularly the valuation of the Group’s project

TK Development has a general agreement with the Group’s

portfolio.

main banker about both operating and projects credits. After the reporting date, the agreement has been extended for a two-year period, subject to the condition that the operating credit limit is reduced by DKK 73.5 million when the forthcoming capital increase has been implemented, at the latest. During and after the period under review, TK Development has concluded agreements regarding the refinancing of project credits worth DKK 1.2 billion out of the DKK 1.5 billion due to mature in 2013/14 as of 31 January 2013. The most significant project credit of those refinanced after the reporting date has been extended by two years, subject to the condition that the credit is reduced by DKK 50 million when the forthcoming capital increase has been implemented, at the latest. Now that the above-mentioned refinancing agreements are in place, credits of DKK 0.3 billion are due to mature in 2013/14. The Group is in ongoing dialogue with the relevant credit institutions, and Management anticipates being able to either prolong or otherwise refinance project credits that have not been prematurely repaid upon project sales.

O u tl o o k fo r 2 0 1 3 / 1 4

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C onso l idated f inancia l h ig h l ig h ts and key ratios

DKKm

Q1 2013/14

Q1 2012/13

Full year 2012/13

131.6

54.7

632.3

1.6

-0.3

-37.8

32.2

39.4

-139.5

8.5

12.1

-241.1

-27.9

-19.1

-87.4

Fi n a n c ial h ig h lig h t s : Net revenue Value adjustment, investment properties, net Gross profit/loss Operating profit/loss (EBIT) Financing, etc. Profit/loss before tax and writedowns, etc.

-19.0

-6.9

-0.3

Profit/loss before tax

-19.0

-6.9

-326.0

Profit/loss for the period

-16.2

-154.9

-493.3

3,957.9

4,480.6

4,009.3

Property, plant and equipment

500.9

447.5

498.8

of which investment properties/investment properties under construction

498.8

443.4

496.3

Total project portfolio

3,021.9

3,546.6

3,030.9

Equity

1,370.9

1,725.7

1,389.7

Balance sheet total

Cash flows from operating activities Net interest-bearing debt, end of period

46.1

-24.8

45.6

2,195.7

2,278.3

2,206.1

-4.7 %

-34.4 %

-30.2 %

6.5 %

22.1 %

-38.1 %

34.6 %

38.5 %

34.7 %

32.6

41.0

33.0

0.3

K ey rati o s : Return on equity (ROE) *) EBIT margin Solvency ratio (based on equity) Equity value in DKK per share

0.4

0.4

42,065,715 42,065,715

42,065,715

-3.7

-11.7

Price/book value (P/BV) Number of shares, end of period Earnings per share (EPS) in DKK

-0.4

Dividend in DKK per share

0

0

0

Listed price in DKK per share

9

15

13

Return on equity (ROE) *)

-4.7 %

-34.4 %

-30.2 %

Solvency ratio (based on equity)

34.7 %

K ey rati o s ad j u s ted fo r warra n t s :

34.6 %

38.5 %

Equity value in DKK per share

32.6

41.0

33.0

Diluted earnings per share (EPS-D) in DKK

-0.4

-3.7

-11.7

The calculation of key ratios is based on the 2010 guidelines issued by the Danish Society of Financial Analysts. *)

Annualized.

C onso lfidated f inancia l h ig hd tskey andrati key oratios moRrt e pQo1rt2 0Q1132/ 0 v epm lo e pm t /AS/ S | | 55 //3 34 C o n s o lidated i n a n c ial h ig h lig h thsl ig an s | I n t| e rI n i mt eRrei p 11 4 3 /| 1T4k | DTekv D e elo netnA


R esu l ts in Q 1 2 0 1 3 / 1 4 and out l ook f or 2 0 1 3 / 1 4

TK Development’s results for the first quarter of 2013/14

phase out activities.

amounted to DKK -19.0 million before tax, compared to DKK -6.9 million in the same period the year before. The results after

Therefore, the financial review below contains a description of

tax amounted to DKK -16.2 million against DKK -154.9 million in

the results and balance sheet total at group level only.

the same period the year before.

A c c o u n ti n g p o li c ie s The balance sheet total amounted to DKK 3,957.9 million at 30

The Interim Report is presented in accordance with IAS 34, In-

April 2013 against DKK 4,009.3 million at 31 January 2013. Con-

terim Financial Reporting, as adopted by the EU, and Danish dis-

solidated equity totalled DKK 1,370.9 million, and the solvency

closure requirements for listed companies.

ratio stood at 34.6 %. The Interim Report has been presented in accordance with The results for Q1 2013/14 and the balance sheet at 30 April

the financial reporting standards (IFRS/IAS) and IFRIC interpre-

2013, broken down by business segment, appear from the ta-

tations applicable for financial years beginning at 1 February

bles below.

2013.

The activities within each individual business segment are de-

The implementation of new and amended financial reporting

scribed in more detail on pages 13-22.

standards and interpretations that have entered into force as of the 2013/14 financial year has not impacted recognition and

The property development segment is described on pages

measurement in the consolidated financial statements and

13-16. The description includes information about the

thus has no effect on the earnings per share and the diluted

development potential of TK Development’s project portfolio,

earnings per share.

including an outline of the individual development projects. In March 2013, the Board of Directors decided to change the The asset management segment is described on pages

internal reporting procedure. In this connection, the segment

17-21. The description contains information about TK

definition has been revised, and segments are now divided into

Development’s own properties under asset management, in-

property development activities, asset management activi-

cluding an outline of the operation and customer influx for the

ties and discontinuing activities. The comparative figures have

individual projects.

been restated accordingly.

The discontinuing activities are described on page 22, which

The accounting policies have been applied consistently with

provides more details about TK Development’s properties and

those presented in the Annual Report for 2012/13. Reference

projects in the countries where Management has decided to

is made to the Annual Report for a complete description of the

R e s u lt s q 1 2 0 1 3 / 1 4 ( D K K m ) Q1 2013/14

Property development

Asset management

Discontinuing activities

Unallocated

131.6

95.1

33.1

3.4

0.0

Gross profit/loss

32.2

2.5

29.8

-0.1

0.0

Costs

23.2

-

-

2.1

21.1

8.5

2.5

29.8

-2.2

-21.6

Financing, net

-27.9

-6.3

-16.5

-1.7

-3.4

Profit/loss before tax

-19.0

-3.6

13.4

-3.8

-25.0

Profit/loss Revenue

Operating profit/loss

Tax on profit/loss for the period Profit/loss for the period

-2.8

-

-

-

-2.8

-16.2

-

-

-

-22.2

The balance sheet structure appears from the next page.

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R esu l ts in Q 1 2 0 1 3 / 1 4 and out l ook f or 2 0 1 3 / 1 4

B ala n c e s h eet s tr u c t u re at 3 0 april 2 0 1 3 ( D K K m )

Balance sheet

Property development

Asset management

Discontinuing activities

Unallocated

481.2

-

314.0

167.2

-

17.6

17.6

-

-

170.8

30 Apr 2013

Assets Investment properties Investment properties under construction Other non-current assets Projects in progress or completed Receivables

177.4

3.3

3.3

-

3,021.9

1,159.9

1,624.7

237.3

-

209.0

50.4

135.4

21.9

1.3

Deposits in blocked and escrow accounts, cash and cash equivalents, etc.

50.8

10.9

12.5

0.4

27.0

3,957.9

1,242.1

2,089.9

426.8

199.1

Equity

1,370.9

582.3

694.6

233.5

-139.5

Credit institutions

2,260.5

533.4

1,246.3

188.9

291.9

326.5

126.4

149.0

4.4

46.7

Equity and liabilities

3,957.9

1,242.1

2,089.9

426.8

199.1

Solvency ratio

34.6 %

46.9 %

33.2 %

54.7 %

-70.1%

Assets Equity and liabilities

Other liabilities

Group’s accounting policies.

Overview of handed-over projects Q1 2013/14

No interim financial statements have been prepared for the Parent Company. The Interim Report is presented in DKK, which

Retail park, Enebyängen, Danderyd, Sweden

is the presentation currency for the Group’s activities and the

In the municipality of Danderyd near Stockholm, TK Develop-

functional currency of the Parent Company. The Interim Report

ment handed over the first 13,000 m² phase of the retail park

has not been audited or reviewed by the Company’s auditors.

to an investor in 2010/11. Construction of the second phase of about 1,800 m² was completed in March 2013, and the re-

A c c o u n ti n g e s ti m ate s a n d j u dg m e n t s

tail park was handed over to the investor in the first quarter of

The most significant accounting estimates and judgments

2013/14. The second phase is fully let and tenanted by Plan-

made by Management in applying the Group’s accounting pol-

tagen (2012/13: 100 %). The total project has been sold to the

icies, and the associated, estimated material uncertainty, are

German investment fund Commerz Real on the basis of forward

the same as those made in the preparation of the Annual Re-

funding.

port for 2012/13. For a more detailed description, reference is therefore made to the Annual Report.

