INTERIM REPORT H1 2013/14 - GlobeNewswire · 2013. 9. 26. · 2013/14 tk development a/s | cvr no....

I N T E R I M R E P O R T H 12013/14

TK DEvElOPMENT A/S | CvR NO. 24256782COMPANY ANNOUNCEMENT NO. 30/2013 | 26 SEPTEMBER 2013

PHOTO:

FUTURUM HRADEC KRÁLOVÉ, SHOPPING CENTRE

CZECH REPUBlIC

2 / 3 4 | T k D e v e lo pm e n T A / S | H 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 H1 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 | H 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 H A L F O F 2 0 1 3 / 1 4 During the first six months of the 2013/14 financial year,

Tk Development recorded results before tax of Dkk -24.3

million, of which the results for the discontinuing activities

before tax amounted to Dkk -8.0 million. For the first half

of 2012/13, the results before tax amounted to Dkk -40.0

million.

The results after tax amounted to Dkk -30.1 million against

Dkk -186.6 million in the first half of 2012/13.

The balance sheet total amounted to Dkk 3,941.4 million

at 31 July 2013 against Dkk 4,009.3 million at 31 January

2013. Consolidated equity totalled Dkk 1,355.7 million, and

the solvency ratio stood at 34.4 %.

Cash flows for the period amounted to Dkk -3.1 million

against Dkk -23.6 million in the same period the year before.

net interest-bearing debt amounted to Dkk 2,183.4 million

at 31 July 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 June 2013 Tk Development sold a 20,000 m² retail park

project in Barkarby, Stockholm, Sweden, to a fund managed

by Cordea Savills. The sale is based on forward funding, and

73 % of the project premises have been let. The option to

purchase land for the project was exercised immediately be-

fore construction startup in August 2013. earnings from the

sale will be recognized in the 2014/15 financial year.

In the municipality of Danderyd near Stockholm, Tk Develop-

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

to an investor in 2010/11. The second phase of about 1,800

m² was completed in march 2013 and handed over to the in-

vestor 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.

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, with

61 % of all the units being handed over in the first half of

2013/14. In total, 88 % (Q1 2013/14: 76 %) of the first-pha-

se units have been sold.

In addition, agreements regarding the letting and sale of

several minor retail projects have been concluded. The ear-

nings from these sales are expected to be recognized in the

2014/15 financial year upon handover of the projects to the

investors.

The Group’s project portfolio in the property development

area comprised 451,000 m² at 31 July 2013 (31 January

2013: 452,000 m²).

A s s E T M A n Ag 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 1,939.0 million at 31 July 2013, of

which investment properties accounted for Dkk 314.4 milli-

on. The annual net rent from the current leases corresponds

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

occupancy, the return on the carrying amount is expected

to reach 7.9 %.

The operation of these properties is generally proceeding

satisfactorily. overall the revenue in the centres is devel-

oping positively, but the footfall is showing signs of decline

at a few centres.

D I s C O n T I n U I n g A C T I V I T I E s In June 2013 a minor investment property in Germany was

sold and handed over to the buyer.

After the reporting date, an agreement has been concluded

regarding the sale of a further German investment property,

expected to be handed over to the buyer in early october

2013. The selling price amounts to Dkk 43.8 million, equal

to the carrying amount.

In August 2013 Tk Development announced that a Group

project, Domuspro Retail park in vilnius, lithuania, had been

conditionally sold to BpT Baltic opportunity Fund, which is

managed by BpT Asset management. The project will be

handed over to the buyer once the usual commercial condi-

tions have been met, including those relating to project con-

struction and letting. The selling price is based on a return

requirement of 8.5 %. The project is to be built in phases,

and construction of the first phase of about 7,500 m2 star-

ted in August 2013, with the opening scheduled for spring

2014.

IllUSTRATIon:

bARKARby gATE, RETAIL PARK

SToCkHolm, SWeDen

4 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | s U M M A Ry

S U M M A R Y

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-ma-

king processes among financing sources, tenants and inve-

stors alike.

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

tingent on obtaining full or partial financing for them and on

freeing up cash resources from the sale of major completed

projects.

F I n A n C I A L I s s U E sIncrease of capital base – to strengthen the group’s financial

platform

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 was implemented in September 2013.

A substantial portion of the proceeds from the capital in-

crease has been used to reduce the debt to credit instituti-

ons and 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 operating and project credits. The agre-

ement has been extended for a two-year period, subject to

the condition that the operating credit limit be reduced by

Dkk 83.5 million after the implementation of the capital in-

crease. This reduction took place in September 2013.

Since 31 January 2013, Tk Development has entered into

agreements on the refinancing of project credits totalling

Dkk 1.2 billion. The most significant project credit refinan-

ced after the reporting date has been extended by two

years, subject to the condition that the credit be reduced

by Dkk 50 million after the implementation of the capital

increase. This reduction took place in September 2013.

now that the above-mentioned refinancing agreements

are in place, credits of Dkk 0.2 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.

With the implementation of the capital increase, the Group

has fulfilled its strategic goal of adjusting the balance sheet

and having a solvency ratio of about 40 %. moreover, the

Group has obtained interest margin reductions on several

major credits.

