PARK STREET nordicom

ANNUAL REPORT 2020

Company: Park Street Nordicom A/S
CVR: 12932502
Svanvej 12, 4
2400 København NV
Accounting period: 1 January - 31 December 2020
Chairman: Kristian Engkjær Sørensen
Approved - Kristian Engkjær Sørensen

PARK STREET nordicom

Annual Report 2020

Company:

Park Street Nordicom A/S
Svanevej 12
DK-2400 København NV
CVR no.: 12 93 25 02
LEI no.: LEIN913442016122012215420784
Registered office: Copenhagen, Denmark

Phone: +45 33 33 93 03
Internet: www.nordicom.dk / www.psnas.com
E-mail: [email protected]

Board of Directors:
Andrew John Essex La Trobe, Chairman
Pradeep Pattem
Ohene Aku Kwapong
Lars-Andreas Nilsen
Anita Nassar

Management:
CEO Pradeep Pattem
Head of Finance David Casado

Auditor:
PriceWaterhouseCoopers Statsautoriseret Revisionspartnerselskab

Main activity:
Park Street Nordicom 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 held April 22th, 2021 at 10:00 on Svanevej 12, 2400 Copenhagen NV

PARK STREET nordicom
Annual Report 2020

Directors' report 2
Directors' report 2
Subsequent events after December 31, 2020 3
Outlook and strategy for 2021 4
Financial Highlights 9
Financial Results 10
Risk Factors 13
Statutory Report CSR 15
Legal requirements for Corporate Governance 16
Statutory report on diversity in management 16
Management composition and remuneration 17
Board of Directors and Management 18
Shareholder structure 19
Group structure as of December 31, 2020 21
Statements 22
Statement by Board of Directors and Management 22
Independent auditors report 23
Consolidated Financial statements 27
Income statement 28
Statement of comprehensive income 29
Statement of financial position 30
Statement of equity 32
Statement of cash flows 33
Notes 34
Annual accounts for Park Street Nordicom A/S 67
Income statement 68
Statement of comprehensive income 69
Statement of financial position as of December 31 70
Statement of equity 72
Statement of cash flows 73
Notes 74
Property Overview 92

Park Street Nordicom/ Director's report

Main Activity

Park Street Nordicom 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 2020

Park Street Nordicom result analysis primarily uses the term EBVAT (Earnings before value adjustments and tax) to measure the Group's operating results.

In 2020, Park Street Nordicom achieved EBVAT of DKK 69.8 million (2019: DKK 83.2 million), which is in line with management expectations given for the period.

The EBVAT achieved is DKK 13.4 million lower than the one in 2019. The decrease is mainly caused by the reduction of net sales partly compensated by the reduction of operating expenses, overheads and financial expenses.

The evolution of the EBVAT is influenced by the following factors:

Gross profit in 2020 is DKK 125.0 million (2019: DKK 150.0 million), equivalent to a decrease of DKK 25.0 million. The reduction in gross profit is primarily due to decrease on the income received from the hotels in the group (DKK -10.7 million), the increase of intentional vacancy in order to initiate residential projects (DKK -5.0M) and a delay on filling vacancies due to the uncertainties caused by Covid-19.
The Group's overheads were DKK 29.4 million in 2020 against DKK 37.8 million in 2019. The decrease of DKK 8.3 million is caused by a reduction of employee expenses, a reduction of external advisor expenses and depreciation of fix assets.
Net financial items amounts to DKK -25.8 million in 2020 against DKK -29.1 million in 2019, representing a positive change of DKK 3.3 million driven by the reduction of the debt with financial institutions and lower margins interest rates.

Net Profit of the period has increased from DKK 115.1 million in 2019 to DKK 145.3 Million in 2020 due to the following effects:

Fair value adjustment in 2020 with a net of DKK 79.5 million while the fair value adjustment in 2019 had a net effect of DKK 62.4 million. In both periods an evaluation of the domicile and investment properties have been made adjusting the yield and the estimated profit and loss by the entire portfolio of Park Street Nordicom A/S and subsidiaries.
In 2020, the sale of four non-core and stabilized properties which generated a profit of 38.5 million DKK (2019: DKK 0.4 million).

The Group's equity as at 31st December 2020 was DKK 1,071.9 million, compared to DKK 931.1 million as at 31 December 2019. The improvement in the Group's equity is due to the profit for the period and revaluation of the domicile with a net increase of DKK 5.4 million.

The operation of the Group's properties in 2020 was impacted by the restraint shown by businesses to commit to leases and investment, which has delayed closings of some new leases. We also further received some long expected terminations. The current vacancy rate (calculated by rental value) for the Group's investment properties at $22.1\%$ in 2020, against $11.0\%$ for all of 2019. The new vacancies were significantly below market levels, and several pending discussions from 2020 with potential tenants should lead to a highly intensive period of concluding new leases and reducing the vacancy levels. During the first months of 2021, it has been identified positive traction with the signature of new leases.

Property acquisitions and sales

In 2020, Park Street Nordicom sold the following properties and plots:

Office building in Copenhagen
Residential unit in Ballerup
Gas station in Søborg
Retail building in Slagelse

Park Street Nordicom/ Director's report

Park Street Nordicom acquired the following properties:

Four residential units in Østerbro, Copenhagen

In addition to the above transactions, Park Street Nordicom has made the following transactions in 2021:

Sale of a residential unit in Ballerup

Organisation

Since April 23th April of 2020 when the Annual general of the Company took place the Board of Directors of Park Street Nordicom consists of Andrew La Trobe, Pradeep Pattern, Ohene Aku Kwapong, Lars-Andreas Nilsen and Anita Nassar.

The number of employees of Park Street Nordicom were 38 by the end of 2020, against 42 at the start of the year.

Subsequent events after December 31, 2020

As stated above a residential unit has been sold in February 2021 in Ballerup.

As indicated in note 23 of the consolidated financial statements in the Annual report for 2020 the share buy-back programme initiated on 19 October 2020 concluded on the 25 February 2021. In the period from 19 October 2020 to 25 February 2021, Park Street Nordicom has bought 918,313 shares for a total amount of DKK 10.0 million.

From the balance sheet date until the date of presentation of this Annual Report no additional events have occurred other than the abovementioned which significantly affects the assessment of the annual report.

Park Street Nordicom/ Director's report

Outlook and Strategy for 2021

Background of 2020, and its impact

2020 has been a testing one for the company, with key impacts and learnings:

Diverse portfolio of the company, and the blessing of the portfolio being concentrated in Denmark, which has managed the 2020 crisis better than most other countries, helped us tide through the year strongly. The performance of Hotel revenue has been negatively impacted, while we maintained low delinquencies across other sectors.
Systems and Technology driven operations which allow for managing operations remotely, dynamic access to operating and financial data is Core Infrastructure for property management and no longer a nice to have. Our efforts of the past years in developing such systems allowed for seamless operations.
While we planned for several vacancies to be leased out, the decisions have been slow. The outlook for increasing revenues in 2021 is better part in view of the preceding discussions.
The company has done preparatory work for select projects, the execution will be contingent to optimal financing and execution partners, which have been slow to achieve in 2020.
The company has further strengthened its balance sheet with reduction of short term debt from the proceeds of sale of assets.
There has been significant clean up of the pending operating expenses settlements, reduction of the financial expenses from debt paydown and general tightening of costs which has compensated to a large degree the impact of reduced revenues.

Park Street Nordicom/ Director's report

Portfolio Strategy 2021

After an indepth review of the portfolio, the portfolio of our assets are now classified into three buckets with clear associated strategy.

	CORE
Number of assets	21
Debt (DKK)	620,898,870
Book Value (DKK)	1,628,796,179
Net Operating Income 2020 (DKK)	73,334,715
Net Operating Income Stabilised - Potential (DKK)	104,243,301
	NON - CORE
---	---
Number of assets	24
Debt (DKK)	293,950,679
Book Value (DKK)	539,215,901
Net Operating Income 2020 (DKK)	32,691,975
Net Operating Income Stabilised - Potential (DKK)	36,633,844
DEVELOPMENT JV PROSPECTS
---	---
Number of asset clusters*	4
Debt (DKK)	231,383,202
Book Value (DKK)	490,918,429
Net Operating Income 2020 (DKK)	15,412,320
Net Operating Income Stabilised - Potential (DKK)	32,147,416

*there are a total of 10 assets in 4 of these clusters: Ringsted, Næstved, Odense and Taastrup

Core Assets

Concentrated in Greater Copenhagen.
Significant NOI growth potential.
Long term hold with stable low LTV financing.
Focus on Vacancy Reduction.
Focus NOI Optimisation.
Focus on Debt Optimisation.

Non-CoreAssets

Stable Assets in regional markets.
Focus is to Sell.

Development JV Prospects

Odense and Tastrup properties have immediate opportunities to significantly increase NOI.
Identify JV and Financing Partners to develop them as stand alone projects.
Seek Financing and Development partners.
Property clusters in Naestved and Ringsted are in strategic locations.

Park Street Nordicom/ Director's report

Portfolio Strategy 2021

Core Assets Outlook

Core Assets constitute 61% of the current portfolio, generating DKK 73 Million NOI.
Core Assets have a potential to generate DKK 104 Million of stabilised NOI (as per Collier's assessment).
PSN's strategy for its core operations is to focus on the asset management and enhancement of the Core Portfolio towards significantly increasing the NOI.
Mortgage Debt LTV of Core Assets is less than 40% to its book value. Some of these asset have scope to optimise the financing, which will be the focus in 2021.

Other Assets Outlook

PSN will seek to divest the Non-Core portfolio over the next 12 to 18 months.
The Non-Core portfolio is stable and generates DKK 32 Million NOI with 54% LTV Mortgage financing.
PSN will seek to identify development and financing partners for Development JV prospects, and these assets will be developed as ring fenced independent projects, where possible.

Park Street Nordicom/ Director's report

Asset Management 2021

Core Assets Focus

NOI increase from asset repositioning and increased rental income.
Key target for 2021: 17 Million DKK increase in leasing revenue.
Debt optimization towards replacing bank debt with long mortgage debt.
Key target for 2021: substantial reduction to full replacement of the current bank debt.

Other Assets and Project Focus

Disposable of Non – Core Portfolio.
Key target for 2021: execute over 250 Million DKK of assets sales.
Conclude pre – development plans for select projects towards identifying suitable JV partners for execution and partial diversments.
Key target for 2021: initiate Pulse Nørrebro project and conclude plans for Pulse Taastrup.

Park Street Nordicom/ Director's report

EBVAT Target for 2021: 85 to 90 Million DKK

Park Street Nordicom/ Director's report

Financial Highlights

Key figures

Amounts in DKK 1000s	2020	2019	2018	2017	2016
Income statement
Rental income	126,903	147,518	149,729	140,678	145,535
Total net sales	172,669	203,166	175,444	167,657	175,098
Gross profit	124,979	150,093	146,154	132,106	131,727
Profit from primary operations	187,759	146,021	142,341	392,800	24,471
Financial items	-25,757	-29,105	-33,409	-73,397	-74,926
Earnings before value adjustments and tax (EBVAT)	69,813	83,223	84,014	25,902	24,858
Profit for the period	145,321	115,053	108,289	360,137	43,496
Statement of financial position
Investment properties	2,462,633	2,477,996	2,304,614	2,255,395	1,918,052
Investments in property, plant and equipment	36,991	19,257	2,650	11,702	12,287
Balance sheet total	2,723,066	2,772,843	2,580,698	2,488,782	2,225,316
Interest-bearing debt	1,405,024	1,633,364	1,590,916	1,783,271	2,196,434
Total equity	1,071,946	931,133	810,652	554,947	-33,062
Statement of cash flows
Cash flows from operations	61,966	92,856	87,930	32,377	45,901
Cash flows from investment	137,919	-125,487	51,825	24,885	144,433
Cash flows from financing	-238,341	39,927	-94,668	-116,556	-152,493
Other disclosures
Non-current liabilities as a proportion of total liabilities (%)	94.1	89.7	94.1	82.7	58.4
Share capital	67,513	67,513	67,513	42,853	12,028
Share price, end of period (DKK)	10.00	6.65	6.7	5.8	1.3
Share price change in points	3.35	-0.05	0.9	4.5	-0.6
Dividend per share	0.0	0.0	0.0	0.0	0.0
Number of employees in the Group (average)	26	32	27	23	26

Financial ratios

	2020	2019	2018	2017	2016
Return on property portfolio (% p.a.)	4.7	5.8	5.9	5.5	5.7
Average loan rate (% p.a.)	1.8	1.8	2.0	3.7	3.3
Return margin on property portfolio (% p.a.)	2.9	4.0	3.9	1.8	2.4
Return on equity (%)	13.6%	12.4%	13.4%	64.9%	N/A
Equity ratio (%)	39.4%	33.6%	31.4%	22.3%	Neg.
Net asset value per share, end of period (DKK)	15.9	13.8	12.0	13.0	-2.8
Earnings per share (avg. Number of shares) (DKK)	2.2	1.7	1.7	21.3	3.7
Earnings per share, end of period (DKK)	2.2	1.7	1.6	8.4	3.7
Result of continuing activities per. share (DKK)	2.2	1.7	1.6	8.4	3.7
Dividend yield (%)	0.0	0.0	0.0	0.0	0.0
Price/net asset value, end of period	0.0	0.5	0.6	0.4	Neg.
Cash flow from operations per share (DKK)	0.9	1.4	1.4	1.9	3.9

The above financial ratios are calculated in accordance with the definitions in CFA Society Denmark's 'Recommendations & Financial Ratios 2015'. Reference is made to note 33 to the consolidated financial statements in the Annual report for 2020.