Residential park, Bielany, Warsaw, Poland Construction of the first phase of 7,850 m², a total of 136 units,

I n c o m e s tate m e n t

was completed in January 2013, and the first units were hand-

Revenue

ed over to the buyers in February 2013. A total of 76 % of the

The revenue for the period under review totalled DKK 131.6 mil-

units have been sold (2012/13: 69 %), with 50 % being handed

lion against DKK 54.7 million in Q1 2012/13.

over to the buyers in Q1 2013/14. The residential units are being sold as owner-occupied apartments to private users.

The revenue stems from the sale of projects, rental and fee income, etc.

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R esu l ts in Q 1 2 0 1 3 / 1 4 and out l ook f or 2 0 1 3 / 1 4

Gross margin

Goodwill

The gross margin for Q1 2013/14 amounted to DKK 32.2 million

Goodwill is unchanged compared to 31 January 2013, amount-

against DKK 39.4 million in Q1 2012/13. The gross margin de-

ing to DKK 33.3 million at the reporting date. Goodwill relates

rives from the operation of completed projects, the operation

to the Group’s property development and asset management

and value adjustment of the Group’s investment properties and

activities in Poland and the Czech Republic. There are no indica-

profits on handed-over projects.

tions of any need to impair the value of goodwill.

The value adjustment of the Group’s investment properties

Investment properties and investment properties under con-

amounted to DKK 1.6 million against DKK -0.3 million in Q1

struction

2012/13.

TK Development’s investment properties consist of:

Staff costs and other external expenses

Futurum Hradec Králové, shopping centre, the Czech Repub-

Staff costs and other external expenses amounted to DKK 23.2 million for Q1 2013/14 against DKK 26.7 million in Q1 2012/13, a reduction of about 13 %.

lic (a 20 % interest). Galeria Tarnovia, shopping centre, Tarnów, Poland (a 30 % interest). German investment properties.

Staff costs amounted to DKK 16.6 million against DKK 18.7 million in the same period the year before, a decline of about 11

The total value of the Group’s investment properties amounted

%. The number of employees totalled 105 at 30 April 2013 (31

to DKK 481.2 million against DKK 479.4 million at 31 January

January 2013: 112), including employees working at operation-

2013. DKK 167.2 million of the value at 30 April 2013 is attribu-

al shopping centres.

table to the Group’s German investment properties, which are described in more detail in the section “Discontinuing activities”

Other external expenses amounted to DKK 6.6 million, a reduc-

below. The two remaining investment properties belong to the

tion of about 18 % compared to Q1 2012/13.

asset management segment and are described in more detail under that heading.

Development in costs: The valuation of the Czech investment property, the Futurum

180

Hradec Králové shopping centre, made at 31 January 2013 was

150

based on the ongoing sales process. This valuation was upheld

120

at 30 April 2013.

90 60

TK Development’s 30 % ownership interest in Galeria Tarnovia

30

has been valued at fair value based on the return on the pro-

0

08

9 /0

20

0 /1

09

20

Costs, DKKm

1 /1

10

20

20

11

2 /1

20

12

Costs, trend

3 /1

/

13

20

E 14

2

01

2 Q1

3 /1

3

01

2 Q1

4 /1

Financing

perty agreed upon in December 2012 in connection with the sale of 70 % to Heitman. In Management’s opinion, the rate of return agreed upon in December 2012 is still consistent with the current market level.

TK Development realized net financing expenses of DKK 27.9 million against DKK 19.1 million in the same period the year

TK Development’s investment properties under construction

before. The increase is attributable partly to higher financing

consist of the Group’s ownership interest in the Jelenia Góra

costs on individual project credits and partly to the declining

development project in Poland. No value adjustment of the in-

volume of projects on which interest is capitalized following the

vestment property was made at 30 April 2013, as the parties

decision to sell some of the Group’s plots of land.

are awaiting final permits for the project and further clarification of the building phase, including the timing of construction

B ala n c e s h eet

startup, construction period, etc.

The Group’s balance sheet total amounted to DKK 3,957.9 million, which is a decline of DKK 51.4 million compared to 31 Jan-

Deferred tax assets

uary 2013.

Deferred tax assets were recorded at DKK 134.7 million in the

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R esu l ts in Q 1 2 0 1 3 / 1 4 and out l ook f or 2 0 1 3 / 1 4

balance sheet against DKK 127.0 million at 31 January 2013.

Receivables Total receivables amounted to DKK 209.0 million, a decline of

The valuation of the tax assets is based on existing budgets

DKK 32.0 million from 31 January 2013 that relates mainly to

and profit forecasts for a five-year period. For the first three

other receivables.

years, budgets are based on an evaluation of specific projects in the Group’s project portfolio. The valuation for the next two

Cash and cash equivalents

years is based on specific projects in the project portfolio with

Cash and cash equivalents amounted to DKK 26.9 million

a longer time horizon than three years as well as various project

against DKK 31.2 million at 31 January 2013. The Group’s total

opportunities.

cash resources, see note 4, came to DKK 68.1 million against DKK 70.1 million at 31 January 2013.

Due to the substantial uncertainties attaching to these valuations, provisions have been made for the risk that projects

Equity

are postponed or not implemented and the risk that project

The Group’s equity came to DKK 1,370.9 million against

profits fall below expectations. A change in the conditions and

DKK 1,389.7 million at 31 January 2013.

assumptions for budgets and profit forecasts, including time estimates, could result in the value of the tax assets being low-

Since 31 January 2013, equity has partly been affected by the

er than that computed at 30 April 2013, which could have an

results for the period and negative market-value adjustments

adverse effect on the Group’s results of operations and finan-

after tax of DKK 2.8 million related to foreign subsidiaries and

cial position.

hedging instruments.

Project portfolio

The solvency ratio amounts to 34.6 %.

The total project portfolio came to DKK 3,021.9 million against DKK 3,030.9 million at 31 January 2013. The decline is a com-

Equity and solvency:

bined result of an increase in the Group’s portfolio of ongoing projects and a decrease due to the sale of projects.

2,000

2013/14. At 30 April 2013, forward funding represented 94.8 % of the gross carrying amount of sold projects.

0

31 Jan 09

31 Jan 10

Equity, DKKm

The Group’s total portfolio of completed projects and investment properties amounted to DKK 2,138 million at 30 April 2013 (31 January 2013: DKK 2,132 million), and the Group’s net interest-bearing debt amounted to DKK 2,196 million (31 January 2013: DKK 2,206 million).

34,6 %

31 Jan 12

creased due to the handover of projects to investors in Q1

34.7 %

31 Jan 11

59 %

40.4 %

500

40.4 %

DKK 369.6  million at 31 January 2013. Forward funding de-

1,000

36.4 %

were DKK 330.3 million at 31 January 2013, compared to

39.5 %

1,500

Total prepayments based on forward-funding agreements

31 Jan 13

30 Apr 13

Solvency ratio

Non-current liabilities The Group’s non-current liabilities represented DKK 140.8 million against DKK 141.0 million at 31 January 2013. Current liabilities The Group’s current liabilities represented DKK 2,446.2 million

2,500

against DKK 2,478.6 million at 31 January 2013. The decline is 1,875

primarily attributable to debt owing to credit institutions.

1,250

Ca s h f l o w s tate m e n t

625 0

The Group’s cash flows from operating activities were positive 31.1.09

31.1.10

31.1.11

31.1.12

31.1.13

31.4.13

in the amount of DKK 46.1 million (2012/13: positive in the

Net interest-bearing debt, DKKm

amount of DKK 45.6 million). This amount is a combined result

Investment properties and completed projects, DKKm

of a reduction of funds tied up in projects due to project sales, new project investments, a decline in receivables, interest and

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R esu l ts in Q 1 2 0 1 3 / 1 4 and out l ook f or 2 0 1 3 / 1 4

tax paid, as well as other operating items.

Fi n a n c ial i s s u e s Capital increase

The Group’s cash flows from investing activities were nega-

At the Company’s Annual General Meeting on 22 May 2013,

tive in the amount of DKK 1.0 million (2012/13: positive in the

the Board of Directors was authorized to carry out a capital in-

amount of DKK 6.4 million), due mainly to additional invest-

crease with gross proceeds of about DKK 210-231 million. The

ments in the Group’s investments properties and investment

capital increase will help generate the cash resources required

properties under construction.

to underpin future operations and project flow, and thus longterm earnings. The capital increase has been discussed with

The cash flows from financing activities were negative in the

the Group’s major shareholders, who, together with a few major

amount of DKK 49.6 million (2012/13: negative in the amount

private and institutional investors, have given conditional sub-

of DKK 76.2 million). The negative cash flows result from a re-

scription and underwriting commitments for the total capital

duction of payables to credit institutions coupled with the fi-

increase.

nancing raised for project investments. The Board of Directors has appointed Nordea Bank Danmark

G o al s a n d s trategy

A/S to be the Manager of the offering. The more specific terms

As described in company announcement no. 6/2013 and the

and conditions governing the capital increase have not yet

Annual Report for 2012/13, in March 2013 Management resol-

been determined. The prospectus currently being prepared

ved to revise the Group’s strategy and business model and to

will set out the detailed terms and conditions of the capital in-

adjust its market focus.

crease. TK Development expects to publish the prospectus in the first half of August 2013 and expects the capital increase

In this connection, Management decided to carry out a number

to be completed in early September 2013.

of adaptations, the aim being to achieve the following results after a two-year transformation process:

A substantial portion of the proceeds from the capital increase will be used to reduce the debt to credit institutions, including

The remaining activities will have been limited to Denmark, Sweden, Poland and the Czech Republic. The portfolio of projects not initiated (plots of land) will have

project finance loans of DKK 68.5 million granted by a number of the Company’s major shareholders and members of Management.

been reduced from about DKK 1.1 billion to about DKK 500 million. The balance sheet will have been adjusted, with a solvency ratio of about 40 %.