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 ti-

ming and phase-out of the discontinuing activities are sub-

ject 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 | H 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

Dkkm

H1

2013/14

H1

2012/13

Full year

2012/13

F I n A n C I A L H I g H L I g H T s :

net revenue 218.8 129.3 632.3

value adjustment, investment properties, net 0.0 -24.3 -37.8

Gross profit/loss 76.7 49.4 -139.5

operating profit/loss (eBIT) 29.5 -3.6 -241.1

Financing, etc. -54.6 -37.5 -87.4

profit/loss before tax and writedowns, etc. -21.4 -3.0 -0.3

profit/loss before tax -24.3 -40.0 -326.0

Profit/loss for the period -30.1 -186.6 -493.3

Balance sheet total 3,941.4 4,538.8 4,009.3

property, plant and equipment 491.1 427.2 498.8

of which investment properties/investment properties under construction 489.5 423.6 496.3

Total project portfolio 3,002.5 3,615.2 3,030.9

Equity 1,355.7 1,697.7 1,389.7

Cash flows from operating activities 43.1 -75.0 45.6

net interest-bearing debt, end of period 2,183.4 2,327.6 2,206.1

K E y R AT I O s :

Return on equity (Roe) *) -4.4 % -20.9 % -30.2 %

eBIT margin 13.5 % -2.8 % -38.1 %

Solvency ratio (based on equity) 34.4 % 37.4 % 34.7 %

equity value in Dkk per share 32.2 40.4 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 -0.7 -4.4 -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) *) -4.4 % -20.9 % -30.2 %

Solvency ratio (based on equity) 34.4 % 37.4 % 34.7 %

equity value in Dkk per share 32.2 40.4 33.0

Diluted earnings per share (epS-D) in Dkk -0.7 -4.4 -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 | H 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 | H 1 2 0 1 3 / 1 4 | M A n Ag E M E n T COM M E n TA Ry

Tk Development recorded results of Dkk -24.3 million before

tax in the first six months (H1) of 2013/14, compared to Dkk

-40.0 million in H1 2012/13. The results after tax amounted to

Dkk -30.1 million against Dkk -186.6 million in the same period

the year before.

The balance sheet total amounted to Dkk 3,941.4 million at 31

July 2013 against Dkk 4,009.3 million at 31 January 2013. Con-

solidated equity totalled Dkk 1,355.7 million, and the solvency

ratio stood at 34.4 %.

The results for H1 2013/14 and the balance sheet at 31 July

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.

R E S U lT S I N H 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 H 1 2 0 1 3 / 1 4 ( D K K M )

Profit/loss H1 2013/14

Property

development

Asset

management Discontinuing Unallocated

Revenue 218.8 144.8 66.7 7.3 0.0

Gross profit/loss 76.7 20.3 57.9 -1.5 0.0

Costs 46.3 - - 3.5 42.8

operating profit/loss 29.5 20.3 57.9 -5.0 -43.7

Financing, net -54.6 -10.7 -33.6 -3.2 -7.1

profit/loss before tax -24.3 10.1 24.4 -8.0 -50.8

Tax on the profit/loss for the period 5.8 - - - 5.8

Profit/loss for the period -30.1 -56.6

b A L A n C E s H E E T s T R U C T U R E AT 3 1 j U Ly 2 0 1 3 ( D K K M )

Balance sheet 31 July 2013

Property

development

Asset

management Discontinuing Unallocated

Assets

Investment properties 469.8 - 314.4 155.4 -

Investment properties under construction 19.7 19.7 - - -

other non-current assets 170.6 3.6 3.3 - 163.7

projects in progress or completed 3,002.5 1,146.9 1,624.6 231.0 -

Receivables 223.4 58.2 143.5 21.2 0.5

Cash, cash equivalents, escrow accounts, etc. 55.4 13.5 13.9 0.4 27.6

Assets 3,941.4 1,241.9 2,099.7 408.0 191.8

Equity and liabilities

equity 1,355.7 606.1 696.2 209.3 -155.9

Credit institutions 2,252.3 523.8 1,240.4 186.2 301.9

other liabilities 333.4 112.0 163.1 12.5 45.8

Equity and liabilities 3,941.4 1,241.9 2,099.7 408.0 191.8

Solvency ratio 34.4 % 48.8 % 33.2 % 51.3 % -81.3 %

M A n Ag E M E n T COM M E n TA Ry | H 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n T A / S | 7 / 3 4

AC C O U n T I n g P O L I C I E sThe 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, asset management and discontinuing

activities. The comparative figures have been restated accord-

ingly.

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

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 sThe 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 TRevenue

The revenue for the period under review totalled Dkk 218.8 mil-

lion against Dkk 129.3 million in H1 2012/13.

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

come, etc.

Handed-over projects

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. The second phase of about 1,800 m²

was completed in march 2013 and handed over to the investor

in the first quarter of 2013/14. The second phase is fully let

and tenanted by plantagen (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. 88 % of the units (Q1

2013/14: 76 %) have been sold, and 50 % of the units were

handed over to buyers in Q1, with an additional 11 % being

handed over in Q2 2013/14. The residential units are being sold

as owner-occupied apartments to private users.

gross margin

The gross margin for the first half of 2013/14 amounted to Dkk

76.7 million against Dkk 49.4 million in H1 2012/13. The gross

margin derives from the operation of the Group’s completed

projects, the operation and value adjustment of the Group’s in-

vestment properties and profits on handed-over projects.

The value adjustment of the Group’s investment properties

amounted to Dkk 0.0 net, with Dkk -0.6 million relating to

the German investment properties and Dkk 0.6 million relat-

ing to remaining investment properties. The value adjustment

amounted to Dkk -24.3 million in the first half of 2012/13.

staff costs and other external expenses

Staff costs and other external expenses amounted to Dkk 46.3

million for H1 2013/14 against Dkk 51.8 million in H1 2012/13,

a reduction of about 11 %.

Staff costs amounted to Dkk 32.8 million against Dkk 36.2 mil-

lion in the same period the year before, a decline of about 9

%. The number of employees totalled 102 at 31 July 2013 (31

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

al shopping centres.

other external expenses amounted to Dkk 13.5 million, a re-

duction of about 13 % compared to H1 2012/13.

A number of measures have been initiated to reduce the cost

level by about 20 % relative to 2012/13, with half of the reduc-

tion deriving from the discontinuation of activities in Germany,

Finland and the Baltic States.


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Development in costs:

Costs, DKKm Costs, trend

0

30

60

90

120

150

180

H1 2013/14

H1 2012/13

2014/15E

2013/14E

2012/13

2011/12

2010/11

2009/10

2008/09

Financing

Tk Development realized net financing expenses of Dkk 54.6

million against Dkk 37.5 million in H1 2012/13. The increase is

attributable partly to higher financing costs on individual proj-

ect 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.

