Park Street

Annual Report (ESEF) • Apr 4, 2024

Park Street A/S Annual Report 2023 Company: Park Street A/S Svanevej 12 DK-2400 København NV CVR no.: 12 93 25 02 LEI no.: 213800VGJC18MRKMZC33 Registered office: Copenhagen, Denmark Phone: +45 33 33 93 03 Internet: www.nordicom.dk / www.psnas.com E-mail: parkstreet@parkstreet.dk Board of Directors: Anita Nassar, Chair Claes Peter Rading Ohene Aku Kwapong Pradeep Pattem Medha Pattem Management: CEO Pradeep Pattem Auditor: PriceWaterhouseCoopers Statsautoriseret Revisionspartnerselskab Main activity: Park Street is a fully integrated European real estate investment and asset management company with offices in Copenhagen and London. It owns and manages a large portfolio of commercial properties located across Denmark. Annual General Meeting: Annual General Meeting to be held on 26th April 2024 at 14:00 at Svanevej 12, 2400 Copenhagen NV, Denmark. Annual Report 2023 1 Contents Directors' report 2 Directors' report 2 Subsequent events after 31 December 2023 3 Outlook and strategy for 2024 4 Financial Highlights 25 Financial Results 26 Risk Factors 30 Statutory Report CSR 31 Legal requirements for Corporate Governance 32 Statutory report on diversity in management 32 Management composition and remuneration 33 Board of Directors and Management 33 Shareholder structure 36 Group structure as of 31 December 2023 37 Statements 38 Statement by Board of Directors and Management 38 Independent auditors report 39 Consolidated Financial statements 45 Income statement 46 Statement of comprehensive income 47 Statement of financial position 48 Statement of equity 49 Statement of cash flows 50 Notes 51 Annual accounts for Park Street A/S 81 Income statement 82 Statement of comprehensive income 83 Statement of financial position as of 31 December 2023 84 Statement of equity 85 Statement of cash flows 86 Notes 87 Property Overview 102 Park Street/ Director’s report 2 Main Activity Park Street is a fully integrated European real estate investment and asset management company with offices in Copenhagen and London. It owns and manages a large portfolio of commercial properties located across Denmark. Results of the year 2023 Park Street result analysis primarily uses the term EBVAT (Earnings before value adjustments and tax) to measure the Group’s operating results. The Group achieved in 2023 an EBVAT (profit excluding value adjustments and tax) of DKK 41.4 million (2022:DKK 42.9 million), as compared to expectations of DKK 45-50 million (published in the Park Street Interim Report Half Year 2023 results announcement in Aug 2023), primarily driven due to a combination of reduction in number of assets from sale of properties, leading to lower income, combined with an increase in financial expenses due to changes in interest rates. Furthermore, there was an increase in new leasing adding to costs for marketing activity, and an in- crease in energy costs related to vacant units. We expect the EBVAT for 2024 to be DKK 30-40 million in view of our expectation for new leases in pipeline and expected reduction in costs. This outlook assumes the portfolio to remain same and could change with any significant sales or additions to properties. The evolution of the EBVAT is influenced by the following factors: ▪ Gross profit in 2023 is DKK 121.9 million (2022: DKK 104.7 million), equivalent to a increase of DKK 17.2 million. The increase in gross profit is primarily due to rental income (DKK 9.2 million) and an decrease in Opex of DKK 4.4 million, driven by increase in R&M, Clean- ing services and losses from tenants. ▪ The Group's overheads were DKK 28.1 million in 2023 against DKK 31.8 million in 2022. The decrease of DKK 3.7 million is caused by a savings in employee cost and depreciation. ▪ Net financial items amount to DKK –52.4 million in 2023 against DKK -29.9 million in 2022, representing a negative change of DKK 22.5 million driven by an increase in interest costs due to an increase in the debt in 2023 with financial institutions including development loan for Pulse N with higher margins interest rates. The decrease in the Net Result for the period from DKK 55 million in 2022 to DKK –24.2 million in 2023 is due to the following effects: ▪ Fair value adjustment in 2023 with a net of DKK –73.8 million while the fair value adjustment in 2022 had a net effect of DKK 36.6 mil- lion. In both periods an evaluation of the domicile and investment properties have been made adjusting the yield and the estimated prof- it and loss by the entire portfolio of Park Street A/S and subsidiaries. The Group's equity as at 31 December 2023 was DKK 1,060 million, compared to DKK 1,087 million as at 31 December 2022. The decline in equity is due to the loss during the year. The operation of the Group's properties in 2023 included negotiations and closings of several new leases and sale of assets not core to Park Street. This should positively impact the performance of 2023 towards reducing vacant unit costs while enhancing the top line. However there are further lease terminations which need to be marketed. While the investment and interest rate environment has turned challenging, the demand for new leases and market rental levels continue to see positive traction. The current vacancy rate (calculated by rental value) for the Group's invest- ment properties has decreased to 16.34% in 2023 (20.47% in 2022) driven by Storage 41.92% in 2023 (53.54% in 2022) while it has increased for Retail 28.64% in 2023 (13.67% in 2022) and Office 18.51% in 2023 (17.46% in 2022). Property acquisitions and sales In 2023, Park Street sold the following properties and plots: ▪ Residential building in Dæmningen, Vejle ▪ Retail building in Stenbukken, Aalborg ▪ Residential building in Møllergade 1, Svendborg Organisation Since April of 2023 when the Annual General Meeting of the Company took place the Board of Directors of Park Street consists of Pradeep Pat- tem, Ohene Aku Kwapong, Anita Nassar, Medha Pattem and Claes Peter Rading. The number of employees of Park Street (parent company) were 9 by the end of 2023, against 18 at the start of the year. Park Street/ Director’s report 3 Subsequent events after 31 December 2023 Park Street has sold three assets (Project NV), viz., Hejrevej 26-28 (Hejrevej), Hejrevej 30, (Hejrevej), and Svanavej 12, (Ømevej) to a total amount of DKK 270 Million. From the balance sheet date until the date of presentation of this Annual Report no additional events have occurred other than the above men- tioned which significantly affect the assessment of the annual report. Park Street/ Director’s report 4 Park Street – Journey to here Park Street was setup in 2014 to identify and invest in Real Estate opportunities – in particular, assets embedded in capital structure challenges or with value-add potential. Park Street invested across Europe (UK, Germany, Norway, Spain etc.) before the acquisition of Nordicom portfolio in Denmark in 2017. The portfolio of assets are now concentrated in Denmark with assets across sectors: Residential, Offices, Hotels and Retail, in the form of Park Street A/S. Current challenging CRE market across Europe creates an opportunity for Park Street's strategy to diversify into new opportunities and to rebalance its portfolio. Our strategy in 2024 will aim for a bold shift towards creating distinct Capital and Business strategy for each part of our current portfolio. A simplified company and portfolio structure will facilitate new capital, financing and focused asset management – we will take steps towards implementing this. Retail assets in Aalborg, Svendborg and Vejle were sold to regional investors in 2023. Park Street also sold several non-core assets in 2024, including 3 office assets in Copenhagen. Park Street/ Director’s report 5 Park Street – Our path We at Park Street share an ambition defined by… Park Street/ Director’s report 6 Our intention is bring together members of team and partners who share some common values and way of working together. Park Street/ Director’s report 7 As we shape our way, the path itself is fulled with several obstacles and inefficiencies - some in our control and some shaped by the nature of industry. Our attempts to improve things at times lead to disturbing and breaking things which work well - we are learning from it and working towards better outcomes for our tenants, buildings, partners and team members. The path so far has made more aware of Janteloven. Park Street/ Director’s report 8 Park Street – Way forward Park Street A/S will seek Board and Shareholder approval to delist within 2024, subject to Nasdaq approval. Park Street will aim to allocate capital with a clean split of corporate structure and seek further opportunities across: 1. Stable Core Portfolio • Low LTV (60%) long term debt • High occupancy diversified leases • 14%+ Return of Equity • 8%+ dividend potential • 23 Asset from our current portfolio 2. Pulse Living • Living Spaces for young professionals • Develop, Manage and Partner across Europe • 2 Assets from our current portfolio and existing pulse platform to be further scaled 3. Spark Spaces • Create Work Live Play environment • 2 Assets from our current portfolio seed this opportunity • Key area to identify new opportunities requiring new capital and design / asset management. 4. Other Assets • Park Street will retain 2 Hotels and 4 project sites for the long run. • 8 remaining non-core assets will be aimed to be disposed within 2024. The Portfolio Value excludes the properties which have been sold in 2024. Park Street/ Director’s report 9 Stable Portfolio Park Street/ Director’s report 10 Stable Core Portfolio - Maintain and selectively rebalance the portfolio with following characteristics • Low LTV (60%) long term debt • High occupancy diversified leases • 14%+ Return of Equity • 8%+ dividend potential • 23 Asset from our current portfolio - Develop long term partnerships with Mortgage Institutions and capital Park Street/ Director’s report 11 Largest 20 aggregated tenants cover 75% of total current rent 5,1 1. Danish Government is 20% of rent in this portfolio across four locations in Kolding, Svendborg and Næstved. 2. Grocery Retail includes tenants as Salling Group, LIDL and Rema 1000 across 4 locations. 3. Office tenants including Tesla, GLS, 9Altitudes is 20% of the rent. 4. The remaining 40% rent is across a diversified portfolio of over 100 tenants. Park Street/ Director’s report 12 Park Street/ Director’s report 13 Park Street/ Director’s report 14 • Pulse Living is focused in shaping a vibrant living environment for young professionals' platform. • A scalable design, development and community development platform is shaped and tested at Pulse Nør- rebro and Østerbro. • Pulse Living is focused in shaping a vibrant living environment for young professionals' platform. • A scalable design, development and community development platform is shaped and tested at Pulse Nørrebro and Øster- bro. • Assets in the sector a both immense interest and fit for long term institutional capital. • Pulse Living will aim to scale up the platform with stable long-term capital with its focus on further developing a tech driven platform and creating vibrant connected communities. 2023: First Pulse N resident gathering 2022: Pulse N project construction kicks off Park Street/ Director’s report 15 Pulse Living: Pulse N Park Street/ Director’s report 16 Pulse Living: Pulse O Park Street/ Director’s report 17 Park Street/ Director’s report 18 • Globally city planning is shifting towards creating vibrant urban area with a community shaped by work areas, living spac- es and entertainment spaces. • Park Street sees immense opportunity to work with local municipality of Odense and Glostrup to develop such spaces across its two assets in the area. • Initial focus would be to fill the spaces of current building while planning towards a larger plan for connected living spaces. • Park Street will allocate capital for brining life to current buildings and over next years seek to partner with long term capi- tal for future developments / additions. Spark Spaces: 2G Glostrup Park Street/ Director’s report 19 Spaces: 2G Glostru Spark Spaces: Dannebrogsgade vision Park Street/ Director’s report 20 Park Street/ Director’s report 21 Other Portfolio Park Street/ Director’s report 22 Pulse Hotels • Hotel Prindsen is an exceptional property with several centuries of history as a hotel. • Park Street will seek to reposition the hotel as a luxury destination in the long run once the current lease concludes in 2030. • Ballerup hotel is a high performing hotel with a stable management contract. • Park Street has no plans for additional capital to this segment this year. Park Street/ Director’s report 23 Projects • Park Street owns 2 significant project assets in Taastrup and in Vejle. • Pulse T will be initiated as a Pulse Living project once standalone Financing and Capital is obtained. • Building permit and design finalization will be concluded for Pulse T. • Park Street will work with Vejle Kommune to shape the design/planning for long term development of Sjellansgade proper- ty. • All land and project assets are with no or minimal debt currently and any new investment will be done with a standalone capital and financing with partners. Park Street/ Director’s report 24 Projects: Pulse T and Sjællandsgade Park Street/ Director’s report 25 Financial Highlights Key figures Amounts in DKK 1000s 2023 2022 2021 2020 2019 Income statement Rental income 145,503 136,348 124,328 126,903 147,518 Total net sales 166,142 153,281 158,264 172,669 203,166 Gross profit 121,915 104,675 117,418 124,979 150,093 Result from primary operations -34,917 74,499 187,225 187,929 146,021 Financial items -52,424 -29,932 -25,881 -25,757 -29,105 Earnings before value adjustments and tax (EBVAT) 41,369 42,898 56,866 69,983 83,223 Result for the period -24,245 54,980 145,459 145,491 115,053 Statement of financial position Investment properties 2,436,714 2,521,581 2,615,015 2,462,633 2,477,995 Investments in property, plant and equipment 65,284 -15,061 25,803 36,991 19,259 Balance sheet total 2,716,690 2,807,465 3,020,749 2,723,067 2,772,843 Interest-bearing debt 1,335,662 1,402,935 1,509,471 1,405,024 1,633,364 Total equity 1,059,959 1,087,024 1,217,038 1,071,946 931,133 Statement of cash flows Cash flows from operations 50,742 40,219 57,999 61,966 92,856 Cash flows from investment 208 116,508 -17,777 137,919 -125,487 Cash flows from financing -47,274 -290,015 104,447 -238,341 39,927 Other disclosures Non-current liabilities as a proportion of total liabilities (%) 95.2 95.6 95.7 94.1 89.7 Share capital 57,175 57,175 67,513 67,513 67,513 Share price, end of period (DKK) 7.70 13.90 14.10 10.00 6.65 Share price change in points -6.20 -0.20 4.10 3.35 -0.05 Dividend per share 0.0 0.0 0.0 0.0 0.0 Number of employees in the Group (average) 22 27 26 26 32 Financial ratios 2023 2022 2021 2020 2019 Return on property portfolio (% p.a.) 4.6 3.9 4.3 4.7 5.8 Average loan rate (% p.a.) 3.8 2.1 1.8 1.8 1.8 Return margin on property portfolio (% p.a.) 0.8 1.8 2.5 2.9 4.0 Return on equity (%) -2.3 5.1 11.9 13.6 12.4 Equity ratio (%) 39.0 38.7 40.3 39.4 33.6 Net asset value per share, end of period (DKK) 18.5 19.0 18.0 15.9 13.8 Earnings per share (avg. Number of shares) (DKK) -0.4 1.1 2.2 2.2 1.7 Dividend yield (%) 0.0 0.0 0.0 0.0 0.0 Share Price/net asset value, end of period 0.4 0.3 0.4 0.4 0.5 Cash flow per share (DKK) 0.9 0.7 0.9 0.9 1.4 The above financial ratios are calculated in accordance with the definitions in Note 22 to the parent company financial statements in the Annual report for 2023. Park Street/ Director’s report 26 Financial Results Segment Information Park Street does not present segment information and the Group’s portfolio is presented as one. Operation from Investment Properties The Group's investment properties at 31 December 2023 is composed of all the Group's 40 properties, excluding ▪ 2 properties classified as domicile property The Group's investment properties are geographically concentrated in Greater Copenhagen and Zealand. Based on investment property values, the portfolio allocates as follows: Amount in Million DKK 2023 2022 Zealand 1,902 78% 1.876 74% Fyn 220 9% 233 9% Jutland 314 13% 413 17% Total 2.436 2.522 The annual rent per square meter (in DKK) for the year 2023 in the aforementioned regions is, Zealand – 1,257; Fyn – 873, Jutland – 801. Park Street/ Director’s report 27 The breakdown by activity based the property value is split as follows: Amount in Million DKK 2023 2022 Residential 878 36% 479 17% Residential Project 175 7% 511 20% Office 525 22% 629 25% Retail 729 30% 824 33% Hotel 97 4% 99 4% Storage 32 1% 24 1% Total 2.436 2.522 The following table shows the calculated average vacancy divided by property types: Average vacancy in % 2023 2022 Retail 28.64 13.67 Office 18.51 17.46 Residential 8.88 8.83 Storage 41.92 53.54 Hotel 0.00 0.00 Total 16.34 20.47 The following table shows the calculated average gross rent obtained divided by property types on properties held at 31 December 2023: Avg. gross rent per sqm p.a. (DKK) 2023 2022 Retail 1,142 1,058 Office 934 1,110 Residential 2,371 2,059 Storage 403 412 Hotel 1,711 1,678 Total 1,144 1,136 Park Street/ Director’s report 28 Consolidated Financial Review PROFIT AND LOSS Park Street's Net Result is DKK -24.2 million for 2023 (2022: DKK 55 million), equivalent to a change of DKK 79.2 million in relation to 2022. As mentioned above the EBVAT in 2023 is DKK 41.4 million (2022: DKK 42.9 million), which is DKK 1.5 million lower than the one achieved in 2022. The reduction is primarily driven by an increase in the financial expenses (DKK –22.5 million), due to an increase in the average loan rate to 3.8% p.a. (2022: 2.1% p.a.) and primarily driven by the sale of properties, intentional vacancy to initiate residential projects and a delay on filling vacancies. This has partially been offset by an increase in rental income (DKK 7.2 million). The Net Result for the period is DKK –24.2 million (2022: DKK 55 million) is due to fair value adjustment in 2023 with a net of DKK -73.8 million while the fair value adjustment in 2022 had a net effect of DKK 36.1 million. To finalize, the effect of the Tax on profit in 2023 is DKK 10.7 million (2022: DKK -19.5 million) due to a significant reduction in fair value adjustments. BALANCE SHEET Park Street's Net Assets as at 31 December 2023 were DKK 2,716.7 million, a decrease of DKK 72.7 million on the balance sheet total at 31 December 2022. The decline is mainly due to sale of investment properties leading to a reduction of DKK 84.8 million and an increase in current assets of DKK 2 million (from DKK 78.6 million at 31 December 2022 to DKK 80.6 million at 31 December 2023) due to proceeds from sale of investment properties, financing and re-financing activities. There was a negative revaluation of investment and domicile properties of DKK 72 million. Non-current assets were DKK 2,636.1 million at 31 December 2023 (2022: DKK 2,728.8 million). The Group's equity as at 31 December 2023 was DKK 1,060 million, compared to DKK 1,087 million as at 31 December 2022. The decline in the Group's equity is mainly due to the losses for the period worth DKK 24.2 million. Liabilities to credit institutions were DKK 1,355.7 million as at 31 December 2023 (31 December 2022: DKK 1,402.9 million), consisting of DKK 1,332.7 million (98%) for non-current liabilities and DKK 23 million (2%) for current liabilities. In 2023, financial liabilities were decreased by DKK 47.3 million driven by decrease in debt and amortization repayments to credit institutions. CASH FLOWS FOR 2023 Cash flows from operating activities for 2023 were DKK 50.7 million (2022: DKK 40.2 million), equivalent to an increase of DKK 10.5 million in relation to the same period last year. The increase is primarily due to increase in operating capital and operating profit. Cash flows from investing activities for 2023 were DKK 208 thousand (2022: DKK 116.5 million). Cash flows from investing activities decreased compared to the previous year due to lesser sale of assets in 2023 as compared to 2022 (2023: DKK 76.4 million, 2022: DKK 216.2 million). There was higher improvements made to investment properties of DKK –78.2 million (2022: DKK –99 million). Cash flows from financing activities for 2023 were DKK -47.3 million (2022: DKK –290 million) mainly driven by the repurchase of shares of DKK 183.5 million in year 2022 and repayments to credit institutions of DKK 90 million. The Group's liquid assets amounted to DKK 38.2 million at 31 December 2023 against DKK 34.5 million as at 31 December 2022. Uncertainty in connection with recognition and measurement In connection with the Annual report, management makes a number of estimates and assessments regarding the carrying amount of assets and liabilities, including: ▪ Fair value of investment properties, ▪ Fair value of domicile properties, ▪ Impairment test on domicile properties, ▪ Classification of properties, ▪ Deferred tax assets and tax liabilities Because of assumptions, assessments and estimates, uncertainty relates to the mentioned conditions and items. It may be necessary to change previously made estimates, etc. due to changes in the circumstances underlying the estimate, changed strategy or due to additional information, further experience or subsequent events. Reference is made to note 1 of the consolidated financial statements and note 1 in the parent company's financial statements for further discussion of the assumptions, assessments, estimates and associated uncertainties. Park Street/ Director’s report 29 Parent company Park Street A/S For the parent company Park Street A / S, profit before tax amounts to DKK –38.5 million in 2023 (2022: DKK 79.5 million). The parent company's profit and loss before tax is affected by an increase of the retail income of DKK 2 million (2022: DKK 32 million). Parent company equity as of 31 