Other financial issues The fact that a number of completed projects have not been sold means a substantial portion of the Group’s financial re-

Overheads will have been reduced by around 20 % relative

sources is tied up in these projects. This has made it difficult to

to 2012/13, with half of the reduction deriving from the

allocate the necessary capital to securing the progress of new

discontinuation of activities in Germany, Finland and the

projects. Therefore, in December 2012 Management decided to

Baltic States – cost cuts implemented at the beginning of

revise the Group’s sales strategy with a view to realizing faster

2013.

sales. The sale of several completed projects will free up the

Financing costs will have been normalized as a result of the initiatives implemented.

cash resources that are essential for strengthening the Group’s financial platform. Moreover, financial resources will be secured

The new reporting procedure – applied with effect as of the

to regenerate momentum and thus to realize the substantial

2012/13 Annual Report – will have provided a better over-

development potential inherent in several of the Group’s proj-

view of the Group’s activities, values, value creation and

ects.

expected development. TK Development is dependent on its ability to continue obtainFollowing implementation of the above-mentioned adaptati-

ing either full or partial financing of existing and new projects,

ons, Management believes that a platform for normalized ear-

either from credit institutions or from investors in the form of

nings will have been established.

forward funding, and on freeing up substantial cash resources from the sale of several major completed projects. Having sufficient cash resources is essential for the Group. In order to complete the development of its planned projects and there-

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R esu l ts in Q 1 2 0 1 3 / 1 4 and out l ook f or 2 0 1 3 / 1 4 by achieve the expected results, the Group must have or must

S u b s e q u e n t eve n t s

be able to procure sufficient cash resources to cover the costs

As stated in company announcement no. 15/2013, in June

and deposits required for the projects, the capacity costs and

2013 TK Development has sold a Swedish 20,000 m² retail park

other obligations.

project in Barkarby, Stockholm, to a fund managed by Cordea Savills. The sale is based on forward funding. 73 % of the proj-

TK Development has a general agreement with the Group’s

ect premises have been let, and construction is scheduled to

main banker about both operating and project credits. After the

begin in August 2013.

reporting date, the agreement has been extended for a twoyear period, subject to the condition that the operating credit

Other than those mentioned in the management commentary,

limit is reduced by DKK 73.5 million when the forthcoming capi-

no significant events of relevance to the Company have oc-

tal increase has been implemented, at the latest.

curred after the reporting date.

During and after the period under review, TK Development has concluded agreements regarding the refinancing of project credits worth DKK 1.2 billion out of the DKK 1.5 billion due to mature in 2013/14 as of 31 January 2013. The most significant project credit of those refinanced after the reporting date has been extended by two years, subject to the condition that the credit is reduced by DKK 50 million when the forthcoming capital increase has been implemented, at the latest. Now that the above-mentioned refinancing agreements are in place, credits of DKK 0.3 billion are due to mature in 2013/14. The Group is in ongoing dialogue with the relevant credit institutions, and Management anticipates being able to either prolong or otherwise refinance project credits that have not been prematurely repaid upon project sales.

OU T L OO K FO R 2 0 1 3 / 1 4 Management anticipates positive results before tax for the continuing activities for the 2013/14 financial year. The timing and progress of the phase-out of the discontinuing activities are subject to major uncertainty, and the results of these activities are therefore not included in the outlook for the 2013/14 financial year. As mentioned previously, Management has revised the sales strategy for the Group’s projects and chosen to accept reduced prices for selected project sales. Thus, Management considers it important for the Group to sell some of its completed projects and plots of land in the 2013/14 financial year. The expectations mentioned in this Interim Report, including earnings expectations, are naturally subject to risks and uncertainties, which may result in deviations from the expected results. Various factors may impact on expectations, as outlined in the section “Risk issues” in the Group’s Annual Report for 2012/13, particularly the valuation of the Group’s project portfolio.

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M arket conditions In Management’s opinion, the Group’s market conditions have

on international financial markets.

not changed appreciably during the past months. The current market conditions are still leading to long decision-making pro-

The rental level is expected to remain fairly stable in the period

cesses among investors, tenants and financing sources alike.

ahead. However, the rental level for secondary locations is ex-

The Danish market in particular continues to be affected by

pected to be under pressure.

uncertainty, partly because of a weakened financial sector. In Management’s opinion, there are no indications of a significant

In the residential segment in Warsaw, Poland, demand is slug-

improvement during the period to come.

gish and prices have realigned due to the large supply of new housing for sale, among other factors. The scope of housing

The access to project financing remains difficult and is currently

projects launched in Warsaw is now diminishing, and over time

the greatest challenge facing the property sector. The financial

the supply of housing is expected to stabilize. Therefore, in the

sector is weakened and has sharpened its focus on credit risks,

opinion of Management, housing development in Poland will be-

and at the same time new rules have imposed stricter capital

come attractive again, particularly in the Warsaw area.

requirements on banks. This means that credit institutions remain reluctant to provide loans to finance real property, with a resulting negative effect for the property sector, and thus TK Development as well. TK Development is dependent on its ability to continue obtaining either full or partial project financing, either from credit institutions or from investors in the form of forward funding, and on freeing up substantial cash resources from the sale of several major completed projects. The past year has seen cautious investor optimism and increased interest in investing in selected segments of retail projects, with quality and location being key factors in the investment decision. However, the decision-making processes continue to be lengthy, in part because of the investors’ requirement for lower project risk. Institutional investors need options for placing their funds, and this paves the way for setting up partnerships with such investors for the purpose of cooperating on the execution of new projects. These opportunities fall in line with the Group’s business model, according to which TK Development wishes to enter into partnerships regarding completed properties and new development projects, and thus to improve the allocation of the Company’s equity, diversify risks and better utilize the Group’s development competencies. The Swedish market is currently considered the most transparent and attractive market for selling projects in the Nordic region, and given the continued retail expansion, this market is highly interesting for TK Development. In the letting market for retail property, tenants continue to focus on location. TK Development is experiencing a good amount of interest in prime-location projects, and several strong national and international retail chains are expanding, although decision-making processes are protracted in light of the unrest

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P roperty de v e l opment

The Group’s primary business area is the development of real

The development in the Group’s project portfolio is outlined be-

property, termed property development.

low:

Strategy for business area – Property development Developing projects from the conceptual phase through to project completion, based on one of several models: • Sold projects (forward funding / forward purchase) • Projects with partners • On TK’s own books based on a high degree of confidence in the letting and sales potential • Services for third parties.

31 Jan 2012

31 Jan 2013

30 Apr 2013

Completed

0

15

13

In progress

17

17

0

DKKm Sold

Not initiated

10

6

5

Total

27

38

18

Remaining

Property development

Completed

0

38

28

Countries:

In progress

286

198

195

Not initiated

938

901

919

Total

1.224

1.137

1.142

Net project portfolio

1.251

1.175

1.160

293

370

330

1.544

1.545

1.490

91,6 %

91,1 %

94,8 %

Denmark, Sweden, Poland and the Czech Republic

Revenue:

Q1 2013/14: DKK 95.1 million (Q1 2012/13: DKK 14.5 million)

Gross profit/loss:

Q1 2013/14: DKK 2.5 million (Q1 2012/13: DKK 5.5 million)

Balance sheet total:

30 Apr 2013: DKK 1,242.1 million (31 Jan 2013: DKK 1,284.5 million)

Forward funding Gross project portfolio Forward funding in % of gross carrying amount of sold projects Table 1

In its property development segment, TK Development focuses on executing existing projects in the portfolio, as well as on se-

By means of forward funding, the Group reduces the funds tied

curing satisfactory pre-construction letting or sales. In addition,

up in the portfolio of sold projects. Forward funding has fallen

the Group continuously works on new project opportunities.

since 31 January 2013 due to the handover of projects to investors.

The Group will make the startup of major new projects contingent on obtaining either full or partial financing for them and on

The development potential of the Group’s project portfolio is

freeing up cash resources from the sale of one or more major

shown below (in square metres):

completed projects. m² (’000)

31 Jan 2012

31 Jan 2013

30 Apr 2013

0

4

2 0

The gross margin for development activities amounted to DKK 2.5 million in Q1 2013/14 against DKK 5.5 million in Q1 2012/13.

Sold Completed

The Group’s retail projects on which construction is already on-

In progress

7

3

going or about to start are still attracting a good amount of in-

Not initiated

29

0

0

terest from tenants. During the period under review, the Group

Total

36

7

2

also concluded lease agreements for several of these projects. The development potential of the project portfolio represented 456,000 m² at 30 April 2013, of which sold projects accounted for 2,000 m² and remaining projects for 454,000 m². The project portfolio had a total development potential of 452,000 m² at 31 January 2013.