Corporate income tax

Tax on the results for the year amounts to Dkk 5.8 million. The

tax amount has been negatively affected by a Dkk 8.5 million

impairment of the Group’s Danish tax asset following the adop-

tion of new legislation to gradually reduce the corporate tax

rate, which has lengthened the time horizon for utilizing the

Group’s Danish tax asset.

b A L A n C E s H E E TThe Group’s balance sheet total amounted to Dkk 3,941.4 mil-

lion, which is a decline of Dkk 67.9 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 469.8 million against Dkk 479.4 million at 31 January

2013. Dkk 155.4 million of the value at 31 July 2013 is attrib-

utable 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 31 July 2013.

Tk Development’s 30 % ownership interest in Galeria Tarnovia

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

erty 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 cur-

rent 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 this

project was made at 31 July 2013, pending fulfilment of the

conditions in the agreement with the investor, and thus startup

of the project.

Deferred tax assets

Deferred tax assets were recorded at Dkk 128.1 million in the

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 31 July 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 3,002.5 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.

M A n Ag E M E n T COM M E n TA Ry | H 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n T A / S | 9 / 3 4

Total prepayments based on forward-funding agreements were

Dkk 6.3 million at 31 July 2013, compared to Dkk 369.6 million

at 31 January 2013. The decrease is due to the handover of

projects to investors in H1 2013/14. At 31 July 2013 forward

funding represented 18.8 % of the gross carrying amount of

sold projects.

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

ment properties amounted to Dkk 2,126 million at 31 July 2013

(31 January 2013: Dkk 2,132 million), and the Group’s net inter-

est-bearing debt amounted to Dkk 2,183 million (31 January

2013: Dkk 2,206 million).

Total project portfolio and net interest-bearing debt:

Net interest-bearing debt, DKKm

0

625

1,250

1,875

2,500

31 Jul 1331 Jan 1331 Jan 1231 Jan 1131 Jan 1031 Jan 09

Investment properties and completed projects, DKKm

Receivables

Total receivables amounted to Dkk 223.4 million, a decline of

Dkk 17.6 million from 31 January 2013 that relates mainly to

other receivables.

Cash and cash equivalents

Cash and cash equivalents amounted to Dkk 27.5 million

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

cash resources, see note 4, came to Dkk 64.8 million against

Dkk 70.1 million at 31 January 2013.

Equity

The Group’s equity came to Dkk 1,355.7 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 4.2 million related to foreign subsidiaries and

hedging instruments.

The solvency ratio amounts to 34.4 %.

Equity and solvency:

Equity, DKKm Solvency ratio

0

500

1,000

1,500

2,000

31 Jul 1331 Jan 1331 Jan 1231 Jan 1131 Jan 1031 Jan 09

59 %

39.5

%

36.4

% 40.4

%

40.4

%

34.7

%

34,4

%

non-current liabilities

The Group’s non-current liabilities represented Dkk 96.3 million

against Dkk 141.0 million at 31 January 2013. The decline re-

sults mainly from debt to credit institutions being transferred

to current liabilities.

Current liabilities

The Group’s current liabilities represented Dkk 2,489.4 million

against Dkk 2,478.6 million at 31 January 2013.

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 43.1 million (Q1 2013/14: positive in the

amount of Dkk 46.1 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

tax paid, as well as other operating items.

The Group’s cash flows from investing activities were positive

in the amount of Dkk 6.8 million (Q1 2013/14: negative in the

amount of Dkk 1.0 million), a combined result of the sale of one

of the Group’s German investment properties and additional

investments in the Group’s investment properties and invest-

ment properties under construction.

The cash flows from financing activities were negative in

the amount of Dkk 53.0 million (Q1 2013/14: negative in the

amount of Dkk 49.6 million). The negative cash flows result

from a reduction of payables to credit institutions coupled with

the financing raised for project investments.

E x EC U T I O n O F A n n O U n C E D s T R AT E gyAs described in company announcement no. 6/2013 and the

Annual Report for 2012/13, in march 2013 management re-

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

to adjust its market focus.

As announced previously, the goal is to execute these adjust-

ments within a period of two years. In management’s opinion,

the strategy execution is progressing satisfactorily and as

planned.


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The initiatives adopted and the current status of their execu-

tion are outlined below:

The remaining activities will be limited to Denmark, Sweden,

poland and the Czech Republic.

• Tk Development’s activities in Germany, Finland and the

Baltic States are being discontinued, and the phase-out

is progressing satisfactorily. The German activities have

been downscaled through the sale of investment pro-

perties. In the Baltic States, a conditional agreement has

been concluded regarding the sale of the Group’s retail

park project Domuspro in vilnius, which will be handed

over to the buyer upon completion of construction. The

branch offices in Berlin, Germany, and Helsinki, Finland,

will be closed down before the end of 2013.

The portfolio of projects not initiated (plots of land) is to be

reduced from about Dkk 1.1 billion to about Dkk 500 million.

• This process is progressing satisfactorily and according

to plan.

The balance sheet is to be adjusted, with a solvency ratio of

about 40 %.

• Following the implementation of the capital increase in

September 2013, the solvency ratio constitutes about

40 %.

overheads are to be reduced by around 20 % relative to

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

discontinuation of activities in Germany, Finland and the Bal-

tic States.

• Cost-reducing measures have been implemented and

are expected to achieve full impact in the course of

2014/15.

Financing costs are to be normalized as a result of the initia-

tives implemented.

• In connection with the implementation of the capital

increase, the Group has reached agreements for a re-

duction of the interest payable on several major credits,

and is currently negotiating interest rate reductions for

other credits.

management believes that a platform for normalized earnings

will have been established once the above-mentioned adapta-

tions have been implemented.

F I n A n C I A L I s s U E sCapital 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 was implemented in September 2013.