December 2023 amounts to DKK 1,060 Million (31 December 2022: DKK 1,087 million). Risk factors Financial Risk The financial management of the Group is geared towards optimising the term structure of liabilities in line with the Group's operations and mini- mizing the Group's financial risk exposure. It is part of the Group's policy not to conduct speculative transactions by active use of financial instru- ments, except to manage the financial risks inherent to the Group’s core activities. The Group is exposed to various financial risks due to its activities, including liquidity risk, market risks (primarily interest rate risk) and credit risk. Park Street regularly reviews the Group's risk profile in the areas of greatest risk, as per above description on page 2 and on the Consolidated Financial Statements Note 1 and 27. Other financial risks Park Street financial risks are described in the consolidated financial statements, Note 27 and includes a description of the following compo- nents: ▪ Liquidity risk • Refinancing risk • Liquidity risk management ▪ Interest rate risk. ▪ Credit risk. ▪ Capital management. Refer to the information in Note 27. Business risks Park Street is subject to normal commercial and societal risks applicable to players in the Danish real estate market. Park Street's significant business risks can be divided into the following categories: ▪ Properties market value ▪ Market Rent ▪ Vacancy ▪ Maintenance ▪ Sales of properties ▪ Errors and omissions concerning the renovation and new construction. Properties market value Park Street values investment properties at fair value (market value) and includes valuation adjustments in net profit. Park Street's portfolio of properties constitute a large share of the Group's balance sheet, which means that sensitivity to falling prices in the property market is relatively large. Park Street/ Director’s report 30 Property value is influenced by several factors, including a particular value sensitivity to fluctuations in the following parameters: i. Market rent ii. Vacancy iii. Yield Estimated changes in the properties' fair value changes of the parameters above are disclosed in note 1 to the consolidated financial statements. Market Rent Park Street’s portfolio of leases are generally at market rent levels. The Group has an opportunity to review the leases where there is a gap to market rents using section 13 clause to migrate the lease levels closer to market rents. Improving demand for space and increasing market rents could also give an opportunity to make capital investments on structurally vacant areas of the portfolio to create further lettable areas. Renegotiating with existing tenants could create the risk of increased vacancy, which in turn will create a need for further capital investment re- quirements for upgrading the vacant space. Vacancy Park Street is dependent on the ability to maintain or create a natural user requirement for the properties. In the case of a tenant's relocation of a lease, there is a risk that the vacant lease cannot be re-leased within the expected time horizon or, if nec- essary, can only be leased at lower rent level than expected. In addition, vacancy rates are affected by the general economic situation in the area where the individual property is situated. Maintenance The basis for obtaining rental income is, of course, that Park Street can offer leases that meet the expectations and requirements of the tenants, including a satisfactory maintenance condition for the property. Lack of maintenance of properties therefore creates a risk to Park Street. Lack of maintenance can be due to many conditions, such as structural deficiencies, unforeseen wreckage, vandalism, extreme weather conditions, etc. The company prepares long term maintenance budgets and carries out the maintenance work necessary to maintain a satisfactory maintenance condition on the properties. Sales of properties Park Street sells properties that are suitable to sell. The selling price is naturally linked to uncertainty as it depends on the actual negotiation situa- tion at the time of sale and is also influenced by a number of other factors, including the rental income of the property, the general interest rate level and market conditions at the time of sale. Errors and deficiencies regarding rebuilding and newbuilding When rebuilding the existing properties of the Group, or in the case of new construction, there is a risk of malfunctioning. Park Street ensures against this through contracts with the Group's suppliers (contractors, etc.) who will be required to correct any deficiencies. In cases where suppli- ers have gone bankrupt or for some reason cannot fill their obligations, Park Street may, however, have to rectify defects at your own expense, provided there is no guarantee or other security from the suppliers. Other risks Other risks can be divided into the following categories: ▪ Insurance risks. ▪ Tax risks. ▪ Legal risks. ▪ IT risks. Insurance risks Park Street subscribes to statutory insurance and insurance policies that are deemed to be relevant and customary. The Group regularly conducts an insurance review with the assistance of an insurance specialist. Based on the latest report on the company’s insurance coverage, management believes that Park Street has sufficient insurance coverage. Park Street/ Director’s report 31 Tax risks Changes in tax legislation may affect Park Street's fiscal situation. Legal risks Park Street regularly enters into a number of agreements, including agreements concerning the operation of properties. The agreements involve opportunities and risks, which are assessed and hedged in connection with the conclusion of the agreements. IT risks Park Street uses IT to a considerable extent and are thus exposed to operational disruption of the established IT safety. This can cause operating and financial losses. Park Street constantly works to ensure a high level of IT security, which is currently estimated to be the case. Statutory report CSR Business model Please, refer to the section Main Activity on page 2. Risks related to CSR While Park Street generally and based upon our business model has not identified nor experienced any material risks in relation to CSR, the Company has decided to author and implement policies with respect to environment, climate change, human rights, social and employee condi- tions and anti-corruption due to our social responsibility in each of the business activities that are performed. CSR is reflected in the way we man- age and refurbish our properties, in our relationship with tenants, employees, business partners and any stakeholder that the Group operates with. Policies, activities and results ▪ Environmental and climate conditions: In connection with the re-devolpment and maintenance of the existing assets Park Street is fol- lowing all applicable building regulations with the the goal of reducing energy consumptions. In 2023, the Group invested over DKK 65.3 million in the maintenance and modernization of the existing properties. Park Street A/S regularly monitors the Energy Ratings of its properties with external reviews per regulation. Such review proactively seeks to outline the various initiatives which could reduce the carbon emissions. Park Street intends to annually take steady steps towards taking energy conservation steps including but not limited to changing old light bulbs, improve ventilation for heat conservation etc. Furthermore Park Street A/S has taken several initiatives to re- tain various elements from existing buildings for recycling into new projects or maintenance works. Close to 100 doors have been re- tained from Pulse N project during demolition phase which could be used for future projects.” Increasing energy prices and suboptimal enregy performances of the buildings will have a direct impact on the cost borne by our current and prospective tenants, this could im- pact both the ability to retain the current tenants, their ability to pay the required cost and also the ability to procure new tenants. ▪ Social conditions and employee relations and respect for human rights: Employees are the most important resource for progress, and therefore the Group is constantly working to ensure a healthy physical and mental work environment with a focus on reducing sickness absence. Park Street supports all human rights within national laws as well as international laws, and acknowledges the importance of supporting the local community as well as helping in a larger perspective. In order to support the data protection for individuals, the Group is implementing and continuously improving processes and IT measures to meet the EU GDPR standards. Continuous engage- ment of the team with objectives of the company, transparent environment encouraging team work has been key pillars for developing the employees supplemented by external leadership development coaching. No breach of these policies have been identified in 2023 which we also expect in 2024. The business model requires certain functions of managing buildings to be outsourced to external ven- dors, there is a risk that the vendor might not have stringent standard to meet requisite human right legislation to the detriment of our own goals. ▪ Human Resouce: Denmark, our main jurisdiction of operations set a high and positive bar for the quality of work environment, work safety and overall work conditions. It also has high demand for talent in our industry and there is a risk of not attracting the right required talent if the work environment and the condition do not meet the high standards. Park Street/ Director’s report 32 ▪ Anti-corruption and bribery: The Group is has invested to develop systems for transparently reviewing invoices and implemented a ven- dor and property specific approval policy and workflows to mitigate any risks related to expenses. The group has established an Anti- corruption policy were employees and business partners are not allowed to receive gifts from suppliers larger than DKK 500. In connec- tion with the ongoing controlling of employees, the Group has strict guidelines on only paying bills according to legal documents with documented expenses, and that prices are benchmarked against usual costs. The IT systems for invoice payments have been further enhanced to minimise manual invoices. No corruption has been detected in 2023 an we also expect in 2024. The zero-tolerance policy requirement within the company is exposed to the external vendor’s own stringent implantation of similar approach and could expose the company to unwarranted actions outside company’s control. ▪ Data ethics: The Park Street Group does not have a formalized policy on data ethics. Park Street only processes data for business pur- poses. Park Street does not make use of new technologies such as artificial intelligence, advanced algorithms, monitoring and the like. Data processed in Park Street is not made available to third parties. Should there be a desire to make data available to third parties, it should be approved by the company's top management. The Park Street Group complies with applicable legislation for the processing of personal data. As a rule, the Group does not process personal data, apart from what relates to employee data. Legal requirements for corporate governance Park Street has chosen on the company's website to publish the statutory statement of business management, according to section § 107b of the Danish Financial Statements Act (Årsregnskabslovens § 107b.). The full statutory report available on our website http://www.psnas.com/index.php/corporate-governance-statement/ Statutory report on diversity in management Park Street’s board composed at the time of publication of the annual report for 2023 by 5. In accordance with the Danish Commerce and Industry Agency's (Erhvervsstyrelsens) "Guidelines on targets and Policies for Gender Composition of Management and Reporting on this issue" issued in March 2016, Park Street has a sub-representation of the board (top Management body). Park Street has set a target for the underrepresented gender in the Board of Directors (top Management body). Park Street had chosen that the under-represented sex must be represented by 20% of the board by the end of 2022. Consequently, the goal of 40% women in the Board of Direc- tors has been met in the previous year. The target for 2023 is to maintain the representation. We have achieved sufficient diversity according to the definition published by the Danish Business Authorities. Gender diversity: Target 2024 2023 2022 Exective management: Total number: 1 1 1 Underrepresented gender (in %) 0 0 0 Target (in %) 0 0 0 Gender diversity: Target 2024 2023 2022 Board of Directors: Total number: 5 5 5 Underrepresented gender (in %) 40 40 20 Target (in %) 40 40 20 Since the number of employees in the Group is less than 50, Park Street is not required to develop policies or targetsetting to increase the pro- portsion of under-represented gender in the Group's other management levels. Group’s overall policy is to employ or promote the best suitable candidates no matter of gender. Park Street A/S had fewer than 50 employees from 1 January to 31 December 2023, and is therefore not obligated to establish and report on a policy or targetsetting for increasing the underrepresented gender in other management layers. The company's board currently consists of 5 members. Park Street/ Director’s report 33 Internal control and risk management systems in relation to the accounting process Park Street Board of Directors and the Audit Committee have the overall responsibility for risk management and internal controls in relation to the presentation of the Group financial statements. Group’s internal control and risk management systems relating to the accounting process are designed to minimise the risk of irregularities and significant errors in the published financial statements. The Board of Directors / Audit Committee regularly assess material risks and internal controls in order to ensure that the control environment of Park Street provides a good risk management and effective internal control. At least once a year, as part of risk assessment, the Board of Directors / Audit Committee and the ccutive Board undertake a general identification and assessment of risks in connection with the financial reporting, including the risk of fraud, and consider the measures to be implemented in order to reduce or eliminate such risks. The Board of Directors is overall responsible for the Group having information and reporting systems in place to ensure that its financial reporting is in conformity with rules and regulations. For this purpose, the Company has set out detailed requirements in policies, manuals and procedures. The internal control and risk management systems are monitored at different levels within the Group. Any weaknesses, control failures and viola- tions of the applicable policies, manuals and procedures or other material deviations are communicated upwards in the organization in accordance with relevant policies and instructions. Any weaknesses, omissions and violations are reported to the Executive Board. The auditors elected by the Annual General Meeting account for any material weaknesses in the internal control systems related to financial report- ing in the Auditor’s Long-form Report to the Board of Directors. Minor irregularities are reported in Management Letters to the Executive Board. Management composition and remuneration The management of Park Street consist of the following: ▪ Board Directors ▪ Executive Board Appointed / Employee Expiry of electoral term Age Shareholding at the begin- ning, number of shares Share buy in the year, number of shares Shareholding at the end of the year Independence Sex Board of Directors Anita Nassar()(*) 2016 2024 62 0 0 0 Independent F Pradeep Pattem (*)() 2016 2024 47 6,722,484 0 6,722,484 1) Not Independent M Ohene Kwapong 2016 2024 63 0 0 0 Independent M Medha Pattem 2023 2024 46 0 0 0 Not Independent F Claes Peter Rading() 2021 2024 61 0 0 0 Independent M () Anita Nassar holds the position of chairman of the Board. Claes Peter Rading is the chairman of the Audit Committee. () Pradeep Pattem holds the position of CEO of the Company () Pradeep Pattem holds controlling rights in Park Street Nordac Sarl through Park Street Asset Management () Anita Nassar hold shares in Park Street Nordac Sarl without controlling rights 1) Acquired via Park Street Asset Management Ltd. Remuneration to the Board of Directors and Executive Board The purpose of the Group's remuneration, including any incentive remuneration, is to attract and retain the group's management skills and pro- mote the management incentive to realize Park Street’s objectives and create value in and for the company. A remuneration policy has been prepared that describes the guidelines for defining and approving remuneration for the members of the Board of Directors and the Executive Board. The remuneration policy approved at the company's general meeting and is available on www.nordicom.dk and www.psnas.com. Park Street/ Director’s report 34 The board members receive a fixed monthly fee. The Chairman receives DKK 250,000 annually, the Vice Chairman of the Board (currently va- cant) receives DKK 150,000 annually, and other Board members receive DKK 100,000 annually. In addition, the Chairman of the Audit Committee receives DKK 75,000 annually and other members of the Audit Committee receive DKK 50,000 annually. The remuneration for the members of the Board of Directors in 2023 is shown in Note 5 of the consolidated financial statements. Salary and employment conditions for the Executive Board are set at least once a year by the Board of Directors. The salary consists of fixed salary, without bonus and pension. In addition, the Executive Board receives free telephone, etc. Total wage package is composed so that the fees are set at a competitive level, taking into account the competencies and efforts of the Executive Member and the results achieved. Reference is made to Note 5 of the consolidated accounts regarding remuneration to the Executive Board. Board of Directors and Management Pradeep Pattem (Indian Citizen), Director and CEO Pradeep Pattem is a graduate engineer from the Delhi Institute of Technology and has an MBA from the Indian Institute of Management, Calcutta. As the founder and CEO of Park Street Advisors Limited, Pradeep has advised and implemented investments in across Europe since its estab- lishment in 2014. Pradeep previously had a position as Managing Director, Head of Credit & Mortgage Markets for Europe and Asia in the Royal Bank of Scotland (RBS). In connection with the employment in RBS, Pradeep also held senior positions as a member of the Global Trading Man- agement Committee, the Chairman of the Strategic Investments Committee and the Chair of Credit & Mortgage Risk and Compliance Committee. Director Positions Park Street Asset Management Limited, England Park Street Advisors, England Park Street A/S Pulse Taastrup P/S, Denmark Pulse Glostrup P/S, Denmark PS Holdco I P/S Pulse Glostrup P/S Pulse Taastrup P/S Pulse O P/S Pulse N P/S Svanevej P/S Ballerup Hotel P/S Toldbuen P/S Management positions CEO of Park Street A/S, Denmark Phoam Studio ApS PSN ApS Pulse Living ApS Albuen ApS PS I ApS Ohene Aku Kwapong (US citizen, Ghanaian citizen) Ohene Aku Kwapong is a graduate of Massachusetts Institute of Technology’s (MIT) Sloan School of Management, Cambridge, Massachusetts, with MBA in Financial Engineering and also studied Chemical / Nuclear Engineering at MIT. He holds a PHD in Non-linear Systems Dynamics from Columbia University, New York. Ohene Aku has previously held senior positions at Exxon Mobil, Deutsche Bank London, Senior Manager at Microsoft Corporation, VP at GE Capital, Senior Vice President at the New York City Economic Development Corporation, Senior VP at Deutsche Bank in New York, and COO EMEA Credit at Royal Bank of Scotland in London. Since 2014, Ohene Aku has been engaged in consultancy in restructuring and launched The Songhai Group, a corporate development company. Management Positions Managing Partner, The Songhai Group, US. Director positions Ecobank Ghana, Risk and Governance Committees. The Practice School, an executive management skills company. Trustee, Head of State Award Scheme – Ghana. Park Street/ Director’s report 35 Anita Nassar (formerly Kamal) (French citizen) Anita Nassar holds a bachelor's degree in business administration from the American University of Beirut. Anita is the founder of 'Alternative Con- sultant Group'. Ms Nassar is Partner and Senior Managing Director at Balyasny Asset Management. She is also a member of BAM’s Management Committee. Anita joined BAM from Citadel where she was a Partner and Managing Director serving Europe, the Middle-East, Africa and Asia Pacific. Prior to joining Citadel, Anita served at Merrill Lynch, London as Managing Director, Co-Head of Government Institutions Sales. Previously, she worked at HSBC London as Managing Director, Global Head of Government Sales, serving Asia, Europe, and the Americas. Management Positions Founder and CEO at Alternative Consultant Group. Partner, Senior Managing Director at Balyasny Asset Management. Director positions Board of Trustees at Northeastern University, Boston, USA. Endowment Trustee in the Funds and Investments Subcommittee at Northeastern University, Boston, USA. Claes Peter Rading (Swedish citizen) Peter Rading is a Swedish citizen who graduated with a Bachelor of Science in Business Administration Summa Cum Laude from Georgetown University DC in 1986. He worked for Royal Bank of Scotland Plc from 1990 to 2013, running multiple complex global businesses for the bank between 2000 and 2013, when he then retired from the bank and the banking industry. His final position at the bank was as Global Co-Head of Trading and included his serving on the