Remaining Completed

0

3

2

In progress

39

20

19

Not initiated

560

422

433

Total

599

445

454

Total project portfolio

635

452

456

50

37

35

Number of projects Table 2

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P roperty D e v e l opment

Project outline The outline below lists the key projects in the portfolio in the property development segment.

Construction TKD’s

Project name

start/

Opening/

TKD’s share

ownership

expected con-

expected

of area (m )

interest

struction start

opening

4,395

100 %

Mid-2011

January 2013

City/town

Country

Segment

Warsaw

PL

Residential/services

Amerika Plads, underground car park

Copenhagen

DK

Under-ground car park

16,000

50 %

2004

Continuously

Vasevej

Birkerød

DK

Mixed

3,400

100 %

-

-

BROEN, shopping centre

Esbjerg

DK

Retail

29,800

100 %

Autumn 2013

2015

Østre Teglgade

Copenhagen

DK

Office/residential

32,700

100 %

Amerika Plads, lot C

Copenhagen

DK

Mixed

6,500

Amerika Plads, lot A

Copenhagen

DK

Office

Aarhus South, phase II

Aarhus

DK

Retail

Ejby Industrivej

Copenhagen

DK

Office

12,900

Østre Havn/Stuhrs Brygge

Aalborg

DK

Mixed

36,000

Retail park, Marsvej

Randers

DK

Retail

10,000

Development of town centre

Køge

DK

Mixed

27,500

Farum Bytorv, extension

Farum

DK

Retail

The Kulan commercial district

Gothenburg

SE

Mixed

Barkarby Gate, retail park

Stockholm

SE

Retail

Retail park, Söderhamn

Söderhamn

SE

Retail

Retail park, Gävle, phase II

Gävle

SE

Shopping centre, Jelenia Góra

Jelenia Góra

PL

Residential park, Bielany, remaining phases

Warsaw

PL

Bytom Retail Park

Bytom

PL

Shopping centre, Frýdek Místek

Frýdek Místek

Most Retail Park, phase II

Most

2

Completed Residential Park, Bielany, phase I

In progress

Not initiated

Property development, total floor space

Continuously

Continuously

50 %

2014

2016

5,900

50 %

2014

2016

2,800

100 %

2013

2014

1)

-

-

Continuously

Continuously

100 %

2013

2014

100 %

2013

Continuously

8,000

100 %

2013

2015

45,000

100 %

2013

2015

20,000

100 %

August 2013

Autumn 2014

10,000

100 %

2013

2014

Retail

15,800

100 %

Continuously

Continuously

Retail

7,200

30 %

2013

2015

Residential/services

48,350

100 %

Continuously

Continuously

Retail

25,800

100 %

Continuously

Continuously

CZ

Retail

14,800

100 %

2013

2014

CZ

Retail

2,000

100 %

-

-

approx.

385,000

) Share of profit on development amounts to 70 %.

1

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100 % 1)

50 %


P roperty D e v e l opment Geographical segmentation of the development potential in

Kvickly, Aldi, Imerco, Skoringen, Sport-Master, Bahne, Panduro

square metres:

Hobby, Kong Kaffe and Gina Tricot. The fitness facilities have been let to Fitness World. Construction is expected to commence in autumn 2013, and the shopping centre is scheduled

Denmark

to open in 2015. TK Development is currently working on the Czech Republic

planning, design, startup and sale of the project.

Sweden

Østre Teglgade, Copenhagen, Denmark TK Development owns an attractively located project area at

Poland

Teglholmen of about 32,700 m². Current plans involve establishing a church and possibly a residential care facility. Discussions are also being held with several interested parties regard-

C o m pleted pr o j e c t s Residential park, Bielany, Warsaw, Poland TK Development owns a tract of land in Warsaw allowing for the construction of about 56,200 m², distributed on 900-1,000 residential units. The plan is to build the project in four phases. Construction of the first phase of 7,850 m², consisting of 136 units, was completed in January 2013. Sluggish demand in the Polish residential market has affected the pre-completion sale of the units. The sales process has now picked up, and 76 % of the first-phase units (2012/13: 69 %) have been sold. The residential units are being sold as owner-occupied apartments to private users, and 50 % of the units had been handed over to the buyers at 30 April 2013. Management expects the remaining units to be sold in the course of the 2013/14 financial year.

ing the construction of residential property in the project area. Amerika Plads, lots A and C, Copenhagen, Denmark Kommanditaktieselskabet Danlink Udvikling (DLU), which is owned 50/50 by Udviklingsselskabet By og Havn I/S and TK Development, owns three projects at Amerika Plads: lot A, lot C and an underground car park. A building complex with about 11,800 m² of office space is to be built on lot A, and a building complex with about 13,000 m² of commercial and residential space on lot C. Construction will take place as the space is let. Østre Havn/Stuhrs Brygge, Aalborg, Denmark In the area previously occupied by Aalborg Shipyard at Stuhrs Brygge, TK Development is developing a business and residential park of about 72,000 m² through a company jointly owned

P r o j e c t s i n pr o gre s s Amerika Plads, underground car park, Copenhagen, Denmark Kommanditaktieselskabet Danlink Udvikling (DLU), which is owned 50/50 by Udviklingsselskabet By og Havn I/S and TK Development, owns three projects at Amerika Plads: lot A, lot C and an underground car park. Part of the underground car park in the Amerika Plads area has been built. The Group expects to sell the total parking facility upon final completion.

with Frederikshavn Maritime Erhvervspark on a 50/50 basis. The area was acquired by the jointly owned company, with payment being effected for the development rights acquired in step with the development and execution of specific projects. A new local plan comprising about 31,000 m² of housing, offices and parking facilities has been launched. Retail park, Marsvej, Randers, Denmark In October 2010, the Group took over a plot of land on Marsvej

Vasevej, Birkerød, Denmark TK Development owns a property of about 3,000 m² at Vasevej in Birkerød, rented by SuperBest. The project consists of a refurbishment of the existing property and a minor extension comprising a few stores and dwellings. The combined project is expected to comprise about 3,400 m².

in Randers, intended for a retail development project of 10,000 m². Letting has been initiated, and there is a satisfactory level of interest among potential tenants. Development of town centre, Køge, Denmark TK Development is working on a potential project in Køge. In February 2012, Køge Kyst and TK Development entered into a

P r o j e c t s n o t i n itiated BROEN, shopping centre, Esbjerg, Denmark In Esbjerg, TK Development has bought a plot earmarked for a shopping centre project, BROEN, of about 29,800 m², to be built on the railway land at Esbjerg station. The shopping centre is expected to comprise about 70 stores. The current occupancy rate is 74 % (2012/13: 75 %), with tenants including H&M,

conditional agreement under which TK Development is to buy land for constructing a project of about 27,500 m². The project, to be built immediately next to Køge Station and the town centre shopping area, comprises retail stores of about 12,000 m², public service facilities of about 8,500 m² including a town hall and rehabilitation centre, residential premises of about 3,600 m² and office premises/fitness facilities of about 3,400 m² as

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P roperty D e v e l opment well as a 14,000 m² underground car park. The local plan for

has an option to buy a plot of land for developing additional

the area is to be changed, and a new one expected to be final-

retail park premises of about 15,800 m².

ly adopted in mid-2013. TK Development expects to enter into an agreement with Køge Municipality regarding its takeover of

Shopping centre, Jelenia Góra, Poland

both town hall and rehabilitation centre. Letting of the retail

TK Development has bought a plot of land in Jelenia Góra and

premises has started, and potential tenants are showing a

has an option on additional land for the development of a shop-

good amount of interest in the project.

ping centre of about 24,000 m². The project will comprise a supermarket of about 2,200 m² and retail, restaurant and service

Farum Bytorv, extension, Farum, Denmark

premises totalling about 21,800 m². The local plan for the area

In Farum, TK Development has made a winning bid for an exten-

is in place and the letting of premises has started. Construction

sion of Farum Bytorv by about 8,000 m². A new local plan for the

is expected to commence in 2013, and the shopping centre is

area is to be drawn up. This process is under way, and the local

scheduled to open in 2015. In December 2012, 70 % of the proj-

plan is expected to be adopted in mid-2013.

ect was handed over to Heitman, and in this connection the Group’s 30 % ownership interest was classified under “Invest-

The Kulan commercial district, shopping centre and service/

ment properties under construction”. TK Development will re-

commercial space, Gothenburg, Sweden

ceive fee income from the jointly owned company established

TK Development and the Swedish housing developer JM AB

for developing, letting and managing the construction of the

have entered into a cooperation agreement with SKF Sverige

project.

AB to develop SKF’s former factory area in the old part of Gothenburg. The contemplated project comprises a total floor

Residential park, Bielany, Warsaw, Poland

space of about 75,000 m²: 30,000 m² for a shopping centre,

TK Development owns a tract of land in Warsaw allowing for

15,000 m² for services/commercial use and 30,000 m² for

the construction of residential units of about 56,200 m² in all;

housing. TK Development will be in charge of developing the

see above under “Completed projects”. Construction of the first

45,000 m² for a shopping centre, services and commercial fa-

phase of 7,850 m² has been completed. The plan is to initiate

cilities, while JM AB will have responsibility for the 30,000 m² of

construction of the remaining three phases of about 48,350

housing. The local plan is being drawn up and is expected to be

m² successively, in continuation of the completion of the first

approved in 2013. The project is being discussed with potential

phase, once pre-construction sales have reached a satisfacto-

tenants, and several lease agreements have been concluded.

ry level.