For technical reasons, a capital reduction was implemented

before the capital increase, whereby the denomination of all

shares was written down from Dkk 15 to Dkk 1. The capital

reduction amounted to Dkk 588.9 million, which was allocated

to a special fund under equity. Subsequently, this special fund

can only be used following a resolution to this effect at a Gen-

eral meeting.

The capital increase was implemented by issuing 56,087,620

new shares of nominally Dkk 1 at a price of Dkk 4.11, thus

yielding gross proceeds of Dkk 230.5 million. The net proceeds

after costs amount to a total of Dkk 218.7 million.

A substantial portion of the proceeds from the capital increase

has been used to reduce the debt to credit institutions and

project finance loans of Dkk 68.5 million granted by a number

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

ment.

Adjustment of warrants

As a consequence of the capital reduction and capital increase

implemented, the Board of Directors resolved, in accordance

with the Company’s Articles of Association, to adjust the num-

ber of warrants allocated to the Company’s executive Board

and other executive staff members as well as the subscription

price for exercising the warrants. The adjustment was made to

ensure that the value of the warrants for the employees will

be maintained after implementation of the above-mentioned

alterations to Tk Development’s capital structure.

The adjustment means that the employees will be allotted a

number of additional warrants, and that the subscription price

upon exercise of the warrants will be reduced. Reference is also

made to company announcement no. 26/2013.

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. The sale of completed

projects will free up the cash resources that are essential for

strengthening the Group’s financial platform. moreover, finan-

cial resources will be secured to regenerate momentum and

thus to realize the substantial development potential inherent

in several of the Group’s projects.

The Group’s ability to complete the development of its planned

projects and thereby achieve the expected results is contin-

gent on its continuing to obtain full or partial financing for exist-

ing and new projects, from either credit institutions or investors

in the form of forward funding, and on cash resources being

freed up from the sale of major completed projects.

Tk Development has a general agreement with the Group’s


M A n Ag E M E n T COM M E n TA Ry | H 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n T A / S | 1 1 / 3 4

main banker about operating and project credits. The agree-

ment has been extended for a two-year period, subject to the

condition that the operating credit limit be reduced by Dkk 83.5

million after the implementation of the capital increase. This

reduction took place in September 2013.

Since 31 January 2013, Tk Development has entered into

agreements on the refinancing of project credits totalling Dkk

1.2 billion. The most significant project credit refinanced after

the reporting date has been extended by two years, subject to

the condition that the credit be reduced by Dkk 50 million after

the implementation of the capital increase. This reduction took

place in September 2013.

now that the above-mentioned refinancing agreements are in

place and instalments paid, credits of Dkk 0.2 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 4management still anticipates positive results before tax for the

continuing activities for the 2013/14 financial year. The timing

and phase-out of the discontinuing activities are subject to ma-

jor 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 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 The capital increase was implemented in September 2013, gen-

erating gross proceeds of Dkk 230.5 million; see above.

After the reporting date, an agreement has been concluded re-

garding the sale of a further German investment property, ex-

pected to be handed over to the buyer in early october 2013.

The selling price amounts to Dkk 43.8 million, equal to the car-

rying amount.

moreover, Tk Development has entered into a conditional

agreement for the sale of 80 % of the Group’s planned shop-

ping centre project of 14,800 m2 in Frýdek místek, the Czech

Republic; see below.

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 current-

ly the greatest challenge facing the property sector. The finan-

cial 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 institu-

tions 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 full or partial project financ-

ing, from either credit institutions or investors in the form of

forward funding, and on freeing up substantial cash resources

from the sale of several of the major completed projects.

The past year has seen cautious investor optimism and in-

creased interest in investing in selected segments of retail

projects, with location, returns and quality being key factors

in the investment decision. However, the decision-making pro-

cesses 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.

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 sustained weak economic growth.

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.

The scope of residential projects launched in Warsaw, poland,

is diminishing, and the supply of housing is stabilizing. Follow-

ing the realignment of prices referred to in Tk Development’s

Annual Report for 2012/13, the Group is experiencing rising de-

mand for housing and is regularly concluding agreements for

the sale of apartments in its completed residential project in

Bielany. Therefore, in the opinion of management, housing de-

velopment in poland will become 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 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.

Property development

Countries: Denmark, Sweden, poland

and the Czech Republic

Revenue: H1 2013/14: Dkk 144.8 million

(H1 2012/13: Dkk 43.9 million)

Gross profit/loss: H1 2013/14: Dkk 20.3 million

(H1 2012/13: Dkk 2.6 million)

Balance sheet total: 31 July 2013: Dkk 1,241.9 million

(31 January 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 robust 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 con-

tingent on obtaining full or partial financing for them and on

freeing up cash resources from the sale of major completed

projects.

The gross margin for development activities amounted to

Dkk 20.3 million in H1 2013/14 against Dkk 2.6 million in H1

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.

moreover, agreements regarding the letting and sale of several

minor retail projects have been concluded. The earnings from

these sales are expected to be recognized in the 2014/15 fi-

nancial year upon handover of the projects to the investors.

The development potential of the project portfolio represented

451,000 m² at 31 July 2013, of which sold projects accounted

for 22,000 m² and remaining projects for 429,000 m². The proj-

ect 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:

DKKm

31 jan

2012

31 jan

2013

31 jul

2013

sold

Completed 0 15 14

In progress 17 17 0

not initiated 10 6 12

Total 27 38 26

Remaining

Completed 0 38 16

In progress 286 198 194


Total 1,224 1,137 1,121

net project portfolio 1,251 1,175 1,147

Forward funding 293 370 6

Gross project portfolio 1,544 1,545 1,153

Forward funding in % of gross

carrying amount of sold

projects 91.6 % 91.1 % 18.8 %

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

31 jul

2013

sold

Completed 0 4 2

In progress 7 3 0


Total 36 7 22

Remaining

Completed 0 3 1

In progress 39 20 19


Total 599 445 429

Total project portfolio 635 452 451

number of projects 50 37 36

Table 2

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



Project outline

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

Project City/town Country segment

TKD’s

share of

area (m2)