Park Street Nordicom/ Director's report

Financial Results

Yearly result compared to expected development

The Group achieved in 2020 an EBVAT (profit excluding value adjustments and tax) of DKK 69.8 million, which is in range with the guidance mentioned in the interim report for the first half of 2020.

Segment Information

Park Street Nordicom does not present segment information and the Group's portfolio is presented as one.

Operation from Investment Properties

The Group's investment properties at December 31, 2020 is composed of all the Group's 56 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	2020		2019
Zealand	1,664	68%	1,692	68%
Bornholm	38	2%	38	2%
Fyn	231	9%	231	9%
Jutland	529	21%	517	20%
Total	2,462		2,478

Park Street Nordicom/ Director's report

The breakdown by activity based the property value is split as follows:

Amount in Million DKK	2020		2019
Residential	339	14%	289	12%
Residential Project	394	16%	363	15%
Office	701	28%	823	33%
Retail	907	37%	877	35%
Hotel	89	4%	94	4%
Storage	32	1%	32	1%
Total	2,462		2,478

The following table shows the calculated average vacancy divided by property types:

Average vacancy in %	2020	2019
Retail	18.4%	5.7%
Office (*)	31.0%	15.1%
Residential	13.7%	7.8%
Storage	42.9%	44.8%
Others	0.0%	6.5%
Total	22.1%	11.0%

(*) Office vacancies include a re-development project in an asset located in Taastrup.

The following table shows the calculated average gross rent obtained divided by property types on properties held at 31 December 2020:

Avg. gross rent per sqm p.a. (DKK)	2020	2019
Retail	826	814
Office	867	815
Residential	1,188	1,132
Storage	337	299
Other	430	488
Total	808	774

Park Street Nordicom/ Director's report

Consolidated Financial Review

PROFIT AND LOSS

Park Street Nordicom's Net Profit is DKK 145.3 million for 2020 (2019: DKK 115.1 million), equivalent to a change of DKK 30.2 million in relation to 2019.

As mentioned above the EBVAT in 2020 is DKK 69.8 million (2019: DKK 83.2 million), which is DKK 13.4 million lower than the one achieved in 2019. The reduction is primarily driven by the reduction of the gross profit (DKK -25.0 million), primarily due to decrease on the income received from the hotels in the group (DKK -10.7 million), the increase of intentional vacancy in order to initiate residential projects (DKK -5.0M) and a delay on filling vacancies due to the uncertainties caused by Covid-19. This increase has partially been compensation by a reduction of the Group's overheads (DKK -8.3 million) and net financial items (DKK -3.3 million).

Net Profit of the period has increased from DKK 115.1 Million in 2019 to DKK 145.3 Million in 2020 due to the a higher revaluation of the investment properties amounting to DKK 79.5 Million (2019: DKK 62.4 Million). Additionally, the sale of four non-core stabilized properties have generated a profit of 38.5 million DKK while in 2019 the sale of assets generated DKK 0.4 million. To finalize, the effect of the Tax on profit is higher in 2020, being DKK 42.4 Million in 2020 (2019: DKK 31.0 Million) caused by the increase in fair value adjustments.

BALANCE SHEET

Park Street Nordicom's balance sheet total as at 31 December 2020 was DKK 2,723.1 million, a reduction of DKK 49.8 million on the balance sheet total at 31 December 2019. The reduction is mainly due to disposal of four assets which had a book value of DKK 154.3 million by the end of 2019. This effect has been partially compensated by the revaluation of investment and domicile properties of DKK 86.5 million and acquisition and improvements of assets by DKK 51.6 million. Non-current assets were DKK 2,665.7 million at 31 December 2020 (31 December 2019: DKK 2,679.9 million). Current assets have decreased from DKK 92.9 million at 31 December 2019 to DKK 57.4 million at 31 December 2020, a reduction of DKK 35.6 million mainly caused by the payment of short term debt with financial institutions.

Liabilities to credit institutions were DKK 1,405.0 million at 31 December 2020 (31 December 2019: DKK 1,633.3 million), consisting of DKK 1,354.0 million (96%) for non-current liabilities and DKK 51.0 million (4%) for current liabilities. In 2020, financial liabilities were decreased by DKK 228.3 million driven by the repayment the only short term facility existing in the portfolio (DKK 105.0 Million), repayment of debt from disposal of assets (DKK 77.5) and the remaining amount corresponds to amortization repayments to credit institutions.

CASH FLOWS FOR 2020

Cash flows from operating activities for 2020 were DKK 61.9 Million (2019: DKK 92.9 million), equivalent to a decrease of DKK 35.9 million in relation to the same period last year. The decrease is primarily due to the decrease of operating profit (EBIT) previously mentioned and changes on working capital.

Cash flows from investing activities for 2020 were DKK 137.9 million (2019: DKK -125.5 million). Cash flows from investing activities were positively affected by the sale of assets (DKK 192.8 million), partly compensated by improvements made to investment properties (DKK -36.9 million) and acquisition of assets (DKK 14.6 million). In 2019 cash flow from investing activities was negatively affected mainly by the acquisition of a properties by 103.9 million.

Cash flows from financing activities for 2020 were DKK -238.3 million (2019: DKK 39.9 million) mainly driven by the repayment the only short term facility existing in the portfolio (DKK 105.0 Million), repayment of debt from disposal of assets (DKK 77.5) and the remaining amount corresponds to amortization repayments to credit institutions.

The Group's liquid assets amounted to DKK 23.1 million at 31 December 2020 against DKK 61.6 million at 31 December 2019.

Park Street Nordicom/ Director's report

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.

Parent company Park Street Nordicom A/S

For the parent company Park Street Nordicom A / S, profit before tax amounts to DKK 145.3 million in 2020 (2019: DKK 146.0 million).

The parent company's profit and loss before tax is affected by a loss of DKK 26.2 million (2019: gain of DKK 27.0) from subsidiaries.

Parent company equity per 31 December 2020 amounts to DKK 1,071.9 Million (31 December 2019: DKK 931.1 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 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, 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 Nordicom 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 28.

Other financial risks

Park Street Nordicom financial risks are described in the consolidated financial statements, Note 28 and includes a description of the following components:

Liquidity risk
Refinancing risk
Liquidity risk management
Interest rate risk.
Credit risk.
Capital management.

Refer to the information in Note 28.

Park Street Nordicom/ Director's report

Business risks

Park Street Nordicom is subject to normal commercial and societal risks applicable to players in the Danish real estate market.

Park Street Nordicom'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 Nordicom values investment properties at fair value (market value) and includes valuation adjustments in net profit. Park Street Nordicom'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.

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

Some of the properties in Park Street Nordicom's portfolio have leases which were either entered into or renegotiated during the tough markets of 2009 to 2014. The Group has an opportunity to review these leases 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 requirements for upgrading the vacant space.

Vacancy

Park Street Nordicom 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 necessary, 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 Nordicom 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 Nordicom. 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 Nordicom sells properties that are suitable to sell. The selling price is naturally linked to uncertainty as it depends on the actual negotiation situation 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

Park Street Nordicom/ Director's report

When rebuilding the existing properties of the Group, or in the case of new construction, there is a risk of malfunctioning. Park Street Nordicom ensures against this through contracts with the Group's suppliers (contractors, etc.) who will be required to correct any deficiencies. In cases where suppliers have gone bankrupt or for some reason cannot fill their obligations, Park Street Nordicom 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 Nordicom 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 company's insurance coverage, management believes that Park Street Nordicom has sufficient insurance coverage.

Tax risks

Changes in tax legislation may affect Park Street Nordicom's fiscal situation.

Legal risks

Park Street Nordicom 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 Nordicom 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 Nordicom 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 Nordicom 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 conditions and anti-corruption due to our social responsibility in each of the business activities that are performed. CSR is reflected in the way we manage 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-development and maintenance of the existing assets Park Street Nordicom is following all applicable building regulations with the goal of reducing energy consumptions. In 2020, the Group invested DKK 41.3 million in the maintenance and modernization of the existing properties.
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 Nordicom 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. At the same time a policy is getting established for development of future employees. No breach of these policies have been identified in 2020.
Anti-corruption and bribery: The Group is working on establishing an Anti-corruption policy where employees and business partners are not

Park Street Nordicom/ Director's report

allowed to receive gifts from suppliers larger than DKK 500. In connection 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. No corruption has been detected in 2020.

Legal requirements for corporate governance

Park Street Nordicom 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 Nordicom board composed at the time of publication of the annual report for 2020 by four men and one woman. 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, Nordicom has a sub-representation of the board (top Management body).

Park Street Nordicom has set a target for the underrepresented gender in the Board of Directors (top Management body). Park Street Nordicom has chosen that the under-represented sex must be represented by 40% of the board by the end of 2022. Consequently the goal of 40% women in the Board of Directors has not been met yet as no candidates of the underrepresented gender were up for election in the previous year.

Since the number of employees in the Group is less than 50, Park Street Nordicom is not required to develop policies to increase the proportion of under-represented gender in the Group's other management levels, however the percentage of female employees represents 55% of the employees in the Group by the end of 2020. Group's overall policy is to employ or promote the best suitable candidates no matter of gender.

Internal control and risk management systems in relation to the accounting process

Park Street Nordicom 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 Nordicom 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 Executive 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 violations 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 reporting in the Auditor's Long-form Report to the Board of Directors. Minor irregularities are reported in Management Letters to the Executive Board.

Park Street Nordicom/ Director's report

Management composition and remuneration

The management of Park Street Nordicom consists of the following:

Board Directors
Executive Board

	Appointed / Employee	Expiry of electoral term	Age	Shareholding at the beginning, number of shares	Share buy in the year, number of shares	Shareholding at the end of the year	Independence	Sex
Board of Directors
Andrew LaTrobe (*)	2017	2021	55	0	0	0	Not Independent	M
Pradeep Pattem ()(*)	2016	2021	44	0	0	6,722,484^{1)}	Not Independent	M
Ohene Kwapong	2016	2021	59	0	0	0	Independent	M
Lars-Andreas Nilsen(***)	2016	2021	45	0	0	0	Independent	M
Anita Nassar(***)	2016	2021	58	0	0	0	Independent	F
(*) Andrew Latrobe holds the position of chairman of the Board
(**) 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
(***) Lars-Andreas Nilsen and 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 promote the management incentive to realize Park Street Nordicom'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.

The board members receive a fix monthly fee. The Chairman receives DKK 250,000 annually, the Vice Chairman of the Board (currently vacant) 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 2020 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.

Park Street Nordicom/ Director's report

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 establishment 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 Management Committee, the Chairman of the Strategic Investments Committee and the Chair of Credit & Mortgage Risk and Compliance Committee.

Management Positions

Park Street Asset Management Limited, England.

Park Street Advisors, England.

