Q1_Announcement_2013

I N T E R I M R E P O R T Q 1

TK DEvElOPMENT A/S | CvR NO. 24256782

COMPANY ANNOUNCEMENT NO. 16/2013 | 21 JUNE 2013

2013/14

IllUSTRATION:

BARKARBY GATE, RETAIL PARK

Stockholm, Sweden

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 | TA B L E o f co n T E n Ts

TA b l E O f C O N T E N T S

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

page

s u m m A RY | 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 U M M A R Y

R E s u LT s fo R T h E f I R s T q u A RT E R 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

-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

the solvency ratio stood at 34.6 %.

Cash flows for the period amounted to Dkk -4.5 million

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

net interest-bearing debt amounted to Dkk 2,195.7 million

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

2013.

P R o P E RT Y D E V E Lo Pm E n T

In the municipality of Danderyd near Stockholm, Tk Devel-

opment handed over the first 13,000 m² phase of a retail

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

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

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 for-

ward funding.

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

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

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

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

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

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

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

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

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

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

The option to purchase land for the project will be exercised

simultaneously with construction startup, scheduled for Au-

gust 2013. earnings from the sale are expected to be recog-

nized in the 2014/15 financial year.

The Group’s project portfolio in the property development

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

2013: 452,000 m²).

A s s E T m A n A G E m E n T

The total portfolio of own properties under asset manage-

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

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

of which investment properties accounted for Dkk 314.0

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

sponds to a return on the carrying amount of 6.7 %. Based

on full occupancy, the return on the carrying amount is ex-

pected to reach 7.9 %.

The operation of these properties is generally proceeding

satisfactorily, and overall the footfall and revenue in the

centres are developing positively.

m A R K E T c o n D I T I o n s

In management’s opinion, the market conditions have not

changed appreciably during the past months.

The main challenge currently facing the property sector is

the difficult access to financing. Uncertainty on the inter-

national financial markets continues to adversely affect the

property sector, leading to consistently long decision-mak-

ing processes among financing sources, tenants and inves-

tors alike.

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

tingent on obtaining either full or partial financing for them

and on freeing up cash resources from the sale of several

major completed projects.

f I n A n c I A L 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 capital increase will help generate the cash resources

required to underpin future operations and project flow, and

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

pHoTo:

fAshIon AREnA ouTLET cEnTER

prAGUe, CZeCH repUBlIC

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 | s u m m A RY

S U M M A R Y

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

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

en conditional subscription and underwriting commitments

for the total capital increase.

The Board of Directors has appointed nordea Bank Danmark

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

terms and conditions governing the capital increase have

not yet been determined. The prospectus currently being

prepared will set out the detailed terms and conditions of

the capital increase. Tk Development expects to publish the

prospectus in the first half of August 2013 and expects the

capital increase to be completed in early September 2013.

A substantial portion of the proceeds from the capital in-

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

including project finance loans of Dkk 68.5 million granted

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

bers of management.

Tk Development has a general agreement with the Group’s

main banker about both operating and projects credits. Af-

ter the reporting date, the agreement has been extended

for a two-year period, subject to the condition that the op-

erating 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 proj-

ect 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 re-

porting 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 T Lo o 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 re-

duced prices for selected project sales. Thus, management

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

pleted 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 un-

certainties, which may result in deviations from the expected

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

lined in the section “Risk issues” in the Group’s Annual Report

for 2012/13, particularly the valuation of the Group’s project

portfolio.

co n s o L I DAT E D f I n A n c I A L h I G h L I G h Ts A n D K E Y R AT I os | 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 | 5 / 3 4

C O N S O l I D AT E D f I N A N C I A l h I G h l I G h T S A N D K E Y R AT I O S

DkkmQ1

2013/14Q1

2012/13Full year

2012/13

f I n A n c I A L h I G h L I G h T s :

net revenue 131.6 54.7 632.3

value adjustment, investment properties, net 1.6 -0.3 -37.8

Gross profit/loss 32.2 39.4 -139.5

operating profit/loss (eBIT) 8.5 12.1 -241.1

Financing, etc. -27.9 -19.1 -87.4

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

Balance sheet total 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

Cash flows from operating activities 46.1 -24.8 45.6

net interest-bearing debt, end of period 2,195.7 2,278.3 2,206.1

K E Y R AT I o s :

return on equity (roe) *) -4.7 % -34.4 % -30.2 %

eBIT margin 6.5 % 22.1 % -38.1 %

Solvency ratio (based on equity) 34.6 % 38.5 % 34.7 %

equity value in Dkk per share 32.6 41.0 33.0

price/book value (p/Bv) 0.3 0.4 0.4

number of shares, end of period 42,065,715 42,065,715 42,065,715

earnings per share (epS) in Dkk -0.4 -3.7 -11.7

Dividend in Dkk per share 0 0 0

listed price in Dkk per share 9 15 13

K E Y R AT I o s A Dj u s T E D fo R wA R R A n T s :

return on equity (roe) *) -4.7 % -34.4 % -30.2 %

Solvency ratio (based on equity) 34.6 % 38.5 % 34.7 %

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 O N S O l I D AT E D f I N A N C I A l h I G h l I G h T S A N D K E Y R AT I O 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 | 5 / 3 4

6 / 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 | m A n AG E m E n T com m E n TA RY

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

amounted to Dkk -19.0 million before tax, compared to Dkk

-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. Con-

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

ratio stood at 34.6 %.