TKD’s

ownership

interest

Construction start /

expected construc-

tion start

Opening/

expected

opening

Completed

Residential park, Bielany, phase I Warsaw pl Residential/services 2,950 100 % mid-2011 January 2013

In progress

Amerika plads, underground car park Copenhagen Dk Underground 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 Autumn 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 5,200 100 % 2013 2014

Development of town centre køge Dk mixed 26,500 100 % 2013 Continuously

The kulan commercial district Gothenburg Se mixed 45,000 100 % 2014 2016

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

Retail park, Söderhamn Söderhamn Se Retail 10,000 100 % 2014 2015

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. 370,000

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

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 88 % of

the first-phase units (Q1 2013/14: 76 %) have been sold. The

residential units are being sold as owner-occupied apartments

to private users, and 61 % (Q1 2013/14: 50 %) of the units had

been handed over to the buyers at 31 July 2013. management

expects the remaining units to be sold in the course of the

2013/14 financial year.

P R O j E C T s I n P R O g R E s sAmerika 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. For a de-

scription of Amerika plads, lots A and C, please see the section

“projects not initiated” below.

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 E C T s n OT I n I T I AT E DbROEn, shopping centre, Esbjerg, Denmark

In esbjerg, Tk Development owns a plot earmarked for a shop-

ping centre project, BRoen, of about 29,800 m², to be built

at esbjerg station. The shopping centre is expected to com-

prise about 70 stores. The current occupancy rate is 72 %

(Q1 2013/14: 74 %), 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 Fit-

ness World. Construction is expected to start in autumn 2013,

with the opening scheduled for autumn 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 in part

of the project area. Discussions are also being held with sever-

al interested parties regarding the construction of residential

property in the 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 5,200

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 26,500 m². The project,

to be built immediately next to køge Station and the town cen-

tre shopping area, comprises retail stores of about 11,500 m²,

public service facilities of about 8,700 m² including a town hall

and rehabilitation centre, residential premises of about 3,300

m² and office premises/fitness facilities of about 2,900 m² as

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

adopted in June 2013. Tk Development expects to enter into

an agreement with køge municipality regarding the municipal-

ity’s takeover of both town hall and rehabilitation centre. let-

ting of the retail premises has started, and potential tenants

are showing a good amount of interest in the project. The proj-

ect allows for phased construction.

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 Gothen-

burg. 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 facilities, 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 a number of 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 occu-

pancy rate is 73 % (Q1 2013/14: 73 %), 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. In June

2013 the project was sold to a fund managed by Cordea Sav-

ills. The sale is based on forward funding. After the reporting

date, the option to purchase land for the project was exercised

immediately before construction startup in August 2013. The

opening has been scheduled for autumn 2014. earnings from

the sale will be recognized in 2014/15 upon handover of the

project to the investor.

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 start in late 2013, with the opening scheduled

for late 2015. In December 2012 70 % of the project was hand-

ed over to Heitman, and in this connection the Group’s 30 %

ownership interest was classified under “Investment properties

under construction”. Tk Development will receive fee income

from the jointly owned company established for developing, let-

ting 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 48,350 m² in three successive

phases in continuation of the completion of the first phase and

once pre-construction sales have reached a satisfactory level.

Tk Development is currently planning the second phase, con-

sisting of about 300 residential units and service facilities. The

pre-construction sales process for the second phase is expect-

ed to start at the end of 2013.

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 is planning

to build a 14,800 m² shopping centre, consisting of about 60

stores. After the reporting period, Tk Development has condi-

tionally sold 80 % of the project to a business partner. Tk De-

velopment will receive fee income for letting and managing the

construction of the project and related services. The current

occupancy rate is 80 % (Q1 2013/14: 71 %), and lease agree-

ments have been concluded with such tenants as Billa, Inter-

sport, H&m, newYorker and euronics. Construction is expected

to start in autumn 2013, and the retail park is scheduled to

open in 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.

strategy for business area – Asset management

Owning, operating, maturing and optimizing completed projects for

a medium-long operating period that matches the potential for add-

ing value.

Asset management

Countries: Denmark, Sweden,

poland and the Czech Republic


(H1 2012/13: Dkk 78.5 million)

Gross profit/loss: H1 2013/14: Dkk 57.9 million

(H1 2012/13: Dkk 42.5 million)

Balance sheet total: 31 July 2013: Dkk 2,099.7 million

(31 January 2013: Dkk 2,100.7 million)

number of employees

at centres:

31 July 2013: 13

(31 January 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 57.9 million in the first half of 2013/14 against Dkk 42.5

million in the first half of 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 sev-

eral 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.

The total portfolio of properties under asset management

amounted to Dkk 1,939.0 million at 31 July 2013 (30 April

2013: Dkk 1,938.7 million), of which investment properties ac-

counted for Dkk 314.4 million (30 April 2013: Dkk 314.0 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 % (Q1 2013/14: 6.7 %). Based on

full occupancy, the return on the carrying amount is expected

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:


to reach 7.9 % (Q1 2013/14: 7.9 %).

overall, the individual centres recorded favourable develop-

ment in 2012, with the positive trend in revenue continuing

into 2013, but the footfall is showing signs of decline at a few

centres.

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 Sacz

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 % (Q1 2013/14: 100 %)

footfall 2012 5.6 million

In 2012 an extension of almost 10,000 m² was added to the shopping centre, and the existing centre was also modernized. The number of retail stores now totals 110. The shopping centre is fully let and conti-nues to have a satisfactory occupancy rate, operating profit and cust-omer influx.

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 94 % (Q1 2013/14: 95 %)


The shopping centre’s revenue has shown an increase during the first seven months of the year compared to the same period last year. The annual footfall is on a par with the previous year. Tk Development’s focus is on enhancing the centre’s attraction value, and current initi-atives are aimed at bolstering occupancy and customer influx, 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 % (Q1 2013/14: 92 %)


In the continuing difficult economic climate with subdued private con-sumption, the centre’s footfall and revenue have showed a slight decli-ne compared to 2012. Tenants are regularly replaced and newcomers move in to optimize the centre. In spring 2013 both Gina Tricot and Signal opened outlets in the centre, and the most recent newcomer is Sisters point. 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.