Pulse Taastrup P/S, Denmark.

Pulse Glostrup P/S, Denmark.

Director positions

CEO of Park Street Nordicom A/S, Denmark.

Phoam Studio ApS

PSN ApS

Pulse Living ApS

Andrew LaTrobe (UK citizen, chairman)

Andrew LaTrobe graduated with a Bachelor of Commerce degree from Rhodes University in South Africa, and then completed a Diploma in Social Studies at Oxford University and a MSC (Industrial Relations) at London School of Economics, as a Rhodes Scholar. He has been a director of Park Street Advisors since December 2014 with responsibility for operations, asset management and corporate governance. Previous corporate experience includes seven years working in a variety of client coverage and transaction execution roles at Royal Bank of Scotland (RBS), and twelve years with Standard Bank Group, working out of Johannesburg, London and Singapore.

Management Positions

Park Street Asset Management Limited, England.

Park Street Advisors, England.

Park Street Nordicom UK Limited, England

Xplore Markets Limited, England.

Pulse Taastrup P/S, Denmark.

Pulse Glostrup P/S, Denmark.

Director positions

Enviro Options Holdings (Pty) Ltd, South Africa

Swindon Ground Lease Limited, England

Sthenos International Limited, England

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 Nordicom/ Director's report

Lars-Andreas Nilsen (Norwegian citizen)

Lars-Andreas Nilsen is educated in mathematics, physics and IT at Hartvig Nissen High School in Oslo. Lars-Andreas has previously held positions at Orkla Finans, Enskilda Securities SEB, Carnegie Investment Bank, Fortis Bank and Nordea Bank Denmark, as Head of Equity Finance. Lars-Andreas owns and runs a contracting company in Sweden and owns an investment company and has a joint venture with Sector Asset Management AS in Oslo.

Management Positions

Arka Glov & Måleri AB, Sweden, CEO.

Director positions

Arka Glov & Måleri AB, Sweden, Chairman of the Board.

Scandinavian Trust AB, Sweden

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 Consultant 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.

Shareholder structure

Share capital	DKK 67,513,372
Nominal share amount	DKK 1
Number of shares	67,513,732 shares
Share Classes	DKK 12,027,858 A-shares Listed
DKK 55,485,874 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
Shareholders above 5%	In percent
---	---
Park Street Asset Management Ltd.	92.14%

The number of registered shareholders amounts as of 31 December 2020 990 pcs. (December 31, 2019: 1,077). The registered shareholders represent per 31 December 2020 99% of the share capital (31 December 2019: 98%).

All Park Street Nordicom A / S shares are listed on Nasdaq Copenhagen and are part of the Small Cap segment. The share price ended 31 December 2020 at price 10.00 (31 December 2019: 6.65), which is an increase of 3.35 points in relation to the share price per share as of 31 December 2019. The market value of Park Street Nordicom A / S constitute as of 31 December 2020 120.28 million (31 December 2019: DKK 79.99 million).

Park Street Nordicom/ Director's report

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 Nordicom 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 23 of the consolidated financial statements.

Dividends

The performance the Company during 2020 was impacted to a certain extent by COVID-19 related disruption with lower than expected top line revenue. However, in view of tighter cost control the performance was in line, though at lower end of the expectations. In view of some remaining uncertainties in the global economy, and its potential impact on our operations, The Board of Directors deems it prudential to propose to the Annual General Meeting that no dividend will be paid for the financial year 2020.

Investor Relations

It is Park Street Nordicom'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 Nordicom's information policy to:

publish interim reports,
issue annual reports, and
provide quick responses to inquiries to the group.

Stock exchange announcements in 2020 and 2021

Date	Title
08/01/2020	Park Street Nordicom A/S –Financial Calendar
31/01/2020	Park Street Nordicom A/S – Strategy 2020
26/03/2020	Park Street Nordicom A/S – Annual Report 2019
01/04/2020	Park Street Nordicom A/S – Annual General Meeting 2020 call
23/04/2020	Park Street Nordicom A/S – Annual General Meeting 2020
13/05/2020	Park Street Nordicom A/S – Disposal of office property in Copenhagen
31/08/2020	Park Street Nordicom A/S – Interim Financial Report, 1st half of 2020
19/10/2020	Park Street Nordicom A/S – New share buy back program
28/10/2020	Park Street Nordicom A/S – Share buy back program
05/11/2020	Park Street Nordicom A/S – Share buy back program
13/11/2020	Park Street Nordicom A/S – Share buy back program
23/11/2020	Park Street Nordicom A/S – Share buy back program
01/12/2020	Park Street Nordicom A/S – Share buy back program
10/12/2020	Park Street Nordicom A/S – Share buy back program
17/12/2020	Park Street Nordicom A/S – Share buy back program

Park Street Nordicom/ Director's report

22/12/2020 Park Street Nordicom A/S – Financial calendar
29/12/2020 Park Street Nordicom A/S – Share buy back program
08/01/2021 Park Street Nordicom A/S – Share buy back program
19/01/2021 Park Street Nordicom A/S – Share buy back program
27/01/2021 Park Street Nordicom A/S – Share buy back program
29/01/2021 Park Street Nordicom A/S – Strategy 2021
04/02/2021 Park Street Nordicom A/S – Share buy back program
15/02/2021 Park Street Nordicom A/S – Share buy back program
23/02/2021 Park Street Nordicom A/S – Share buy back program
26/02/2021 Park Street Nordicom A/S – Share buy back program

Financial Calendar
| 28/01/2021 | 2021 Strategy Update |
| --- | --- |
| 25/03/2021 | Annual Report 2020 |
| 22/04/2021 | Ordinary General Meeting |
| 26/08/2021 | Half year report 2021 |
| 30/03/2022 | Annual Report 2021 |
| 21/04/2022 | Ordinary General Meeting |

More info

Further information on company and shareholder matters and the Group's activities can be found on Park Street Nordicom's website 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: [email protected]

Group structure at December 31, 2020

The Group structure at December 31, 2020 consists of the company Park Street Nordicom A/S and the fully owned subsidiaries Phoam Studio ApS, Park Street Nordicom UK Ltd., Pulse Taastrup P/S, Pulse Glostrup P/S, PSN ApS and Pulse Living ApS.

Information on investment is disclosed in note 8 of the parent company's financial statements. All subsidiaries are fully consolidated in the consolidated financial statements of Park Street Nordicom A/S.

Park Street Nordicom/ Statements

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 2020 for Park Street Nordicom A/S.

The annual report is prepared in accordance with International Financial Reporting Standards as adopted by the EU, and further requirements in the Danish Financial Statement Act and rules for listed companies.

In our opinion, the consolidated financial statements give a true and fair view of the Group and the Parent's financial position as at 31 December 2020 and of the results of the Group's and the Parent Company's operations and cash flows for 2020.

It is also our opinion that the directors' report contains a true and fair account of the development of the Group's activities 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.

The annual report is submitted to the Ordinary General Meeting for approval.

Copenhagen 25 March 2021

Management

Pradeep Pattem
CEO

Board of Directors

Andrew John Essex La Trobe
Chairman

Pradeep Pattem

Ohene Aku Kwapong

Lars-Andreas Nilsen

Anita Nassar

Independent Auditor’s Report

To the shareholders of Park Street Nordicom A/S

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 2020 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 2020 in accordance with International Financial Reporting 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 Nordicom A/S for the financial year 1 January to 31 December 2020 comprise income statement and statement of comprehensive income, statement of financial position, statement of equity, statement of cash flows and notes for the Group as well as for the Parent Company. Collectively referred to as the "Financial Statements".

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's responsibilities for the audit of the Financial Statements section of our report.

We 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' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accordance with 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 Nordicom A/S on 27 April 2017 for the financial year 2017. We have been reappointed annually by shareholder resolution for a total period of uninterrupted engagement of 4 year, including the financial year 2020.

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 2020. 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.

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 2 domiciles that are revalued to fair value at 31 December 2020.	We assessed the method used by management to measure the fair value of investment properties and domiciles, and we challenged the assumptions applied, using our knowledge of the real estate market and professional scepticism.
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 significant effect on the fair value of the properties.	We assessed the competencies, capacity and independence of external valuer used by Management.
Management has used the capitalisation method to determine the fair value. The model is described in note 1.2, with market rent, vacancy and yield being the most significant assumptions.	We assessed and tested on a sample basis the data inputs used to determine fair value, including market rent and yields, by comparing the valuation made by Management with the valuation made by the external valuer and comparable trades.
Management has obtained valuations from an external valuer to support the fair value determined by Management; including the assumptions used, with market rent and yield being the most significant assumptions.	We tested on a sample basis the calculation for the fair values including the assumptions used and the related disclosures in the notes.
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.

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.

Management's responsibilities for the Financial Statements

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

In preparing the Financial Statements, Management is responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting 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, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Parent Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.
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 report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group 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 achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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 or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Hellerup, 25 March 2021

PricewaterhouseCoopers

Statsautoriseret Revisionspartnerselskab

CVR no 3377 1231

Jesper Wiinholt

State Authorised Public Accountant

mne13914

Morten Jørgensen

State Authorised Public Accountant

mne32806

2020

CONSOLIDATED FINANCIAL STATEMENTS

Park Street Nordicom | CONSOLIDATED Financial Statements

Income statement

Note	Amounts in DKK 1000s	2020	2019
3	Net sales	172,669	203,166
4	Operating expenses	-47,690	-53,072
	Gross profit	124,979	150,093
5	Employee benefit expenses	-17,977	-20,346
6	Other external expenses	-8,540	-11,342
7	Depreciation, amortisation and impairment	-2,891	-6,077
	Operating profit (EBIT)	95,570	112,328
8	Financial expenses	-25,757	-29,105
	Earnings before value adjustments (EBVAT)	69,813	83,223
9	Adjustment to fair value, net	79,463	62,387
10	Gains realised on the sale of investment properties	38,483	411
	Profit before tax	187,759	146,021
11	Tax on profit for the period	-42,438	-30,968
	Profit for the period	145,321	115,053
	Distributed as follows
	Parent's shareholders	145,321	115,053
	Profit for the period	145,321	115,053
12	Earnings per share, end of period	2.19	1.71
12	Diluted earnings per share, end of period	2.19	1.71

Park Street Nordicom | CONSOLIDATED Financial Statements

Statement of comprehensive income

Amounts in DKK 1000s	2020	2019
Profit for the period	145,321	115,053
Other comprehensive income:
Items that cannot be reclassified to the income statement:
Fair value adjustment of domicile properties	7,041	6,959
Tax on fair value adjustment of domicile properties	-1,549	-1,531
Other comprehensive income after tax	5,492	5,428
Comprehensive income for the period	150,813	120,481
Distributed as follows
Parent's shareholders	150,813	120,481
Comprehensive income for the period	150,813	120,481

Park Street Nordicom | CONSOLIDATED Financial Statements

Statement of financial position

Note	Amounts in DKK 1000s	2020	2019
	ASSETS
	Non-current assets
	Intangible assets
13	Software	3,671	1,784
		3,671	1,784
	Property, plant and equipment
14	Domiciles	196,298	190,820
15	Investment properties	2,462,633	2,477,995
16	Machinery and equipment	792	6,838
		2,659,723	2,675,653
	Financial assets
17	Investment in associates	2,029	2,029
	Deposits	279	392
		2,308	2,421
	Total non-current assets	2,665,703	2,679,858
	Current assets
18	Mortgages and instruments of debt	8,000	8,335
19	Project holdings	0	1,628
20	Receivables	17,202	17,513
	Income tax receivable	4,403	269
	Prepaid expenses and accrued income	4,609	3,634
21	Cash and short-term deposits	23,151	61,606
	Total current assets	57,364	92,985
	Total assets	2,723,066	2,772,843

Park Street Nordicom | CONSOLIDATED Financial Statements

Statement of financial position

Note	Amounts in DKK 1000s	2020	2019
LIABILITIES
Equity
	Share capital	67,513	67,513
	Revaluation reserve	55,107	51,177
	Share Premium	289,260	289,260
	Accumulated profit	660,066	523,182
22,23	Total equity	1,071,946	931,133
Liabilities
Non-current liabilities
24	Deferred tax	191,733	152,430
25	Credit institutions	1,354,054	1,478,691
	Deposits	7,769	21,435
		1,553,556	1,652,556
Current liabilities
26	Provisions for liabilities	400	400
25	Credit institutions	50,970	154,673
	Trade and other payables	3,988	4,987
	Income tax payable	4,549	25
	Deposits	24,732	19,819
	Other liabilities	12,926	9,250
		97,565	189,154