Barkarby Gate, retail park, Stockholm, Sweden

Bytom Retail Park, Bytom, Poland

In Barkarby in the northwestern part of Stockholm, TK Develop-

TK Development intends to develop a retail park with total leas-

ment has an option on an area for the development of a 20,000

able space of about 25,800 m² on its site at the Plejada shop-

m² retail park. The retail park is expected to consist of 12-14

ping centre in Bytom, which is centrally located in the Katowice

units, of which 9-10 units will be retail stores. The current oc-

region. Construction of the project will be phased in step with

cupancy rate is 73 % (2012/13: 70 %), and lease agreements

letting. Letting efforts are ongoing, and construction will start

have been concluded with various major tenants, including XXL

as space is let.

(sports store), Clas Ohlson, Intersport, Lager 157, Grizzly, Kjell & Co., Burger King and the fitness chain Nordic Wellness. After

Shopping centre, Frýdek Místek, the Czech Republic

the reporting date, the project has been sold to a fund man-

In the Czech town of Frýdek Místek, TK Development has an

aged by Cordea Savills. The sale is based on forward funding.

option to buy a plot of land for building a 14,800 m² shopping

The option to purchase land for the project will be exercised

centre, consisting of about 60 stores. The current occupancy

simultaneously with construction startup, scheduled for Au-

rate is 71 % (2012/13: 75 %). As the project has been post-

gust 2013. The opening has been scheduled for autumn 2014.

poned relative to the original schedule, a few tenants have cho-

Earnings from the sale will be recognized upon handover of the

sen to exercise their right to withdraw from the lease agree-

project to the investor, expected to take place in 2014/15.

ments, which is the reason for the declining occupancy rate. The letting process is still proceeding satisfactorily, and lease

Retail park, phase II, Gävle, Sweden

agreements have been concluded with such tenants as Billa,

In 2012/13, TK Development sold and handed over an 8,300 m²

Intersport, H&M, NewYorker and Euronics. Construction is ex-

retail park in the Swedish town of Gävle to the Swedish proper-

pected to start in the course of 2013, with the opening sched-

ty company Nordika Fastigheter AB. Moreover, TK Development

uled for 2014.

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A sset management

The Group’s secondary business area is asset management,

Breakdown of own properties under asset management by

which consists of owning, operating, running in, maturing and

country (carrying amount):

optimizing completed projects for a medium-long operating period whose length matches the potential for adding value both

Denmark

for the Group and for third parties. Poland

Strategy for business area – Asset management Owning, operating, maturing and optimizing completed projects for a medium-long operating period that matches the potential for adding

Czech Republic

value both for the Group and for third parties.

The gross margin for asset management activities amounted

Asset management Countries:

Denmark, Sweden, Poland and the Czech Republic

Revenue:

Q1 2013/14: DKK 33.1 million (Q1 2012/13: DKK 37.0 million)

Gross profit/loss:

Q1 2013/14: DKK 29.8 million (Q1 2012/13: DKK 31.9 million)

Balance sheet total:

30 Apr 2013: DKK 2,089.9 million (31 Jan 2013: DKK 2,100.7 million)

Number of employees at centres:

30 Apr 2013: 9

to DKK 29.8 million in Q1 2013/14 against DKK 31.9 million in Q1 2012/13. Although these properties have been classified under asset management, TK Development will focus on selling them in whole or in part, as their sale will substantially strengthen the Group’s financial platform. Therefore, the process of selling a number of the Group’s completed projects continues. Management anticipates being able to conclude final sales agreements for one or more of these properties within a short period of time.

(31 Jan 2013: 12)

The Group’s own properties under asset management comprise the following nine properties: Project

Country

Type

TKD’s ownership interest

Floor space m2

Investment properties Futurum Hradec Králové

Czech Republic

Shopping centre

20 %

28,250

Galeria Tarnovia, Tarnów

Poland

Shopping centre

30 %

16,500

Sillebroen, Frederikssund

Denmark

Shopping centre

100 %

25,000

Fashion Arena Outlet Center, Prague

Czech Republic

Outlet centre

75 %

25,000

Galeria Sandecja, Nowy Sącz

Poland

Shopping centre

100 %

17,300

Ringsted Outlet

Denmark

Outlet centre

50 %

13,200

Most Retail Park

Czech Republic

Retail park

100 %

6,400

Aabenraa

Denmark

Retail park

100 %

4,200

Brønderslev

Denmark

Shopping-street property

100 %

Other completed projects

Total

2,400 138,250

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A sset management

The total portfolio of properties under asset management amounted to DKK 1,938.7 million at 30 April 2013 (31 January 2013: DKK 1,932.1 million), of which investment properties accounted for DKK 314.0 million (31 January 2013: DKK 312.1 million). The operation of these properties, which largely consist of shopping centres, is generally proceeding satisfactorily. The annual net rent from the current leases corresponds to a return on the carrying amount of 6.7 % (2012/13: 6.7 %). Based on full occupancy, the return on the carrying amount is expected to reach 7.9 % (2012/13: 7.9 %). Overall, the individual centres recorded favourable development in 2012, and the positive development in both footfall and revenue has continued into 2013. The development of the individual centres appears from pages 19-21. Generally, TK Development’s properties have a satisfactory letting status, and the current occupancy rates are: Futurum Hradec Králové Galeria Tarnovia, Tarnów Sillebroen, Frederikssund Fashion Arena Outlet Center, Prague Galeria Sandecja, Nowy Sącz Ringsted Outlet Most Retail Park Aabenraa, retail park Brønderslev, shopping-street property 40 %

50 %

60 %

70 %

80 %

90 %

100 %

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A sset management

F U T U R U M H R A D E C K R Á L O V É , C Z E C H R E P U BL I C Opening

November 2000/May 2012

Leasable area Occupancy rate

28,250 m² 100 % (2012/13: 100 %)

Footfall 2012

Major tenants: Cinestar, Tommy Hilfiger, H&M, New Yorker, Adidas, Reserved, Intersport, Takko Fashion, Foot Locker, Gant, C & A, Lindex, Datart.

5.6 million

In 2012, an extension of almost 10,000 m² was added to the shopping centre. In this connection the existing centre was also modernized, bringing up the number of retail stores to 110. The shopping centre is fully let and also recorded a satisfactory occupancy rate, operating profit and customer influx throughout the period under review.

G A L E R I A TA R N O V I A , S H O P P I N G C E N T R e , TA R N Ó W , P O La N d Opening Leasable area Occupancy rate

November 2009 16,500 m², including a 2,000 m² supermarket

Major tenants: H&M, New Yorker, Euro RTV AGD, Reserved, Deichmann, Douglas, Rossmann, Stradivarius, Takko Fashion, Simply Market.

95 % (2012/13: 96 %)

Footfall 2012

1.8 million

Following the sale of 70 % of the centre to Heitman in December 2012, the Group’s ownership interest amounts to 30 %. The shopping centre continues to have a satisfactory influx of customers and to perform well. Despite a slight decline in the number of visitors, the shopping centre revenue continued the positive trend of the previous year. TK Development’s focus is on enhancing the centre’s attraction value, and current initiatives are aimed at bolstering occupancy in the centre, among other things.

S I LL E B R O E N , S H O P P I N G C E N T R e , F R E D E R I K S S U N D , D E N M A R K Opening Leasable area Occupancy rate

March 2010 25,000 m², including 5,000 m² supermarket units

Major tenants: Kvickly, Fakta, H&M, Fona, Gina Tricot, Matas, Sport-Master, Frederikssund Isenkram, Deichmann, Vero Moda, Vila, Wagner.

92 % (2012/13: 91 %)

Footfall 2012

3.0 million

In the continuing difficult economic climate with subdued private consumption, the centre’s footfall and revenue have showed a slight decline compared to 2012. Tenants are regularly replaced and newcomers move in to optimize the centre. In March 2013, Gina Tricot opened an outlet in the centre, and the most recent newcomer is Signal. Negotiations with tenants for several of the remaining rental units are ongoing. The centre is still being run in and matured, and continued efforts are being made to position the centre on the market. TK Development’s focus is on strengthening the occupancy and revenue levels for the centre.

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A sset management

FA S H I O N A R E N A O U T L E T C E N T E R , P R A G ue , C Z E C H R E P U BL I C Opening Leasable area Occupancy rate Footfall 2012

November 2007/October 2010 25,000 m²

Major tenants: Tommy Hilfiger, Nike, Adidas, Benetton, Tom Tailor, Ecco, Gant, Lacoste, Levi Strauss & Co., Esprit.

96 % (2012/13: 96 %) 2.2 million

In recent years, the Fashion Arena Outlet Center has truly distinguished itself as one of the outlet centres with the highest attraction value in Central Europe. Since the second phase opened in 2010, the centre has recorded a highly positive development in footfall and revenue, including a 24 % hike in revenue in 2012 compared to 2011. This positive trend in the centre’s revenue has continued into the first months of 2013.