The results for Q1 2013/14 and the balance sheet at 30 April

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

bles below.

The activities within each individual business segment are de-

scribed in more detail on pages 13-22.

The property development segment is described on pages

13-16. The description includes information about the

development potential of Tk Development’s project portfolio,

including an outline of the individual development projects.

The asset management segment is described on pages

17-21. The description contains information about Tk

Development’s own properties under asset management, in-

cluding an outline of the operation and customer influx for the

individual projects.

The discontinuing activities are described on page 22, which

provides more details about Tk Development’s properties and

projects in the countries where management has decided to

phase out activities.

Therefore, the financial review below contains a description of

the results and balance sheet total at group level only.

A c c o u n T I n G P o L I c I E s

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

terim Financial reporting, as adopted by the eU, and Danish dis-

closure requirements for listed companies.

The Interim report has been presented in accordance with

the financial reporting standards (IFrS/IAS) and IFrIC interpre-

tations applicable for financial years beginning at 1 February

2013.

The implementation of new and amended financial reporting

standards and interpretations that have entered into force as

of the 2013/14 financial year has not impacted recognition and

measurement in the consolidated financial statements and

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

earnings per share.

In march 2013, the Board of Directors decided to change the

internal reporting procedure. In this connection, the segment

definition has been revised, and segments are now divided into

property development activities, asset management activi-

ties and discontinuing activities. The comparative figures have

been restated accordingly.

The accounting policies have been applied consistently with

those presented in the Annual report for 2012/13. reference

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

R E S U lT S I N Q 1 2 0 1 3 / 1 4 A N D O U T l O O K f O R 2 0 1 3 / 1 4

R E s u LT s q 1 2 0 1 3 / 1 4 ( D K K m )

Profit/lossQ1

2013/14Property

developmentAsset

managementDiscontinuing

activities Unallocated

revenue 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

operating profit/loss 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

Tax on profit/loss for the period -2.8 - - - -2.8

Profit/loss for the period -16.2 - - - -22.2

The balance sheet structure appears from the next page.

m A n AG E m E n T com m E n TA RY | 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 | 7 / 3 4

Group’s accounting policies.

no interim financial statements have been prepared for the

parent Company. The Interim report is presented in Dkk, which

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

functional currency of the parent Company. The Interim report

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

Ac c o u n T I n G E s T I m AT E s A n D j u D G m E n T s

The most significant accounting estimates and judgments

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

icies, and the associated, estimated material uncertainty, are

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

port for 2012/13. For a more detailed description, reference is

therefore made to the Annual report.

I n c o m E s TAT E m E n T

Revenue

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

lion against Dkk 54.7 million in Q1 2012/13.

The revenue stems from the sale of projects, rental and fee in-

come, etc.

overview of handed-over projects

q1 2013/14

Retail park, Enebyängen, Danderyd, Sweden

In the municipality of Danderyd near Stockholm, Tk Develop-

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

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

of about 1,800 m² was completed in march 2013, and the re-

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

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

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

German investment fund Commerz real on the basis of forward

funding.

Residential park, bielany, Warsaw, Poland

Construction of the first phase of 7,850 m², a total of 136 units,

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

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

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

over to the buyers in Q1 2013/14. The residential units are be-

ing sold as owner-occupied apartments to private users.


B A L A n c E s h E E T s T R u c T u R E AT 3 0 A P R I L 2 0 1 3 ( D K K m )

balance sheet 30 Apr 2013Property

developmentAsset

managementDiscontinuing

activities Unallocated

Assets

Investment properties 481.2 - 314.0 167.2 -

Investment properties under construction 17.6 17.6 - - -

other non-current assets 177.4 3.3 3.3 - 170.8

projects in progress or completed 3,021.9 1,159.9 1,624.7 237.3 -

receivables 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

Assets 3,957.9 1,242.1 2,089.9 426.8 199.1

Equity and liabilities

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

other liabilities 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%

8 / 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 | m A n AG E m E n T com m E n TA RY


Gross margin

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

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

rives from the operation of completed projects, the operation

and value adjustment of the Group’s investment properties and

profits on handed-over projects.

The value adjustment of the Group’s investment properties

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

2012/13.

staff costs and other external expenses

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 %.

Staff costs amounted to Dkk 16.6 million against Dkk 18.7 mil-

lion in the same period the year before, a decline of about 11

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

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

al shopping centres.

other external expenses amounted to Dkk 6.6 million, a reduc-

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

Development in costs:

Costs, DKKm Costs, trend

0

30

60

90

120

150

180

Q1 2013/14

Q1 2012/13

2013/14E

2012/13

2011/12

2010/11

2009/10

2008/09

financing

Tk Development realized net financing expenses of Dkk 27.9

million against Dkk 19.1 million in the same period the year

before. The increase is attributable partly to higher financing

costs on individual project credits and partly to the declining

volume of projects on which interest is capitalized following the

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

B A L A n c E s h E E T

The Group’s balance sheet total amounted to Dkk 3,957.9 mil-

lion, which is a decline of Dkk 51.4 million compared to 31 Jan-

uary 2013.

Goodwill

Goodwill is unchanged compared to 31 January 2013, amount-

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

to the Group’s property development and asset management

activities in poland and the Czech republic. There are no indica-

tions of any need to impair the value of goodwill.

Investment properties and investment properties under con-

struction

TK Development’s investment properties consist of:

Futurum Hradec králové, shopping centre, the Czech repub-

lic (a 20 % interest).