	Total liabilities	1,651,121	1,841,710

	Total equity and liabilities	2,723,066	2,772,843

Park Street Nordicom | CONSOLIDATED Financial Statements

Statement of equity

Amounts in DKK 1000s	Share capital	Revaluation reserve	Accumulated profit	Share Premium	Equity Total
Statement of equity for 2020:
Equity as at 1 January 2020	67,513	51,177	523,182	289,260	931,133
Comprehensive income for the period
Profit for the period	0	0	145,321	0	145,321
Fair value adjustment of domicile	0	7,041	0	0	7,041
Tax on other comprehensive income	0	-1,549	0	0	-1,549
Other comprehensive income during the financial year	0	5,492	0	0	5,492
Comprehensive income for the period	0	5,492	145,321	0	150,813
Transactions with owners
Repurchase own shares	0	0	-10,000	0	-10,000
Cash injection by existing shareholders	0	0	0	0	0
Liabilities with financial institutions converted into Equity	0	0	0	0	0
Total transactions with owners	0	0	-10,000	0	-10,000
Other adjustments
Depreciation of revalued value of domiciles	0	-1,563	1,563	0	0
Total other adjustments	0	-1,563	1,563	0	0
Equity as at 31 December 2020	67,513	55,107	660,066	289,260	1,071,946

Park Street Nordicom | CONSOLIDATED Financial Statements

Statement of cash flows

Amounts in DKK 1000s	2020	2019
Operating profit (EBIT)	95,570	112,328
Adjustment for illiquid operating items, etc.	2,891	5,677
Change in project holdings, net	0	0
Change in other operating capital	-6,380	9,987
Cash flows concerning primary operations	92,081	127,992
Financial income received	0	0
Financial expenses paid	-25,757	-29,105
Paid Corporate Tax	-4,358	-6,031
Total cash flow from operating activities	61,967	92,856
Cash flow from investing activities
Improvements to investment properties	-36,991	-19,257
Sales of investment properties	192,805	1,900
Purchase of intangible assets	-3,249	-2,172
Purchases of other property, plant and equipment	-14,645	-103,930
Share capital increase (cash injection)	0	0
Acquisition of subsidiaries	0	0
Acquisition of associates	0	-2,029
Total cash flow from investing activities	137,919	-125,487
Cash flow from financing activities
Repurchase Own Shares	-10,000	0
Proceeds from assumption of liabilities to credit institutions	0	95,000
Repayment of liabilities to credit institutions	-150,831	-55,073
Repayment of debt from disposal of assets	-77,510	0
Total cash flow from financing activities	-238,341	39,927
Total cash flow for the period	-38,455	7,296
Liquid assets as at 1 January	61,606	54,310
Liquid assets at the end of the period	23,151	61,606
Liquid assets at the end of the period
Cash and short term deposit	23,151	61,606
Liquid assets held for sale	0	0
Liquid assets at the end of the period	23,151	61,606

Summary

Note 1 Accounting policies, accounting estimates and risks, etc.
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 Adjustments 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 associatates
Note 18 Mortgages and instruments of debt
Note 19 Project holdings
Note 20 Receivables
Note 21 Cash and short-term deposits
Note 22 Share capital
Note 23 Own shares
Note 24 Deferred taxes
Note 25 Credit institutions
Note 26 Provisions for liabilities
Note 27 Contingent assets and liabilities
Note 28 Financial risks and use of derivative financial instruments
Note 29 Non-current operating items, etc.
Note 30 Change in other working capital
Note 31 Related parties
Note 32 Subsequent events
Note 33 Accounting policies

Notes

Note 1 - Accounting policies, accounting estimates and risks, etc.

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 33 for a full description of the accounting policies used.

b. Changes to accounting policies

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2019 as stated on note 33.

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 transaction 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 model used contains the following main elements:

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 Underrented elements
11	+ Cash deposits
12	+ Other
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 subscriptions, 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 stabilised 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 Nordicom'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)	2020	2019
Retail	826	814
Office	867	815
Residential	1,188	1,132
Storage	337	299
Other	430	488
Total	808	774

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.

Change in market rent per sqm per year (DKK)	Change in market value (Million DKK)
	2020	2019
200	565	697
100	282	348
50	142	174
-50	-141	-171
-100	-276	-339
-200	-545	-673

The table shows that an increase in the market price of, for example 50 DKK per sqm per year will increase the completed investment properties' fair value by DKK 142 million (31 December 2019: DKK 174 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 (broken down by property types and calculated as estimated vacancy divided by the market rent in the terminal):

Change in Vacancy (%-point)	Change in market value (Million DKK)
	2020	2019
10%	-2	-2
5%	-1	-1
-2%	1	1
-5%	2	2

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 -1 Million (31 December 2019: DKK -1 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.

	2020		2019
Percentage p.a.	Interval	Weighted Avg	Interval	Weighted Avg
Retail	6.00 – 8.75	7.44	5.25 – 8.75	7.21
Office	5.00 – 8.50	6.46	4.50 – 8.50	6.04
Storage	6.75 – 9.50	7.27	9.00 – 9.50	9.23
Residential	4.13 – 5.50	4.58	4.00 – 5.25	4.12
Others	6.50 - 6.75	6.51	6.25 – 6.75	6.37
Total	4.13 - 9.50	6.30	4.00 – 9.50	6.38

The table shows that the return requirements for completed investment properties at December 31, 2020 is in the range $4.13\% - 9.50\%$ per annum. The corresponding interval at December 31, 2019 amounted to $4.00\% - 9.50\%$ per annum.

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 December 31, 2020 6.30% per annum for the overall portfolio of finished investment properties at December 31, 2019, the corresponding weighted return requirements for the entire portfolio 6.38% 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 (% points)	Change in market value (DKK million)
	2020	2019
1.00%	-285	-400
0.75%	-221	-312
0.50%	-152	-216
0.25%	-79	-113
-0.25%	85	123
-0.50%	201	258
-0.75%	302	408
-1.00%	412	575

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 - 79 million (31 December 2019: DKK -113 million).

The breakdown by activity based the property value is split as follows:

Amount in Million DKK	2020		2019
Residential	339	14%	285	12%
Residential Project	394	16%	363	16%
Office	701	28%	680	29%
Retail	907	37%	871	37%
Hotel	89	4%	94	4%
Storage	32	1%	32	1%
Total	2,462		2,325

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 31. Park Street Nordicom possesses at 31 December 2020 the following two domiciles:

Svanevej 12, Copenhagen NV (Nordicom'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 December 31, 2020 resulted in a positive revaluation of the properties' book value by DKK 7.0 million (31 December 2019: DKK 7.0 million), which is included under "Fair value adjustment of domicile properties" in other comprehensive income.

i. Park Street Nordicom domicile in Copenhagen

Park Street Nordicom's headquarters at Svanevej 12 in Copenhagen Nordvest neighbourhood is an office building that is partially used as domicile for Park Street Nordicom and partly for rental. The property is characterized by generating a current return on rent, similar to the Group's investment

properties (see description above except that the property is also used as domicile for Park Street Nordicom). 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:

	2020	2019
Market rent per sqm. per year (DKK)	1,240	1,165
Vacancy (%)	0.0	0.0
Return requirement (% p.a.)	5.25	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 +3.8 million. (31 December 2019: DKK +3.6 million) and DKK -3.7 million (31 December 2019: DKK -3.6 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 -7.8 million (31 December 2019: DKK -6.7 million) and DKK +9.4 million (31 December 2019: DKK +8.0 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 Nordicom hotel on Marbækvej 6 in Ballerup is a property where Park Street Nordicom 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 estimate 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 between 2020 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.

	2020	2019
Market rent (% of expected revenue from the hotel)	33.0	33.0
Return requirement (% p.a.)	5.50	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 rent of 1.0% of expected revenue from the hotel will result in a change of the property's fair value, respectively DKK +3.5 million. (31 December 2019: DKK +1.2 million) and DKK -3.5 million (31 December 2019: DKK -1.2 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 -9.1 million (31 December 2019: DKK -10.9 million) and DKK +10.9 million (31 December 2019: DKK +10.9 million).

Classification of properties

Park Street Nordicom classifies the properties in the following categories:

Domicile (Owner-occupied properties)
Investment Properties

Reference is made to note 33 in accounting policies for a more detailed description of how the properties are included in the above-mentioned classifications.

Classification of properties takes place on the basis of Park Street Nordicom'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 Nordicom 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 Nordicom.

Deferred tax assets and liabilities

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 December 31, 2020 the Group has included unused tax losses of DKK 165 million (31 December 2019: DKK 206 million), which all of them (31 December 2019: DKK 206 million) is estimated to be realized within a three-year period or against deferred tax liabilities. The reduction in unutilized losses in 2020 and 2019 is due to positive tax income.

Determining the fair value of debt to credit institutions

As stated on Note 25 the value of the Group's mortgage debt and bank debt is classified as amortized cost.

As stated in Note 25 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 Nordicom's property portfolio is managed under a single management makes no segmentation of the portfolio. Information on the Group's revenue 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	2020	2019
Rental income	126,903	147,518
Sales of other services	45,179	55,008
Total sales of services	172,082	202,526
Interest income, mortgages and instruments of debt	587	640
	172,669	203,166

Note 4 - Operating expenses

Amounts in DKK 1000s	2020	2019
Operating expenses, investment properties	43,263	47,750
Operating expenses, other services	4,428	5,323
	47,690	53,073

Note 5 – Employee benefits expenses

Amounts in DKK 1000s	2020	2019
Salary	16,549	18,772
Contribution-based pensions (*)	958	958
Other social security costs	65	43
Other staff costs	406	615
	17,977	20,346
Average number of employees	26	32

(*) The Group 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 to the parent company's CEO (Pradeep Pattem) comprises the following (**):
Salary and salary	2,760	2,760
Contribution-based pensions	0	0
Bonus	0	0
	2,760	2,760

Remuneration to the parent company's board of directors constitutes the following (***):

Board members
Pradeep Pattem (CEO)	100	100
Andrew LaTrobe (Chairman of the Board)	250	250
Ohene Kwapong (Chairman of the Audit Committee)	175	175
Lars-Andreas Nilsen (Member of the Audit Committee)	150	150
Anita Nassar	100	100
Per Høpfner	50	75
	825	850

(**) Remuneration of the board of directors is disclosed on the Director's report of the Annual Report.

Note 6 – Auditor's fees

The auditor appointed in 2020 and 2019 is PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab. Their fees can be specified as follows:

Amounts in DKK 1000s	2020	2019
Statutory audit	428	465
Other assurance services	0	0
Tax and VAT advice	177	209
Other services	109	44
	714	718

Fees for non-audit services delivered by PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab, include issuing assurance statement on opening balance in subsidiary and general accounting and tax advisory services.