Investment Bank executive committee, the Markets division management committee and as Chair of the bank’s technology board. Since his departure from Royal Bank of Scotland Plc in 2013, Peter has actively focused on private investment activity in the real estate sector, including an active involvement in the Nordics and high growth specialist real estate sub-sectors. Director positions: Elwyn Green Ltd IP Nexus, US Kamo River Investments Ltd LocalCircles India Pvt Ltd, India Seequestor, UK Tillingbourne (Canterbury) Ltd Tillingnourne (Horham) Ltd Medha Pattem (UK citizen) Medha Pattem is a graduate engineer from the Osmania University and has MS from the Rensselaer Polytechnic Institute, Troy, NY. Director positions: Sthenos International Ltd. Park Street Advisors Ltd. Park Street Asset Management Ltd. Floorstax Ltd. Swindon Ground Lease Ltd. Xplore Markets Ltd. India Growth Capital Ltd. Thermopads UK Ltd. Park Street/ Director’s report 36 Shareholder structure Shareholders above 5% In percent Park Street Asset Management Ltd. 93.5% The number of registered shareholders amounts as of 31 December 2023 to 789 pcs. (31 December 2022: 865 pcs.). The registered shareholders represent per 31 December 2023 99% of the share capital (31 December 2022: 99%). All Park Street A / S shares are listed on Nasdaq Copenhagen and are part of the Small Cap segment. The share price ended 31 December 2023 at price 7.70 (31 December 2022: 13.9), which is a decrease of 6.2 points in relation to the share price per share as of 31 December 2022. Appointment of board members Rules of appointing and replacing members of the board of directors are included in the section 13.1 of the articles of association. Rules for changing articles of association Park Street A/S articles of association can be changed by a General Meeting in accordance with the Companies Act §§106 and 107. Resolution on amendment of the Articles of Association are only valid if the resolution is approved by at least 2/3 of both voting rights and percentage of equity which are present at the meeting. Own shares Information about treasury shares is shown in note 22 of the consolidated financial statements. Dividends The Board of Directors deems it prudential to propose to the Annual General Meeting that no dividend will be paid for the financial year 2023. Investor Relations It is Park Street's policy to inform quickly about relevant matters. The Executive Board informs shareholders and investors according to guidelines agreed with the Board, and it is the goal to meet the information obligations of Nasdaq Copenhagen each time. It is part of Park Street's information policy to: ▪ publish interim reports, ▪ issue annual reports, and ▪ provide quick responses to inquiries to the group. Share capital DKK 57,175,572 Nominal share amount DKK 1 Number of shares 57,175,572 shares Share Classes DKK 12,827,637 A-shares Listed DKK 44,347,935 B-shares Not listed Number of votes per share One Bearer Yes Restriction on voting rights No Limitations on transferability No ISIN DK0010158500 Stock Exchange Nasdaq Copenhagen Park Street/ Director’s report 37 Stock exchange announcements made in 2024 & 2023 Date Title 11-03-2024 Park Street A/S – Share buyback program 2024 05-03-2024 Park Street A/S : 2024 Strategy 28-02-2024 Park Street A/S – Share buyback program 2024 22-09-2023 Park Street A/S - Park Street Interim Report Half Year 2023 - Corrections 22-09-2023 Park Street A/S - Park Street Interim Report Half Year 2023 24-08-2023 Park Street A/S - Park Street publishes Interim Report Half Year 2023 24-08-2023 Park Street A/S - Park Street Interim Report Half Year 2023 28-04-2023 Park Street announces results of Annual General Meeting 2023 05-04-2023 Park Street A/S : Annual report 2022 05-04-2023 Park Street A/S : Annual General Meeting 05-04-2023 Park Street A/S : Publishes Annual Report 2022 02-03-2023 Park Street A/S : 2023 Strategy Financial Calendar 04-04-2024 Annual Report 2023 26-04-2024 Annual General Meeting More info Further information on company and shareholder matters and the Group's activities can be found on Park Street's website http://www.nordicom.dk/ and www.psnas.com Inquiries regarding the Group's relations with investors and the stock market can be addressed to: CEO: Pradeep Pattem Tel.: + 45 33 33 93 03 E-mail: parkstreet@parkstreet.dk The Group structure at 31 December 2023 The Group structure at 31 December 2023 consists of the company Park Street A/S and the fully owned subsidiaries Pulse Taastrup P/S, Pulse Glostrup P/S, Pulse N P/S, Pulse O P/S, Ballerup Hotel P/S, Svanevej P/S, Toldbuen P/S, PS Holdco I P/S, Phoam Studio ApS, PSN ApS, Pulse Living ApS, Albuen ApS, PS I ApS, and Park Street UK. Information on investment is disclosed in note 11 of the parent company's financial statements. All subsidiaries are fully consolidated in the consol- idated financial statements of Park Street A/S. Park Street/ Statements 38 Statement by Board of Directors and Management The Board of Directors and management have today considered and adopted the annual report for the financial year 1 January – 31 December 2023 for Park Street A/S. The annual report is prepared in accordance with IFRS Accounting Standards as adopted by the EU, and further requirements in the Danish Fi- nancial Statement Act and rules for listed companies. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group and the Parent's financial position as of 31 December 2023, and of the results ofthe Group's and the Parent Company’s operations and cash flows for 2023. It is also our opinion that the directors' report contains a true and fair account of the development of the Group's and the parent company’s activi- ties and financial conditions, the profit for the period and the Group's and the Parent Company’s financial position as a whole, and a description of the significant risks and uncertainty factors that the Group and the Parent Company faces. In our opinion, the annual report of Park Street A/S for the financial year 1 January to 31 December 2023, with the file name 213800VGJC18MRKMZC33-20231231-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. The annual report is submitted to the Ordinary General Meeting for approval. Copenhagen, 4 April 2024 Management Pradeep Pattem CEO Board of Directors Anita Nassar Pradeep Pattem Chairman Ohene Aku Kwapong Claes Peter Rading Medha Pattem Park Street/ Independent Auditor’s Report 39 Independent Auditor’s Report To the shareholders of Park Street A/S Report on the audit of the Financial Statements Our opinion In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group’s and the Parent Company’s financial position at 31 December 2023 and of the results of the Group’s and the Parent Company’s operations and cash flows for the financial year 1 January to 31 December 2023 in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act. Our opinion is consistent with our Auditor’s Long-form Report to the Audit Committee and the Board of Directors. What we have audited The Consolidated Financial Statements and Parent Company Financial Statements of Park Street A/S for the financial year January 1 to 31 De- cember 2023 comprise income statement and other comprehensive income, balance sheet, statement of equity, statement of cash flow and notes, including material accounting policy information for the Group as well as for the Parent Company. Collectively referred to as the “Financial State- ments”. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s responsibilities for the audit of the Financial State- ments section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided. Appointment We were first appointed auditors of Park Street A/S on 27 April 2017 for the financial year 2017. We have been reappointed annually by share- holder resolution for a total period of uninterrupted engagement of 7 years including the financial year 2023. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements for 2023. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Park Street/ Independent Auditor’s Report 40 Independent Auditor’s Report (continued) Key audit matter How our audit addressed the key audit matter Valuation of Investment Properties and Domiciles The Group owns a portfolio of investment properties that are valued at fair value and two domiciles that are revalued to fair value at 31 December 2023. Valuation of investment properties and domiciles at fair value contains significant estimates based on significant assumptions, where even minor changes in the assumptions can have a signif- icant effect on the fair value of the properties. Management has used the capitalization method to determine the fair value. The model is descripted in note 1.2, with market rent and yield being the significant assumptions. Management has obtained valuations from an external valuer to support the fair value determined by Management; for all signifi- cant properties; including the assumptions used, with market rent and yield being the significant assumptions. We focused on this area as valuation of investment properties and domiciles at fair value is based on significant estimates which are subjective and a high degree of estimation uncertainty. Refer to note 1.2,9, 14 and 15. We performed risk assessment procedures with the purpose of achieving an understanding of procedures and relevant controls relating to valuation of investment properties and domiciles. In respect of controls, we assessed whether these were designed and imple- mented effectively to address the risk of material misstatement. We assessed the method used by management to measure the fair value of investment properties and domiciles. We verified on a sample basis the accuracy of the data used. We assessed and challenged the assumptions applied, using our knowledge of the real estate market and professional scepticism. We assessed the competencies and independence of external valuer used by Management. We compared the fair values determined by the Management with the external valuer’s assessments. Furthermore, we assessed the appropriateness of disclosures. Statement on Management’s Review Management is responsible for Management’s Review . Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. Moreover, we considered whether Management’s Review includes the disclosures required by the Danish Financial Statements Act. Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review. Park Street/ Independent Auditor’s Report 41 Management’s responsibilities for the Financial Statements Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, for- gery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • Conclude on the appropriateness of Management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s re- port to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to ex- press an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independ- ence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter. Park Street/ Independent Auditor’s Report 42 Independent Auditor’s Report (continued) Report on compliance with the ESEF Regulation As part of our audit of the Financial Statements we performed procedures to express an opinion on whether the annual report of Park Street A/S for the financial year 1 January to 31 December 2023 with the filename 213800VGJC18MRKMZC33-2023-12-31-en.zip is prepared, in all material respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the Consolidated Financial Statements including notes. Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes: • The preparing of the annual report in XHTML format; • The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for all financial information required to be tagged using judgement where necessary; • Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human-readable format; and • For such internal control as Management determines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation. Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of proce- dures selected depend on the auditor’s judgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The procedures include: • Testing whether the annual report is prepared in XHTML format; • Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process; • Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes; • Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suitable element in the ESEF taxonomy has been identified; • Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and • Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements. In our opinion, the annual report of Park Street A/S for the financial year 1 January to 31 December 2023 with the file name 213800VGJC18MRKMZC33-2023-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. Hellerup, 4 April 2024 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab CVR no 33 77 12 31 Torben Jensen Jacob Dannefer State Authorised Public Accountant mne18651 State Authorised Public Accountant mne47886 Park Street/ Independent Auditor’s Report 43 Park Street/ Independent Auditor’s Report 44 Park Street/ Independent Auditor’s Report 45 2023 CONSOLIDATED FINANCIAL STATEMENTS Park Street | CONSOLIDATED Financial Statements 46 Income statement Note Amounts in DKK 1000s 2023 2022 3 Net sales 166,142 153,281 4 Operating expenses -44,227 -48,606 Gross profit 121,915 104,675 5 Employee benefit expenses -15,528 -17,231 Other expenses, by nature -10,039 -10,936 7 Depreciation, amortisation and impairment -2,556 -3,678 Operating profit (EBIT) 93,792 72,830 8 Financial expenses -52,424 -29,932 Earnings before value adjustments (EBVAT) 41,369 42,898 9 Adjustment to fair value, net -73,750 36,066 10 Losses realised on the sale of investment properties -2,535 -4,466 Result before tax -34,917 74,498 11 Tax on profit for the period 10,671 -19,518 Result for the period -24,245 54,980 Distributed as follows Parent's shareholders -24,245 54.980 Result for the period -24,245 54,980 12 Earnings per share, end of period -0.44 1.00 12 Diluted earnings per share, end of period -0.44 1.00 Park Street | CONSOLIDATED Financial Statements 47 Statement of comprehensive income Note Amounts in DKK 1000s 2023 2022 Profit for the period -24,245 54,980 Other comprehensive income: Items that cannot be reclassified to the income statement: Fair value adjustment of domicile properties -3,615 11,252 Tax on fair value adjustment of domicile properties 795 -2,420 Other comprehensive income after tax -2,820 8,832 Comprehensive income for the period -27,065 63,812 Distributed as follows Parent's shareholders -27,065 63,812 Comprehensive income for the period -27,065 63,812 Park Street | CONSOLIDATED Financial Statements 48 Statement of financial position Note Amounts in DKK 1000s 2023 2022 ASSETS Non-current assets Intangible assets 13 Software 0 446 13 Leasehold improvements 439 625 439 1,071 Domiciles, Investment property and Property, plant and equipment 14 Domiciles 198,281 203,462 15 Investment properties 2,436,719 2,521,581 16 Machinery and equipment 458 507 2,635,458 2,725,550 Financial assets 17 Investment in associates 0 2,029 Deposits 161 161 161 2,190 Total non-current assets 2,636,058 2,728,811 Current assets 18 Current financial assets at amortised cost 14,114 7,412 19 Trade and other current receivables 24,930 28,594 Income tax receivable 2,315 6,774 Prepaid expenses and accrued income 1,065 2,609 20 Cash and cash equivalents 38,207 34,531 Total current assets 80,631 78,654 Total assets 2,716,690 2,807,465 Equity Share capital 57,175 57,175 Revaluation reserve 55,575 59,961 Share Premium 289,260 289,260 Accumulated profit 657,948 680,628 21,22 Total equity 1,059,959 1,087,024 LIABILITIES Non-current liabilities 23 Deferred tax 233,847 254,025 24 Borrowings 1,332,708 1,382,643 Deposits 10,185 10,224 1,576,741 1,646,892 Current liabilities 25 Provisions 400 400 24 Current borrowings 22,953 20,293 Trade and other payables 18,557 19,337 Deposits 31,664 27,693 Other liabilities 6,417 5,827 79,991 73,549 Total liabilities 1,656,732 1,720,441 Total equity and liabilities 2,716,690 2,807,465 Park Street | CONSOLIDATED Financial Statements 49 Statement of equity Amounts in DKK 1000s Share capi- tal Revaluation reserve Accumulated profit Share Pre- mium Equity Total Statement of equity for 2023: Equity as at 1 January 2023 57,175 59,961 680,628 289,260 1,087,024 Comprehensive income for the period Profit for the period 0 0 -24,245 0 -24,245 Fair value adjustment of domicile 0 -3,615 0 0 -3,615 Tax on other comprehensive income 0 795 0 0 795 Other comprehensive income during the financial year 0 -2,820 0 0 -2,820 Comprehensive income for the period 0 -2,820 -24,245 0 -27,065 Transactions with owners Repurchase own shares 0 0 0 0 0 Capital reduction 0 0 0 0 0 Total transactions with owners 0 0 0 0 0 Other adjustments Increase/decrease through transfer of depreciation of revaluedvalue of owner- occupied property 0 -1,566 1,566 0 0 Total other adjustments 0 -1,566 1,566 0 0 Equity as at 31 December 2023 57,175 55,575 657,948 289,260 1,059,959 Statement of equity for 2022: Equity as at 1 January 2022 67,513 52,920 807,344 289,260 1,217,037 Comprehensive income for the period Profit for the period 0 0 54,980 0 54,980 Fair value adjustment of domicile 0 11,252 0 0 11,252 Tax on other comprehensive income 0 -2,420 0 0 -2,420 Other comprehensive income during the financial year 0 8,832 0 0 8,832 Comprehensive income for the period 0 8,832 54,980 0 63,812 Transactions with owners Repurchase own shares Capital Reduction 0 -10,338 0 0 -183,488 0 0 0 -183,488 -10,338 Total transactions with owners -10,338 0 -183,488 0 -193,826 Other adjustments Depreciation of revalued value of domiciles 0 -1,790 1,790 0 0 Total other adjustments 0 -1,790 1,790 0 0 Equity as at 31 December 2022 57,175 59,961 680,628 289,260 1,087,024 Park Street | CONSOLIDATED Financial Statements 50 Statement of cash flows Note Amounts in DKK 1000s 2023 2022 Operating profit (EBIT) 93,792 72,830 Reversal of depreciations and amortisations 2,556 3,678 Change in operating capital (Note:29) 6,817 -4,616 Cash flows concerning primary operations 103,166 71,892 Financial income received 0 0 Financial expenses paid -52,424 -29,932 Paid Corporate Tax 0 -1,742 Total cash flow from operating activities 50,742 40,218 Cash flow from investing activities Improvements to investment properties -78,221 -99,024 Sales of investment properties 76,400 216,202 Purchase of intangible assets 0 -670 Sale of associates 2,029 0 Total cash flow from investing activities 208 116,508 Cash flow from financing activities Repurchase own shares 0 -183,479 Proceeds from assumption of liabilities to credit institutions 42,721 67,994 Repayment of other liabilities to credit institutions -89,995 -174,530 Total cash flow from financing activities -47,274 -290,015 Total cash flow for the period 3,676 -133,289 Liquid assets as at 1 January 34,531 167,820 Liquid assets at the end of the period 38,207 34,531 Liquid assets at the end of the period Cash and short term deposits 38,207 34,531 Liquid assets at the end of the period 38,207 34,531 51 Summary Note 1 Material accounting policy information Note 2 Segment information Note 3 Net sales Note 4 Operating expenses Note 5 Employee benefits expenses Note 6 Auditor’s fees Note 7 Depreciation and amortization Note 8 Financial Expenses Note 9 Adjustment to fair value, net Note 10 Realized gains on the sale of investment properties Note 11 Tax on profit for the year and other comprehensive income Note 12 Earnings per share Note 13 Intangible assets Note 14 Domicile Note 15 Investment properties Note 16 Machinery and equipment Note 17 Investment in associates Note 18 Mortgages and instruments of debt Note 19 Receivables Note 20 Cash and cash equivalents Note 21 Share capital Note 22 Own shares Note 23 Deferred taxes Note 24 Borrowings Note 25 Provisions for liabilities Note 26 Contingent assets and liabilities Note 27 Financial risks Note 28 Non-current operating items, etc. Note 29 Change in operating capital Note 30 Disclosure of related parties Note 31 Subsequent events Note 32 Accounting policies 52 Notes Note 1 – Material accounting policy information Note 1.1. – Basis of preparation a. Accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. Refer to note 32 for a full description of the accounting policies used. The company presents its annual report in compliance with reporting class D. b. Changes to accounting policies Accounting policies are unchanged from the previous year. Note 1.2. – Investment properties A property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. An investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. After initial recognition, an investment property is carried at fair value. Fair value is based on active market prices, adjusted, if necessary, for differences in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods, such as recent prices on less active markets or discounted cash flow projections. The fair value of an investment property reflects, among other things, rental income from current leases and other assumptions market participants would make when pricing the property under current market conditions. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. Changes in fair values are recognised in the income statement. Investment properties are derecognised when they have been disposed. Where the Group disposes of a property at fair value in an arm’s length transaction, the carrying value immediately prior to the sale is adjusted to the transac- tion price, and the adjustment is recorded in the income statement within net gain from fair value adjustment on investment property. The principles and methods for determining the estimated fair value of the properties in this category is based on the capitalisation method. The determination of fair values in accordance to the capitalisation method is generally the most accepted and widely used model for valuating property. The method is based on a stabilised net rent, capitalised at a rate of return assuming a stabilised property in a stable market, which is fully let at an annual market rent at, or close to, market level. For non-stabilised properties, special conditions such as vacancy and refurbishment costs are taken into consideration. The Market Valuation of the properties could vary from year to year based on changes i the market yield and market rent, but also could be im- pacted when the properties or units are either significantly changed in quality (upgraded or otherwise) or from change of usage, which in itself would change the applicable market rents. Furthermore reduction or change in vacancy can impact in valuations, based on the real rent achieved from leases compared to assumed market rents, and the actual capex compared to the refurbishment capex assumed in previous valuations.On a overall portfolio basis the average market yield could vary from year to year based on yields of the properties sold or acquired during the year or change in the market in general. The fair value of a property is calculated by the following process: 1 + Annual Rental Income (fully rented) 2 - Non-recoverable operating costs 3 = Net Operating Income (NOI) 4 - Cap rate (net initial yield) 5 = Market value before regulations and deposits 6 - Vacancy costs 7 - Refurbishment cost 8 - Rental loss (discounts, etc.) 9 + Net Present Value (NPV) of Overrented elements 10 - Net Present Value (NPV) of Underrrented elements 11 + Cash deposits 12 + Other 53 13 = Market value after regulations and deposits (Fair Value) Ad. 1) The annual rental income represents the budget rent. For non-vacant units, the budget rent equals the actual rental income. If the actual rental income differs significantly, the market rent is used. For vacant areas, the market rent is used. Ad. 2) All operating expenses not recoverable from the tenants are deducted. This includes taxes, insurance, cleaning, utility costs, service sub- scriptions, administration, external maintenance etc. Ad. 4) The yield requirement is determined individually for each property based on the yield requirement for comparable properties in the same geographical area (where this is possible) and the property's risk profile. Ad. 6) Vacancy costs reflect the estimated loss of rental income until a re-letting is assumed. There is vacancy until the stablised level is reached. When the stabilised level is reached all properties are assumed fully let. Ad. 7) For vacant units, it is assumed that a refurbishment is required before a re-letting can take place. At some properties, these are not included as the leases already are ready for reletting. Ad. 8) Current discounts are deducted from the market value. Ad. 9) If an overrented lease is regulated to market rent, it is implemented over a 4-year period according to section 13 in the Danish Commercial Rent. As a result, the lease will generate an overrenting element in this period. Ad. 10) If an underrented lease is regulated to market rent, it is implemented over a 4-year period according to section 13 in the Danish Commercial Rent. As a result, the lease will generate an underrenting element in this period. . The calculation of the properties' fair value is sensitive to changes in all the above inputs to the valuation model. The most significant non- observable inputs used in calculating the current value of the completed investment properties are as follows: i. Market Rent per square meter (sqm.) per year ii. Vacancy iii. Yield A general increase in market rent per sqm and decrease of the vacancy in the areas in which Park Street's properties are located, will likely decrease the yield requirements. i. Market Rent per sqm per year Market rent per sqm per year represents an important input for calculating the fair value of the property. If it is estimated that the current rent is lower or higher than the rent that can be obtained by re-hire, a correction of the current rent will be made to the expected rent on re-hire. This input is based on an estimate. Similarly, input on market rent for empty areas is based on an estimate. The long-term average market rent (ie at terminal level) is the following divided by property types: Avg. gross rent per sqm p.a. (DKK) 2023 2022 Retail 1,142 1,058 Office 934 1,110 Residential 2,371 2,059 Storage 403 412 Hotel 1,711 1,678 Total 1,144 1,136 The estimated fair value is sensitive to changes in the estimated budget rent. The sensitivity of changes in the average budget rent per sqm are illustrated in the table below, which shows the effect on the fair value of the properties if only the average budget rent per change is changed sqm per year. 54 Change in market rent Change in market value per sqm per year (DKK) (Million DKK) 2023 2022 200 503 637 100 252 319 50 126 159 -50 -126 -159 -100 -252 -319 -200 -503 -637 The table shows that an increase in the market price of, for example 50 DKK per sqm per year will increase the completed investment proper- ties' fair value by DKK 126 million (31 December 2022: DKK 159 million). ii. Vacancy No structural vacancy has been considered in the property valuation; as it has been estimated that the current vacancy will be let within 6 to 12 months. An increase in the current vacancy has been estimated and represents the following (calculated as estimated vacancy divided by the market rent in the terminal): Change in Vacancy Change in market value (%-point) (Million DKK) 2023 2022 10% -5 -6 5% -3 -3 -2% 1 1 -5% 3 3 The table shows that an increase in the vacancy by 5 percentage points will reduce the finished investment property with the fair value of DKK -3 Million (31 December 2022: DKK -3 million). iii. Yield The fixed return requirement is an essential input in estimating fair values. The table below shows the ranges for the return requirement divided by property type and the weighted return requirement in- for each property type. Percentage p.a. 2023 2022 Interval Weighted Avg Interval Weighted Avg Retail 6.50 – 17.17 8.17 4.85 – 9.00 6.95 Office 6.25 – 16.91 7.00 5.25 – 11.68 6.97 Storage 9.50 – 10.22 9.83 9.00 – 9.50 9.25 Residential 4.25– 13.53 4.87 4.00 – 7.58 5.60 Hotel 6.75 – 6.75 6.75 6.50 – 6.50 6.50 Total 4.25 – 17.17 6.50 4.00 - 11.68 6.80 The table shows that the return requirements for completed investment properties at 31 December 2023 is in the range 4.25% - 17.17% per annum. The corresponding interval at 31 December 2022 amounted to 4.00% - 11.68% per annum. 55 The weighted yield requirement in the table are calculated as each property yield requirements weighted by the property's fair value in relation to property type's / portfolio's fair value and amounts at 31 December 2023 6.50% per annum for the overall portfolio of finished investment proper- ties at 31 December 2022 the corresponding weighted return requirements for the entire portfolio 6.80% per annum. The yield requirements used have a significant impact on the fair value of the property. The sensitivity of changes in the return requirement is illustrated in the table below which shows the effect on the fair value of the properties if only the average return rate is changed. Change in return requirements Change in market value (Million DKK) (% points) 2023 2022 1.00% -395 -482 0.75% -314 -376 0.50% -226 -261 0.25% -133 -136 -0.25% 78 149 -0.50% 196 313 -0.75% 325 495 -1.00% 465 698 The table shows that an increase in the rate of return of 0.25 percentage point would reduce the completed investment property fair value DKK - 133 million (31 December 2022: DKK -136 million). The breakdown by activity based the property value is split as follows: Amount in Million DKK 2023 2022 Residential 878 36% 479 17% Residential Project 175 7% 511 20% Office 525 22% 629 25% Retail 729 30% 824 33% Hotel 97 4% 99 4% Storage 32 1% 24 1% Total 2,436 2.522 Determining the fair value of Domicile properties From 2015 domicile properties have been evaluated at the amount equivalent to the fair value at the date of revaluation less depreciation, see mention in the note 33. Park Street possesses on 31 December 2023 the following two domiciles: ▪ Svanevej 12, Copenhagen NV (Park Street's headquarters in Copenhagen Nordvest neighborhood). ▪ Marbækvej 6, Ballerup (Hotel in Ballerup). When calculating the fair value of the above two domicile properties, principles and calculation methods are applied which are used to estimate the property's fair values. Due to different characteristics, different principles and calculation methods are used for each of the two domicile properties. The fair value of both owner-occupied properties is based on significant estimates. Changes in fair values are recognised in other comprehensive income statement. Domicile properties are derecognised when they have been disposed or transferred into investment property. The estimation of the properties’ fair value as of 31 December 2023 resulted in a revaluation of the properties’ book value by DKK –3.6 million (31 December 2022: DKK 11 million), which is included under "Fair value adjustment of domicile properties" in other comprehensive income. i. Park Street domicile in Copenhagen Park Street's headquarters at Svanevej 12 in Copenhagen Nordvest neighbourhood is an office building that is partially used as domicile for Park Street and partly for rental. The property is characterized by generating a current return on rent, similar to the Group’s investment properties (see 56 description above except that the property is also used as domicile for Park Street). Principles and methods for determining the property’s fair value is the same as the applied to Investment properties described above. Property estimated market rent and determining the required return on owner-occupied property is based on inputs from an independent valuer. The estimate of the property's fair value, similar to the Group's completed investment properties, is sensitive to changes in input in the valuation model. The most significant non-observable input used for estimating the fair value of the domicile property is as follows: Domicile Office 2023 2022 Market rent per sqm. per year (DKK) 1,072 1,150 Vacancy (%) 0 0 Return requirement (% p.a.) 6.50 5.50 The sensitivity to changes in the above non-observable input can be illustrated as follows (assuming the listed events occur one by one): ▪ An increase or decrease in the market price of DKK 50 per sqm per year will result in a change of the property's fair value, respectively DKK +3.1 million. (31 December 2022: DKK +3.8 million) and DKK -3.1 million (31 December 2022: DKK -3.7 million). ▪ An increase or a reduction of the required yield of 0.50% point will entail a change of the property's current value, respectively DKK –4.8 million (31 December 2022: DKK -7.7 million) and DKK +5.6 million (31 December 2022: DKK +9.3 million). A general increase in market rent per sqm and decrease in vacancy in the district, where the property is located, will likely cause a drop in the yield requirement. ii. Hotel in Ballerup Park Street hotel on Marbækvej 6 in Ballerup is a property where Park Street via a management agreement operates the hotel. This property is thus characterized by generating a current return operation from the property. In order to calculate the property's fair value separated from the hotel operations, the measurement of the property's fair value based on an estimate of market rent that could be obtained on a normal lease. The esti- mate of market rent is calculated as a fixed percentage of the revenue of the hotel. The estimate of the hotel’s expected revenue is based on budgeted stabilized revenue discounting a ramp up cost that equals the difference be- tween 2023 actual revenue and the stabilized budget revenue. Property estimated market rent and determining the required return on owner-occupied property is based on inputs from an independent valuer. The estimate of the property's fair value, similar to the Group's completed investment properties, is sensitive to changes in input in the valuation model. The most significant non-observable input used for estimating the fair value of the domicile property is as follows: Domicile Hotel 2023 2022 Market Rent - % of Revenue 28 38 Return requirement (% p.a.) 7.5 7.5 The sensitivity to changes in the above non-observable input can be illustrated as follows (assuming the listed events occur one by one): ▪ An increase or a reduction of the required yield of 0.50% point will entail a change of the property's current value, respectively DKK –8.1 million (31 December 2022: DKK –7.9 million) and DKK +9.3 million (31 December 2022: DKK +9.0 million). Classification of properties Park Street classifies the properties in the following categories: ▪ Domicile (Owner-occupied properties) ▪ Investment Properties Reference is made to note 32 in accounting policies for a more detailed description of how the properties are included in the above-mentioned classifications. 57 Classification of properties takes place on the basis of Park Street's intentions with each land or property at the time of acquisition. If the future purpose for some reason is not finalized at the time of acquisition, the foundation is classified as an investment property. In some cases, services may be provided to tenants, etc. that constitute significant benefits. Park Street owns and operates a hotel where services to guests form a significant part of the total product. The property is therefore classified as a residential property. Reclassification of properties between the above categories is made when the application is changed and a number of criteria are met. Notes to the individual financial statements indicate whether changes have been made to the classification regarding properties owned by Park Street. Disclosure of deferred taxes Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates/laws that have been enacted or substantively enacted by the end of the reporting period. Tax assets arising from unused tax losses, are valued based on existing budgets and profit forecasts for a 3-year period. Tax is recognized for an unused tax loss carryforward or unused tax loss carryforward when it is considered probable that there will be sufficient future taxable profit against which the loss or credit carryforward can be utilised. At 31 December 2023 the Group has included unused tax losses of DKK 137 million (31 December 2022: DKK 137 million) all of which is estimated to be realized within a three-year period or against deferred tax liabilities. The reduction in unutilized losses in 2023 and 2022 is due to positive tax income. Disclosure of borrowings As stated on Note 24 the value of the Group’s mortgage debt and bank debt is classified as amortized cost. As stated in Note 24 Group's non-convertible bonds are recognized as liabilities towards credit institution and are recognized as at fair value based on data that is non-observable in the market. Note 2 – Segment information Park Street's property portfolio is managed under a single management makes no segmentation of the portfolio. Information on the Group's reve- nue to external customers is disclosed in note 3 below. The Group has no customers / tenants who make up more than 10% of the group's rental income. The group only has activities in Denmark. Note 3 - Net sales Amounts in DKK 1000s 2023 2022 Rental income 145,503 136,348 Of which rental income from: Investment properties 121,028 111,415 Domicile properties 24,475 24,933 Sales of other services 20,639 16,478 Total sales of services 166,142 152,826 Interest income, mortgages and instruments of debt 0 455 166,142 153,281 Note 4 - Operating expenses Amounts in DKK 1000s 2023 2022 Operating expenses, investment properties 36,996 41,630 Operating expenses, other services 7,231 6,976 44,227 48,606 58 Note 5 – Employee benefits expenses Amounts in DKK 1000s 2023 2022 Salary 14,548 16,040 Contribution-based pensions () 509 716 Other social security costs 80 59 Other staff costs 390 416 15,528 17,231 Average number of employees 22 27 () The Group has only defined contribution plans. For defined contribution plans, the employer undertakes to pay a defined contribution to a pen- sion fund, but has no risk with regard to future developments in interest rates, inflation, mortality, disability, etc. as regards the amount to be paid to the employee. Disclosure of information about key management personnel (Pradeep Pattem) comprises the following: Salary 2,760 2,760 Contribution-based pensions 0 0 Bonus 0 0 2,760 2,760 Disclosure of share-based payment arrangements: Amounts in DKK 1000s 2023 2022 Disclosure of fees to Board members Pradeep Pattem (CEO) 100 100 Andrew LaTrobe (Member of the Audit Committee) (Jan-Apr 2022) 0 50 Ohene Kwapong (Chairman of the Audit Committee) 175 175 Anita Nassar (Chairman of the Board) 250 250 Claes Peter Rading (Member of the Audit Committee) (May-Dec 2021, Jan-Dec 2022) 150 150 Medha Pattem (Director) 0 0 675 725 Note 6 – Auditor’s fees The auditor appointed in 2023 and 2022 is PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab. Their fees can be specified as follows: Amounts in DKK 1000s 2023 2022 Statutory audit 1,015 897 Tax and VAT advice 243 334 1,258 1,231 Fees for non-audit services delivered by PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab, include taxation and VAT services. 59 Note 7 – Depreciation, amortisation and impairment Amounts in DKK 1000s 2023 2022 Amortisation, software 632 1,464 Depreciation, domicile properties 1,566 1,790 Depreciation, inventory and fixed assets 359 424 2,556 3,678 Note 8 – Financial expenses Amounts in DKK 1000s 2023 2022 Interest expenses, liabilities to credit institutions measured at amortized cost 52,339 28,388 Other interest costs and fees 85 852 Borrowing costs 0 691 52,424 29,932 Note 9 – Adjustments to fair value, net Amounts in DKK 1000s 2023 2022 Fair value adjustment, investment properties -73,750 36,066 -73,750 36,066 Note 10 – Losses realised on the sale of investment properties Amounts in DKK 1000s 2023 2022 Sales, investment properties 76,400 110,772 The property's carrying amount on sale etc. -78,935 -115,238 -2,535 -4,466 Note 11 – Tax on profit for the year and other comprehensive income Amounts in DKK 1000s 2023 2022 Annual tax can be divided as follows: Current tax on profit of the year 0 0 Current tax on domicile -795 2,420 Changes in deferred tax liabilities -10,671 19,518 -11,467 21,938 60 Amounts in DKK 1000s 2023 2022 Tax on profit for the year can be explained as follows: Estimated tax at a tax rate of 22% -7,682 16,390 Adjustment of previous years taxes -3,785 5,548 -11,467 21,938 Effective tax rate 32.84% 29.45% Note 12 – Earnings per share Amounts in DKK 1000s 2023 2022 Profit for the period -24,245 54,981 Parent company shareholders' share of profit for the year, used to calculate earnings per share -24,245 54,981 Average number of shares 57,175,572 57,175,572 Average number of own shares -2,428,031 -2,428,031 Average number of shares in circulation 54,747,541 54,747,541 Convertible bond's average dilution effect 0 0 Diluted average number of shares in circulation 54,747,541 54,747,541 Number of shares, end period 57,175,572 57,175,572 Number of own shares, end period -2,428,031 -2,428,031 Number of shares in circulation, end period 54,747,541 54,747,541 Convertible bond's dilution effect, end of period 0 0 Diluted average number of shares in circulation 54,747,541 54,747,541 Earnings per share (average number of shares) (DKK) -0.44 1.00 Diluted results per. share (average number of shares) (DKK) -0.44 1.00 Earnings per share (DKK), end period -0.44 1.00 Diluted results per share (DKK), end period -0.44 1.00 Note 13 – Intangible assets Amounts in DKK 1000s 2023 2022 Cost at 1 of January 6,091 5,421 Additions during the year 670 670 Cost at 31 December 6,761 6,091 Amortization at 1 January -5,020 -3,556 Amortization during the year -1,302 -1,464 Amortization at 31 December -6,322 -5,020 Balance at 31 December 439 1,071 61 Note 14 – Domiciles Amounts in DKK 1000s 2023 2022 Cost at 1 of January 219,438 208,186 Revaluation of value -3,615 11,252 Cost / Revaluated Value at 31 December 215,823 219,438 -15,976 -14,186 Depreciation and amortization at 1 January Depreciation -1,566 -1,790 Depreciation and amortization at 31 December -17,542 -15,976 Balance at 31 December 198,281 203,462 Domicile properties consist of a hotel in Ballerup and Park Street’s headquarters in Copenhagen. Disclosure of fair value measurement As the property is presented as a domicile, depreciation is required in accordance with IAS 16. Assets are revaluated equal to fair value at revalua- tion date (revalued by independent valuer) 31 December 2023, less accumulated depreciation and subsequent impairment losses. There have been revaluations both as of 31 December 2023, and 31 December 2022. Domicile properties are pledged as security for loans, mortgage loans and other credit institutions as stated in Note 26. Information on fair value hierarchy of Domicile property is as follows: Amounts in DKK 1000s Level 1 Level 2 Level 3 Total At 31 December 2023: Domicile property 0 0 198,281 198,241 0 0 198,241 198,241 At 31 December 2022: Domicile property 0 0 203,462 203,462 0 0 203,462 203,462 Classification of domicile properties in level 3 means that determining the fair value of domicile properties mainly based on data that are not ob- servable in the market. During the 2023 and 2022 there have been no transfers between levels of the fair value hierarchy. The fair value of domicile properties is based on estimates. Refer to note 1 for additional details. No domiciles have been acquired in 2023 and 2022. If Park Street domiciles were measured at the historical cost less accumulated depreciation, the book value would have been the following: Amounts in DKK 1000s 2023 2022 Domicile properties 112,477 114,043 112,477 114,043 62 Note 15 – Investment properties As of 31 December 2023, ther sales processes is going on for 3 office properties regarding investment properties. Amounts in DKK 1000s 2023 