Galeria Tarnovia, shopping centre, Tarnów, poland (a 30 %

interest).

German investment properties.

The total value of the Group’s investment properties amounted

to Dkk 481.2 million against Dkk 479.4 million at 31 January

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

table to the Group’s German investment properties, which are

described in more detail in the section “Discontinuing activities”

below. The two remaining investment properties belong to the

asset management segment and are described in more detail

under that heading.

The valuation of the Czech investment property, the Futurum

Hradec králové shopping centre, made at 31 January 2013 was

based on the ongoing sales process. This valuation was upheld

at 30 April 2013.

Tk Development’s 30 % ownership interest in Galeria Tarnovia

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

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’s investment properties under construction

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

development project in poland. no value adjustment of the in-

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

are awaiting final permits for the project and further clarifica-

tion of the building phase, including the timing of construction

startup, construction period, etc.

Deferred tax assets

Deferred tax assets were recorded at Dkk 134.7 million in the

m A n AG E m E n T com m E n TA RY | 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 | 9 / 3 4

balance sheet against Dkk 127.0 million at 31 January 2013.

The valuation of the tax assets is based on existing budgets

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

years, budgets are based on an evaluation of specific projects

in the Group’s project portfolio. The valuation for the next two

years is based on specific projects in the project portfolio with

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

opportunities.

Due to the substantial uncertainties attaching to these val-

uations, provisions have been made for the risk that projects

are postponed or not implemented and the risk that project

profits fall below expectations. A change in the conditions and

assumptions for budgets and profit forecasts, including time

estimates, could result in the value of the tax assets being low-

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

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

cial position.

Project portfolio

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-

bined result of an increase in the Group’s portfolio of ongoing

projects and a decrease due to the sale of projects.

Total prepayments based on forward-funding agreements

were Dkk 330.3 million at 31 January 2013, compared to

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

creased due to the handover of projects to investors in Q1

2013/14. At 30 April 2013, forward funding represented 94.8

% of the gross carrying amount of sold projects.

The Group’s total portfolio of completed projects and invest-

ment 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 Janu-

ary 2013: Dkk 2,206 million).

Net interest-bearing debt, DKKm

0

625

1,250

1,875

2,500

31.4.1331.1.1331.1.1231.1.1131.1.1031.1.09

Investment properties and completed projects, DKKm

Receivables

Total receivables amounted to Dkk 209.0 million, a decline of

Dkk 32.0 million from 31 January 2013 that relates mainly to

other receivables.

cash and cash equivalents

Cash and cash equivalents amounted to Dkk 26.9 million

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

cash resources, see note 4, came to Dkk 68.1 million against

Dkk 70.1 million at 31 January 2013.

Equity

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

Dkk 1,389.7 million at 31 January 2013.

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

results for the period and negative market-value adjustments

after tax of Dkk 2.8 million related to foreign subsidiaries and

hedging instruments.

The solvency ratio amounts to 34.6 %.

Equity and solvency:

Equity, DKKm Solvency ratio

0

500

1,000

1,500

2,000

30 Apr 1331 Jan 1331 Jan 1231 Jan 1131 Jan 1031 Jan 09

59 %

39.5

%

36.4

% 40.4

%

40.4

%

34.7

%

34,6

%

non-current liabilities

The Group’s non-current liabilities represented Dkk 140.8 mil-

lion against Dkk 141.0 million at 31 January 2013.

current liabilities

The Group’s current liabilities represented Dkk 2,446.2 million

against Dkk 2,478.6 million at 31 January 2013. The decline is

primarily attributable to debt owing to credit institutions.

cA s h f Lo w s TAT E m E n T

The Group’s cash flows from operating activities were positive

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

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

of a reduction of funds tied up in projects due to project sales,

new project investments, a decline in receivables, interest and


1 0 / 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 | m A n AG E m E n T com m E n TA RY

tax paid, as well as other operating items.

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

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

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

ments in the Group’s investments properties and investment

properties under construction.

The cash flows from financing activities were negative in the

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

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

duction of payables to credit institutions coupled with the fi-

nancing raised for project investments.

G oA L s A n D s T R AT EGY

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

Annual report for 2012/13, in march 2013 management resol-

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

adjust its market focus.

In this connection, management decided to carry out a number

of adaptations, the aim being to achieve the following results

after a two-year transformation process:

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

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 %.

overheads will have been reduced by around 20 % relative

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

discontinuation of activities in Germany, Finland and the

Baltic States – cost cuts implemented at the beginning of

2013.

Financing costs will have been normalized as a result of the

initiatives implemented.

The new reporting procedure – applied with effect as of the

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

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

expected development.

Following implementation of the above-mentioned adaptati-

ons, management believes that a platform for normalized ear-

nings will have been established.

f I n A n c I A L I s s u E s

capital increase

At the Company’s Annual General meeting on 22 may 2013,

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

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

capital increase will help generate the cash resources required

to underpin future operations and project flow, and thus long-

term earnings. The capital increase has been discussed with

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

private and institutional investors, have given conditional sub-

scription and underwriting commitments for the total capital

increase.

The Board of Directors has appointed nordea Bank Danmark

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

and conditions governing the capital increase have not yet

been determined. The prospectus currently being prepared

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

crease. Tk Development expects to publish the prospectus in

the first half of August 2013 and expects the capital increase

to be completed in early September 2013.

A substantial portion of the proceeds from the capital increase

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

project finance loans of Dkk 68.5 million granted by a number

of the Company’s major shareholders and members of manage-

ment.