Note 7 – Depreciation and amortization

Amounts in DKK 1000s	2020	2019
Depreciation, software	1,361	388
Depreciation, domicile properties	1,563	1,563
Depreciation, inventory and fixed assets	-32	4,127
	2,891	6,077

Note 8 – Financial Expenses

Amounts in DKK 1000s	2020	2019
Interest expenses, liabilities to credit institutions measured at amortized cost	24,585	29,022
Other interest costs and fees	296	4
Borrowing costs	875	80
	25,757	29,105

Note 9 – Adjustments to fair value, net

Amounts in DKK 1000s	2020	2019
Fair value adjustment, investment properties	79,463	62,387
	79,463	62,387

Note 10 – Realized gains on the sale of investment properties

Amounts in DKK 1000s	2020	2019
Sales, investment properties	192,805	2,310
The property's carrying amount on sale etc.	-154,322	-1,899
	38,483	411

Note 11 – Tax on profit for the year and other comprehensive income

Amounts in DKK 1000s	2020	2019
Annual tax can be divided as follows:
Current tax on profit of the year	4,524	2,755
Current tax, previous years	160	-2,257
Changes in deferred tax liabilities	37,805	27,984
Changes in deferred tax assets previous years	0	179
Changes in deferred tax liabilities previous years	-51	2,307
	42,438	30,968
Tax on profit for the year can be explained as follows:
Estimated tax at a tax rate of 22%	41,307	32,125
Non-deductible costs	586	255
Non-taxable income	0	-109
Adjustment of previous years taxes	545	-1,303
	42,438	30,968
Effective tax rate	22.60%	21.21%

Note 12 – Earnings per share

Amounts in DKK 1000s	2020	2019
Profit for the period	145,321	115,053
Parent company shareholders' share of profit for the year, used to calculate earnings per share	145,321	115,053
Average number of shares	67,513,732	67,513,732
Average number of own shares	-459,157	-119,491
Average number of shares in circulation	67,054,576	67,394,241
Convertible bond's average dilution effect	0	0
Diluted average number of shares in circulation	67,054,576	67,394,241
Number of shares, end period	67,513,732	67,513,732
Number of own shares, end period	-1,037,804	-119,491
Number of shares in circulation, end period	66,475,928	67,394,241
Convertible bond's dilution effect, end of period	0	0
Diluted average number of shares in circulation	66,475,928	67,394,241
Earnings per share (average number of shares) (DKK)	2.17	1.71
Diluted results per share (average number of shares) (DKK)	2.17	1.71

Note 13 – Intangible assets

Amounts in DKK 1000s	2020	2019
Cost at 1 of January	2,172	0
Additions during the year	3,249	2,172
Cost at 31 December	5,421	2,172
Amortization at 1 January	-388	0
Amortization during the year	-1,361	-388
Amortization at 31 December	-1,749	-388
Balance at 31 December	3,671	1,784

Note 14 – Domicile

Amounts in DKK 1000s	2020	2019
Cost at 1 of January	201,648	194,689
Revaluation of value	7,041	6,959
Cost / Revaluated Value at 31 December	208,689	201,648
Depreciation and amortization at 1 January	-10,828	-9,266
Depreciation	-1,563	-1,563
Depreciation and amortization at 31 December	-12,391	-10,828
Balance at 31 December	196,298	190,820

Domicile properties consist of a hotel in Ballerup and Park Street Nordicom's headquarters in Copenhagen.

As the property is presented as a domicile, depreciation is required in accordance with IAS 16. Assets are revaluated equal to fair value at the date of revaluation less accumulated depreciation and subsequent impairment losses. There have been revaluations both as of December 31, 2020 and December 31, 2019.

Domicile properties are pledged as security for loans, mortgage loans and other credit institutions as stated in Note 29. Information on fair value hierarchy of Domicile is as follows:

Amounts in DKK 1000s	Level 1	Level 2	Level 3	Total
At 31 December 2020:
Domicile property	0	0	196,298	196,298
	0	0	196,298	196,298
At 31 December 2019:
Domicile property	0	0	190,820	190,820
	0	0	190,820	190,820

Classification of domicile properties in level 3 means that determining the fair value of domicile properties mainly based on data that are not observable in the market.

During the 2020 and 2019 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 2020 and 2019.

If Park Street Nordicom domiciles were measured at the historical cost less accumulated depreciation, the book value would have been the following:

Amounts in DKK 1000s	2020	2019
Domicile properties	117,628	119,191
	117,628	119,191

Note 15 – Investment properties

As of 31 December 2020 there are no ongoing sales processes regarding investment properties.

Amounts in DKK 1000s	2020	2019
Balance at 1 of January	2,477,996	2,304,614
Transfer to / from project holdings	1,628	0
Transfer to / from machinery and equipment	5,216	0
Costs incurred for improvements	36,991	19,257
Adjustment to fair value, net	79,463	62,387
Acquisition of properties	14,645	96,478
Depreciation of fixed assets	1,015	-2,840
Retirement on sale	-154,322	-1,900
Balance at 31 December	2,462,633	2,477,995

Fair value hierarchy for investment:

Amounts in DKK 1000s	Level 1	Level 2	Level 3	Total
At 31 December 2020:
Investment properties	0	0	2,462,633	2,462,633
	0	0	2,462,633	2,462,633
At 31 December 2019:
Investment properties	0	0	2,477,995	2,477,995
	0	0	2,477,995	2,477,995

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 2020 and 2019 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. Four residential units in an already existing properties have been acquired in 2020 while a shopping center, a land plot and a residential unit in an already existing property were acquired in 2019.

Total fair value adjustments on investment properties in the financial year are:

Amounts in DKK 1000s	2020	2019
Investment properties	79,463	62,387
	79,463	62,387

Total fair value adjustments amounts to DKK 79.46 million (2019: DKK 62.4 million) for the properties owned by the Company as of December 31, 2020. 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 27.

The Group does not have any agreement which required the Group to build or redevelop any properties neither in 2020 or 2019.

The net income of the investment portfolio is as follows:

Amounts in DKK 1000s	2020	2019
Rental income from investment properties	121,842	146,984
Operating expenses, investment properties	-42,098	-46,015
Net income from investment properties	79,744	100,969

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	2020	2019
Remaining termination within 1 year from the balance sheet date	80,608	101,534
Remaining termination between 1 and 5 years from the balance sheet date	120,944	104,340
Remaining termination after 5 years from the balance sheet date	53,272	45,972
	254,824	251,846

Note 16 – Machinery and equipment

Amounts in DKK 1000s	IT Equipment	Appliances	Total Machinery and Equipment
Cost at 1 of January 2020	4,164	8,356	12,520
Additions during the year	83	128	211
Disposals during the year
Cost at 31 December 2020	4,247	8,484	12,731
Amortization at 1 January 2020	-4,099	-6,799	-10,898
Amortization during the year	-88	-953	-1,041
Amortization at 31 December 2020	-4,187	-7,752	-11,939
Balance at 31 December 2020	60	732	792
Cost at 1 of January 2019	4,120	6,532	10,652
Additions during the year	44	1,824	1,868
Disposals during the year			0
Cost at 31 December 2019	4,164	8,356	12,520
Amortization at 1 January 2019	-4,092	-4,695	-8,787
Amortization during the year	-7	-2,104	-2,111
Amortization at 31 December 2019	-4,099	-6,799	-10,898
Balance at 31 December 2019	65	1,557	1,622

Note 17 – Investment in associates

The company acquired 150,000 units of common membership interest in the entity Enterra Solution, LLC in August 2019 as part of the strategy to develop a Real Estate Platform with Technology. This company is developing an advanced AI (Artificial Intelligence) based system that allows organizations to capture, curate and analyse data which will help the Company to increase efficiency in the operations and simplify the processes.

Amounts in DKK 1000s	2020	2019
Cost price at January 1	2,029	0
Additions	0	2,029
Cost price at December 31	2,029	2,029
Carrying amount at December 31	2,029	2,029

Note 18 – Mortgages and Instruments of Debt

The Group has the following mortgage and debt instruments classified as "Financial assets measured at amortized cost":

Amounts in DKK 1000s	2020	2019
Financial assets at amortized cost at 1 January	8,335	8,618
Repayment of the year	-335	-283
Financial assets at amortized cost at 31 December	8,000	8,335

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
Value	Expire	2020	2019	2020	2019	2020	2019
DKK	2025	7.5%	7.5%	8,000	8,335	8,000	8,335
				8,000	8,335	8,000	8,335

The calculated fair value is based on estimates (Level 2 in fair value hierarchy).

Note 19 – Project Holdings

Amounts in DKK 1000s	2020	2019
Project holdings at 1 January	1,628	1,628
Additions and improvements	0	0
Sales of project holdings, valued at cost price	0	0
Transferred to / from investment properties	-1,628	0
	0	1,628
Project holdings at 31 December	0	1,628
Carrying forward of project holdings recognized at net realizable value	0	1,628

Project holdings are pledged as security for debt to credit institutions as stated in the comments in note 27.

Note 20 – Receivables

Amounts in DKK 1000s	2020	2019
Receivable Rental Income	3,056	9,828
Deposited funds in banks	10,119	5,999
Other Receivables	4,027	1,686
Receivables at 31 December	17,202	17,513

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	1,939	2,261
Net additional provisions	740	585
Recognized losses (Write off)	-817	-907
	1,862	1,939

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	60	1,053
Between 30 and 90 days	978	29
Over 90 days	492	3,207
	1,530	4,289

Trade receivables are predominantly non-interest bearing. Apart from rental income receivable, Park Street Nordicom has no receivables that are overdue at the balance sheet date or which have been assessed as impaired.

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 21 – Cash and cash equivalents

Amounts in DKK 1000s	2020	2019
Petty cash	3	10
Deposits in banks for free disposal	23,148	61,596
	23,151	61,606

Note 22 – Share capital

Amounts in DKK 1000s	2020	2019
Share capital as on 1st of January	67,513	67,513
Share capital increase	0	0
Share capital at 31 December	67,513	67,513

The share capital consists of 67,513,372 shares of DKK 1 (31 December 2019: 67,513,372 shares of DKK 1). No shares have special rights. 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 92.14% (and a corresponding percentage of the votes) of the total nominal share capital of the Company.

Note 23 – Own shares

| | Number of shares | | Nominal value
(Amount in DKK 1000) | | Share of share capital | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| 1 January | 119,491 | 119,491 | 119 | 119 | 0.2% | 0.2% |
| Additions during the year | 918,313 | - | 918 | - | 1.3% | - |
| 31 December | 1,037,804 | 119,491 | 1,037 | 119 | 1.5% | 0.2% |

As indicated on the company announcement published on 19 October, 2020 Park Street Nordicom A/S initiated a share buyback program for up to DKK 11.9m, to be executed during the period from October 19, 2020 to 25 February, 2021. The buyback program was launched in accordance with the authorization granted to the board of directors as stated on the point 3.7 of the Articles of Associated and approved by the shareholders at the Annual General Meeting on April 25, 2019. The board of directors is authorized in the period until 31 December 2021 to allow the Company to acquire class A treasury shares corresponding to a total of 10% of the Company's class A share capital.

In the period from 19 October 2020 to 31 December 2020, Park Street Nordicom bought 918,313 shares for a total amount of DKK 10.0 million.

All own shares are owned by Park Street Nordicom A/S.

Note 24 – Deferred Taxes

Amounts in DKK 1000s	2020	2019
Deferred tax asset at 1st of January	0	179
Additions from acquired companies	0	0
Recognized in the income statement	0	0
Correction from previous years	0	-179
Deferred tax assets at 31 December	0	0
Amounts in DKK 1000s	2020	2019
Deferred tax liabilities at 1st of January	152,430	120,606
Recognized in other comprehensive income	1,549	1,531
Correction from previous years	-51	2,309
Recognized in the income statement	37,805	27,984
Deferred tax liabilities at 31 December	191,733	152,430
Deferred tax is recognized in the balance sheet as follows:
Deferred tax (active)	0	0
Deferred tax (liability)	-191,733	-152,430
	-191,733	-152,430
Deferred tax at 31 December	-191,733	-152,430

Deferred tax recognized in the balance

The calculation of deferred taxes included DKK 165 million relating to tax losses carried forward from Group companies. Based on budget accounting and tax profits in the period 2021-2024 and deferred tax liabilities, it is estimated that all tax losses (tax base) will be realized, which is included in the calculation of deferred tax DKK 191.7 million (taxable value) per 31 December 2020.

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 Phoam Studio ApS, PSN ApS, Pulse Living ApS and Park Street Nordicom UK.