2022 Balance at 1 of January 2,521,580 2,615,814 Costs incurred for improvements 65,284 98,638 Adjustment to fair value, net -73,750 36,066 Retirement on sale -76,400 -228,938 Balance at 31 December 2,436,714 2,521,580 Disclosure of fair value measurement Fair value hierarchy for investment: Amounts in DKK 1000s Level 1 Level 2 Level 3 Total At 31 December 2023: Investment properties 0 0 2,436,714 2,436,714 0 0 2,436,714 2,436,714 At 31 December 2022: Investment properties 0 0 2,521,581 2,521,581 0 0 2,521,581 2,521,581 Classification of investment properties in level 3 means that determining the fair value of investment properties is mainly based on data that is not observable in the market. During 2023 and 2022 there has been no transfers between levels of the fair value hierarchy. The fair value of investment properties is based on estimates. Refer to note 1 for additional details. Total fair value adjustments on investment properties in the financial year are: Amounts in DKK 1000s 2023 2022 Investment properties -73,750 36,066 -73,750 36,066 Total fair value adjustments amounts to DKK -73.8 million (2022: DKK 36.1 million) for the properties owned by the Company as of 31 December 2023. These value adjustments are recognized in the income statement as “Adjustments to fair value, net”. Investment properties are pledged as security for debt to mortgage banks and other credit institutions as indicated in Note 26. The Group does not have any agreement which required the Group to build or redevelop any properties neither in 2023 nor 2022. The net income of the investment portfolio is as follows: Amounts in DKK 1000s 2023 2022 Rental income from investment properties 121,028 111,415 Operating expenses, investment properties -36,996 -40,609 Net income from investment properties 84,032 70,806 The accumulated minimum lease payments for commercial rentals during the non- cancellable period can be shown as follows: 63 Amounts in DKK 1000s 2023 2022 Before 1 Year 47,035 51,467 Before 2 Years 12,442 18,641 Before 3 years 7,574 15,244 Before 4 years 3,028 3,054 Before 5 years 251 4,216 After 5 years 28,783 13,298 Total accumulated minimum lease 99,113 105,920 payments Note 16 – Machinery and equipment Total Machinery and Amounts in DKK 1000s IT Equipment Appliances Equipment Cost at 1 of January 2023 3,568 4,534 8,102 Additions during the year 0 56 56 Disposals during the year 0 0 0 Cost at 31 December 2023 3,568 4,589 8,157 Amortization at 1 January 2023 -3,534 -4,061 -7,594 Amortization during the year -35 -70 -105 Amortization at 31 December 2023 -3,568 -4,131 -7,699 Balance at 31 December 2023 0 458 458 Cost at 1 of January 2022 3,568 4,285 7,853 Additions during the year 0 248 248 Disposals during the year 0 0 Cost at 31 December 2022 3,568 4,534 8,102 Amortization at 1 January 2022 -3,524 -3,839 -7,363 Amortization during the year -10 -222 -231 Amortization at 31 December 2022 -3,534 -4,061 -7,594 Balance at 31 December 2022 34 473 507 Note 17 – Investment in associates The company acquired 150,000 units of common membership interest in the entity Enterra Solution, LLC (Address: One Palmer Square, Suite 530, Prince-ton, NJ 08542) in August 2019 as part of the strategy to develop a Real Estate Platform with Technology. This company has sold this investment in April’2023. Amounts in DKK 1000s 2023 2022 Cost price at 1 January . 2,029 Cost price at 31 December . 2,029 Carrying amount at 31 December . 2,029 64 Note 18 – Current financial assets at amortised cost The Group has the following mortgage and debt instruments classified as "Financial assets measured at amortized cost": Amounts in DKK 1000s 2023 2022 Financial assets at amortized cost at 1 January 7,412 7,671 Additions for the year 6,702 0 Repayment of the year 0 -259 Financial assets at amortized cost at 31 December 14,114 7,412 Mortgages and debt securities classified as financial instruments in the category "Financial assets at amortized cost" expire in the following periods: Effective interest rate p.a. Balance in DKK 1000 Fair value in DKK 1000 Amounts in DKK 1000s 2023 2022 2023 2022 2023 2022 Value Expire DKK 2025 7.50% 7.50% 14,114 7,412 14,114 7,412 14,114 7,412 14,114 7,412 The calculated fair value is based on estimates (Level 2 in fair value hierarchy). Note 19 – Trade and other current receivables Amounts in DKK 1000s 2023 2022 Receivable Rental Income 11,244 6,313 Deposited funds in banks 3,718 24,821 Other Receivables 9,968 -2,541 Receivables at 31 December 24,930 28,594 Write-downs on receivable rental income have been made after an individual assessment and have developed as follows: Bad debt provision as of 1st of January 4,961 2,788 Net additional provisions 0 69 Recognized losses (Write off) 126 2,104 5,087 4,961 In the above tenant rental income, receivables have been recognized which were overdue as at 31 December but have not been written down, with the following amounts: 2023 2022 Up to 30 days 877 121 Between 30 and 90 days 3,048 2,172 Over 90 days 7,319 4,019 11,244 6.313 Trade receivables are predominantly non-interest bearing. Apart from rental income receivable, Park Street has no receivables that are overdue at the balance sheet date or which have been assessed as impaired. Funds deposited in banks related to receivables selling price from properties sold, funds deposited as collateral for mortgage loans and deposits as security for the initiated maintenance work on properties. 65 Note 20 – Cash and cash equivalents Amounts in DKK 1000s 2023 2022 Deposits in banks for free disposal 38,143 34,468 Petty cash 64 64 38,207 34,532 Note 21 – Share capital Amounts in DKK 1000s 2023 2022 Share capital as on 1st of January 57,175 67,513 Share capital Decrease 0 -10,338 Share capital as on 31. December 57,175 57,175 The share capital consists of 57,175,572 shares of DKK 1 (31 December 2022: 57,175,572 shares of DKK 1). The shares are fully paid. Park Street Asset Management Ltd. and Park Street NordAc Sarl own 100% of the nominal class B share capital and 55.89% of the nominal class A share capital and a total of 93.50% (and a corresponding percentage of the votes) of the total nominal share capital of the Company. Note 22 – Treasury shares Number of shares Nominal value Share of share capital (Amount in DKK 1000) 2023 2022 2023 2022 2023 2022 As at 1 January 3,465,835 1,037,804 3,466 1,038 0.2% 0.2% Additions during the year 0 2,428,031 0 2,428 1.3% 1.3% As at 31 December 3,465,835 3,465,835 3,466 3,466 1.5% 1.5% All own shares are owned by Park Street A/S. Note 23 – Deferred Taxes Amounts in DKK 1000s 2023 2022 Deferred tax liabilities at 1st of January 254,025 232,087 Recognized in other comprehensive income -795 2,420 Corrections from previous years -8,712 0 Recognized in the income statement -10,671 19,518 Deferred tax liabilities at 31 December 233,847 254,025 Deferred tax is recognized in the balance sheet as follows: Deferred tax (active) Deferred tax (liability) -233,847 -254,025 Deferred tax at 31 December -233,847 - 254,025 Deferred tax recognized in the balance The calculation of deferred taxes included DKK 28 million relating to tax losses carried forward from Group companies. Based on budget account- ing and tax profits in the period 2024-2027 and deferred tax liabilities, it is estimated that all tax losses (tax base) will be realized, which is includ- ed in the calculation of deferred tax DKK 233.8 million (taxable value) per 31 December 2023 (2022: DKK 254 million) Deferred tax assets (value calculated at a tax rate of 22%) recognized in the balance sheet relate to profit and losses from the subsidiaries Pulse Taastrup P/S, Pulse Glostrup P/S, Pulse N P/S, Pulse O P/S, Ballerup Hotel P/S, Svanevej P/S, Toldbuen P/S, PS Holdco I P/S, Phoam Studio ApS, PSN ApS, Pulse Living ApS, Albuen ApS, PS I ApS, and Park Street UK. 66 Recognized Recognized in another in the income comprehensive Amounts in DKK 1000s Balance 1/1 statement income Balance 31/12 2023 Software 98 -312 0 -214 Investment and domicile properties 284,199 -23,208 -795 260,196 Fixtures and fittings -388 25 0 -363 Receivables -612 0 0 -612 Provisions -88 -88 0 -176 Credit institutions 1,131 1,910 0 3,041 Tax losses carryforward -30,315 2,291 0 -28,024 254,025 -19,382 -795 233,847 2022 Software 410 -312 0 98 Investment and domicile properties 266,087 15,692 2,420 284,199 Fixtures and fittings -413 25 0 -388 Receivables -612 0 0 -612 Provisions 0 -88 0 -88 Credit institutions -779 1,910 0 1,131 Tax losses carryforward -32,606 2,291 0 -30,315 232,087 19,518 2,420 254,025 Note 24 – Borrowings Amounts in DKK 1000s 2023 2022 Credit institutions, nominal 1,361,241 1,408,514 Market value adjustments -5,579 -5,579 1,355,662 1,402,935 The liabilities are thus included in the balance sheet: Credit institutions, long-term 1,332,708 1,382,643 Credit institutions, short-term 22,953 20,293 1,355,662 1,402,935 The Group's loans and credits are distributed as per 31 December as follows: Liabilities recognized at fair value Currency Rate type Expiry date 2023 2022 Convertible bonds DKK Interest-free 11-15 years 11,335 11,335 11,335 11,335 Market value adjustments -5,579 -5,579 Carrying amount 5,757 5,757 67 Liabilities recognized at amortized cost Currency Rate type Expiry date 2023 2022 Banks Debt DKK Fixed 0-1 years 0 0 Banks Debt DKK Fixed 2-5 years 618,631 575,630 Mortgage Debt DKK Variable 2-5 Years 50,822 96,146 Mortgage Debt DKK Variable 6-10 years 0 0 Mortgage Debt DKK Variable 11-15 years 596,489 667,824 Mortgage Debt DKK Variable 16-20 years 109,012 109,780 Carrying amount 1,374,955 1,449,380 The nominal amounts stated in the tables represent the amount that Park Street will repay under the loan agreements by the end of these agree- ments. The interest component is not included in the table above. Fixed interest loans stated in the tables indicate that a fixed rate applies until the loans' maturity date or until a new negotiation is made with the individual bank. Variable interest rates expressed in the tables indicate that the loans have interest rates that are regularly adjusted over the term of the loans due to fluctuations in market interest rates. The evolution of the long and short term liabilities with credit institutions is specified follows: Amounts in DKK 1000s 2023 2022 Non-current financial liabilities 1,382,643 1,488,364 Current financial liabilities 20,293 21,107 Financial liabilities with credit institutions at 1 January 1,402,935 1,509,471 Repayment of liabilities to credit institutions -89,995 -174,530 Proceeds from assumption of liabilities to credit institutions 42,721 67,994 Financial liabilities with credit institutions at 31 December 1,355,662 1,402,935 Non-current financial liabilities 1,332,708 1,382,643 Current financial liabilities 22,953 20,293 Total financial liabilities with credit institutions at 31 December 1,355,662 1,402,935 Determining the fair value of debt to credit institutions Information on Group’s financial loan agreements, mortgage debt and convertible bonds is disclosed in note 27. Information on estimates and judgments related to the determination of fair value of financial liabilities is disclosed in note 1. As stated in these notes mortgage and bank debt have been recognized at amortised cost in 2023 and 2022. Zero-coupon bonds (former Convertible bonds) As a result of a prior bank agreement, Park Street issued in 2010 convertible bonds for a number of credit institutions for a total nominal DKK 69.0 million. The bonds are non-callable by credit institutions until 31 December 2029 and non-amortized. Conversion period for the bonds to shares has expired, and as a result, the bonds in the annual report classified as normal loans from credit institutions and is therefore included under "Credit institutions" in the balance sheet (zero-coupon bonds). The convertible bonds are recorded as subordinated loan capital and are subordinate to all other unsubordinated debt. The movement of the nominal value of these zero-coupon bonds is as follows: Amounts in DKK 1000s 2023 2022 Zero-coupon bonds at 1 January (Nominal value) 11,335 11,335 Bonds converted into class B shares (Nominal value) 0 0 Zero-coupon bonds at 31 December (Nominal Value) 11,335 11,335 68 The carrying value of zero-coupon bonds in the statement of financial position is shown in the following table: Amounts in DKK 1000s 2023 2022 5,757 5,226 Fair value of financial liability at the date of issue Amortization of convertible bonds at 31 December 0 0 Fair Value adjustment recognized in the Profit and Loss 0 531 Fair Value adjustment of convertible bonds converted in Equity 0 0 Balance at 31 December 5,757 5,757 As stated the Group's non-convertible bonds are recognized as liabilities towards credit institution and are recognized as at fair value based on data that is non-observable in the market. Note 25 – Provisions Amounts in DKK 1000s 2023 2022 Provisions at 1 January 400 400 Used in the year 0 0 Reversed during the year 0 0 Accrued in the year 0 0 Provisions 31 December 400 400 Provisions relate to an obligation with the purchaser of a property concerning environmental clean-up on a land. Disclosure of leases There are leases hire for cars rental and printers. Amounts in DKK 1000s 2023 2022 Within 1 year from the balance sheet date 10 10 Between 1 and 5 years from the balance sheet date 387 422 After 5 years from the balance sheet date 0 0 Lease hire obligations at 31 December 397 431 Minimum lease payments recognized in the profit and loss account for the year 44 31 Note 26 – Contingent assets and liabilities Disclosure of collateral The nominal pledge for the bank debt and mortgage debt given by credit institutions per 31 December 2023 amounts a total of DKK 1,670 million (31 December 2022: DKK 1,728 million), the nominal value of the loans amounts a total of DKK 1,356 million (31 December 2022: DKK 1,403 million) in the group's investment properties and domiciles with a book value totalling DKK 2,634 million (31 December 2022: DKK 2,725 million). The nominal pledge for the bank debt and mortgage debt given by credit institutions per 31 December 2023 amounts a total of DKK 7.2 million (31 December 2022: DKK 7.4million), in the group's deposited mortgage deeds with a book value totalling DKK 7.4 million (31 December 2022: DKK 7.7 million). 69 Disclosure of contingent liabilities Park Street had a legal dispute with a previous and a current tenant in relation to the lease being deemed as a commercial or a residential lease. Park Street has lost the argument and now the lease is deemed to be residential. This could lead to some potential liability in relation to the dilapi- dations claim and other aspects. This will be clarified as the case proceeds further with court processes. No additional significant litigations and disputes are acknowledged by the Group at 31 December 2023, other than the ones indicated in Note 25. Note 27 – Financial risks Amounts in DKK 1000s 2023 2022 Mortgages and debentures 14,114 7,412 Financial assets measured at fair value through profit or loss 14,114 7,412 Receivables 24,930 28,594 Cash and equivalents 38,207 34,532 Loan and receivables 63,137 63,125 Credit institutions -5,757 -5,757 Financial liabilities measured at fair value through profit or loss -5,757 -5,757 Credit institutions 1,355,662 1,402,935 Deposits 41,849 37,916 Accounts payable 18,557 19,336 Other Debts 6,417 5,827 Financial liabilities measured at amortized cost 1,422,480 1,466,016 Risk management policy The financial management of the Group is geared towards stabilization and optimization of the Group's operations, while at minimizing the Group's financial risk exposure. It is part of the Group's policy not to conduct speculative transactions by active use of financial instruments. The group is due to its activities exposed to various financial risks, including liquidity risk, market risks (primarily interest rate risk) and credit risk. Liquidity risk Park Street’s liquidity risk consists on not being able to make regular payments and not being able to provide sufficient liquidity to cover the financ- ing costs, capital repayment obligations and capital investments. Lack of liquidity may arise from insufficient cash resources and may be adversely affected by missed payments from Park Street tenants, increased vacancy, repayment of deposits, divestments, unexpected costs and investment needs. Lack of liquidity may also arise from default of loans signed and in connection with refinancing when existing loan agreements expire or are terminated. Cash reserves total at 31 December, 2023 DKK 38.2 million (31 December 2022: DKK 34.5 million). Park Street forecasts that current and gener- ated liquidity is sufficient to carry out the group's planned activities throughout 2024. 70 Maturity of financial liabilities is specified as follows: Contractual Amounts in DKK 1000s Carry forward balance 0 - 1 Years 2 - 3 Years 4 - 5 Years After 5 Years cash flows 2023 Non-derivative financial instruments Credit institutions 1,355,662 1,587,129 87,823 742,884 136,014 620,407 Trade payables 18,557 18,557 0 0 0 0 Deposits 41,849 41,849 31,664 5,004 2,312 2,869 Other debts 6,417 6,417 0 0 0 0 Total 1,422,485 1,653,952 119,487 747,888 138,326 623,277 2022 Non-derivative financial instruments Credit institutions 1,402,935 1,685,331 82,476 697,124 96,146 809,585 Trade payables 19,336 19,336 0 0 0 0 Deposits 37,916 37,916 27,693 5,028 2,453 2,742 Other debts 5,827 5,827 0 0 0 0 Total 1,466,014 1,748,410 110,169 702,152 98,599 812,327 Interest rate risk Park Street is as a result of its financing activities in significant extent exposed to interest rate fluctuations. The interest rate risk is therefore an essential element in the overall assessment of the Group's financial situation. The interest rate risk as of 31 December, 2023, primarily relate to the following: ▪ Fluctuations in market interest rates on mortgages with variable rates (Cibor6, F2, F3, F5). ▪ Renegotiation of the margin rate applied on the mortgage loans. ▪ Renegotiation of fixed interest rate of bank debt associated with the extension of loans / terms. Fixed rate includes loans, which applies a fixed rate until the loans' maturity date, to other agreed point in time or until a renegotiation is made with the individual bank. Park Street’s major interest rate risk is the risk that the financial creditors on short notice increase terms of interest and margin rates. In this situation, the level of interest and contribution rates depend on negotiations with the financial institutions. The Group's loan portfolio is continu- ously monitored with a view to optimizing the group's exposure to interest rate risks. Park Street in 31 December 2023, does not have financial instruments for interest rate hedging, and the group has limited opportunities to influence the interest rate risk in the current financial situation. Group's nominal financial debt is specified as follows, based on the type of interest rate that is linked to individual loans: Type of loan Nominal * Weighted interest rate (per (DKK million) annum) At 31 December, 2023: Mortgage debt Cibor3 0 Mortgage debt Cibor6 88 4.26% Mortgage debt F2 40 2.60% Mortgage debt F3 219 1.33% Mortgage debt F5 385 1.15% Bank debt etc. Cibor3 624 7.63% Interest-Others 0 0.00% free 1,355 4.39% 71 Type of loan Nominal * Weighted interest rate (per (DKK million) annum) At 31 December, 2022: Mortgage debt Cibor3 0 Mortgage debt Cibor6 104 4.91% Mortgage debt F2 43 2.64% Mortgage debt F3 232 0.86% Mortgage debt F5 463 0.98% Bank debt etc. Cibor3 576 6.67% Interest-Others 0 0.00% free 1,418 3.61% () Weighted interest rate (pa) includes contributions to mortgage and expresses the average weighted interest rates in effect at the turn of the year and in the subsequent period until the next repricing date. The calculated weighted interest rate for all Group loans at 31 December 2023 is 4.39% per annum, and is based on the latest confirmed interest rates. The corresponding calculated weighted rate at 31 December, 2022 was 3.61% per annum. This have a significant impact on the P&L for 2023. Breakdown by maturity until the next date of interest rate adjustment distributes the Group's loans as follows (as of Dec. 31): Amounts in DKK 1000s 2023 2022 Between 0 and 12 months 88 82 Between 2 and 3 years 743 697 Between 4 and 5 years 136 96 After 5 years 620 810 1,587 1,685 The interest rate adjustment date for fixed-rate and interest-free loans is included in the above table at the time of the renegotiation of the maturity and / or terms of the loans or where existing confirmations on a given interest rate expire for a period. Interest rate risk from Park Street’s view can be presented in the following two divisions: ▪ Variable market interest rates: Risks associated with fluctuations in market interest rates, i.e. on loans where interest rate adjustment takes place at defined times based on market fluctuations. This applies to mortgage loans with variable interest rates. ▪ Interest, etc. on all loans: Risks associated with fluctuations in interest rates on all loans. In addition to the above fluctuations in market rates, this includes the renegotiation of contribution rates at mortgage banks and renegotiation of loan terms with bank creditors. The hypothetical effect on the results and equity after tax as a result of 1 percentage point increase in interest rates (ex. Fair value adjustments) is illustrated in the following table: Amounts in DKK 1000s 2023 2022 Variable Interest rate loans: Effect on income statement -7.1 -6.8 Effect on equity -7.1 -6.8 Regarding loans from credit institutions that have ongoing interest rate adjustments resulting from changes in market interest rates, the table above illustrates that the hypothetical effect on net income and equity as a result of one percentage point increase in interest rates amounts to DKK –7.1 million per annum (2022: DKK –6.8 million). The approach used to determine the effect has been carried out by increasing the base rate by 100 basis points of all the loans with floating rate exposure. This analysis includes F2, F3, F5 loans as well. The effect on the income statement has been calculated for a 12 month period. 