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-

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

allocate the necessary capital to securing the progress of new

projects. Therefore, in December 2012 management decided to

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

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

cash resources that are essential for strengthening the Group’s

financial platform. moreover, financial resources will be secured

to regenerate momentum and thus to realize the substantial

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

ects.

Tk Development is dependent on its ability to continue obtain-

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

either from credit institutions or from investors in the form of

forward funding, and on freeing up substantial cash resourc-

es 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-


m A n AG E m E n T com m E n TA RY | 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 | 1 1 / 3 4

by achieve the expected results, the Group must have or must

be able to procure sufficient cash resources to cover the costs

and deposits required for the projects, the capacity costs and

other obligations.

Tk Development has a general agreement with the Group’s

main banker about both operating and project 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 capi-

tal 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 capi-

tal 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 institu-

tions, and management anticipates being able to either prolong

or otherwise refinance project credits that have not been pre-

maturely repaid upon project sales.

o u T Lo o 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 activ-

ities 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 proj-

ects 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 un-

certainties, which may result in deviations from the expected

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

lined in the section “Risk issues” in the Group’s Annual Report

for 2012/13, particularly the valuation of the Group’s project

portfolio.

s u B s Eq u E n T E V E n T s

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

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

project in Barkarby, Stockholm, to a fund managed by Cordea

Savills. The sale is based on forward funding. 73 % of the proj-

ect premises have been let, and construction is scheduled to

begin in August 2013.

other than those mentioned in the management commentary,

no significant events of relevance to the Company have oc-

curred after the reporting date.



In management’s opinion, the Group’s market conditions have

not changed appreciably during the past months. The current

market conditions are still leading to long decision-making pro-

cesses among investors, tenants and financing sources alike.

The Danish market in particular continues to be affected by

uncertainty, partly because of a weakened financial sector. In

management’s opinion, there are no indications of a significant

improvement during the period to come.

The access to project financing remains difficult and is currently

the greatest challenge facing the property sector. The financial

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

and at the same time new rules have imposed stricter capital

requirements on banks. This means that credit institutions re-

main 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 abil-

ity 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 in-

creased interest in investing in selected segments of retail

projects, with quality and location being key factors in the in-

vestment decision. However, the decision-making processes

continue to be lengthy, in part because of the investors’ re-

quirement 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 trans-

parent 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 fo-

cus on location. Tk Development is experiencing a good amount

of interest in prime-location projects, and several strong na-

tional and international retail chains are expanding, although

decision-making processes are protracted in light of the unrest

on international financial markets.

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

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

pected to be under pressure.

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

gish and prices have realigned due to the large supply of new

housing for sale, among other factors. The scope of housing

projects launched in Warsaw is now diminishing, and over time

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

opinion of management, housing development in poland will be-

come attractive again, particularly in the Warsaw area.

M A R K E T C O N D I T I O N S


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

property, termed property development.

Strategy for business area – Property development

Developing projects from the conceptual phase through to proj-ect 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.

Property development

Countries: 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)

In its property development segment, Tk Development focuses

on executing existing projects in the portfolio, as well as on se-

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

the Group continuously works on new project opportunities.

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

gent on obtaining either full or partial financing for them and on

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

completed projects.

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.

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

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

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

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.

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

low:

DKKm31 Jan

201231 Jan

201330 Apr

2013

sold

Completed 0 15 13

In progress 17 17 0

not initiated 10 6 5

Total 27 38 18

Remaining

Completed 0 38 28

In progress 286 198 195


Total 1.224 1.137 1.142

net project portfolio 1.251 1.175 1.160

Forward funding 293 370 330

Gross project portfolio 1.544 1.545 1.490

Forward funding in % of gross

carrying amount of sold projects 91,6 % 91,1 % 94,8 %

Table 1

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

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

since 31 January 2013 due to the handover of projects to in-

vestors.

The development potential of the Group’s project portfolio is

shown below (in square metres):

m² (’000) 31 Jan 2012 31 Jan 2013 30 Apr 2013

sold

Completed 0 4 2

In progress 7 3 0


Total 36 7 2

Remaining

Completed 0 3 2

In progress 39 20 19


Total 599 445 454

Total project portfolio 635 452 456

Number of projects 50 37 35

Table 2

P R O P E R T Y D E v E l O P M E N T


Project name city/town country segment

TKD’s share

of area (m2)

TKD’s

ownership

interest

construction

start/

expected con-

struction start

opening/

expected

opening

Completed

residential park, Bielany, phase I Warsaw pl residential/services 4,395 100 % mid-2011 January 2013

In progress

Amerika plads, underground car park Copenhagen Dk Under-ground car park 16,000 50 % 2004 Continuously

vasevej Birkerød Dk mixed 3,400 100 % - -

Not initiated

Broen, shopping centre esbjerg Dk retail 29,800 100 % Autumn 2013 2015

Østre Teglgade Copenhagen Dk office/residential 32,700 1) 100 % Continuously Continuously