Amounts in DKK 1000s	Balance 1/1	Recognized in the income statement	Recognized in another comprehensive income	Balance 31/12
2020
Software	0	807	0	807
Investment and residential properties	199,231	27,360	1,549	228,140
Fixtures and fittings	-1,552	1,029	0	-523
Project Holdings	0	0	0	0
Receivables	0	-409	0	-410
Provisions	-88	0	0	-88
Credit institutions	256	-52	0	204
Tax losses carryforward	-45,417	9,019	0	-36,399
	152,430	37,754	1,549	191,733

2019

Investment and residential properties	169,801	27,899	1,531	199,231
Fixtures and fittings	-593	-959	0	-1,552
Project Holdings	0	0	0	0
Receivables	-497	497	0	0
Provisions	-264	176	0	-88
Credit institutions	123	133	0	256
Tax losses carryforward	-48,143	2,726	0	-45,417
	120,427	30,472	1,531	152,430

Note 25 – Credit Institutions

Amounts in DKK 1000s	2020	2019
Credit institutions, nominal	1,412,811	1,641,151
Market value adjustments	-7,787	-7,787
	1,405,024	1,633,364
The liabilities are thus included in the balance sheet:
Credit institutions, long-term	1,354,054	1,478,691
Credit institutions, short-term	50,970	154,673
	1,405,024	1,633,364

The Group's loans and credits are distributed as per 31 December as follows:

Liabilities recognized at fair value	Currency	Rate type	Expiry date	2020	2019
Zero-coupon bonds	DKK	Interest-free	6-10 years	11,335	0
Zero-coupon bonds	DKK	Interest-free	11-15 years	0	11,335
				11,335	11,335
Market value adjustments				-7,787	-7,787
Carrying amount				3,548	3,548
Liabilities recognized at amortized cost	Currency	Rate type	Expiry date	2020	2019
Banks Debt	DKK	Fixed	0-1 years	0	102,520
Banks Debt	DKK	Fixed	2-5 years	255,260	271,491
Mortgage Debt	DKK	Variable	6-10 years	143,986	166,666
Mortgage Debt	DKK	Variable	11-15 years	97,372	29,394
Mortgage Debt	DKK	Variable	16-20 years	904,858	1,059,744
Carrying amount				1,401,476	1,629,816

The nominal amounts stated in the tables represent the amount that Park Street Nordicom 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	2020	2019
Non-current financial liabilities	1,478,691	1,540,073
Current financial liabilities	154,673	50,843
Financial liabilities with credit institutions at 1 January	1,633,364	1,590,916
Repayment of liabilities to credit institutions	-150,831	-55,073
Proceeds from assumption of liabilities to credit institutions	0	95,000
Repayment of debt from disposal of assets	-77,510	0
Accrued financial expenses	0	2,520
Financial liabilities with credit institutions at 31 December	1,405,024	1,633,364
Non-current financial liabilities	1,354,054	1,478,691
Current financial liabilities	50,970	154,673
Total financial liabilities with credit institutions at 31 December	1,405,024	1,633,364

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 2020 and 2019.

Zero-coupon bonds (former Convertible bonds)

As a result of a prior bank agreement, Park Street Nordicom 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 is subordinate to all other unsubordinated debt. The movement of the nominal value of these zero-coupon bonds is as follows:

Amounts in DKK 1000s	2020	2019
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

The fair value estimated by an independent reviewer (Level 3 of the fair value hierarchy) at December 31 2020 corresponds to a rate of 31.30 (31 December 2019 – 31.30). The carrying value of zero-coupon bonds in the statement of financial position is shown in the following table:

Amounts in DKK 1000s	2020	2019
Fair value of financial liability at the date of issue	3,548	3,548
Amortization of convertible bonds at 31 December	0	0
Fair Value adjustment recognized in the Profit and Loss	0	0
Fair Value adjustment of convertible bonds converted in Equity	0	0
Balance at 31 December	3,548	3,548

As stated in note 27 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 26 – Provisions for liabilities

Amounts in DKK 1000s	2020	2019
Provisions at 1 January	400	1,200
Used in the year	0	0
Reversed during the year	0	-800
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.

Note 27 – Contingent assets and liabilities

Pledges and guarantees

The nominal pledge for the bank debt and mortgage debt given by credit institutions per December 31, 2020 amounts a total of DKK 2,002 million (31 December 2019: DKK 2,082 million), the nominal value of the loans amounts a total of DKK 1,405 million (December 31, 2019: DKK 1,633 million) in the group's investment properties and domiciles with a book value totalling DKK 2,658 million (31 December 2019: DKK 2,669 million).

The nominal pledge for the bank debt and mortgage debt given by credit institutions per December 31, 2020 amounts a total of DKK 8.3 million (31 December 2019: DKK 8.3 million), in the group's deposited mortgage deeds with a book value totalling DKK 8.0 million (31 December 2019: DKK 8.3 million).

Litigations and disputes

No additional significant litigations and disputes are acknowledged by the Group at December 31, 2020 other than the ones indicated in Note 26.

Conditional debt relief and contingencies

In connection with the sale of a property in 2014, Park Street Nordicom has been subject to a surcharge for the property if the purchaser on the site before 1 January 2024 obtains more building rights than assumed at the conclusion of the transaction. The additional price amounts to DKK 2,000 for each building rights. Additional building plans will require a change of the local plan for the area in which the property in question is located. Nordicom is not aware of any plans to change the local plan in question, for this reason Park Street Nordicom does not consider the potential additional price as a contingent asset.

Contingent assets

As part of the sales agreement of the property sold in 2018, Park Street Nordicom and the buyer have agreed that Park Street Nordicom is entitled to obtain an additional supplement of DKK 1 million if the buyer completes a development project of more than 5,000 square meters within 5 years from the date of acquisition; the Company has decided not to recognize the contingent asset in the balance as at December 31, 2020.

Lease commitments

There are operating leases for cars rental and printers.

	2020	2019
Within 1 year from the balance sheet date	2	16
Between 1 and 5 years from the balance sheet date	3	8
After 5 years from the balance sheet date	0	1
Operating lease obligations at 31 December	5	16
Amounts in DKK 1000s
Minimum lease payments recognized in the profit and loss account for the year	242	792

Note 28 – Financial risks and use of derivative instruments

Amounts in DKK 1000s	2020	2019
Mortgages and debentures	8,000	8,335
Financial assets measured at fair value through profit or loss	8,000	8,335
Receivables	17,202	17,513
Cash and equivalents	23,151	61,606
Financial assets measured at amortized cost	40,353	79,119
Credit institutions	3,548	3,548
Financial liabilities measured at fair value through profit or loss	3,548	3,548
Credit institutions	1,401,476	1,629,816
Deposits	32,501	41,254
Accounts payable	3,988	4,987
Other Debts	12,926	9,250
Financial liabilities measured at amortized cost	1,450,892	1,685,307

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 Nordicom's liquidity risk consists of not being able to make regular payments and not being able to provide sufficient liquidity to cover the financing 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 Nordicom 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 December 31, 2020 DKK 23.2 million (31 December 2019: DKK 61.6 million). Park Street Nordicom forecasts that current and generated liquidity is sufficient to carry out the group's planned activities throughout 2021.

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
2020
Non-derivative financial instruments
Credit institutions	1,405,024	1,542,908	69,339	326,760	96,539	1,050,270
Trade payables	3,988	3,988	0	0	0	0
Deposits	32,501	32,501	25,108	3,417	3,492	484
Other debts	12,926	12,926	0	0	0	0
Total	1,454,439	1,592,324	94,448	330,177	100,031	1,050,754
2019
Non-derivative financial instruments
Credit institutions	1,633,364	1,794,356	180,189	349,031	100,803	1,164,333
Trade payables	4,987	4,987	0	0	0	0
Deposits	41,254	41,254	19,819	6,443	8,793	6,200
Other debts	9,250	9,250	0	0	0	0
Total	1,688,856	1,849,848	200,008	355,474	109,596	1,170,532

Interest rate risk

Park Street Nordicom 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 December 31, 2020 primarily relates 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 Nordicom'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 continuously monitored with a view to optimizing the group's exposure to interest rate risks. Park Street Nordicom at December 31, 2020 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 December 31, 2020:
Mortgage debt	Cibor6	208	1.77%
Mortgage debt	F2	49	2.64%
Mortgage debt	F3	383	0.86%
Mortgage debt	F5	506	1.27%
Bank debt etc.	Fixed	255	2.54%
Others	Interest-free	4	0.00%
		1,405	1.51%
At December 31, 2019:
Mortgage debt	Cibor3	39	0.96%
Mortgage debt	Cibor6	235	1.67%
Mortgage debt	F2	52	2.44%
Mortgage debt	F3	929	1.13%
Bank debt etc.	Fixed	374	3.28%
Others	Interest-free	4	0.00%
		1,633	1.74%

(*) 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 are at 31 December 2020 1.51% per annum, and is based on the latest confirmed interest rates. The corresponding calculated weighted rate at 31 December, 2019 was 1.74% 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	2020	2019
Within six months	208	498
Between 6 and 12 months	0	0
Between 1 and 2 years	299	727
Between 2 and 5 years	894	405
After 5 years	4	4
	1,405	1,633

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 Nordicom'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) is illustrated in the following table:

Amounts in DKK million	2020	2019
Variable Interest rate loans:
Effect on income statement	-14.1	-12.6
Effect on equity	-14.1	-12.6

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 -14.1 million per annum (2019: DKK -12.6 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 Nordicom'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 December 31, 2020 is further described in note 20.

Group's cash and short-term deposits 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 1,405 thousand. 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 the fair value estimated by an independent reviewer (estimated rate of 31.30 at December 31, 2020).

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
2020
Mortgages and debentures	8,000	0	8,000	0
Total financial assets	8,000	0	8,000	0
Credit institutions	3,548	0	0	3,548
Total financial liabilities	3,548	0	0	3,548
2019
Mortgages and debentures	8,335	0	8,335	0
Total financial assets	8,335	0	8,335	0
Credit institutions	3,548	0	0	3,548
Total financial liabilities	3,548	0	0	3,548

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 hierarchy. 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	2020	2019
Carrying amount at 1st of January	3,548	3,548
Gains / losses in the income statement	0	0
Redemptions	0	0
Transfer to Level 3	0	0
Transfer from Level 3	0	0
Balance at 31st of December	3,548	3,548
Gain / loss in the income statement for liabilities held at 31st of December	0	0

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. 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 29 – Non-current operating items, etc.

Amounts in DKK 1000s	2020	2019
Depreciation and amortization	-2,891	6,077
Profit/loss on sale of operating assets	38,483	411
Total regulation	35,592	6,488

Note 30 – Changes in other working capital

Amounts in DKK 1000s	2020	2019
Change in receivables	311	3,484
Change in provisions	0	-800
Change in deposit	-8,865	2,275
Change in trade payables and other liabilities	2,676	1,220
Change in total working capital	-5,878	6,179

Note 31 – Related parties

Park Street Asset Management Ltd. (London, England) has controlling influence in Park Street Nordicom A/S by virtue of its shareholding of 92.14% of shares and votes in Park Street Nordicom A/S. See note 5, where the remuneration of Directors and Board of Nordicom appears. The Company has additionally had the following transactions between Park Street Nordicom and related parties:

Amounts in DKK 1000s	2020	2019
Other related parties
Intangible assets	3,249	2,172

There have been no other transactions, etc. with related parties during the period.

Note 32 – Subsequent Events

A residential unit has been sold in February 2021 in Ballerup.

Note 33 – Accounting policies

The annual report for the period January 1 to December 31, 2020 for Park Street Nordicom A / S comprises the consolidated financial statements of Park Street Nordicom A / S and its subsidiary companies and separate financial statements of the parent company. The annual report of Park Street Nordicom A / S for the year 2020 is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and requirements according to the Danish Financial Statements Act. The annual report has been approved by the Board of Directors on March 25, 2021. The annual report shall be submitted to Park Street Nordicom A / S shareholders for approval at the Annual General Meeting that will take place on April 22, 2021.

BASIS OF PREPARATION

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 reassessed value. The accounting policies are otherwise as described below.

CHANGES IN ACCOUNTING POLICIES

Park Street Nordicom A / S has implemented all new or revised accounting standards (IFRS) and interpretations (IFRIC), as adopted by the EU with effect for the financial year 1 January-31 December 2019. The implementation of new or amended standards and interpretations contributions have not had a material impact on Nordicom's consolidated accounts.