G A L E R I A S A N D E C J A , S H O P P I N G C E N T R e , N O W Y S Ą C Z , P O Land Opening Leasable area Occupancy rate

October 2009 17,300 m², including a 5,000 m² hypermarket

Major tenants: Carrefour, H&M, New Yorker, Reserved, Deichmann, Douglas, Camaieu, Carry, Euro RTV AGD.

96 % (2012/13: 96 %)

Footfall 2012

2.4 million

The operation of Galeria Sandecja is still proceeding satisfactorily. The shopping centre had a footfall of almost 2.4 million in 2012, slightly below the previous year’s figure. Nevertheless, the shopping centre’s revenue rose by about 14 % in 2012 compared to 2011. During the first months of 2013, the shopping centre’s revenue and footfall increased compared to the same period the year before. TK Development continues its efforts to optimize the centre and is exploring various initiatives to help improve operations, footfall and occupancy.

R I N G S T E D O U T L E T, R I N G S T E D , D E N M A R K Opening Leasable area Occupancy rate Footfall 2012

March 2008 13,200 m²

gacy. In terms of revenue and footfall, the centre has continued the positive development from 2012 in the first months of 2013.

60 % (2012/13: 61 %)

Major tenants: Hugo Boss, Nike, Puma, Diesel, G-Star Raw, Redgreen,

1.1 million

Ticket to Heaven, McDonald’s, Superdry, Le Creuset, Levi’s, Sparkz, Jackpot.

After a long running-in period, Ringsted Outlet has recorded pleasing progress in the past year. Despite the difficult letting situation and intensified competition in the Danish retail trade sector, in 2012 Ringsted Outlet recorded the highest number of visitors and the highest revenue since its opening. However, the 25 % growth in revenue should be viewed in light of the centre’s relatively low revenue the year before. Lease agreements have been concluded with several new tenants, and a few tenants have moved out. Five new retail stores opened in spring 2013 – Sparkz, Jackpot, Saint Tropez, Superdry, and recently Nordic Le-

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A sset management

M O S T R E TA I L PA R K , C Z E C H R E P U BL I C

TK Development is developing an 8,400 m² retail park in the Czech town of Most, to be built in phases. The first phase of 6,400 m² opened in April 2009, and the current occupancy rate for this phase is 91 % (2012/13: 91 %). One vacant rental unit remains, and efforts are being made to let this unit. Management believes the vacant rental unit should be let before the project can be sold.

R E TA I L P A R K , A A B E N R A A , D E N M A R K

TK Development has built a retail park of approx. 4,200 m² in Aabenraa. The retail park opened in September 2009 and is fully let (2012/13: 100 %), and the tenants include jem & fix, Biva, T. Hansen and Sport24.

S h opping - street property , B R Ø N D E R S L E V , D E N M A R K

TK Development has developed retail stores of about 2,400 m2 in the former Føtex property at Mejlstedgade in Brønderslev. Premises have been let to Deichmann, Intersport and Fitness World. The current occupancy rate is 93 % (2012/13: 93 %).

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D iscontinuing acti v ities

As described previously, Management has chosen a market

terminates at the end of September 2013. The office is expect-

focus that targets the countries expected to contribute with

ed to close down in autumn 2013.

long-term, profitable operations in future. This means that the Group will phase out its activities in Finland, Germany, the Bal-

Fi n la n d

tic States and Russia. The phase-out, which will result in office

The Group’s activities in Finland are fairly limited and, apart from

closures and employee dismissals, will be carried out as soon

a few project opportunities, comprise the projects listed below.

as possible, while taking into account that all the countries in question have projects that need to be handled so as to retain

Project

as much of the value of the existing portfolio as possible.

Pirkkala Retail Park, phase II Tammerfors

Retail

5,400

Kaarina Retail Park

Retail

6,600

Discontinuing activities Countries:

Germany, Finland, Lithuania, Latvia and Russia

Revenue:

Q1 2013/14: DKK 3.4 million (Q1 2012/13: DKK 3.2 million)

Gross profit/loss:

Q1 2013/14: DKK -0.1 million (Q1 2012/13: DKK 2.0 million)

Balance sheet total:

30 Apr 2013: DKK 426.8 million (31 Jan 2013: DKK 425.4 million)

Number of employees:

30 Apr 2013: 11 (31 Jan 2013: 11)

ed to DKK -3.8 million in Q1 2013/14 against DKK -2.3 million in Q1 2012/13. The value adjustments of the German investment properties amounted to DKK 0.0 million in Q1 2013/14.

G er m a n y The Group has four investment properties left in Germany: a combined commercial and residential rental property in Lüdenscheid in western Germany and three residential rental properties on the outskirts of Berlin. An agreement regarding the sale of one of the Group’s residential rental properties has been concluded, with the handover taking place after the reporting date. Management considers it essential to downscale the German activities. At 30 April 2013, the value of these properties was DKK 167.2 million. The valuation of the properties has been based on a required rate of return of 6.5 % p.a. calculated on the basis of a discounted cash-flow model over a ten-year period, with the terminal value being recognized in year ten. In the cases where sales negotiations are ongoing with potential investors, these negotiations form the basis for the valuation. In addition to these investment properties, the Group owns a

Turku

Segment

Floor space (m²)

Efforts will be made to phase out the activities in the course of the current financial year. With the exception of the country manager, the employees have been given notice and will leave the company in mid-2013. The office is expected to close down in 2013/14.

B alti c State s The Group’s Baltic activities comprise the following projects: Project

The results for the discontinuing activities before tax amount-

City/town

City/town

DomusPro Retail Park Vilnius (LT)

Segment

Floor space (m²)

Retail

11,100

Milgravja Street

Riga (LV)

Residential

10,400

Ulmana Retail Park

Riga (LV)

Retail

12,500

DomusPro Retail Park, Vilnius, Lithuania TK Development owns a plot of land in Vilnius reserved for building an 11,100 m² retail park. Constructive dialogue has been established with potential tenants, and binding lease agreements have been signed for about 54 % of the premises (2012/13: about 53 %). TK Development intends to execute this project to best harness its inherent values. The plan is to build the project in two phases. Construction of the first phase, of which 80 % has been let, is expected to start in mid-2013 as opposed to the previously expected startup date in spring 2013. Negotiations with potential investors for the project are ongoing. Efforts will be made to phase out the remaining activities in the course of the current financial year.

R u s s ia The Group owns a minor project in Moscow, consisting of Scandinavian-style dwellings that are used for rental, mainly to international company employees stationed in Moscow. Efforts will be made to sell this project.

share of a minor shopping centre and a few plots of land. The employees have been given notice and their employment

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O t h er matters

T h e B o ard OF D I R E C T O R S The Board of Directors is composed of six members elected by the General Meeting. At the Company’s Annual General Meeting in May 2013, Niels Roth, Peter Thorsen and Per Søndergaard Pedersen were re-elected to the Board of Directors. Moreover, three new members were appointed to the Company’s Board of Directors. The newly elected members are Arne Gerlyng-Hansen, CEO of Harald Nyborg A/S, Morten Astrup, founding partner and CIO of Storm Capital Management Ltd., London, and Kim Mikkelsen, CEO of Strategic Capital ApS. After the Annual General Meeting, a meeting was held for the purpose of electing officers, with Niels Roth being elected as the Chairman, and Peter Thorsen being elected as the Deputy Chairman of the Board of Directors.

T ra n s a c ti o n s w it h related partie s No significant or unusual transactions were made with related parties in the first quarter of the 2013/14 financial year other than interest payments on project finance loans granted by a number of major shareholders, including members of Management. As regards transactions with related parties, reference is made to note 7 in the Interim Report.

F I N A NC I A L TA R G E T S To provide for sufficient future financial resources, Management has adopted a liquidity target for the whole Group. Moreover, Management’s target is to have a solvency ratio of about 40 % at group level, calculated as the ratio of equity to total assets. The Group has undertaken a commitment towards its main banker to meet a liquidity target and a solvency target. Both targets were met during the period under review.

Ot h er m atter s For a more detailed review of other matters relating to the Group, including risk issues, reference is made to the Group’s Annual Report for 2012/13, which is available at the Company’s website: www.tk-development.com

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S tatement b y t h e Board o f D irectors and E x ecuti v e Board on t h e I nterim R eport

The Board of Directors and Executive Board have today consid-

Moreover, we consider the Management’s review to give a fair

ered and adopted the Interim Report of TK Development A/S

presentation of the development in the Group’s activities and

for the period from 1 February to 30 April 2013.

financial affairs, the results for the period and the Group’s overall financial position, as well as a true and fair description of

The Interim Report, which has not been audited or reviewed by

the most significant risks and elements of uncertainty faced

the Company’s auditors, is presented in accordance with IAS

by the Group.

34, Interim Financial Reporting, as adopted by the EU, and Danish disclosure requirements for listed companies. In our opinion, the Interim Report gives a true and fair view of the Group’s financial position at 30 April 2013 and of the results of the Group’s operations and cash flows for the period from 1 February to 30 April 2013.