Amerika plads, lot C Copenhagen Dk mixed 6,500 50 % 2014 2016

Amerika plads, lot A Copenhagen Dk office 5,900 50 % 2014 2016

Aarhus South, phase II Aarhus Dk retail 2,800 100 % 2013 2014

ejby Industrivej Copenhagen Dk office 12,900 100 % - -

Østre Havn/Stuhrs Brygge Aalborg Dk mixed 36,000 1) 50 % Continuously Continuously

retail park, marsvej randers Dk retail 10,000 100 % 2013 2014

Development of town centre køge Dk mixed 27,500 100 % 2013 Continuously

Farum Bytorv, extension Farum Dk retail 8,000 100 % 2013 2015

The kulan commercial district Gothenburg Se mixed 45,000 100 % 2013 2015

Barkarby Gate, retail park Stockholm Se retail 20,000 100 % August 2013 Autumn 2014

retail park, Söderhamn Söderhamn Se retail 10,000 100 % 2013 2014

retail park, Gävle, phase II Gävle Se retail 15,800 100 % Continuously Continuously

Shopping centre, Jelenia Góra Jelenia Góra pl retail 7,200 30 % 2013 2015

residential park, Bielany, remaining phases Warsaw pl residential/services 48,350 100 % Continuously Continuously

Bytom retail park Bytom pl retail 25,800 100 % Continuously Continuously

Shopping centre, Frýdek místek Frýdek místek CZ retail 14,800 100 % 2013 2014

most retail park, phase II most CZ retail 2,000 100 % - -

Property development, total floor space approx. 385,000

1) Share of profit on development amounts to 70 %.

Project outline

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



Geographical segmentation of the development potential in

square metres:

Sweden

Denmark

Czech Republic

Poland

c o m P L E T E D P R oj Ec 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 remain-

ing units to be sold in the course of the 2013/14 financial year.

P R o j Ec T s I n P R o G R E 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.

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 re-

furbishment 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.

P R o j Ec T s n oT I n I T I AT E D

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 occupan-

cy rate is 74 % (2012/13: 75 %), with tenants including H&m,

kvickly, Aldi, Imerco, Skoringen, Sport-master, Bahne, panduro

Hobby, kong kaffe and Gina Tricot. The fitness facilities have

been let to Fitness World. Construction is expected to com-

mence in autumn 2013, and the shopping centre is scheduled

to open in 2015. Tk Development is currently working on the

planning, design, startup and sale of the project.

Østre Teglgade, copenhagen, Denmark

Tk Development owns an attractively located project area at

Teglholmen of about 32,700 m². Current plans involve estab-

lishing a church and possibly a residential care facility. Discus-

sions are also being held with several interested parties regard-

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 residen-

tial park of about 72,000 m² through a company jointly owned

with Frederikshavn maritime erhvervspark on a 50/50 basis.

The area was acquired by the jointly owned company, with pay-

ment 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, offic-

es and parking facilities has been launched.

Retail park, marsvej, Randers, Denmark

In october 2010, the Group took over a plot of land on marsvej

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

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 cen-

tre 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



well as a 14,000 m² underground car park. The local plan for

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

ly adopted in mid-2013. Tk Development expects to enter into

an agreement with køge municipality regarding its takeover of

both town hall and rehabilitation centre. letting of the retail

premises has started, and potential tenants are showing a

good amount of interest in the project.

farum Bytorv, extension, farum, Denmark

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

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

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

plan is expected to be adopted in mid-2013.

The Kulan commercial district, shopping centre and service/

commercial space, Gothenburg, sweden

Tk Development and the Swedish housing developer Jm AB

have entered into a cooperation agreement with SkF Sverige

AB to develop SkF’s former factory area in the old part of Go-

thenburg. The contemplated project comprises a total floor

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

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

housing. Tk Development will be in charge of developing the

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

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

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

approved in 2013. The project is being discussed with potential

tenants, and several lease agreements have been concluded.

Barkarby Gate, retail park, stockholm, sweden

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

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

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

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

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

have been concluded with various major tenants, including XXl

(sports store), Clas ohlson, Intersport, lager 157, Grizzly, kjell

& Co., Burger king and the fitness chain nordic Wellness. After

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

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

The option to purchase land for the project will be exercised

simultaneously with construction startup, scheduled for Au-

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

earnings from the sale will be recognized upon handover of the

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

Retail park, phase II, Gävle, sweden

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

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

ty company nordika Fastigheter AB. moreover, Tk Development

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

retail park premises of about 15,800 m².

shopping centre, jelenia Góra, Poland

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

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

ping centre of about 24,000 m². The project will comprise a su-

permarket of about 2,200 m² and retail, restaurant and service

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

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

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

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

ect was handed over to Heitman, and in this connection the

Group’s 30 % ownership interest was classified under “Invest-

ment properties under construction”. Tk Development will re-

ceive fee income from the jointly owned company established

for developing, letting and managing the construction of the

project.

Residential park, Bielany, warsaw, Poland

Tk Development owns a tract of land in Warsaw allowing for

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

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

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

construction of the remaining three phases of about 48,350

m² successively, in continuation of the completion of the first

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

ry level.

Bytom Retail Park, Bytom, Poland

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

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

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

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

letting. letting efforts are ongoing, and construction will start

as space is let.

shopping centre, frýdek místek, the czech Republic

In the Czech town of Frýdek místek, Tk Development has an

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

centre, consisting of about 60 stores. The current occupancy

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

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

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

ments, which is the reason for the declining occupancy rate.

The letting process is still proceeding satisfactorily, and lease

agreements have been concluded with such tenants as Billa,

Intersport, H&m, newYorker and euronics. Construction is ex-

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

uled for 2014.



The Group’s secondary business area is asset management,

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

optimizing completed projects for a medium-long operating pe-

riod whose length matches the potential for adding value both

for the Group and for third parties.