Park Street Nordicom A/S has changed the revenue recognition in accordance with IFRS 15. From 2020 the Group's leases for both residential and commercial leases are designed with a net rent plus contributions for common costs and utilities. Taking into account that the group is responsible for bearing the common costs and consumption taxes, the delivery of these services to the tenants, the group acts as a principal in relation to the tenants, regardless of whether the group does not perform the services itself. Taking into account the recognition criterion for revenue in IFRS 15, the Group has chosen to change its accounting policies so that the tenant's contribution to cover common costs and consumption taxes is recognized as revenue, so that revenue is recognized in accordance with IFRS 15. This means that both revenue and costs is recognized in the income statement against having previously been recognized as a net expense in the balance sheet. The change in recognition means that net sales have increased by DKK 18.3 million. (2019: DKK 23.7 million) and operating costs have increased accordingly. The change does not affect the result for the year. Comparative figures in both the income statement and the main figures overview have been adjusted for the periods 2020 and 2019. Apart from the above, accounting policies are unchanged from the previous year.

DESCRIPTION OF CONSOLIDATED ACCOUNTING POLICIES

Consolidated Financial Statements

The consolidated financial statements include Park Street Nordicom 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 subsidiaries, which have been prepared in accordance with the Group's accounting policies, the elimination of intercompany income and expenses, shareholdings, 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 income 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.

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 associated 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 and related debt as well as debt instruments measured at fair value 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 property 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.

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 project, calculated borrowing costs on the basis of an average interest rate of the group's loans except for loans recorded at the acquisition of specific 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 Nordicom to earn rental income and / or capital gains. Investment properties are measured 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.

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.

Depreciation is based on revalued amount less estimated residual value after useful life (residual value).

Investment in associates

Investments in associates are recognised at cost price following the cost method principle. The investment is recorded at its historical cost (purchase price). Once the initial transaction is recorded there is no need to adjust it, unless there is evidence that the fair market value of the investment has declined below the recorded historical cost. If so, the investment is written down to adjust to its new fair value.

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 recoverable amount does not exceed the carrying amount that the asset would have had after depreciation if the asset had not been impaired.

Mortgages and instruments of debt
63

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.

Project Holdings

Project Holdings include properties held for the purpose of sale, including ongoing or completed construction projects for own account and former investment properties under development for sale.

Project inventories are measured at cost or net realizable value, if this is lower. Fair value at the time when a previous investment property is transferred to project inventory is considered the property's new cost.

The cost includes the purchase price of the properties plus project and construction costs incurred, as well as borrowing costs attributable to the project / conversion period and indirect project costs.

When it is estimated that the total cost of construction projects, including replacement / expansion projects, will exceed the total sales income, the expected loss is recognized in the profit and loss.

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 depreciation 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.

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

Financial liabilities are initially measured at fair value and subsequently measured as described below. Financial liabilities are derecognised when they expiry, are cancelled or are converted into equity. A substantial modification of the terms of a financial liability is treated as a settlement of the original liability and recognition of a new liability. A change in the present value of the contractual cash flows with at least 10%, measured on the basis of the original effective interest rate, is treated as a substantial modification.

Financial liabilities attributable to investment properties are measured at amortised cost. Prior to the significant modification of the liabilities attributable to investment property, they were measured at fair value through profit or loss. Adjustments to financial liabilities attributable to investment properties were recognized in the income statement under "Adjustment at fair value, net".

Other liabilities, including non-current liabilities, debt to suppliers and other debt, are measured at amortized cost.

When a financial liability without equity conversion features is converted into equity, the liability is considered settled at the fair value of the shares issued. A gain or loss is recognised in financial items.

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 repayment 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.

2020

PARK STREET NORDICOM A/S
FINANCIAL STATEMENTS

Park Street Nordicom | Park Street Nordicom A/S Financial Statements

Income statement

Note	Amounts in DKK 1000s	2020	2019
2	Net sales	162,729	186,087
3	Operating expenses	-43,828	-46,235
	Gross profit	118,901	139,852
4	Employee benefit expenses	-16,032	-16,104
5	Other external expenses	-6,371	-11,387
6	Depreciation, amortisation and impairment	-3,442	-3,179
	Operating profit (EBIT)	93,056	109,182
8	Financial income	7,227	0
7	Financial expenses	-22,405	-23,544
	Earnings before value adjustments (EBVAT)	77,878	85,639
8	Income / Loss from subsidiaries	-26,237	27,049
9	Adjustment to fair value, net	97,857	32,881
	Gains realised on the sale of investment properties	38,483	411
	Profit before tax	187,981	145,980
10	Tax on profit for the period	-42,660	-30,927
	Profit for the period	145,321	115,053
	Distributed as follows
	Parent's shareholders	145,321	115,053
	Profit for the period	145,321	115,053

Park Street Nordicom | Park Street Nordicom A/S Financial Statements

Statement of comprehensive income

Amounts in DKK 1000s	2020	2019
Profit for the period	145,321	115,053
Other comprehensive income:
Items that cannot be reclassified to the income statement:
Fair value adjustment of domicile properties	7,040	6,959
Tax on fair value adjustment of domicile properties	-1,549	-1,531
Other comprehensive income after tax	5,491	5,428
Comprehensive income for the period	150,812	120,481
Distributed as follows
Parent's shareholders	150,812	120,481
Comprehensive income for the period	150,812	120,481

Park Street Nordicom | Park Street Nordicom A/S Financial Statements

Statement of financial position

Note	Amounts in DKK 1000s	2020	2019
ASSETS
Non-current assets
Intangible assets
	Software	3,671	1,784
		3,671	1,784
Property, plant and equipment
11	Domiciles	196,298	190,820
12	Investment properties	2,131,476	2,168,799
13	Machinery and equipment	744	1,837
		2,328,517	2,361,456
Financial assets
8	Investment in subsidiaries	87,668	113,920
	Investment in associates	2,029	2,029
	Deferred tax assets	0	0
	Deposits	187	186
		89,885	116,135
	Total non-current assets	2,422,074	2,479,375
Current assets
14	Mortgages and instruments of debt	165,883	23,961
	Project holdings	0	1,628
15	Receivables	18,710	13,807
	Income tax receivable	4,358	269
	Prepaid expenses and accrued income	1,058	0
	Cash and short-term deposits	13,321	53,066
	Total current assets	203,330	92,731
	Total assets	2,625,404	2,572,106

Park Street Nordicom | Park Street Nordicom A/S Financial Statements

Statement of financial position

Note	Amounts in DKK 1000s	2020	2019
LIABILITIES
Equity
	Share capital	67,513	67,513
	Revaluation reserve	55,106	51,177
	Share Premium	289,260	289,260
	Accumulated profit	660,067	523,183
	Total equity	1,071,946	931,133
Liabilities
Non-current liabilities
16	Deferred tax	191,733	152,430
17	Credit institutions	1,259,880	1,383,922
	Deposits	6,936	21,103
		1,458,548	1,557,455
Current liabilities
	Provisions for liabilities	400	400
17	Credit institutions	50,970	52,152
	Trade and other payables	5,175	4,326
	Income tax payable	4,524	0
	Deposits	24,166	18,558
	Other liabilities	9,674	8,082
		94,910	83,518
Total liabilities
		1,553,459	1,640,973
Total equity and liabilities
		2,625,404	2,572,106

Park Street Nordicom | Park Street Nordicom A/S Financial Statements

Statement of equity

Amounts in DKK 1000s	Share capital	Revaluation reserve	Accumulated profit	Share Premium	Equity Total
Statement of equity for 2020:
Equity as at 1 January 2020	67,513	51,177	523,183	289,260	931,133
Comprehensive income for the period
Profit for the period	0	0	145,321	0	145,321
Fair value adjustment of domicile	0	7,041	0	0	7,041
Tax on other comprehensive income	0	-1,549	0	0	-1,549
Other comprehensive income during the financial year	0	5,492	0	0	5,492
Comprehensive income for the period	0	5,492	145,321	0	150,813
Transactions with owners
Repurchase own shares	0	0	-10,000	0	-10,000
Liabilities with financial institutions converted into Equity	0	0	0	0	0
Total transactions with owners	0	0	-10,000	0	-10,000
Other adjustments
Depreciation of revalued value of domiciles	0	-1,563	1,563	0	0
Total other adjustments	0	-1,563	1,563	0	0
Equity as at 31 December 2020	67,513	55,106	660,067	289,260	1,071,946
Statement of equity for 2019:
Equity as at 1 January 2019	67,513	47,312	406,567	289,260	810,652
Comprehensive income for the period
Profit for the period	0	0	115,053	0	115,053
Fair value adjustment of domicile	0	6,959	0	0	6,959
Tax on other comprehensive income	0	-1,531	0	0	-1,531
Other comprehensive income during the financial year	0	5,428	0	0	5,428
Comprehensive income for the period	0	5,428	115,053	0	120,481
Transactions with owners
Liabilities with financial institutions converted into Equity	0	0	0	0	0
Total transactions with owners	0	0	0	0	0
Other adjustments
Depreciation of revalued value of domiciles	0	-1,563	1,563	0	0
Total other adjustments	0	-1,563	1,563	0	0
Equity as at 31 December 2019	67,513	51,177	523,183	289,260	931,133

Park Street Nordicom | Park Street Nordicom A/S Financial Statements

Statement of cash flows

Amounts in DKK 1000s	2020	2019
Operating profit (EBIT)	93,056	109,182
Adjustment for illiquid operating items, etc.	3,442	2,779
Change in project holdings, net	0	0
Change in other operating capital	-4,670	-1,261
Cash flows concerning primary operations	91,828	110,700
Financial expenses paid	-22,405	-23,544
Paid Corporate Tax	-4,358	-6,031
Total cash flow from operating activities	65,064	83,155
Cash flow from investing activities
Improvements to investment properties	-2,239	-1,382
Sales of investment properties	192,805	1,900
Purchase of intangible assets	-3,249	-2,172
Purchases of other property, plant and equipment	-14,645	-8,348
Share capital increase (cash injection)	0	0
Sale of fixed assets	0	0
Intercompany Loans	-142,257	-14,600
Acquisition of subsidiaries	0	-5,000
Acquisition of associates	0	-2,029
Total cash flow from investing activities	30,415	-29,601
Cash flow from financing activities
Repurchase Own Shares	-10,000	0
Proceeds from assumption of liabilities to credit institutions	0	0
Repayment of liabilities to credit institutions	-47,714	-52,264
Repayment of debt from disposal of assets	-77,510	0
Total cash flow from financing activities	-135,224	-52,264
Total cash flow for the period	-39,744	-739
Liquid assets as at 1 January	53,066	53,805
Liquid assets at the end of the period	13,321	53,066
Liquid assets at the end of the period
Cash and short term deposit	13,321	53,066
Liquid assets held for sale	0	0
Liquid assets at the end of the period	13,321	53,066

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Summary

Note 1 Accounting policies, accounting estimates and risks, etc.
Note 2 Net sales
Note 3 Operating expenses
Note 4 Employee benefits expenses
Note 5 Auditor's fees
Note 6 Depreciation and amortization
Note 7 Financial Expenses
Note 8 Investment in subsidiaries
Note 9 Adjustments to fair value, net
Note 10 Tax on profit for the year and other comprehensive income
Note 11 Domicile
Note 12 Investment properties
Note 13 Machinery and equipment
Note 14 Mortgages and instruments of debt
Note 15 Receivables
Note 16 Deferred taxes
Note 17 Credit institutions
Note 18 Contingent assets and liabilities
Note 19 Financial risks and use of derivative financial instruments
Note 20 Change in other working capital
Note 21 Related parties
Note 22 Accounting policies

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

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 1 of the consolidated financial statements, to which reference is made.

See note 8 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	2020	2019
Rental income	119,591	136,767
Sales of other services	42,550	48,397
Total sales of services	162,141	185,164
Interest income, mortgages and instruments of debt	587	923
	162,729	186,087

Note 3 - Operating expenses

Amounts in DKK 1000s	2020	2019
Operating expenses, investment properties	39,400	40,912
Operating expenses, other services	4,428	5,323
	43,828	46,235

Note 4 - Employee benefits expenses

Amounts in DKK 1000s	2020	2019
Salary	14,875	14,959
Contribution-based pensions (*)	835	658
Other social security costs	60	32
Other staff costs	261	454
	16,032	16,104
Average number of employees	24	27
---	---	---

(*) Park Street Nordicom 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 Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Note 5 – Auditor's fees

The auditor appointed in 2020 and 2019 is PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab. Their fees can be specified as follows:

Amounts in DKK 1000s	2020	2019
Statutory audit	373	405
Other assurance services	0	35
Tax and VAT advice	177	120
Other services	20	35
	570	560

Fees for non-audit services delivered by PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab, include general accounting and tax advisory services.