Major tenants: kvickly, Fakta, H&m, Fona, Gina Tricot, matas, Sport-ma-ster, Frederikssund Isenkram, Deichmann, vero moda, Designersmarket, Wagner, Frederikssund Apotek, Tøjeksperten, Skoringen, Companys, Bog & Idé, Café vivaldi.

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 % (Q1 2013/14: 96 %)


In recent years the Fashion Arena outlet Center has truly distinguished itself as one of the most successful outlet centres 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 seven 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 97 % (Q1 2013/14: 96 %)


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 seven months of 2013, the shopping centre’s revenue and footfall in-creased 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. For one thing, most of the vacant premises are let under short-term leases on a continuing basis, which helps boost centre per-formance.

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 62 % (Q1 2013/14: 60 %)


After a long running-in period, Ringsted outlet has recorded pleasing progress in the past two years. Despite the difficult letting situation and intensified competition in the Danish retail trade sector, in 2012 Ring-sted outlet recorded the highest number of visitors and the highest re-venue 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 number of new stores have opened for business in 2013, including Su-perdry, Saint Tropez, envii and mio my mio. moreover, Haglöfs is due to open a store in the outlet centre in october 2013. In terms of revenue and footfall, the centre has continued the positive development from

2012 in the first six 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, Sam-søe & Samsøe, Rosendahl, noa noa, Helly Hansen, Saint Tropez, Asics, envii, Signal.

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 % (Q1 2013/14: 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 built a retail park of approx. 4,200 m² in Aabenraa in 2009. In Q2 2013/14 the retail park’s occupancy rate declined to 71 % (Q1 2013/14: 100 %) after Biva went bankrupt and vacated its premises. The tenants in the retail park include jem & fix, 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, Fitness World and Intersport. The current occupancy

rate is 93 % (Q1 2013/14: 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


(H1 2012/13: Dkk 6.9 million)

Gross profit/loss: H1 2013/14: Dkk -1.5 million

(H1 2012/13: Dkk 4.3 million)

Balance sheet total: 31 July 2013: Dkk 408.0 million

(31 January 2013: Dkk 425.4 million)

number of employees: 31 July 2013: 9

(31 January 2013: 11)

The results for the discontinuing activities before tax amount-

ed to Dkk -8.0 million in H1 2013/14 against Dkk -3.7 million in

H1 2012/13. The value adjustments of the German investment

properties amounted to Dkk -0.6 million in H1 2013/14 against

Dkk 0.0 million in the same period the year before.

g E R M A n y Following the sale of one of the residential properties in June

2013, the Group now has three investment properties left in

Germany. These properties consist of a combined commercial

and residential rental property in lüdenscheid in western Ger-

many and two residential rental properties on the outskirts of

Berlin. management considers it essential to continue down-

scaling the German activities.

After the reporting date, an agreement has been concluded re-

garding the sale of a further German investment property, ex-

pected to be handed over to the buyer in early october 2013.

The selling price amounts to Dkk 43.8 million, equal to the car-

rying amount.

The value of these properties totalled Dkk 155.4 million at 31

July 2013 (30 April 2013: Dkk 167.2 million). The valuation of

the properties is based on a return requirement of 6.5 % p.a.

calculated on the basis of a discounted cash-flow model over

a ten-year period and recognition of the terminal value 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 will close

down in autumn 2013.

F I n L A n DThe 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. The employees have been given

notice, and the branch office is expected to close in 2013/14.

b A LT I C s TAT E sThe 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

building an 11,100 m² retail park. The project has been con-

ditionally sold to BpT Baltic opportunity Fund, which is man-

aged by BpT Asset management. The project will be handed

over to the buyer once the usual commercial conditions have

been met, including those relating to project construction and

letting. The selling price is based on a return requirement of

8.5 %. The project is to be built in phases, and construction of

the first phase of about 7,500 m2 started in August 2013, with

the opening scheduled for spring 2014. Tk Development is en-

gaged in constructive dialogue with potential tenants, and 79

% of the first-phase premises have been let, with supermarket

operator RImI as the anchor tenant. Construction of the second

phase will start once a satisfactory occupancy level has been

reached.

efforts will be made to phase out the remaining activities in the

Baltic States in the course of the current financial year.

R U s s I AThe 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 R A n s AC T I O n s w I T H R E L AT E D PA RT I E sno significant or unusual transactions were made with related

parties in the first half of the 2013/14 financial year other than

interest payments on project finance loans granted by a num-

ber 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 n C I A L TA R g E T sTo provide for sufficient future financial resources, liquidity

targets have been formulated for the whole Group. In addition,

management has adopted a solvency target for the whole

Group corresponding to a solvency ratio of about 40 %, calcu-

lated 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 sFor 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 | H 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 31 July 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 31 July 2013 and of the results

of the Group’s operations and cash flows for the period from 1

February to 31 July 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, 26 September 2013

E x EC 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 | H 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 H1 2013/14 H1 2012/13 q2 2013/14 Q2 2012/13Full year

2012/13

net revenue 218.8 129.3 87.2 74.6 632.3

external direct project costs 2 -142.1 -55.6 -41.1 -40.6 -734.0

value adjustment of investment properties, net 0.0 -24.3 -1.6 -24.0 -37.8

Gross profit/loss 76.7 49.4 44.5 10.0 -139.5

other external expenses 13.5 15.6 6.9 7.6 30.2

Staff costs 32.8 36.2 16.2 17.5 69.2

Total 46.3 51.8 23.1 25.1 99.4

Profit/loss before financing and depreciation 30.4 -2.4 21.4 -15.1 -238.9

Depreciation and impairment of non-current assets 0.9 1.2 0.4 0.6 2.2

Operating profit/loss 29.5 -3.6 21.0 -15.7 -241.1

Income from investments in associates 0.8 1.1 0.4 1.0 2.5

Financial income 2.7 2.7 1.5 1.3 5.6

Financial expenses -57.3 -40.2 -28.2 -19.7 -93.0

Total -53.8 -36.4 -26.3 -17.4 -84.9

Profit/loss before tax -24.3 -40.0 -5.3 -33.1 -326.0

Tax on profit/loss for the period 5.8 146.6 8.6 -1.4 167.3

Profit/loss for the period -30.1 -186.6 -13.9 -31.7 -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 1 -0.7 -4.4 -0.3 -0.7 -11.7