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

value both for the Group and for third parties.

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 employ-

ees at centres:

30 Apr 2013: 9

(31 Jan 2013: 12)

breakdown of own properties under asset management by

country (carrying amount):

Czech Republic

Denmark

Poland

The gross margin for asset management activities amounted

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. manage-

ment anticipates being able to conclude final sales agreements

for one or more of these properties within a short period of time.

A S S E T M A N A G E M E N T

Project country TypeTKD’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

Other completed projects

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 % 2,400

Total 138,250

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


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 ac-

counted for Dkk 314.0 million (31 January 2013: Dkk 312.1 mil-

lion). 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 develop-

ment 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 let-

ting status, and the current occupancy rates are:

40 % 50 % 60 % 70 % 80 % 90 % 100 %

Brønderslev, shopping-street property

Aabenraa, retail park

Most Retail Park

Ringsted Outlet

Galeria Sandecja, Nowy Sącz

Fashion Arena Outlet Center, Prague

Sillebroen, Frederikssund

Galeria Tarnovia, Tarnów

Futurum Hradec Králové



Opening November 2000/May 2012

leasable area 28,250 m²

Occupancy rate 100 % (2012/13: 100 %)

footfall 2012 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.

Major tenants: Cinestar, Tommy Hilfiger, H&m, new Yorker, Adidas, re-

served, Intersport, Takko Fashion, Foot locker, Gant, C & A, lindex, Da-

tart.

Opening November 2009

leasable area 16,500 m², including a 2,000 m² supermarket

Occupancy rate 95 % (2012/13: 96 %)


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 custo-mers and to perform well. Despite a slight decline in the number of vi-sitors, the shopping centre revenue continued the positive trend of the previous year. Tk Development’s focus is on enhancing the centre’s at-traction value, and current initiatives are aimed at bolstering occupancy in the centre, among other things.

Major tenants: H&m, new Yorker, euro rTv AGD, reserved, Deichmann, Douglas, rossmann, Stradivarius, Takko Fashion, Simply market.

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 b l I C

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 l A N D

Opening March 2010

leasable area 25,000 m², including 5,000 m² supermarket units

Occupancy rate 92 % (2012/13: 91 %)


In the continuing difficult economic climate with subdued private con-

sumption, 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 strengt-

hening the occupancy and revenue levels for the centre.

Major tenants: kvickly, Fakta, H&m, Fona, Gina Tricot, matas, Sport-ma-

ster, Frederikssund Isenkram, Deichmann, vero moda, vila, Wagner.

S I l l 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 November 2007/October 2010


Occupancy rate 96 % (2012/13: 96 %)


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, in-

cluding 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.

Major tenants: Tommy Hilfiger, nike, Adidas, Benetton, Tom Tailor, ecco,

Gant, lacoste, levi Strauss & Co., esprit.

Opening October 2009

leasable area 17,300 m², including a 5,000 m² hypermarket

Occupancy rate 96 % (2012/13: 96 %)


The operation of Galeria Sandecja is still proceeding satisfactorily. The shopping centre had a footfall of almost 2.4 million in 2012, slightly be-low the previous year’s figure. nevertheless, the shopping centre’s re-venue 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.

Major tenants: Carrefour, H&m, new Yorker, reserved, Deichmann, Dou-glas, Camaieu, Carry, euro rTv AGD.

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 U E , C Z E C h R E P U b l I C

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 l A N D

Opening March 2008


Occupancy rate 60 % (2012/13: 61 %)


After a long running-in period, ringsted outlet has recorded pleasing

progress in the past year. Despite the difficult letting situation and in-

tensified 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-

gacy. In terms of revenue and footfall, the centre has continued the po-

sitive development from 2012 in the first months of 2013.

Major tenants: Hugo Boss, nike, puma, Diesel, G-Star raw, redgreen,

Ticket to Heaven, mcDonald’s, Superdry, le Creuset, levi’s, Sparkz, Jack-

pot.

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



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.

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.

M O S T R E TA I l PA R K , C Z E C h R E P U b l I C

R E TA I l PA R K , A A b E N R A A , D E N M A R K

Tk Development has developed retail stores of about 2,400 m2 in the for-

mer 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 %).

S h O P P I N G - S T R E E T P R O P E R T Y, b R Ø N D E R S l E v, D E N M A R K



As described previously, management has chosen a market

focus that targets the countries expected to contribute with

long-term, profitable operations in future. This means that the

Group will phase out its activities in Finland, Germany, the Bal-

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

closures and employee dismissals, will be carried out as soon

as possible, while taking into account that all the countries in

question have projects that need to be handled so as to retain

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

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)

The results for the discontinuing activities before tax amount-

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 E R m A n Y

The Group has four investment properties left in Germany: a

combined commercial and residential rental property in lüden-

scheid in western Germany and three residential rental prop-

erties 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 Ger-

man 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

share of a minor shopping centre and a few plots of land.

The employees have been given notice and their employment

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

ed to close down in autumn 2013.

f I n L A n D

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

a few project opportunities, comprise the projects listed below.

Project City/town Segment floor space (m²)

pirkkala retail park, phase II Tammerfors retail 5,400

kaarina retail park Turku retail 6,600

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 A LT I c s TAT E s

The Group’s Baltic activities comprise the following projects:

project City/town Segment Floor space (m²)

Domuspro retail park vilnius (lT) 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 build-

ing an 11,100 m² retail park. Constructive dialogue has been es-

tablished 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. negotia-

tions 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 I A

The Group owns a minor project in moscow, consisting of Scan-

dinavian-style dwellings that are used for rental, mainly to in-

ternational company employees stationed in moscow. efforts

will be made to sell this project.