72 Currency risk The group exposure is very limited to changes in currency rates. Credit risk The Group's credit risk is primarily related to: ▪ Lease receivables ▪ Receivables from the sale of properties ▪ Receivables form mortgages The maximum credit risk for financial assets is reflected in the accounting values of the balance sheet, and taking into account securities re- ceived. Risks concerning to rental receivables are limited to Park Street’s options to deduct payments from deposits and termination of the covered leases. Credit risk on receivables arising from the sale of properties is limited, as the transactions are always subject to payment of purchase price and deposit of the purchase price. With mortgage deeds, the Group has a usual debtor risk, which is reduced by mortgages on properties. In order to minimize the risk of loss of receivable rent, the tenants' ability to pay prior to entering into leases is assessed to the extent that it is relevant. In addition, there is usually a requirement for a cash deposit, a guarantee and / or prepaid rent. However, if a tenant is unable to pay, it may result in loss as well as reduced income due to rental allowance upon relocation, lower future rental income and any additional costs incurred in connection with refurbishment etc. Credit risk on receivables at 31 December 2023 is further described in note 19. Group’s Cash and cash equivalents consists primarily of deposits in reputable banks (with A+ ratings). The group believes that there is no signifi- cant credit risk associated with the cash. Deposits in banks are labelled at variable interest rate. Financial liabilities with credit institutions and fair value Group’s mortgage debt and bank debt is classified as amortized cost. Fair value of loans measured at amortised cost amount to DKK 1,375 thou- sand. Fair value has been determined as the present value of the contractual cash flows discounted at a rate reflecting the current borrowing rate. Due to the fact that the terms of all loans were renegotiated in 2017, fair value of all floating rate loans is considered to be equal to their carrying amount. Based on a recent transaction, the fair value measurement is considered a level 2 measurement. The fair value of zero-coupon debt is established based on last year’s fair value. The Group's financial assets and liabilities measured at fair value are classified on the following 3 levels in the fair value hierarchy: ▪ Level 1: Based on listed prices (non-adjusted) on active markets for identical assets or liabilities. ▪ Level 2: Based on inputs other than listed prices' that are observable for the asset or liability, either direct (as prices) or indirect (derived from prices). ▪ Level 3: Based on data that is not observable in the market. Amounts in DKK 1000s Carry forward balance Level 1 Level 2 Level 3 2023 Mortgages and debentures 14,114 0 14,114 0 Total financial assets 14,114 0 14,114 0 Credit institutions 5,756 0 0 5,756 Total financial liabilities 5,756 0 0 5,756 2022 Mortgages and debentures 7,671 0 7,671 0 Total financial assets 7,671 0 7,671 0 Credit institutions 5,226 0 0 5,226 Total financial liabilities 5,226 0 0 5,226 73 It is the Group's policy to recognise transfers between the different levels from the time at which an event or change in circumstances entails a change in the classifications. No transfers were made between levels 1 and 2 in the accounting period. When calculating the fair value of the Group's liabilities in accordance with level 3 of the fair value hierarchy, a correction is made for the Group's own credit rating, taking into account the legal status of the liabilities, and the security in the assets measured at fair value. Consequently, no direct assumptions of discount factors, etc. are included when measuring liabilities to credit institutions in accordance with level 3 of the fair value hierar- chy. The table below shows the change in liabilities to credit institutions measured at fair value in the balance sheet based on valuation methods in which significant inputs are not based on observable market data (level 3): Amounts in DKK million 2023 2022 Carrying amount at 1st of January 5,757 5,226 Gains / losses in the income statement 0 531 Redemptions 0 0 Transfer to Level 3 0 0 Transfer from Level 3 0 0 Balance at 31st of December 5,757 5,757 Gain / loss in the income statement for liabilities held as at 31 December 0 531 Gains/losses concerning credit institutions measured at fair value are included in the item 'Adjustment to fair value, net' in the income statement. Liabilities to credit institutions measured at fair value are transferred to/from level 3 in the fair value hierarchy depending on whether the fair value of the loans contains a correction for the Group's own credit rating. For financial instruments that are not measured at fair value, the book value is assessed as being a reasonable approximation of fair value. This is based on the trade price of the underlying bonds (Level 2). Note 28 – Non-current operating items, etc. Amounts in DKK 1000s 2023 2022 Depreciation and amortization -2,556 -3,678 Profit/loss on sale of operating assets -2,535 -4,466 Total regulation -5,091 -8,144 Note 29 – Change in operating capital Amounts in DKK 1000s 2023 2022 Change in receivables 3,664 -4,620 Change in deposit 3,993 -614 Change in trade payables -780 11,618 Change in total working capital 6,817 6,384 Note 30 – Disclosure of related parties Park Street Asset Management Ltd. (London, England) has controlling influence in Park Street A/S by virtue of its shareholding of 93.06% of shares and votes in Park Street A/S. See note 5, where the remuneration of Directors and Board of Park Street A/S appears. The Company additionally had the following transactions between Park Street and related parties that consisted of intangible assets. Amounts in DKK 1000s 2023 2022 Other related parties Intangible assets 0 446 Software expenses 1,338 1,338 There have been no other transactions, etc. with related parties during the period. 74 Note 31 – Subsequent Events Subsequent events after 31 December 2023 Park Street has sold three assets (Project NV), viz., Hejrevej 26-28 (Hejrevej), Hejrevej 30, (Hejrevej), and Svanavej 12, (Ømevej) to a total amount of DKK 270 million. From the balance sheet date until the date of presentation of this Annual Report no additional events have occurred other than the above men- tioned which significantly affect the assessment of the annual report. Note 32 – Accounting policies Statement of IFRS compliance The annual report for the period 1 January to 31 December 2023 for Park Street A/S comprises the consolidated financial statements of Park Street A/S and its subsidiary companies and separate financial statements of the parent company. The annual report of Park Street A / S for the year 2023 is prepared in accordance with IFRS accounting standards as adopted by the EU and requirements according to the Danish Financial Statements Act. The Company has implemented the following new amendments or new standards (IFRS) for financial year 2023 which is effective from 1 janurary 2023 • Presentation of Financial Statements and Practice Statement • Accounting Policies, Changes in Accounting Estimates and Errors • Income Taxes The annual report has been approved by the Board of Directors on 4 April 2024. The annual report shall be submitted to Park Street A / S share- holders for approval at the Annual General Meeting that will take place on 26 April 2024. Disclosure of authorization of financial statements The annual report is presented in Danish crown (DKK) rounded to the nearest DKK 1,000, which is considered to be the primary currency of the Group's activities and the functional currency of the parent company. The annual report is prepared on a historical cost basis, except for investment properties and certain financial obligations that are measured at fair value. Further, investment properties and domicile are measured at reas- sessed value. The accounting policies are otherwise as described below. CHANGES IN ACCOUNTING POLICIES Accounting policies are unchanged from the previous year. DESCRIPTION OF CONSOLIDATED ACCOUNTING POLICIES Consolidated Financial Statements The consolidated financial statements include Park Street A / S (parent company) and companies (subsidiaries) controlled by the parent. The parent company is deemed to have control if it (i) has control of the relevant activities in the entity, (ii) is exposed to or are entitled to a variable returns from the investment and (iii) may use its controlling interest to affect the variables of their return. The consolidated financial statements are prepared as a consolidation of the parent financial statements and accounts of the individual subsidiar- ies, which have been prepared in accordance with the Group's accounting policies, the elimination of intercompany income and expenses, share- holdings, balances, dividends and gains and losses on transactions, taken between the consolidated companies. Sale of subsidiaries and activities When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive in- come in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. Foreign currency Transactions in currencies other than the individual companies’ functional currencies are translated initially at the transaction date. Receivables and payables and other monetary items in foreign currencies that have not been settled at the balance sheet date are translated at the closing rate. Exchange differences arising between the date of transaction and payment date or the balance sheet date are recognized in the income statement under financial income or expenses. Exchange differences arising from the translation of foreign companies' balance sheet items at the beginning of the exchange rates and the translation of income statements from average rates to closing rates are recognized in other comprehensive income. 75 Exchange rate on full or partial disposal of foreign entities, where control is transferred, the foreign currency translation adjustments are recognized in other comprehensive income, which is attributable to the unit from other comprehensive income to net income along with the gain or loss on the disposal. PROFIT AND LOSS STATEMENT Revenue Revenue includes rental income, interest on mortgage and debt instruments measured at fair value, sale amount from sold project holding, sales of goods and sales of other services. Rental Revenue is measured at the fair value of the consideration received or receivable and is calculated exclusive of VAT collected on behalf of third parties and discounts. Revenue from the sale of project portfolios is recognized when delivery takes place and transfer of risk to the buyer (sales method), ie when any construction is completed and finally transferred to the buyer, and all essential elements of the sales agreement are met. Sales of goods factored when delivery and risk transition have taken place. Rental income, interest on mortgage and debt instruments measured at fair value, and sales of other services is recognized in the periods to which they relate. Operating costs Operating costs include costs directly related to turnover, including ongoing operating expenses of the Group investment properties, costs associ- ated with the acquisition and construction of submitted project inventories and other operating costs. Adjustments to fair value, net Adjustment to fair value, net includes continuous adjustments of investment properties through profit or loss. Realized gains on sale of investment properties Realized gains on sale of investment properties is recognized when the risks and rewards are transferred to the buyer, and the control of the prop- erty has been transferred. Financial income and expenses Financial items include interest income and interest expenses, foreign exchange rate adjustments, amortization premiums / discounts, realized and unrealized gains and losses on securities as well as surcharges and refunds under the tax. 76 77 Borrowing costs directly attributable to the development projects of investment or project portfolios, added to the cost of the assets until the time when the project is completed and the property can be used for the intended purpose. If there is a loan directly to finance the development pro- ject, calculated borrowing costs on the basis of an average interest rate of the group's loans except for loans recorded at the acquisition of specif- ic assets. Other borrowing costs are recognized in the income statement in the periods to which they relate. Income tax expense Tax for the year comprises current tax and changes in deferred tax, is recognized in the income statement with the portion attributable to the profit and directly in equity or in other comprehensive income with the portion attributable to amounts recognized directly in equity and in other comprehensive income. BALANCE STATEMENT Intangible assets Intangible assets (software) is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of those parts that are replaced is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation, based on a component approach, is calculated using the straight line method to allocate the cost over the asset’s estimated useful lives. Intangible assets (software) have been depreciated under the assumption of 3 years of useful live. Depreciation is based on revalued amount less estimated residual value after useful life (residual value). Domicile Domicile properties are initially measured at cost. The cost comprises the cost and expenses directly associated with the acquisition. Fair value at the time of a previous investment property is transferred to owner-occupied properties, is considered the property new cost. Domicile properties are then measured at a readjusted value, corresponding to the fair value at the time of re-evaluation less accumulated depreciation. Principles and Estimates Management's estimate of the properties' fair value are shown in note 1. Revaluations recognized in other comprehensive income and attributed to the separate reserve for revaluation of equity. Owner-occupied properties are depreciated over the assets / components' estimated useful lives, as follows: Buildings 50 years Other components 15-30 years Depreciation is based on revalued amount less estimated residual value after useful life (residual value). Land is not depreciated. Investment properties Investment property includes land and buildings held by Park Street to earn rental income and / or capital gains. Investment properties are meas- ured initially at cost, which comprises the properties and cost, directly related costs. Investment properties are then measured at fair value and all value adjustments are recognized in the income statement under "Adjustment to fair value, net". Principles and methods for management's estimate of the properties' fair values is disclosed in note 1. Land plots, where here is no final decision on the purpose of usage have been included in the Group’s portfolio as investment properties. Machinery and equipment All machinery and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of those parts that are replaced is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation, based on a component approach, is calculated using the straight line method to allocate the cost over the asset’s estimated useful lives as stated above on Domicile. 78 Depreciation is based on revalued amount less estimated residual value after useful life (residual value). Investment in associates Investments in associates are recognised and measured in the financial statements under the equity method. On acquisition of associates, the difference between the cost of acquisition and net asset value of the equity acquired is determined at the date of acquisition after the individual assets and liabilities have been adjusted to fair value (the acquisition method). Impairment of non-current assets The carrying value of tangible assets that are not measured at fair value are assessed regularly and at least annually to determine whether there is any indication of impairment. When such an indication is present, the asset is valued at recovery value. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. Value in use is the present value of expected future cash flows from the asset or cash-generating unit to which the asset belongs. If the asset does not generate cash independently of other assets, the recoverable amount of the smallest cash- generating unit that includes the asset. Impairment is recognized if the carrying amount of an asset or cash-generating unit exceeds the assets' useful or cash-generating unit's recovera- ble amount does not exceed the carrying amount that the asset would have had after depreciation if the asset had not been impaired. Current financial assets measured at fair value Mortgages classified as financial instruments categorized as "financial assets measured at fair value through profit or loss" are recognized at fair value on initial recognition and subsequently measured at fair value, continuously carried out a revaluation of this statement. Fair value is determined based on observable market data (interest rates), the debtor's creditworthiness and on assessments of the loan term to maturity and ranking in the position. Receivables Receivables are measured at amortized cost. Impairment losses are made for losses which are deemed to have resulted in an objective indication that an individual receivable is impaired. Prepayments Prepayments recognized under assets comprise incurred costs related to coming financial years. Prepayments are measured at cost. Dividends Dividends are recognized as a liability at the time of adoption at the general meeting. Dividends proposed for distribution is shown as a separate component of equity until the Annual General Meeting. Own shares Acquisition and selling prices of company shares and dividends are recognized directly in equity under retained earnings. Foreign currency reserve Currency translation reserve includes the parent company shareholders' share of exchange rate differences arising from the translation of accounts for companies with a different functional currency than Danish crown. The reserve is dissolved by the disposal of foreign entities. Revaluation reserve Reserve for revaluation includes the accumulated revaluation of domicile. The reserve is reduced by transfer to the profit for the year, as deprecia- tion and write-downs are made on the properties written up or for sale. Corporate tax and deferred tax Current tax liabilities and current tax receivables are recognized in the balance sheet as calculated tax on the taxable income, but adjusted for tax on prior years' taxable income and taxes paid on account. Deferred tax is measured using the balance sheet liability method on temporary differences between accounting and tax values of assets and liabilities, excluding deferred taxes on temporary differences arising on initial recognition of goodwill or the initial recognition of a transaction that is not a business combinations, and where the temporary difference found at the time of initial recognition affects neither the accounting profit nor taxable income. 79 Deferred tax assets including the tax value of tax loss carryforwards, are recognized under non-current assets at the value at which they are expected to be used either by elimination in tax on future earnings or against deferred tax liabilities. Deferred tax assets are reviewed annually and recognized only to the extent that it is probable that they will be utilized. Deferred tax is measured based on the tax rates and at the balance sheet date will be applicable in the respective countries when the deferred tax is expected to crystallize as current tax. Change in deferred tax due to changes in tax rates is recognized in the income statement. Provisions Provisions are recognized when, as a result of an event occurring before or at the balance sheet date has a legal or actual obligation and it is probable that a payment will be needed to settle the obligation. The item includes provision for dealing with specific uncertainties on completed projects. Provisions are measured on a best estimate of the amount required to settle the obligation. Provisions with an expected maturity of one year and above are classified as non-current liabilities. Liabilities Borrowings are initially recognized at fair value which is generally proceeds received, and net of transaction costs incurred. Subsequently, borrowings are measured at amortized cost. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Other financial liabilities, including trade and other payables, are on initial recognition measured at fair value. The liabilities are subsequently measured at amortized cost. Assets held for sale Assets held for sale include non-current assets that are for sale. Liabilities relating to assets held for sale are liabilities directly related to those assets that will be transferred during the transaction. Assets are classified as "held for sale" when their carrying amount will primarily be recouped through a sale within 12 months according to a formal plan rather than through continued use and provided that the sale at the balance sheet date is considered to be highly probable. When the properties are expected to be recovered from the sale of subsidiaries that own the properties, all the subsidiaries' assets and liabilities are reclassified. Assets are not depreciated from the time they are classified as "held for sale". Assets held for sale are measured at the lower of the carrying amount at the time of the "sale-for-sale" or fair value less cost of sale. However, investment properties held for sale are measured according to the Group's usual accounting policies for investment properties, ie. at fair value without deduction of selling costs. CASH FLOW STATEMENT The cash flow statement is presented according to the indirect method and shows cash flows divided by operating, investing and financing activities for the year, the year's shift in cash and cash equivalents at the beginning and end of the year. The liquidity effect on the sale of companies is shown separately under cash flow from investing activities. The cash flow statement recognizes the cash flows of sold companies until the date of sale. Cash flows from operating activities are calculated as operating profit adjusted for non-cash operating items, changes in working capital, received and paid financial income and expenses and paid corporation tax. Cash flows from investing activities include payments in connection with sales of companies and activities, purchase and sale of financial assets as well as purchase, development, improvement and sales, etc. of intangible and tangible assets, including investment properties. Cash flows from financing activities include changes in the parent company's share capital and associated costs as well as admission and repay- ment of loans, repayment of interest-bearing debt, purchase and sale of own shares and payment of dividends. Cash and cash equivalents comprise cash with insignificant price risk. Park Street | Park Street A/S Financial Statements 80 Park Street | Park Street A/S Financial Statements 81 2023 PARK STREET A/S FINANCIAL STATEMENTS Park Street | Park Street A/S Financial Statements 82 Income statement Note Amounts in DKK 1000s 2023 2022 2 Net sales 95,811 93,549 3 Operating expenses -22,728 -26,245 Gross profit 73,083 67,304 4 Employee benefit expenses -10,700 -12,713 Other expenses, by nature -7,592 -9,331 6 Depreciation, amortisation and impairment -737 -1,648 Operating profit (EBIT) 54,053 43,611 Financial income subsidiaries 5,840 11,426 7 Financial expenses -17,248 -8,113 Earnings before value adjustments (EBVAT) 42,645 46,924 8 Income / Loss from subsidiaries 27,099 12,727 9 Adjustment to fair value, net -105,746 24,374 Gains realised on the sale of investment properties -2,535 -4,466 Result before tax -38,536 79,559 10 Tax on profit for the period 11,471 -15,747 Result for the period -27,065 63,812 Distributed as follows Parent's shareholders -27,065 63,812 Result for the period -27,065 63,812 Earnings per share, end of period -0.40 0.95 Diluted earnings per share, end of period -0.40 0.95 Park Street | Park Street A/S Financial Statements 83 Statement of comprehensive income Note Amounts in DKK 1000s 2023 2022 Result for the period -27,065 63,812 Other comprehensive income: Items that cannot be reclassified to the income statement: Fair value adjustment of domicile properties 0 0 Tax on fair value adjustment of domicile properties 0 0 Other comprehensive income after tax 0 0 Comprehensive income for the period -27,065 63,812 Distributed as follows Parent's shareholders -27,065 63,812 Comprehensive income for the period -27,065 63,812 Park Street | Park Street A/S Financial Statements 84 Statement of financial position Note Amounts in DKK 1000s 2023 2022 ASSETS Non-current assets Intangible assets Software 0 446 Capitalised Leasing Fees 439 625 439 1,071 Property, plant and equipment 12 Investment properties 1,214,789 1,398,766 13 Machinery and equipment -124 -45 1,214,665 1,398,721 Financial assets 11 Investment in subsidiaries 492,183 465,332 Investment in associates 0 2,029 Deposits 161 161 492,345 467,522 Total non-current assets 1,707,449 1,867,314 Current assets 14 Intercompany receviables 240,182 212,321 15 Trade and other current receivables 17,903 18,805 Income tax receivable 2,332 2,214 Prepaid expenses and accrued income 0 911 Cash and short-term deposits 14,732 7,167 Total current assets 275,149 241,417 Total assets 1,982,597 2,103,154 Equity Share capital 57,175 57,175 Share Premium 289,260 289,260 Accumulated profit 713,524 740,589 Total equity 1,059,959 1,087,024 LIABILITIES Non-current liabilities 16 Deferred tax 233,842 247,723 17 Borrowings 629,465 720,686 Deposits 7,200 1,615 870,508 970,024 Current liabilities Provisions 400 400 17 Current borrowings 22,567 20,347 Trade and other payables 7,079 -1,804 Deposits 20,675 25,108 Other liabilities 1,410 2,055 51,131 46,106 Total liabilities 922,639 1,016,130 Total equity and liabilities 1,982,597 2,103,154 Park Street | Park Street A/S Financial Statements 85 Statement of equity Amounts in DKK 1000s Share capital Revaluation reserve Accumulated profit Share Premium Equity Total Statement of equity for 2023: Equity as at 1 January 2023 57,175 0 740,589 289,260 1,087,024 Comprehensive income for the period Result for the period 0 0 -27,065 0 -27,065 Fair value adjustment of domicile 0 0 0 0 0 Tax on other comprehensive income 0 0 0 0 0 Other comprehensive income during the financial year 0 0 0 0 0 Comprehensive income for the period 0 0 -27,065 0 - 27,065 Transactions with owners Repurchase own shares 0 0 0 0 0 Capital reduction 0 0 0 0 0 Total transactions with owners 0 0 0 0 0 Equity as at 31 December 2023 57,175 0 713,524 289,260 1,059,959 Statement of equity for 2022: Equity as at 1 January 2022 67,513 0 860,265 289,260 1,217,038 Comprehensive income for the period Result for the period 0 0 63,812 0 63,812 Comprehensive income for the period 0 0 63,812 0 63,812 Transactions with owners Repurchase own shares 0 0 -183,488 0 -183,488 Cash reduction -10,338 0 0 0 -10,388 Total transactions with owners -10,338 0 -183,488 0 -193,826 Other adjustments Depreciation of revalued value of domiciles Equity as at 31 December 2022 57,175 0 740,589 289,260 1,087,024 Park Street | Park Street A/S Financial Statements 86 Statement of cash flows Note Amounts in DKK 1000s 2023 2022 Operating profit (EBIT) 54,063 43,611 Reversal of depreciations and amortisations 737 1,648 Change in other operating capital -31,417 -41,641 Cash flows concerning primary operations 23,373 3,618 Financial expenses paid -17,248 -8,113 Paid Corporate Tax 0 -3,079 Total cash flow from operating activities 6,125 -7,572 Cash flow from investing activities Improvements to investment properties 14,040 -6,313 Sales of investment properties 76,400 225,505 Total cash flow from investing activities 90,440 219,192 Cash flow from financing activities Repurchase Own Shares 0 -183,488 Repayment of liabilities to credit institutions -30,728 -29,524 Repayment of debt from disposal of assets -58,272 -144,092 Total cash flow from financing activities -89,000 -357,104 Total cash flow for the period 7,565 -145,485 Liquid assets as at 1 January 7,167 152,652 Liquid assets at the end of the period 14,732 7,167 Liquid assets at the end of the period Cash and short term deposit 14,732 7,167 Liquid assets at the end of the period 14,732 7,167 Park Street | Property Overview 87 Summary Note 1 Accounting policies, accounting estimates, risks etc. Note 2 Net sales Note 3 Operating expenses Note 4 Employee Expenditure Note 5 Auditor's fees Note 6 Depreciation and amortization Note 7 Financial expenses Note 8 Income / (loss) from subsidiaries Note 9 Adjustment to fair value, net Note 10 Tax on profit for the year and other comprehensive income Note 11 Investment in subsidiaries Note 12 Investment properties Note 13 Machinery and equipment Note 14 Intercompany receviables Note 15 Trade and other current receivables Note 16 Deferred taxes Note 17 Borrowings Note 18 Contingent assets and liabilities Note 19 Financial risks Note 20 Change in other working capital Note 21 Related parties Note 22 Events after the balance sheet date Note 23 Accounting policies Park Street | Property Overview 88 Notes Note 1 - Accounting policies, accounting estimates and risks, etc. The accounting assumptions, assessments and estimates made in the preparation of the parent company accounts are the same as described in note 23 of these financial statements, to which reference is made. See note 11 regarding the recognition and measurement of investments, receivables from subsidiaries and provisions relating to subsidiaries in the Parent Company's financial statements. Note 2 - Net sales Amounts in DKK 1000s 2023 2022 Rental income 83,877 80,543 Sales of other services 11,934 12,551 Total sales of services 95,811 93,094 Interest income, mortgages and instruments of debt 0 455 95,811 93,549 Note 3 - Operating expenses Amounts in DKK 1000s 2023 2022 Operating expenses, investment properties 22,723 26.245 Operating expenses, other services 5 0 22,728 26,245 Note 4 – Employee benefits expenses Amounts in DKK 1000s 2023 2022 Salary 9,770 11,595 Contribution-based pensions () 486 677 Other social security costs 80 57 Other staff costs 364 385 10,700 12,713 Average number of employ- ees 10 17 (*) Park Street A/S has only defined contribution plans. For defined contribution plans, the employer undertakes to pay a defined contribution to a pension fund, but has no risk with regard to future developments in interest rates, inflation, mortality, disability, etc. as regards the amount to be paid to the employee. Remuneration of the CEO and the Board of Directors is described in Note 5 of the consolidated accounts. Park Street | Property Overview 89 Note 5 – Auditor’s fees The auditor appointed in 2023 and 2022 is PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab. Their fees can be specified as follows: Amounts in DKK 1000s 2023 2022 Statutory audit 811 588 Tax and VAT advice 243 334 1,031 922 Fees for non-audit services delivered by PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab, include general accounting and tax advisory services. Note 6 – Depreciation, amortisation and impairment Amounts in DKK 1000s 2023 2022 Depreciation, software 632 1,464 Depreciation, inventory and fixed assets 105 185 737 1,648 Note 7 – Financial Expenses Amounts in DKK 1000s 2023 2022 Interest expenses, liabilities to credit institutions measured at amortized cost 17,187 6,781 Other interest costs and fees 74 640 Borrowing costs -13 691 17,248 8,113 Note 7 (a) - Financial Income Amounts in DKK 1000s 2023 2022 Interest income, Intercompany 5,840 11,426 5,840 11,426 Note 8 – Year’s result in subsidiary companies Amounts in DKK 1000s 2023 2022 Income / Loss from subsidiaries 27,099 12,727 27,099 12,727 Park Street | Property Overview 90 Note 9 – Adjustments to fair value, net Amounts in DKK 1000s 2023 2022 Fair value adjustment, investment properties -105,746 24,374 -105,746 24,374 Note 10 – Tax on profit for the year and other comprehensive income Amounts in DKK 1000s 2023 2022 Annual tax can be divided as follows: Current tax on profit of the year 0 0 Current tax adjustment (Dom) 0 0 Changes in deferred taxes -11,471 21,565 Changes in deferred taxes previous years 0 -5,818 -11,471 15,747 Tax on profit for the year can be explained as follows: Estimated tax at a tax rate of 22% -8,478 17,503 Adjustment of deferred tax assets and liabilities -2,993 -1,756 -11,471 15,747 Effective tax rate 29.77% 19.79% Amounts in DKK 1000s 2023 2022 Tax on other comprehensive income: Tax on fair value adjustment of domicile properties 0 0 0 0 Note 11 – Investment in subsidiaries See accounting policies on note 23 of the Parent’s Financial Statements. Receivables considered part of the overall investment in the subsidiary are written down by any remaining negative equity value. Amounts in DKK 1000s 2023 2022 Cost price at 1 January 404,144 404,144 Additions 0 0 Cost price at 31 December 404,144 404,144 Value adjustments at 1 January 62,426 49,699 Share of profit/loss for the year after tax 27,099 12,727 Value adjustments at 31 December 89,525 62,426 Park Street | Property Overview 91 Carrying amount at 1 January 465,532 452,291 Investments with negative equity offset against trade receivables -1,486 -1,239 Carrying amount at 31 December 492,183 465,332 List of subsidiaries: Subsidiaries Registered Address Equity PSN ApS Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Pulse Glostrup P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Pulse Taastrup P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Phoam Studio ApS Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Pulse Living ApS Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Albuen ApS Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% PSI ApS Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% PSI Hold Co P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Pulse N P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Pulse O P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Ballerup Hotel P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Toldbuen P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Svanevej P/S Svanevej 12, 4th Floor, 2400 Copenhagen NV 100% Park Street Nordicom UK Ltd 85, Great Portland Street, London, W1W 7LT, England 100% Note 12 – Investment properties As of 31 December 2023 the sales processes is going on for 3 office properties regarding investment properties. Amounts in DKK 1000s 2023 2022 Balance at 1 of January 1,398,722 1,596,596 Costs incurred for improvements 0 6,313 Adjustment to fair value, net -105,746 24,374 Additions fixed assests 0 561 Depreciation of fixed assets 0 -185 Retirement on sale -78,187 -228,894 Balance at 31 December 1,214,789 1,398,766 Fair value hierarchy for investment: Amounts in DKK 1000s Level 1 Level 2 Level 3 Total At 31 December 2023: Investment properties 0 0 1,214,789 1,214,789 0 0 1,214,789 1,214,789 At 31 December 2022: Investment properties 0 0 1,398,766 1,398,766 0 0 1,398,766 1,398,766 Classification of investment properties in level 3 means that determining the fair value of investment properties is mainly based on data that is not observable in the market. Park Street | Property Overview 92 During 2023 and 2022 there has been no transfers between levels of the fair value hierarchy. The fair value of investment properties is based on estimates. Refer to note 15 in the consolidated financial statements for additional details. The net income of the investment portfolio is as follows: Amounts in DKK 1000s 2023 2022 Rental income from investment properties 83,877 80,543 Operating expenses, investment properties -22,723 -26,245 Net income from investment properties 61,154 54,298 The Group has entered into operating leases (leases) to tenants of its investment properties. The leases duration is up to 15 years. The contract minimum payments under existing leases are distributed as follows: Amounts in DKK 1000s 2023 2022 Remaining termination within 1 year from the balance sheet date 583 26,972 Remaining termination between 1 and 5 years from the balance sheet date 916 70,238 Remaining termination after 5 years from the balance sheet date 56,442 57,607 57,941 154,817 The accumulated minimum lease payments for commercial rentals during the non- cancellable period can be shown as follows: Amounts in DKK 1000s 2023 2022 Before 1 Year 37,263 33,646 Before 2 Years 10,095 13,544 Before 3 years 4,740 12,069 Before 4 years 2,330 1,861 Before 5 years 0 1,694 After 5 years 16,167 11,462 Total accumulated minimum lease payments 70,594 74,277 Note 13 – Machinery and equipment Amounts in DKK 1000s IT Equipment Appliances Total Machinery and Equipment Cost at 1 of January 2023 4,150 8,424 12,574 Additions during the year 0 0 0 Disposals during the year 0 0 0 Cost at 31 December 2023 4,150 8,424 12,574 Amortization at 1 January 2023 -4,141 -8,478 -12,619 Amortization during the year -36 -43 -79 Amortization at 31 December 2023 -4,177 -8,521 -12,698 Balance at 31 December 2023 -27 -97 -124 Cost at 1 of January 2022 4,150 8,424 12,574 Park Street | Property Overview 93 Additions during the year 0 0 0 Disposals during the year 0 0 0 Cost at 31 December 2022 4,150 8,424 12,574 Amortization at 1 January 2022 -4,131 -8,395 -12,526 Amortization during the year -10 -83 -93 Amortization at 31 December 2022 -4,141 -8,478 -12,619 Balance at 31 December 2022 9 -54 -45 Note 14 – Intercompany receviables Park Street has the following receviables: Amounts in DKK 1000s 2023 2022 Intercompany receviables at 1 January 212,321 212,579 Repayment of the year 0 -258 Additions - Intercompany loans 27,861 0 Financial assets at amortized cost at 31 December 240,182 212,321 Park Street A/S has provided a credit line facility to the subsidiary Pulse Taastrup P/S with an aggregate principal amount of nominal DKK 175 million (175 million utilized at 31.12.22) with an annual interest rate of 7.5% payable at the maturity date of the loan. Additionally, Park Street A/S has provided a credit line facility to the subsidiary Phoam Studio ApS with an aggregate principal amount of nominal DKK 5 million (5 million uti- lized at 31.12.22) with an annual interest rate of 7.5% payable at the maturity date of the loan. Note 15 – Trade and other current receivables Amounts in DKK 1000s 2023 2022 Receivable Rental Income 8,003 4,607 Deposited funds in banks 383 8,272 Other Receivables 9,517 5,927 Receivables at 31 December 17,903 18,806 Write-downs on receivable rental income have been made after an individual assessment and have developed as follows: Bad debt provision as of 1st of January 2,165 2,444 Additional provisions 0 -277 Reversal -1 -1 2,164 2,165 In the above tenant rental income, receivables have been recognized which were overdue as at 31 December but have not been written down, with the following amounts: Up to 30 days 1,305 276 Between 30 and 90 days 2,278 2,535 Over 90 days 4,420 1,801 8,003 4,612 Trade receivables are predominantly non-interest bearing. Apart from rental income receivable, Park Street has no receivables that are overdue at the balance sheet date or which have been assessed as impaired. Park Street | Property Overview 94 Funds deposited in banks relate to receivables selling price from properties sold, funds deposited as collateral for mortgage loans and deposits as security for the initiated maintenance work on properties. Note 16 – Deferred Taxes Amounts in DKK 1000s 2023 2022 Deferred tax liabilities at 1st of January 247,723 232,087 Correction from previous years -2,410 0 Recognized in the income statement -11,471 15,636 Deferred tax liabilities at 31 December 233,842 247,723 Deferred tax is recognized in the balance sheet as follows: Deferred tax (active) Deferred tax (liability) -233,842 -247,723 Deferred tax at 31 December -233,842 -247,723 Deferred tax recognized in the balance The calculation of deferred taxes included DKK 28 million relating to tax losses carried forward from Group companies. Based on budget account- ing and tax profits in the period 2024-2027 and deferred tax liabilities, it is estimated that all tax losses (tax base) will be realized, which is includ- ed in the calculation of deferred tax DKK 237.8 million (taxable value) per 31 December 2023 (2022: DKK 247.7 million). Amounts in DKK 1000s Balance 1/1 Recognized in the income statement Recognized in another comprehensive income Balance 31/12 2023 Software 98 -312 0 -214 Investment and residential properties 277,897 -17,707 0 260,190 Fixtures and fittings -388 25 0 -363 Receivables -612 0 0 -612 Provisions -88 -88 0 -176 Credit institutions 1,131 1,910 0 3,041 Tax losses carryforward -30,315 2,291 0 -28,024 247,723 -13,881 0 233,842 Amounts in DKK 1000s Balance 1/1 Recognized in the income statement Recognized in another comprehensive income Balance 31/12 2022 Software 410 -312 0 98 Investment and residential properties 266,087 11,810 0 277,897 Fixtures and fittings -413 25 0 -388 Receivables -612 0 0 -612 Provisions 0 -88 0 -88 Credit institutions -779 1,910 0 1,131 Tax losses carryforward -32,606 2,291 0 -30,315 232,087 15,636 0 247,723 There are no deferred tax assets not recognized in the balance. Park Street | Property Overview 95 Note 17 – Borrowings Amounts in DKK 1000s 2023 2022 Credit institutions, nominal 657,612 747,142 Market value adjustments -5,579 -6,110 652,033 741,032 The liabilities are thus included in the balance sheet: Credit institutions, long-term 629,465 720,686 Credit institutions, short-term 22,567 20,347 652,033 741,032 The Group's loans and credits are distributed as per 31 December as follows: Liabilities recognized at fair value Currency Rate type Expiry date 2023 2022 Convertible bonds DKK Interest-free 10-14 years 11,335 11,335 11,335 11,335 Market value adjustments -5,579 -6,110 Carrying amount 5,757 5,226 Liabilities recognized at amortized cost Currency Rate type Expiry date 2023 2022 Mortgage Debt DKK Variable 2-5 years 50,822 64,604 Mortgage Debt DKK Variable 6-10 years 0 0 Mortgage Debt DKK Variable 11-15 years 596,489 667,824 Mortgage Debt DKK Variable 16-20 years 0 0 Carrying amount 647,312 732,428 The nominal amounts stated in the tables represent the amount that Park Street will repay under the loan agreements by the end of these agreements. Fixed interest loans stated in the tables indicate that a fixed rate applies until the loans' maturity date or until a new negotiation is made with the individual bank. Variable interest rates expressed in the tables indicate that the loans have interest rates that are regularly adjusted over the term of the loans due to fluctuations in market interest rates. The evolution of the long and short term liabilities with credit institutions is specified follows: Amounts in DKK 1000s 2023 2022 Non-current financial liabilities 720,686 894,301 Current financial liabilities 20,347 20,347 Financial liabilities with credit institutions at 1 January 741,032 914,648 Repayment of liabilities to credit institutions -89,000 -173,616 Financial liabilities with credit institutions at 31 December 652,032 741,032 Non-current financial liabilities 629,465 720,686 Current financial liabilities 22,567 20,347 Total financial liabilities with credit institutions at 31 December 652,033 741,032 Park Street | Property Overview 96 Determining the fair value of debt to credit institutions Information on Group’s financial loan agreements, mortgage debt and convertible bonds is disclosed in note 24 of the consolidated financial state- ments. Information on estimates and judgments related to the determination of fair value of financial liabilities is disclosed in note 1 of the Consoli- dated Financial Statements. As stated in these notes mortgage and bank debt have been recognized at amortised cost in 2022. No reversal of fair value adjustments in 2023. Zero-coupon bonds (former Convertible bonds) See note 24 in the Consolidated Financial Statements. Note 18 – Contingent assets and liabilities Disclosure of collateral The nominal pledge for the bank debt and mortgage debt given by credit institutions per 31 December, 2023 amount a total of DKK 652 million (31 December 2022: DKK 732 million), the nominal value of the loans amounts a total of DKK 652 million (31 December 2022: DKK 741 million) in the group's investment properties and domiciles with a book value totalling DKK 1,233 million (31 December 2022: DKK 1,399 million). The nominal pledge for the bank debt and mortgage debt given by credit institutions per 31 December, 2023 amount a total of DKK 7.4 million (31 December 2022: DKK 7.4 million), in the group's deposited mortgage deeds with a book value totalling DKK 7.4 million (31 December 2022: DKK 7.4 million). Disclosure of contingent liabilities Park Street had a legal dispute with a previous tenant in relation to the lease being deemed as a commercial or a residential lease. Park Street has lost the argument and now the lease is deemed to be residential. This could lead to some potential liability in relation to the dilapidations claim and other aspects. This will be clarified as the case proceeds further with the Housing Board. No additional significant litigations and disputes are acknowledged by the Group at 31 December, 2023. Lease hire agreements There are lease hire agreements for cars rental and printers. 