Aalborg, 21 June 2013 E X E CU T I V E B O A R D

Frede Clausen

Robert Andersen

President and CEO

Executive Vice President

B O A R D OF D I R E C T O R S

Niels Roth

Peter Thorsen

Chairman

Deputy Chairman

Per Søndergaard Pedersen

Arne Gerlyng-Hansen

Kim Mikkelsen

Morten Astrup

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C onso l idated f inancia l statements I n c o m e s tate m e n t

DKKm

Note

Net revenue External direct project costs

2

Q1

Q1

Full year

2013/14

2012/13

2012/13

131.6

54.7

632.3

-101.0

-15.0

-734.0

1.6

-0.3

-37.8

32.2

39.4

-139.5

6.6

8.0

30.2

Staff costs

16.6

18.7

69.2

Total

23.2

26.7

99.4

Profit/loss before financing and depreciation

9.0

12.7

-238.9

Depreciation and impairment of non-current assets

0.5

0.6

2.2

Operating profit/loss

8.5

12.1

-241.1

Income from investments in associates

0.4

0.1

2.5

Financial income

1.2

1.4

5.6

Financial expenses

-29.1

-20.5

-93.0

Total

-27.5

-19.0

-84.9

Profit/loss before tax

-19.0

-6.9

-326.0

-2.8

148.0

167.3

-16.2

-154.9

-493.3

Earnings per share (EPS) of nom. DKK 15

-0.4

-3.7

-11.7

Diluted earnings per share (EPS-D) of nom. DKK 15

-0.4

-3.7

-11.7

-16.2

-154.9

-493.3

Value adjustment of investment properties, net Gross profit/loss Other external expenses

Tax on profit/loss for the period Profit/loss for the period

E ar n i n g s per s h are i n D K K

C o m pre h e n s ive i n c o m e s tate m e n t Profit/loss for the period Items that may be re-classified to profit/loss: 0.7

7.1

6.1

Tax on foreign-exchange adjustments, foreign operations

-0.8

-4.1

-2.9

Value adjustment of hedging instruments

-3.3

0.9

3.1

Foreign-exchange adjustments, foreign operations

Tax on value adjustment of hedging instruments Other comprehensive income for the period Comprehensive income for the period

0.6

-0.2

-0.6

-2.8

3.7

5.7

-19.0

-151.2

-487.6

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C onso l idated f inancia l statements B A L A NC E s h eet

DKKm

30 Apr 2013

31 Jan 2013

30 Apr 2012

Goodwill

33.3

33.3

33.3

Intangible assets

33.3

33.3

33.3

481.2

479.4

367.8

17.6

16.9

75.6

Note

ASSETS

Non-current assets

Investment properties Investment properties under construction

2.1

2.5

4.1

500.9

498.8

447.5

Investments in associates

1.9

1.7

0.3

Receivables from associates

4.6

4.6

2.5

Other fixtures and fittings, tools and equipment Property, plant and equipment

0.8

0.8

1.8

Deferred tax assets

134.7

127.0

143.4

Other non-current assets

142.0

134.1

148.0

Total non-current assets

676.2

666.2

628.8

3,021.9

3,030.9

3,546.6

Trade receivables

70.5

73.2

72.4

Receivables from associates

19.1

19.0

18.0

1.3

4.0

0.6

95.9

122.4

101.9

Other securities and investments

Current assets

Projects in progress or completed

Corporate income tax receivable Other receivables Prepayments Total receivables

22.2

22.4

23.6

209.0

241.0

216.5

4.0

4.3

4.0

Deposits in blocked and escrow accounts

4

19.9

35.7

42.2

Cash and cash equivalents

4

26.9

31.2

42.5

Total current assets

3,281.7

3,343.1

3,851.8

ASSETS

3,957.9

4,009.3

4,480.6

Securities

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C onso l idated f inancia l statements B A L A NC E s h eet

DKKm

30 Apr 2013

31 Jan 2013

30 Apr 2012

631.0

631.0

631.0

2.5

5.3

143.5

737.4

753.4

951.2

1,370.9

1,389.7

1,725.7

101.6

102.2

37.5

0.9

2.3

1.8

36.8

35.0

32.7

1.5

1.5

3.8

140.8

141.0

75.8

2,158.9

2,189.1

2,341.5

98.8

106.3

162.9

6.1

5.0

1.8

13.1

13.1

11.2

158.5

150.2

148.3

10.8

14.9

13.4

Total current liabilities

2,446.2

2,478.6

2,679.1

Total liabilities

2,587.0

2,619.6

2,754.9

TOTAL EQUITY AND LIABILITIES

3,957.9

4,009.3

4,480.6

Note

EQUITY AND LIABILITIES

Equity Share capital 5

Other reserves Retained earnings Total equity

Liabilities Credit institutions Provisions Deferred tax liabilities Other debt Total non-current liabilities Credit institutions Trade payables Corporate income tax Provisions Other debt Deferred income

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C onso l idated f inancia l statements State m e n t o f c h a n ge s i n e q u ity

Share capital

Other reserves

Retained earnings

Total equity

631.0

139.8

1,105.6

1,876.4

Profit/loss for the period

0.0

0.0

-154.9

-154.9

Other comprehensive income for the period

0.0

3.7

0.0

3.7

Total comprehensive income for the period

0.0

3.7

-154.9

-151.2

DKKm Equity at 1 February 2012

Share-based payment

0.0

0.0

0.5

0.5

Equity at 30 April 2012

631.0

143.5

951.2

1,725.7

Equity at 1 February 2013

631.0

5.3

753.4

1,389.7

Profit/loss for the period

0.0

0.0

-16.2

-16.2

Other comprehensive income for the period

0.0

-2.8

0.0

-2.8

Total comprehensive income for the period

0.0

-2.8

-16.2

-19.0

Share-based payment

0.0

0.0

0.2

0.2

631.0

2.5

737.4

1,370.9

Equity at 30 April 2013

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C onso l idated f inancia l statements Ca s h f l o w s tate m e n t

DKKm

Operating profit/loss

Q1

Q1

Full year

2013/14

2012/13

2012/13

8.5

12.1

-241.1

-1.6

0.3

37.8

0.4

0.6

290.1

Adjustments for non-cash items: Value adjustment of investment properties, net Depreciation and impairment Share-based payment

0.2

0.4

0.9

-1.5

-1.7

0.4

-13.8

-1.5

7.5

Increase/decrease in investments in projects, etc.

29.6

-22.6

139.9

Increase/decrease in receivables

47.6

43.3

22.4

Changes in deposits on blocked and escrow accounts

15.8

3.0

9.5

Increase/decrease in payables and other debt

-3.8

-5.8

-61.1

Cash flows from operating activities before net financials and tax

81.4

28.1

206.3

-36.6

-33.4

-142.9

1.6

1.4

4.3

Corporate income tax paid

-0.3

-20.9

-22.1

Cash flows from operating activities

46.1

-24.8

45.6

Investments in equipment, fixtures and fittings

`0.0

-0.2

-0.2

0.0

0.2

0.4

-1.3

-2.9

-11.3

Sale of investment properties

0.0

0.0

17.3

Purchase of securities and investments

0.0

0.0

-0.7

Sale of securities and investments

0.3

0.1

0.9

Cash flows from investing activities

-1.0

-2.8

6.4

Repayment, long-term financing

0.0

0.0

-0.7

Raising of long-term financing

0.0

3.0

13.0

Provisions Foreign-exchange adjustment

Interest paid, etc. Interest received, etc.

Sale of equipment, fixtures and fittings Investments in investment properties

Raising of project financing

2.1

34.5

149.5

Reduction of project financing/repayments, credit institutions

-51.7

-22.8

-238.0

Cash flows from financing activities

-49.6

14.7

-76.2

Cash flows for the period

-4.5

-12.9

-24.2

Cash and cash equivalents, beginning of period

31.2

55.1

55.1

0.2

0.3

0.3

26.9

42.5

31.2

Foreign-exchange adjustment of cash and cash equivalents Cash and cash equivalents, end of period

The figures in the cash flow statement cannot be inferred from the Consolidated Financial Statements alone.