D I S C O N T I N U I N G A C T I v I T I E S


T h E B oA R D o f D I R Ec To R s

The Board of Directors is composed of six members elected by

the General meeting. At the Company’s Annual General meet-

ing 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-Han-

sen, Ceo of Harald nyborg A/S, morten Astrup, founding part-

ner and CIo of Storm Capital management ltd., london, and kim

mikkelsen, Ceo of Strategic Capital ApS. After the Annual Gen-

eral meeting, a meeting was held for the purpose of electing of-

ficers, with niels roth being elected as the Chairman, and peter

Thorsen being elected as the Deputy Chairman of the Board of

Directors.

T R A n s Ac T I o n s w I T h R E L AT E D PA RT I E 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 manage-

ment. As regards transactions with related parties, reference is

made to note 7 in the Interim report.

f I n A n c I A L TA R G E T s

To provide for sufficient future financial resources, manage-

ment has adopted a liquidity target for the whole Group. more-

over, 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 E R m AT T E R 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

O T h E R M AT T E R S

2 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 | sTAT E m E n T BY T h E B oA R D o f D I R EcTo Rs A n D E x Ec u T I V E B oA R D

S TAT E M E N T b Y T h E b O A R D O f D I R E C T O R S A N D E x E C U T I v E b O A R D O N T h E I N T E R I M R E P O R T

The Board of Directors and executive Board have today consid-

ered and adopted the Interim report of Tk Development A/S

for the period from 1 February to 30 April 2013.

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

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

34, Interim Financial reporting, as adopted by the eU, and Dan-

ish 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.

moreover, we consider the management’s review to give a fair

presentation of the development in the Group’s activities and

financial affairs, the results for the period and the Group’s over-

all financial position, as well as a true and fair description of

the most significant risks and elements of uncertainty faced

by the Group.

Aalborg, 21 June 2013

E x E c u T I V E B o A R D

B o A R D o f D I R Ec To R s

frede Clausen

president and Ceo

Robert Andersen

executive vice president

Peter Thorsen

Deputy Chairman

Per Søndergaard Pedersen Arne Gerlyng-hansen

Niels Roth

Chairman

Kim Mikkelsen Morten Astrup

co n s o L I DAT E D f I n A n c I A L sTAT E m E n Ts | 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 | 2 5 / 3 4

I n c o m E s TAT E m E n T

Dkkm Note

Q1

2013/14

Q1

2012/13

Full year

2012/13

net revenue 131.6 54.7 632.3

external direct project costs 2 -101.0 -15.0 -734.0

value adjustment of investment properties, net 1.6 -0.3 -37.8

Gross profit/loss 32.2 39.4 -139.5

other external expenses 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

Tax on profit/loss for the period -2.8 148.0 167.3

Profit/loss for the period -16.2 -154.9 -493.3

E A R n I n G s P E R s h A R E I n D K K

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

c o m P R E h E n s I V E I n c o m E s TAT E m E n T

profit/loss for the period -16.2 -154.9 -493.3

Items that may be re-classified to profit/loss:

Foreign-exchange adjustments, foreign operations 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

Tax on value adjustment of hedging instruments 0.6 -0.2 -0.6

Other comprehensive income for the period -2.8 3.7 5.7

Comprehensive income for the period -19.0 -151.2 -487.6

C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S

2 6 / 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 | co n s o L I DAT E D f I n A n c I A L sTAT E m E n Ts



Dkkm Note 30 Apr 2013 31 Jan 2013 30 Apr 2012

ASSETS

non-current assets

Goodwill 33.3 33.3 33.3

Intangible assets 33.3 33.3 33.3

Investment properties 481.2 479.4 367.8

Investment properties under construction 17.6 16.9 75.6

other fixtures and fittings, tools and equipment 2.1 2.5 4.1

Property, plant and equipment 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 securities and investments 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

current assets

Projects in progress or completed 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

Corporate income tax receivable 1.3 4.0 0.6

other receivables 95.9 122.4 101.9

prepayments 22.2 22.4 23.6

Total receivables 209.0 241.0 216.5

Securities 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




Dkkm Note 30 Apr 2013 31 Jan 2013 30 Apr 2012

EQUITY AND lIAbIlITIES

Equity

Share capital 631.0 631.0 631.0

other reserves 5 2.5 5.3 143.5

retained earnings 737.4 753.4 951.2

Total equity 1,370.9 1,389.7 1,725.7

Liabilities

Credit institutions 101.6 102.2 37.5

provisions 0.9 2.3 1.8

Deferred tax liabilities 36.8 35.0 32.7

other debt 1.5 1.5 3.8

Total non-current liabilities 140.8 141.0 75.8

Credit institutions 2,158.9 2,189.1 2,341.5

Trade payables 98.8 106.3 162.9

Corporate income tax 6.1 5.0 1.8

provisions 13.1 13.1 11.2

other debt 158.5 150.2 148.3

Deferred income 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



s TAT E m E n T o f c h A n G E s I n Eq u I T Y

Dkkm Share

capitalother

reservesretained earnings

Total equity

equity at 1 February 2012 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

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

Equity at 30 April 2013 631.0 2.5 737.4 1,370.9



cA s h f Lo w s TAT E m E n T

DkkmQ1

2013/14

Q1

2012/13

Full year

2012/13

operating profit/loss 8.5 12.1 -241.1

Adjustments for non-cash items:

value adjustment of investment properties, net -1.6 0.3 37.8

Depreciation and impairment 0.4 0.6 290.1

Share-based payment 0.2 0.4 0.9

provisions -1.5 -1.7 0.4

Foreign-exchange adjustment -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