Diluted earnings per share (epS-D) of nom. Dkk 1 -0.7 -4.4 -0.3 -0.7 -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 -30.1 -186.6 -13.9 -31.7 -493.3

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

Foreign-exchange adjustments, foreign operations -5.1 10.8 -5.8 3.7 6.1

Tax on foreign-exchange adjustments, foreign operations 2.1 -4.7 2.9 -0.6 -2.9

value adjustment of hedging instruments -1.5 1.4 1.8 0.5 3.1

Tax on value adjustment of hedging instruments 0.3 -0.2 -0.3 0.0 -0.6

Other comprehensive income for the period -4.2 7.3 -1.4 3.6 5.7

Comprehensive income for the period -34.3 -179.3 -15.3 -28.1 -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 | H 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


b A L A n C E s H E E T

Dkkm Note 31 jul 2013 31 Jan 2013 31 Jul 2012

ASSETS

non-current assets

Goodwill 33.3 33.3 33.3

Intangible assets 33.3 33.3 33.3

Investment properties 469.8 479.4 423.6

Investment properties under construction 19.7 16.9 0.0

other fixtures and fittings, tools and equipment 1.6 2.5 3.6

Property, plant and equipment 491.1 498.8 427.2

Investments in associates 2.2 1.7 1.0

Receivables from associates 4.6 4.6 2.5

other securities and investments 0.8 0.8 1.6

Deferred tax assets 128.1 127.0 152.3

Other non-current assets 135.7 134.1 157.4

Total non-current assets 660.1 666.2 617.9

Current assets

Projects in progress or completed 3,002.5 3,030.9 3,615.2

Trade receivables 78.3 73.2 70.1

Receivables from associates 19.2 19.0 18.1

Corporate income tax receivable 0.5 4.0 4.3

other receivables 102.4 122.4 100.4

prepayments 23.0 22.4 23.8

Total receivables 223.4 241.0 216.7

Securities 4.0 4.3 4.0

Deposits in blocked and escrow accounts 4 23.9 35.7 51.6

Cash and cash equivalents 4 27.5 31.2 33.4

Total current assets 3,281.3 3,343.1 3,920.9

ASSETS 3,941.4 4,009.3 4,538.8



b A L A n C E s H E E T

Dkkm Note 31 jul 2013 31 Jan 2013 31 Jul 2012

EQUITY AND lIABIlITIES

Equity

Share capital 42.1 631.0 631.0

other reserves 5 590.0 5.3 6.9

Retained earnings 723.6 753.4 1,059.8

Total equity 1,355.7 1,389.7 1,697.7

Liabilities

Credit institutions 56.8 102.2 40.7

provisions 0.8 2.3 1.3

Deferred tax liabilities 37.2 35.0 40.0

other debt 1.5 1.5 3.8

Total non-current liabilities 96.3 141.0 85.8

Credit institutions 2,195.5 2,189.1 2,387.8

Trade payables 104.3 106.3 192.2

Corporate income tax 4.8 5.0 5.8

provisions 12.5 13.1 11.1

other debt 163.4 150.2 145.9

Deferred income 8.9 14.9 12.5

Total current liabilities 2,489.4 2,478.6 2,755.3

Total liabilities 2,585.7 2,619.6 2,841.1

TOTAl EQUITY AND lIABIlITIES 3,941.4 4,009.3 4,538.8



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 -186.6 -186.6

other comprehensive income for the period 0.0 7.3 0.0 7.3

Total comprehensive income for the period 0.0 7.3 -186.6 -179.3

Special reserve transferred to distributable reserves 0.0 -140.2 140.2 0.0

Share-based payment 0.0 0.0 0.6 0.6

Equity at 31 July 2012 631.0 6.9 1,059.8 1,697.7

equity at 1 February 2013 631.0 5.3 753.4 1,389.7

profit/loss for the period 0.0 0.0 -30.1 -30.1

other comprehensive income for the period 0.0 -4.2 0.0 -4.2

Total comprehensive income for the period 0.0 -4.2 -30.1 -34.3

Capital decrease -588.9 588.9 0.0 0.0

Share-based payment 0.0 0.0 0.3 0.3

Equity at 31 July 2013 42.1 590.0 723.6 1,355.7



C A s H F LO w s TAT E M E n T

Dkkm H1 2013/14 H1 2012/13

Full year

2012/13

operating profit/loss 29.5 -3.6 -241.1

Adjustments for non-cash items:

value adjustment of investment properties, net 0.0 24.3 37.8

Depreciation and impairment 3.7 1.1 290.1

Share-based payment 0.3 0.6 0.9

provisions -2.0 -3.1 0.4

Foreign-exchange adjustment -13.4 2.2 7.5

Increase/decrease in investments in projects, etc. 38.3 -68.2 139.9

Increase/decrease in receivables 32.3 48.9 22.4

Changes in deposits on blocked and escrow accounts 11.8 -6.4 9.5

Increase/decrease in payables and other debt 6.0 19.8 -61.1

Cash flows from operating activities before net financials and tax 106.5 15.6 206.3

Interest paid, etc. -66.6 -69.8 -142.9

Interest received, etc. 3.1 2.4 4.3

Corporate income tax paid 0.1 -23.2 -22.1

Cash flows from operating activities 43.1 -75.0 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 -4.7 -7.0 -11.3