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C onso l idated f inancia l statements

Page

30

Note 1. Segment information

30

Note 2. External direct project costs

31

Note 3. Share-based payment

31

Note 4. Liquidity reserves

32

Note 5. Other reserves

32

Note 6. Changes in contingent assets and contingent liabilities

33

Note 7. Transactions with related parties

33

Note 8. Financial instruments

N o te 1 . Seg m e n t i n fo r m ati o n The internal reporting in TK Development is split into the business units development, asset management and discontinuing activities. The segment information has been disclosed accordingly. Discontinuing activities

Development

Asset management

Net revenue, external customers

95.1

33.1

3.4

0.0

Profit/loss before tax

-3.6

13.4

-3.8

-25.0

-19.0

1,242.1

2,089.9

426.8

199.1

3,957.9

659.8

1,395.3

193.3

338.6

2,587.0

Development

Asset management

14.5

37.0

3.2

0.0

6.5

16.8

-2.3

-27.9

-6.9

1,462.2

2,315.7

478.1

224.6

4,480.6

697.7

1,540.3

210.8

306.1

2,754.9

DKKm

Unallocated

Total

30 Apr 2013

Segment assets Segment liabilities

DKKm

Discontinuing activities

Unallocated

131.6

Total

30 Apr 2012 Net revenue, external customers Profit/loss before tax Segment assets Segment liabilities

54.7

N o te 2 . E x ter n al dire c t pr o j e c t c o s t s

Project costs

Q1 2013/14

Q1 2012/13

Full year 2012/13

101.0

15.0

446.1

Impairment losses on projects in progress or completed projects

0.0

0.0

303.5

Reversal of impairment losses on projects in progress or completed projects

0.0

0.0

-15.6

101.0

15.0

734.0

External direct project costs, total

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C onso l idated f inancia l statements

N o te 3 . S h are - ba s ed pay m e n t For a more detailed description of the Group’s incentive schemes, reference is made to the Group’s 2012/13 Annual Report. The development in outstanding warrants is shown below: Number of warrants

30 Apr 2013

31 Jan 2013

30 Apr 2012

930,315

1,707,812

1,707,812

-8,000

-16,000

0

0

-761,497

0

Outstanding warrants, end of period

922,315

930,315

1,707,812

Number of warrants exercisable at the reporting date

446,315

446,315

1,207,812

0.2

0.9

0.5

30 Apr 2013

31 Jan 2013

30 Apr 2012

Cash and cash equivalents

26.9

31.2

42.5

Unutilized credit facilities

21.3

3.2

11.6

Total

48.2

34.4

54.1

Deposited funds for later release

19.9

35.7

42.2

Total liquidity reserve

68.1

70.1

96.3

Outstanding warrants, beginning of year Lapsed due to termination of employment Expired during the period

Share-based payment recognized in the profit or loss (DKK million)

N o te 4 . L i q u idity re s erve s

The liquidity reserves break down as follows:

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C onso l idated f inancia l statements

N o te 5 . Ot h er re s erve s

Other reserves at 1 February 2012

Reserve for

Reserve for

value adjust-

value

Reserve for

ment of avail-

adjustment of

foreign-ex-

Special

able-for-sale

hedging

change adjust-

reserve

financial assets

instruments

ments

Total

140.2

-0.1

-3.2

2.9

139.8

Exchange-rate adjustment, foreign operations

0.0

0.0

0.0

7.1

7.1

Value adjustment of hedging instruments

0.0

0.0

0.9

0.0

0.9

Deferred tax on other comprehensive income

0.0

0.0

-0.2

-4.1

-4.3

Other comprehensive income, total

0.0

0.0

0.7

3.0

3.7

140.2

-0.1

-2.5

5.9

143.5

Other reserves at 1 February 2013

0.0

-0.1

-0.7

6.1

5.3

Exchange-rate adjustment, foreign operations

0.0

0.0

0.0

0.7

0.7

Other reserves at 30 April 2012

Value adjustment of hedging instruments

0.0

0.0

-3.3

0.0

-3.3

Deferred tax on other comprehensive income

0.0

0.0

0.6

-0.8

-0.2

Other comprehensive income, total

0.0

0.0

-2.7

-0.1

-2.8

Other reserves at 30 April 2013

0.0

-0.1

-3.4

6.0

2.5

Other reserves amounted to DKK 140.2 million at 30 April 2012 and concerned a special fund that arose in connection with the capital reduction implemented in August 2010, when the denomination of the Group’s shares was changed from DKK 20 to DKK 15. This reserve can be used only following a resolution passed at the General Meeting. At the Company’s Annual General Meeting on 24 May 2012, the proposal to transfer the special reserve of DKK 140.2 million to distributable reserves was adopted. The transfer was made in Q2 2012/13. The reserve for value adjustment of financial assets available for sale comprises the accumulated net change in the fair value of financial assets classified as available for sale. The reserve is dissolved as the relevant financial assets are sold or expire. The reserve for value adjustment of hedging instruments comprises unrealized losses on forward-exchange transactions and interest-rate hedging transactions concluded to hedge future transactions. The reserve for foreign-exchange adjustments comprises all foreign-exchange adjustments arising on the translation of financial statements for enterprises with a functional currency other than Danish kroner; foreign-exchange adjustments relating to assets and liabilities that are part of the Group’s net investment in such enterprises; and foreign-exchange adjustments relating to any hedging transactions that hedge the Group’s net investment in such enterprises. On the sale or winding-up of subsidiaries, the accumulated foreign-exchange adjustments recognized in other comprehensive income in respect of the relevant subsidiary are transferred to the profit or loss.

N o te 6 . C h a n ge s i n c o n ti n ge n t a s s et s a n d c o n ti n ge n t liabilitie s There have been no significant changes in the Group’s contingent assets and contingent liabilities since the most recently published Annual Report.

3 2 / 3 4 | T k D e v e lo pm e n t A / S | I n t e r i m R e p o rt Q 1 2 0 1 3 / 1 4 | C o n s o lidated f i n a n c ial s tate m e n t s


C onso l idated f inancia l statements

N o te 7 . T ra n s a c ti o n s w it h related partie s The Company has no related parties with a controlling interest. The Company has the following related parties: - Board of Directors and Executive Board (and their related parties) - Joint ventures and associates. 30 Apr 2013

31 Jan 2013

30 Apr 2012

1,525,061

Board of Directors and Executive Board (and their related parties) 2,840,251

1,940,251

Obligation towards Executive Board, employee bonds (balance)

Holding of shares, in terms of number (balance)

1.5

1.5

1.5

Fees for Board of Directors

0.4

1.8

0.4

Salaries, Executive Board

1.4

6.2

1.4

Share-based payment, Executive Board

0.0

0.0

0.1

Interest expenses, project finance loans from Board of Directors and Executive Board Project finance loans from Board of Directors and Executive Board (balance) Accrued interests, project finance loans from Board of Directors and Executive Board (balance)

0.5

0.4

0.0

21.7

21.7

0.0

0.2

0.3

0.0

Joint ventures Fees from joint ventures

0.5

1.5

0.5

Interest income from joint ventures

0.7

2.5

0.6

Interest expenses to joint ventures

-0.7

-1.3

-0.3

Receivables from joint ventures (balance)

76.0

46.2

72.6

Payables to joint ventures (balance)

95.8

88.4

89.0

0.1

0.4

1.0

23.7

23.6

20.5

Associates Interest income from associates Receivables from associates (balance)

The Group has taken out second mortgages on two projects of DKK 5 million each as security for project finance loans granted by the Board of Directors and the Executive Board. Moreover, as security for the total project finance loans granted by a group of the Company’s major shareholders, of which the share granted by the Board of Directors and the Executive Board amounts to DKK 21.7 million, the Group has granted a mortgage of DKK 70 million on the land for the project to be financed by the loans. Receivables and payables are settled by payment in cash. No losses were realized on receivables from related parties. In Q1 2013/14 no impairment was made to provide for any probable losses (Q1 2012/13: DKK 0.0 million). N o te 8 . Fi n a n c ial i n s tr u m e n t s TK Development has no significant financial instruments that are measured at fair value. During the period under review, no changes were made to the classification within the fair-value hierarchy. There have been no changes in the Group’s situation or the financial markets that materially affect the disclosures regarding financial instruments measured at fair value as appearing from the Group’s Annual Report for 2012/13.

C o n s o lidated f i n a n c ial s tate m e n t s | I n t e r i m R e p o rt Q 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n t A / S | 3 3 / 3 4


C ompany in f ormation

TK Development A/S

The Group’s mission The overall mission of TK Development is to create added value by developing real property. The Group is a development and service enterprise specialising in being the productive and creative liaison between tenants and investors.

CVR no.: 24256782 ISIN code: DK0010258995 (TKDV) Municipality of registered office: Aalborg, Denmark Website: www.tk-development.com e-mail: tk@tk.dk Executive Board: Frede Clausen and Robert Andersen Board of Directors: Niels Roth, Peter Thorsen, Per Søndergaard Pedersen, Arne Gerlyng-Hansen, Kim Mikkelsen and Morten Astrup.

Helsinki Uudenmaankatu 7, 4. FIN-00 120 Helsinki T: (+358) 103 213 110

Aalborg

Stockholm

Vestre Havnepromenade 7

Gamla Brogatan 36-38

DK-9000 Aalborg

S-101 27 Stockholm

T: (+45) 8896 1010

T: (+46) 8 751 37 30

Copenhagen

Vilnius

Islands Brygge 43

Gynėjų str. 16

DK-2300 Copenhagen S

LT-01109 Vilnius

T: (+45) 3336 0170

T: (+370) 5231 2222

Berlin

Warsaw

Ahornstraße­ 16

ul. Mszczonowska 2

D-14163 Berlin

PL-02-337 Warsaw

T: (+49) 30 802 10 21

T: (+48) 22 572 2910

Prague Karolinská 650/1 CZ-186 00 Prague 8 T: (+420) 2 8401 1010

3 4 / 3 4 | T k D e v e lo pm e n t A / S | I n t e r i m R e p o rt Q 1 2 0 1 3 / 1 4 | C o m pa n y i n fo r m ati o n

Q1_Announcement_2013  

http://tk-development.com/Files/Billeder/Issuu/Interim%20reports/2013_14/Q1_Announcement_2013.pdf

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