Interest paid, etc. -36.6 -33.4 -142.9

Interest received, etc. 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

Sale of equipment, fixtures and fittings 0.0 0.2 0.4

Investments in investment properties -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

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

Foreign-exchange adjustment of cash and cash equivalents 0.2 0.3 0.3

Cash and cash equivalents, end of period 26.9 42.5 31.2

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


n oT E 1 . s E G m E n T I n fo R m AT I 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.

DkkmDevelopment

Asset management

Discontinuingactivities Unallocated Total

30 Apr 2013

Net revenue, external customers 95.1 33.1 3.4 0.0 131.6

Profit/loss before tax -3.6 13.4 -3.8 -25.0 -19.0

Segment assets 1,242.1 2,089.9 426.8 199.1 3,957.9

Segment liabilities 659.8 1,395.3 193.3 338.6 2,587.0

DkkmDevelopment

Asset management

Discontinuingactivities Unallocated Total

30 Apr 2012

net revenue, external customers 14.5 37.0 3.2 0.0 54.7

profit/loss before tax 6.5 16.8 -2.3 -27.9 -6.9

Segment assets 1,462.2 2,315.7 478.1 224.6 4,480.6

Segment liabilities 697.7 1,540.3 210.8 306.1 2,754.9

n oT E 2 . E x T E R n A L D I R Ec T P R oj Ec T c o s T s

Q12013/14

Q1 2012/13

Full year2012/13

project costs 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

External direct project costs, total 101.0 15.0 734.0

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 oT E 3 . s h A R E - B A s E D PAYm 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

outstanding warrants, beginning of year 930,315 1,707,812 1,707,812

lapsed due to termination of employment -8,000 -16,000 0

expired during the period 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

Share-based payment recognized in the profit or loss (Dkk million) 0.2 0.9 0.5

n oT E 4 . L I q u I D I T Y R E s E RV E s

30 Apr 2013 31 Jan 2013 30 Apr 2012

The liquidity reserves break down as follows:

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



n oT E 5 . oT h E R R E s E RV E s

Special

reserve

reserve for

value adjust-

ment of avail-

able-for-sale

financial assets

reserve for

value

adjustment of

hedging

instruments

reserve for

foreign-ex-

change adjust-

ments Total

other reserves at 1 February 2012 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

Other reserves at 30 April 2012 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

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 meet-

ing 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 finan-

cial 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 subsid-

iaries, the accumulated foreign-exchange adjustments recognized in other comprehensive income in respect of the relevant

subsidiary are transferred to the profit or loss.


n oT E 6 . c h A n G E s I n c o n T I n G E n T A s s E T s A n D c o n T I n G E n T L I A B I L I T I E s

There have been no significant changes in the Group’s contingent assets and contingent liabilities since the most recently pub-

lished Annual report.


n oT E 7 . T R A n sAc T I o n s w I T h R E L AT E D PA RT I E 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

board of Directors and Executive board (and their related parties)

Holding of shares, in terms of number (balance) 2,840,251 1,940,251 1,525,061

obligation towards executive Board, employee bonds (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 0.5 0.4 0.0

project finance loans from Board of Directors and executive Board (balance) 21.7 21.7 0.0

Accrued interests, project finance loans from Board of Directors and executive Board (balance) 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

Associates

Interest income from associates 0.1 0.4 1.0

receivables from associates (balance) 23.7 23.6 20.5

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 oT E 8 . f I n A n c I A L I n s T R 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 instru-

ments measured at fair value as appearing from the Group’s Annual report for 2012/13.

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 | com PA n Y I n fo R m AT I o n

Aalborg

vestre Havnepromenade 7

Dk-9000 Aalborg

T: (+45) 8896 1010

Berlin

Ahornstraße 16

D-14163 Berlin

T: (+49) 30 802 10 21

helsinki

Uudenmaankatu 7, 4.

FIn-00 120 Helsinki

T: (+358) 103 213 110

Vilnius

Gynėjų str. 16

lT-01109 vilnius

T: (+370) 5231 2222

warsaw

ul. mszczonowska 2

pl-02-337 Warsaw

T: (+48) 22 572 2910

Prague

karolinská 650/1

CZ-186 00 prague 8

T: (+420) 2 8401 1010

stockholm

Gamla Brogatan 36-38

S-101 27 Stockholm

T: (+46) 8 751 37 30

copenhagen

Islands Brygge 43

Dk-2300 Copenhagen S

T: (+45) 3336 0170

C O M PA N Y I N f O R M AT I O N

TK Development A/S

cVR no.:

24256782

IsIn code:

Dk0010258995 (TkDv)

municipality of registered office:

Aalborg, Denmark

website:

www.tk-development.com

e-mail:

[email protected]

Executive Board:

Frede Clausen and robert Andersen

Board of Directors:

niels roth, peter Thorsen, per Sønder-

gaard pedersen, Arne Gerlyng-Hansen,

kim mikkelsen and morten Astrup.

The Group’s missionThe 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 crea-tive liaison between tenants and investors.

Documents

Q1_Announcement_2013