Sale of investment properties 11.2 0.0 17.3

purchase of securities and investments 0.0 -0.7 -0.7

Sale of securities and investments 0.3 0.3 0.9

Cash flows from investing activities 6.8 -7.4 6.4

Repayment, long-term financing 0.0 0.0 -0.7

Raising of long-term financing 0.0 7.1 13.0

Raising of project financing 35.2 71.6 149.5

Reduction of project financing/repayments, credit institutions -88.2 -19.9 -238.0

Cash flows from financing activities -53.0 58.8 -76.2

Cash flows for the period -3.1 -23.6 -24.2

Cash and cash equivalents, beginning of period 31.2 55.1 55.1

Foreign-exchange adjustment of cash and cash equivalents -0.6 1.9 0.3

Cash and cash equivalents, end of period 27.5 33.4 31.2

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


n OT E 1 . s Eg 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

31 Jul 2013

net revenue, external customers 144.8 66.7 7.3 0.0 218.8

profit/loss before tax 10.1 24.4 -8.0 -50.8 -24.3

Segment assets 1,241.9 2,099.7 408.0 191.8 3,941.4

Segment liabilities 635.8 1,403.5 198.7 347.7 2,585.7

DkkmDevelopment

Asset management

Discontinuingactivities Unallocated Total

31 Jul 2012

net revenue, external customers 43.9 78.5 6.9 0.0 129.3

profit/loss before tax 7.1 11.2 -3.7 -54.6 -40.0

Segment assets 1,459.4 2,371.7 480.1 227.6 4,538.8

Segment liabilities 755.4 1,532.5 211.3 341.9 2,841.1

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

H1 2013/14 H1 2012/13Full year

2012/13

project costs 139.2 42.9 446.1

Impairment losses on projects in progress or completed projects 2.9 12.7 303.5

Reversal of impairment losses on projects in progress or completed projects 0.0 0.0 -15.6

External direct project costs, total 142.1 55.6 734.0

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 31 jul 2013 31 Jan 2013 31 Jul 2012

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

lapsed due to termination of employment -24,000 -16,000 0

expired during the period -446,315 -761,497 -761,497

Outstanding warrants, end of period 460,000 930,315 946,315

number of warrants exercisable at the reporting date 0 446,315 446,315

Share-based payment recognized in the profit or loss (Dkk million) 0.3 0.9 0.6

n OT E 4 . L I q U I D I T y R E s E RV E s

31 jul 2013 31Jan 2013 31Jul 2012

The liquidity reserves break down as follows:

Cash and cash equivalents 27.5 31.2 33.4

Unutilized credit facilities 13.4 3.2 12.9

Total 40.9 34.4 46.3

Deposited funds for later release 23.9 35.7 51.6

Total liquidity reserve 64.8 70.1 97.9



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 val-ue adjustment

of hedging instruments

Reserve for foreign-exchange

adjustments Total

other reserves at 1 February 2012 140.2 -0.1 -3.2 2.9 139.8

Special reserve transferred to distributable reserves -140.2 0.0 0.0 0.0 -140.2

other comprehensive income:

exchange-rate adjustment, foreign operations 0.0 0.0 0.0 10.8 10.8

value adjustment of hedging instruments 0.0 0.0 1.4 0.0 1.4

Deferred tax on other comprehensive income 0.0 0.0 -0.2 -4.7 -4.9

Other comprehensive income, total 0.0 0.0 1.2 6.1 7.3

Other reserves at 31 July 2012 0.0 -0.1 -2.0 9.0 6.9

other reserves at 1 February 2013 0.0 -0.1 -0.7 6.1 5.3

Capital decrease 588.9 0.0 0.0 0.0 588.9

other comprehensive income:

exchange-rate adjustment, foreign operations 0.0 0.0 0.0 -5.1 -5.1

value adjustment of hedging instruments 0.0 0.0 -1.5 0.0 -1.5

Deferred tax on other comprehensive income 0.0 0.0 0.3 2.1 2.4

Other comprehensive income, total 0.0 0.0 -1.2 -3.0 -4.2

Other reserves at 31 July 2013 588.9 -0.1 -1.9 3.1 590.0

In may 2013 the shareholders in General meeting resolved to reduce the Company’s share capital by Dkk 588.9 million from

Dkk 631.0 million to Dkk 42.1 million by an equal writedown of all shares from Dkk 15.00 to Dkk 1.00, as part of the planned

capital increase that was subsequently implemented in September 2013. The capital reduction was carried out in June 2013,

and the amount of the reduction has been allocated to a special reserve fund that can only be used following a resolution to

this effect at a General meeting.

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 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 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.

31 jul 2013 31 Jan 013 31 Jul 2012

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

Holding of shares, in terms of number (balance) *) 11,307,769 1,940,251 1,771,224

obligation towards executive Board, employee bonds (balance) 1.5 1.5 1.5

Fees for Board of Directors 0.8 1.8 0.9

Salaries etc., executive Board 2.7 6.2 3.3

Interest expenses, project finance loans from Board of Directors and executive Board 1.1 0.4 0.0

project finance loans from Board of Directors and executive Board (balance) 20.7 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 0.8 1.5 1.0

Interest income from joint ventures 1.5 2.5 1.2

Interest expenses to joint ventures -1.5 -1.3 -0.6

Receivables from joint ventures (balance) 78.7 46.2 71.9

payables to joint ventures (balance) 103.6 88.4 89.7

Associates

Interest income from associates 0.2 0.4 0.2

Receivables from associates (balance) 23.8 23.6 20.6*) The increase results mainly from the change in the Board of Directors’ composition following the election of Directors at the Company’s Annual

General meeting in may 2013.

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 20.7 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 H1

2013/14 no impairment was made to provide for any probable losses (H1 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 | H 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 devel-

oping real property. The Group is a development and service enterprise

specialising in being the productive and creative liaison between tenants

and investors.

INTERIM REPORT H1 2013/14 - GlobeNewswire · 2013. 9. 26. · 2013/14 tk development a/s | cvr no....

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