2023 2022 Within 1 year from the balance sheet date 10 10 Between 1 and 5 years from the balance sheet date 422 422 After 5 years from the balance sheet date 0 0 Lease hire obligations at 31 December 431 431 Minimum lease payments recognized in the profit and loss account for the year 31 31 Note 19 – Financial risks Amounts in DKK 1000s 2023 2022 Mortgages and debentures 7,412 7,412 Intercompany loan 157,883 157,883 Financial assets measured at amortized cost 165,296 165,296 Park Street | Property Overview 97 Receivables 92,789 60,252 Cash and equivalents 14,732 7,167 Loan and receivables 107,521 67,419 Credit institutions 5,757 5,757 Financial liabilities measured at fair value through profit or loss 5,757 5,757 Credit institutions 652,033 741,032 Deposits 27,876 26,723 Accounts payable 7,079 3,773 Other Debts 881 2,055 Financial liabilities measured at amortized cost 687,868 773,585 Risk management policy The financial management of the Group is geared towards stabilization and optimization of the Group's operations, while at minimizing the Group's financial risk exposure. It is part of the Group's policy not to conduct speculative transactions by active use of financial instruments. The group is due to its activities exposed to various financial risks, including liquidity risk, market risks (primarily interest rate risk) and credit risk. Liquidity risk Park Street’s liquidity risk consists on not being able to make regular payments and not being able to provide sufficient liquidity to cover the financ- ing costs, capital repayment obligations and capital investments. Lack of liquidity may arise from insufficient cash resources and may be adversely affected by missed payments from Park Street tenants, increased vacancy, repayment of deposits, divestments, unexpected costs and investment needs. Lack of liquidity may also arise from default of loans signed and in connection with refinancing when existing loan agreements expire or are terminated. Cash reserves total at 31 December, 2023 DKK 14.7 million (31 December 2022: DKK 7.2 million). Park Street forecasts that current and gener- ated liquidity is sufficient to carry out the group's planned activities throughout 2023. Maturity of financial liabilities is specified as follows: Amounts in DKK 1000s Carry forward balance Contractual cash flows 0 - 1 Years 2 - 3 Years 4 - 5 Years After 5 Years 2023 Non-derivative financial instruments Credit institutions 652,033 883,500 75,642 385,618 82,141 340,098 Trade payables 7,079 7,079 0 0 0 0 Deposits 27,876 27,876 14,960 10,583 1,570 764 Other debts 881 881 881 0 0 0 Total 687,868 919,336 91,483 396,201 83,711 340,862 2022 Non-derivative financial instruments Credit institutions 741,032 751,837 19,409 437,209 64,604 230,615 Trade payables -2,001 -2,001 0 0 0 0 Deposits 26,723 27,507 14,591 10,583 1,570 764 Other debts 2,055 2,005 2,005 0 0 0 Total 767,810 779,399 36,055 447,792 66,174 231,379 Park Street | Property Overview 98 Interest rate risk Park Street is as a result of its financing activities in significant extent exposed to interest rate fluctuations. The interest rate risk is therefore an essential element in the overall assessment of the Group's financial situation. The interest rate risk as of 31 December, 2023 primarily relate to the following: ▪ Fluctuations in market interest rates on mortgages with variable rates (Cibor6, F2, F3, F5). ▪ Renegotiation of the margin rate applied on the mortgage loans. ▪ Renegotiation of fixed interest rate of bank debt associated with the extension of loans / terms. Fixed rate includes loans, which applies a fixed rate until the loans' maturity date, to other agreed point in time or until a renegotiation is made with the individual bank. Park Street’s major interest rate risk is the risk that the financial creditors on short notice increase terms of interest and margin rates. In this situation, the level of interest and contribution rates depend on negotiations with the financial institutions. The Group's loan portfolio is continu- ously monitored with a view to optimizing the group's exposure to interest rate risks. Park Street at 31 December, 2023 does not have financial instruments for interest rate hedging, and the group has limited opportunities to influence the interest rate risk in the current financial situation. Group's nominal financial debt is specified as follows, based on the type of interest rate that is linked to individual loans: Type of loan Nominal (DKK million) * Weighted interest rate (per annum) At 31 December, 2023: Mortgage debt Cibor6 88 4.26% Mortgage debt F2 40 2.60% Mortgage debt F3 110 1.28% Mortgage debt F5 390 1.15% Bank debt etc. Fixed 25 1.15% Others Interest-free 0 - 652 2.98% At 31 December, 2022: Mortgage debt Cibor6 104 4.91% Mortgage debt F2 43 2.64% Mortgage debt F3 122 0.86% Mortgage debt F5 463 0.98% Bank debt etc. Fixed 0 - Others Interest-free 0 - 732 1.62% The calculated weighted interest rate for all Park Street loans at 31 December 2023 was 2.98% per annum and is based on the latest confirmed interest rates. The corresponding calculated weighted rate at 31 December 2022 was 1.62% per annum. Breakdown by maturity until the next date of interest rate adjustment distributes the Group's loans as follows (as of Dec. 31): Amounts in DKK million 2023 2022 Between 0 and 12 months 76 19 Between 2 and 3 years 386 0 Between 4 and 5 years 82 64 After 5 years 340 668 884 752 The interest rate adjustment date for fixed-rate and interest-free loans is included in the above table at the time of the renegotiation of the maturity and / or terms of the loans or where existing confirmations on a given interest rate expire for a period. Park Street | Property Overview 99 Interest rate risk from Park Street’s view can be presented in the following two divisions: ▪ Variable market interest rates: Risks associated with fluctuations in market interest rates, ie. on loans where interest rate adjustment takes place at defined times based on market fluctuations. This applies to mortgage loans with variable interest rates. ▪ Interest, etc. on all loans: Risks associated with fluctuations in interest rates on all loans. In addition to the above fluctuations in market rates, this includes the renegotiation of contribution rates at mortgage banks and renegotiation of loan terms with bank creditors. The hypothetical effect on the results and equity after tax as a result of 1 percentage point increase in interest rates (ex. Fair value adjustments) are illustrated in the following table: Amounts in DKK 1000s 2023 2022 Variable Interest rate loans: Effect on income statement -1.0 -1.0 Effect on equity -1.0 -1.0 On loans from credit institutions, with ongoing interest rate adjustments resulting from changes in market interest rates, illustrates the table above that the hypothetical effect on net income and equity as a result of one percentage point increase in interest rates amounts to DKK –1.0 million per annum (2022 DKK -1.0 million). Currency risk The group exposure is very limited to changes in currency rates. Credit risk The Group's credit risk is primarily related to: ▪ Lease receivables ▪ Receivables from the sale of properties ▪ Receivables form mortgages The maximum credit risk for financial assets is reflected in the accounting values of the balance sheet, and taking into account securities received. Risks concerning to rental receivables are limited to Park Street’s options to deduct payments from deposits and termination of the covered leases. Credit risk on receivables arising from the sale of properties is limited, as the transactions are always subject to payment of purchase price and deposit of the purchase price. With mortgage deeds, the Group has an usual debtor risk, which is reduced by mortgages on properties. In order to minimize the risk of loss of receivable rent, the tenants' ability to pay prior to entering into leases is assessed to the extent that it is relevant. In addition, there is usually a requirement for a cash deposit, a guarantee and / or prepaid rent. However, if a tenant is unable to pay, it may result in loss as well as reduced income due to rental allowance upon relocation, lower future rental income and any additional costs incurred in connection with refurbishment etc. Credit risk on receivables at 31 December, 2023, is further described in note 19 of the consolidated financial statements. Group’s Cash and cash equivalents consists primarily of deposits in reputable banks. The group believes that there is no significant credit risk associated with the cash. Deposits in banks are labelled at variable interest rate. Financial liabilities with credit institutions and fair value Group’s mortgage debt and bank debt is classified as amortized cost. Fair value of loans measured at amortised cost amount to DKK 909,420. Fair value has been determined as the present value of the contractual cash flows discounted at a rate reflecting the current borrowing rate. Due to the fact that the terms of all loans were renegotiated in 2017, fair value of all floating rate loans is considered to be equal to their carrying aomunt. Based on a recent transaction, the fair value measurement is considered a level 2 measurement. The fair value of zero-coupon debt is established based on the fair value estimated by an independent reviewer (estimated rate of 50.79 at 31 December, 2022). Park Street | Property Overview 100 The Group's financial assets and liabilities measured at fair value are classified on the following 3 levels in the fair value hierarchy: ▪ Level 1: Based on listed prices (non-adjusted) on active markets for identical assets or liabilities. ▪ Level 2: Based on inputs other than listed prices that are observable for the asset or liability, either direct (as prices) or indirect (derived from prices). ▪ Level 3: Based on data that is not observable in the market. Amounts in DKK 1000s Carry forward balance Level 1 Level 1 Level 2 2023 Mortgages and debentures 7,412 0 0 7,412 Intercompany loan 157,883 157,883 Total financial assets 165,296 0 0 165,296 Credit institutions 5,757 0 0 5,757 Total financial liabilities 5,757 0 0 5,757 2022 Mortgages and debentures 7,412 0 0 7,412 Intercompany loan 157,883 157,883 Total financial assets 165,296 0 0 165,296 Credit institutions 5,757 0 0 5,757 Total financial liabilities 5,757 0 0 5,757 It is the Group's policy to recognise transfers between the different levels from the time at which an event or change in circumstances entails a change in the classifications. No transfers were made between levels 1 and 2 in the accounting period. When calculating the fair value of the Group's liabilities in accordance with level 3 of the fair value hierarchy, a correction is made for the Group's own credit rating, taking into account the legal status of the liabilities, and the security in the assets measured at fair value. Consequently, no direct assumptions of discount factors, etc. are included when measuring liabilities to credit institutions in accordance with level 3 of the fair value hierar- chy. The table below shows the change in liabilities to credit institutions measured at fair value in the balance sheet based on valuation methods in which significant inputs are not based on observable market data (level 3): Amounts in DKK million 2023 2022 Carrying amount per. 1st of January 5,757 5,226 Gains / losses in the income statement 0 531 Balance at 31st of December 5,757 5,757 Gain / loss in the income statement for liabilities held at 31st of December 0 531 Gains/losses concerning credit institutions measured at fair value are included in the item 'Adjustment to fair value, net' and in the item 'Special items' in the income statement of the consolidated financial statements. Liabilities to credit institutions measured at fair value are transferred to/from level 3 in the fair value hierarchy depending on whether the fair value of the loans contains a correction for the Group's own credit rating. For financial instruments that are not measured at fair value, the book value is assessed as being a reasonable approximation of fair value. Park Street | Property Overview 101 Note 20 – Changes in other working capital Amounts in DKK 1000s 2023 2022 Change in receivables -26,960 -24,214 Change in deposit -1,152 2,798 Change in trade payables -3,305 14,906 Change in total working capital -31,417 -6,510 Note 21 – Related parties Park Street Asset Management Ltd. (London, England) has controlling influence in Park Street A/S by virtue of its shareholding of 93.06% of shares and votes in Park Street A/S. See note 5 in the Consolidated annual report, where the remuneration of Directors and Board of Park Street appears. The Company has additionally had the following transactions between Park Street and related parties: Amounts in DKK 1000s 2023 2022 Other related parties Intangible assets 0 446 Software expenses 0 1,338 There have been no other transactions, etc. with related parties during the period. Note 22 – Accounting policies Park Street A/S applies the same accounting policies as stated in Note 33 on the consolidated financial statements, in addition the following note is applicable for the parent company: Investment in subsidiaries Investments in subsidiaries are recognised and measured in the financial statements of the parent company under the equity method. On acquisi- tion of subsidiaries, the difference between cost of acquisition and net asset value of the entity acquired is determined at the date of acquisition after the individual assets and liabilities having been adjusted to fair value (the acquisition method). The item ”Income (loss) from investment in subsidiaries” in the income statement includes the proportionate share of the profit after tax of the subsidiary. The item ”Investments in subsidiaries” in the balance sheet includes the proportionate ownership share of the net asset value of the entities calculated under the accounting policies of the parent company with deduction or addition of unrealised intercompany profits or losses and with addition of any remaining value of the positive differences (goodwill). Subsidiaries with a negative net assets value are measured at DKK 0, and any receivables from these are written down by the parent company’s share of the negative net asset value, if impaired. Any legal or constructive obligation of the parent company to cover the negative balance of the subsidiaries is recognised as provisions. The total net revaluation of investments in subsidiaries is transferred upon distribution of profit to ” Re- serve for net revaluation” under equity. Gains and losses on disposals or winding up of subsidiaries are calculated as the difference between the sales value or cost of winding up and the carrying amount of the net assets at the date of acquisition including goodwill and expected loss of dis- posal or winding up. The gains or losses are included in the income statement. Financial Ratios The financial ratios have been calculated as follows: Return on property portfolio (% p.a.): Gross profit x 100 / Fair value of investment and domicile properties Average loan rate (% p.a.): Financial items x 100 / Credit institutions Return margin on property portfolio (% p.a.): Return on property portfolio (% p.a.) - Average loan rate Return on equity (%): Profit for the period / Total equity Equity ratio (%): Total equity / Total assets Net asset value per share, end of period (DKK): Total equity / Share capital Earnings per share (avg. Number of shares) (DKK): Profit for the period / Average number of shares Earnings per share, end of period (DKK): Profit for the period / Number of own shares, end period Dividend yield (%): Dividend per share / Share price, end of period Price/net asset value, end of period: Share price / Net asset value per share, end of period Cash flow from operations per share (DKK): Cash flows from operations / Diluted average number of shares in circulation Park Street | Property Overview 102 PROPERTY OVERVIEW Park Street Group owns at 31 December 2023, 42 properties. # Strategy Property Type Address ZIP City 1 Spark Office Office Dannebrogsgade 2, 5000 Odense 2 Glostrup 2600 Glostrup 3 Stable Office Office Omøvej 9 4700 Næstved 4 1 C, Vilhelmskildevej 5700 Svendborg 5 6, Jernbanegade 6 4000 Roskilde 6 23-35, Birkemose Allé 23-35 6000 Kolding 7 6, Toldbuen 4700 Næstved 8 275, Svendborgvej 5000 Odense 9 21, Birkemose Allé 6000 Kolding 10 9 B, Birkemosevej 6000 Kolding 11 22, Stagehøjvej 8600 Slikeborg 12 Stable Residential Residential Nørregade 31-33 4100 Ringsted 13 Stable Retail Retail Ros Have 8, 10, 12, 18 4000 Roskilde 14 20, Prøvestensvej 3000 Helsingør 15 27, Immerkær 2650 Hvidovre 16 27A+B, Nørregade 4100 Ringsted 17 Mosede Centret 2670 Greve 18 10, Dyssegårdsvej 4700 Næstved 19 2, L.C. Worsøesvej 6780 Holbæk 20 3, Banetorvet 3450 Lillerød 21 11, Ros Have 4000 Roskilde 22 13, Ros Have 4000 Roskilde 23 2 A-B, Engdahlsvej 7400 Herning 24 19A, Albuen 6000 Kolding 25 Stable Storage Storage 7-13, Blegdammen 4700 Næstved 26 Pulse Hotel Hotel 13, Algade 4000 Roskilde 27 Ballerup Idrætsby Hotel 2750 Ballerup 28 Pulse Residential 29, Tåsingegade 2100 København 29 8-10, Hejrevej 2400 København Park Street | Property Overview 103 # Strategy Property Type Address ZIP City 30 Park Street Retail Sjællandsgade 12,16,18 7100 Vejle 31 Park Street Resi - Project 2, Selsmosevej 2630 Taastrup 32 39, Skibsegen 3070 Snekkersten 33 Park Street Storage 78, Vordingborgvej 4700 Næstved 34 78-82, Vordingborgvej 4700 Næstved 35 Nordicom Office Office 4, Kirsebærgården 3450 Lillerød 36 Nordicom Retail Retail 102, Silkeborgvej 7400 Herning 37 13-19, Nørregade 4100 Ringsted 38 Nordicom Resi Residential 33-35, Jernbanegade 6000 Kolding 39 3, Naverstræde 6000 Kolding 40 41 42 2, Søndergade 21, Nørregade Grønings Have 4700 Struer Rinsted Havnestaden Annual reportAuditor's report on audited financial statementsParsePort XBRL Converter2023-01-012023-12-312022-01-012022-12-31Reporting class DOpinionBasis for Opinion213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember213800VGJC18MRKMZC332023-01-012023-12-31213800VGJC18MRKMZC332022-01-012022-12-31213800VGJC18MRKMZC332023-12-31213800VGJC18MRKMZC332022-12-31213800VGJC18MRKMZC332022-12-31ifrs-full:IssuedCapitalMember213800VGJC18MRKMZC332023-01-012023-12-31ifrs-full:IssuedCapitalMember213800VGJC18MRKMZC332023-12-31ifrs-full:IssuedCapitalMember213800VGJC18MRKMZC332022-12-31ifrs-full:RevaluationSurplusMember213800VGJC18MRKMZC332023-01-012023-12-31ifrs-full:RevaluationSurplusMember213800VGJC18MRKMZC332023-12-31ifrs-full:RevaluationSurplusMember213800VGJC18MRKMZC332022-12-31ifrs-full:RetainedEarningsMember213800VGJC18MRKMZC332023-01-012023-12-31ifrs-full:RetainedEarningsMember213800VGJC18MRKMZC332023-12-31ifrs-full:RetainedEarningsMember213800VGJC18MRKMZC332022-12-31ifrs-full:SharePremiumMember213800VGJC18MRKMZC332023-01-012023-12-31ifrs-full:SharePremiumMember213800VGJC18MRKMZC332023-12-31ifrs-full:SharePremiumMember213800VGJC18MRKMZC332021-12-31ifrs-full:IssuedCapitalMember213800VGJC18MRKMZC332022-01-012022-12-31ifrs-full:IssuedCapitalMember213800VGJC18MRKMZC332021-12-31ifrs-full:RevaluationSurplusMember213800VGJC18MRKMZC332022-01-012022-12-31ifrs-full:RevaluationSurplusMember213800VGJC18MRKMZC332021-12-31ifrs-full:RetainedEarningsMember213800VGJC18MRKMZC332022-01-012022-12-31ifrs-full:RetainedEarningsMember213800VGJC18MRKMZC332021-12-31ifrs-full:SharePremiumMember213800VGJC18MRKMZC332022-01-012022-12-31ifrs-full:SharePremiumMember213800VGJC18MRKMZC332021-12-31213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember1213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember1213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember2213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember3213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember4213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember5213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember1213800VGJC18MRKMZC332023-01-012023-12-31cmn:ConsolidatedMember2213800VGJC18MRKMZC332022-01-012022-12-31cmn:ConsolidatedMemberiso4217:DKKiso4217:DKKxbrli:sharesxbrli:pure