Note 6 – Depreciation and amortization

Amounts in DKK 1000s	2020	2019
Depreciation, software	1,361	388
Depreciation, domicile properties	1,563	1,563
Depreciation, inventory and fixed assets	518	1,228
	3,442	3,179

Note 7 – Financial Expenses

Amounts in DKK 1000s	2020	2019
Interest expenses, liabilities to credit institutions measured at amortized cost	21,256	23,513
Interest expenses, group companies	9	0
Other interest costs and fees	264	3
Borrowing costs	875	27
	22,405	23,544

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Note 8 – Investment in subsidiaries

See accounting policies on note 33 of the Consolidated Financial Statements.

Receivables considered to be part of the overall investment in the subsidiary are written down by any remaining negative equity value.

Amounts in DKK 1000s	2020	2019
Cost price at January 1	92,227	87,227
Additions	150	5,000
Cost price at December 31	92,377	92,227
Value adjustments at 1 January	21,869	-5,180
Share of profit/loss for the year after tax	-26,459	27,049
Value adjustments at December 31	-4,590	21,869
Carrying amount at January 1	113,920	81,968
Investments with negative equity offset against trade receivables	-119	-176
Carrying amount at December 31	87,668	113,920

In 2020, Park Street Nordicom A/S received DKK 7.2 million in Financial Income from subsidiaries.

Note 9 – Adjustments to fair value, net

Amounts in DKK 1000s	2020	2019
Fair value adjustment, investment properties	97,857	32,881
	97,857	32,881

Note 10 – Tax on profit for the year and other comprehensive income

Amounts in DKK 1000s	2020	2019
Annual tax can be divided as follows:
Current tax on profit of the year	4,524	2,714
Current tax, previous years	382	-2,257
Changes in deferred taxes	37,805	27,984
Changes in deferred taxes previous years	-51	2,486
	42,660	30,927

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Tax on profit for the year can be explained as follows:

Estimated tax at a tax rate of 22%	41,356	32,116
Non-deductible costs	586	255
Non-taxable income	0	-141
Adjustment to previous years taxes	718	-1,303
	42,660	30,927
Effective tax rate	22.69%	21.19%
Amounts in DKK 1000s	2020	2019
Tax on other comprehensive income:
Tax on fair value adjustment of domicile properties	-1,549	-1,531
	-1,549	-1,531

Note 11 – Domicile

Amounts in DKK 1000s	2020	2019
Cost at 1 of January	201,648	194,689
Revaluation of value	7,041	6,959
Cost / Revaluated Value at 31 December	208,689	201,648
Depreciation and amortization at 1 January	-10,828	-9,266
Depreciation	-1,563	-1,563
Depreciation and amortization at 31 December	-12,391	-10,828
Balance at 31 December	196,298	190,820

Domicile properties consist of a hotel in Ballerup and Park Street Nordicom's headquarters in Copenhagen.

Domicile properties are pledged as security for loans, mortgage loans and other credit institutions as stated in Note 18. Information on fair value hierarchy of Domicile is as follows:

Amounts in DKK 1000s	Level 1	Level 2	Level 3	Total
At 31 December 2020:
Domicile property	0	0	196,298	196,298
	0	0	196,298	196,298
At 31 December 2019:
Domicile property	0	0	190,820	190,820
	0	0	190,820	190,820

Classification of domicile properties in level 3 means that determining the fair value of domicile properties mainly based on data that are not observable in the market.

During the 2020 and 2019 been no transfers between levels of the fair value hierarchy.

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

The fair value of domicile properties is based on estimates. Refer to note 1 for additional details. No domiciles have been acquired in 2020 and 2019.

If Park Street Nordicom domiciles were measured at the historical cost less accumulated depreciation, the book value would have been the following:

Amounts in DKK 1000s	2020	2019
Domicile properties	117,628	119,191
	117,628	119,191

Note 12 – Investment properties

As of 31 December 2020 there are no ongoing sales processes regarding investment properties.

Amounts in DKK 1000s	2020	2019
Balance at 1 of January	2,168,799	2,130,520
Transfer to / from project holdings	1,628
Costs incurred for improvements	2,140	1,382
Adjustment to fair value, net	97,857	32,881
Acquisition of properties	14,645	6,409
Depreciation of fixed assets	730	-494
Sale of investment properties	-154,322	-1,900
Balance at 31 December	2,131,476	2,168,799

Fair value hierarchy for investment:

Amounts in DKK 1000s	Level 1	Level 2	Level 3	Total
At 31 December 2020:
Investment properties	0	0	2,131,476	2,131,476
	0	0	2,131,476	2,131,476
At 31 December 2019:
Investment properties	0	0	2,168,799	2,168,799
	0	0	2,168,799	2,168,799

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 2020 and 2019 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:

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Amounts in DKK 1000s	2020	2019
Remaining termination within 1 year from the balance sheet date	75,578	98,109
Remaining termination between 1 and 5 years from the balance sheet date	113,391	94,144
Remaining termination after 5 years from the balance sheet date	52,362	45,972
	241,331	238,225

Note 13 – Machinery and equipment

Amounts in DKK 1000s	IT Equipment	Appliances	Total Machinery and Equipment
Cost at 1 of January 2020	4,140	8,335	12,475
Additions during the year	10	89	99
Disposals during the year
Cost at 31 December 2020	4,150	8,424	12,574
Amortization at 1 January 2020	-4,099	-6,799	-10,898
Amortization during the year	-16	-916	-932
Amortization at 31 December 2020	-4,115	-7,715	-11,830
Balance at 31 December 2020	35	709	744
Cost at 1 of January 2019	4,106	6,511	10,617
Additions during the year	34	1,824	1,858
Disposals during the year
Cost at 31 December 2019	4,140	8,335	12,475
Amortization at 1 January 2019	-4,092	-4,695	-8,787
Amortization during the year	-7	-2,104	-2,111
Amortization at 31 December 2019	-4,099	-6,799	-10,898
Balance at 31 December 2019	41	1,536	1,577

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Note 14 – Mortgages and Instruments of Debt

Park Street Nordicom has the following mortgage and debt instruments classified as "Financial assets measured at amortized cost":

Amounts in DKK 1000s	2020	2019
Financial assets at amortized cost at 1 January	23,961	9,644
Repayment of the year	-335	-283
Additions - Intercompany loans	142,257	14,600
Financial assets at amortized cost at 31 December	165,883	23,961

Mortgages and debt securities classified as financial instruments in the category "Financial assets recognized at amortized cost" expire in the following periods:

		Effective interest rate p.a.		Balance in DKK 1000		Fair value in DKK 1000
Value	Expire	2020	2019	2020	2019	2020	2019
DKK	2025	7.50%	7.50%	8,000	8,335	8,000	8,335
DKK	2021	7.50%	7.50%	1,000	1,026	1,000	1,026
DKK	2021	7.50%	7.50%	1,500	1,500	1,500	1,500
DKK	2021	7.50%	N/A	2,200	0	2,200	0
DKK	2021	7.50%	7.50%	13,100	13,100	13,100	13,100
DKK	2021	7.50%	N/A	140,083	0	140,083	0
				165,883	23,961	165,883	23,961

Park Street Nordicom 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 (153.2 million utilized at 31.12.20) with an annual interest rate of 7.5% payable at the maturity date of the loan. Additionally, Park Street Nordicom A/S has provided a credit line facility to the subsidiary Phoam Studio ApS with an aggregate principal amount of nominal DKK 5 million (4.7 million utilized at 31.12.20) with an annual interest rate of 7.5% payable at the maturity date of the loan.

The calculated fair value is based on estimates (Level 3 in fair value hierarchy).

Note 15 – Receivables

Amounts in DKK 1000s	2020	2019
Receivable Rental Income	2,894	5,877
Receivables from sale of properties	0	0
Deposited funds in banks	6,739	5,961
Other Receivables	327	1,686
Receivables from related parties	8,751	284
Receivables at 31 December	18,710	13,807

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

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	1,488	2,261
Additional provisions	555	-80
Recognized losses (Write off)	-331	-693
	1,712	1,488

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	88	354
Between 30 and 90 days	1,035	29
Over 90 days	379	3,172
	1,502	3,555

Note 16 – Deferred Taxes

Amounts in DKK 1000s	2020	2019
Deferred tax at 1st of January	152,430	120,606
Recognized in other comprehensive income	1,549	1,531
Correction from previous years	-51	2,309
Recognized in the income statement	37,805	27,984
Deferred tax at 31 December	191,733	152,430
Deferred tax is recognized in the balance sheet as follows:
Deferred tax (liability)	-191,733	-152,430
	-191,733	-152,430
Deferred tax at 31 December	-191,733	-152,430

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Deferred tax recognized in the balance

Amounts in DKK 1000s	Balance 1/1	Recognized in the income statement	Recognized in another comprehensive income	Balance 31/12
2020
Software	0	807	0	807
Investment and residential properties	199,231	27,360	1,549	228,140
Fixtures and fittings	-1,552	1,029	0	-523
Project Holdings	0	0	0	0
Receivables	0	-409	0	-409
Provisions	-88	0	0	-88
Credit institutions	256	-52	0	204
Tax losses carryforward	-45,417	9,019	0	-36,398
	152,430	37,754	1,549	191,733
2019
Investment and residential properties	169,802	27,899	1,531	199,231
Fixtures and fittings	-593	-959	0	-1,552
Project Holdings	0	0	0	0
Receivables	-497	497	0	0
Provisions	-264	176	0	-88
Credit institutions	123	133	0	256
Tax losses carryforward	-47,964	2,547	0	-45,417
	120,606	30,293	1,531	152,430

There are no deferred tax assets not recognized in the balance.

Note 17 – Credit Institutions

Amounts in DKK 1000s	2020	2019
Credit institutions, nominal	1,318,637	1,443,861
Market value adjustments	-7,787	-7,787
	1,310,850	1,436,074
The liabilities are thus included in the balance sheet:
Credit institutions, long-term	1,267,667	1,383,922
Credit institutions, short-term	50,970	52,152
	1,310,850	1,436,074

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

The Group's loans and credits are distributed as per 31 December as follows:

Liabilities recognized at fair value	Currency	Rate type	Expiry date	2020	2019
Convertible bonds	DKK	Interest-free	11-15 years	11,335	11,335
				11,335	11,335
Market value adjustments				-7,787	-7,787
Carrying amount				3,548	3,548
Liabilities recognized at amortized cost	Currency	Rate type	Expiry date	2020	2019
Banks Debt	DKK	Fixed	0-1 years	0	0
Banks Debt	DKK	Fixed	2-5 years	255,260	271,491
Mortgage Debt	DKK	Variable	6-10 years	143,986	166,666
Mortgage Debt	DKK	Variable	11-15 years	97,372	29,394
Mortgage Debt	DKK	Variable	16-20 years	810,684	964,975
Carrying amount				1,307,302	1,432,526

The nominal amounts stated in the tables represent the amount that Park Street Nordicom will repay under the loan agreements by the end of these agreements.

The evolution of the long and short term liabilities with credit institutions is specified follows:

Amounts in DKK 1000s	2020	2019
Non-current financial liabilities	1,383,922	1,432,269
Current financial liabilities	52,152	56,069
Financial liabilities with credit institutions at 1 January	1,436,074	1,488,338
Transfer of liabilities from credit institutions to a subsidiary	0	0
Repayment of liabilities to credit institutions	-47,714	-52,264
Repayment of debt from disposal of assets	-77,510	0
Financial liabilities with credit institutions at 31 December	1,310,850	1,436,074
Non-current financial liabilities	1,259,880	1,383,922
Current financial liabilities	50,970	52,152
Total financial liabilities with credit institutions at 31 December	1,310,850	1,436,074

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 25 of the consolidated financial statements. Information on estimates and judgments related to the determination of fair value of financial liabilities is disclosed in note 1 of the Consolidated Financial Statements. As stated in these notes mortgage and bank debt have been recognized at amortised cost in 2020. No reversal of fair value adjustments in 2020 and 2019.

Zero-coupon bonds (former Convertible bonds)

See note 25 on the Consolidated Financial Statements.

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Note 18 – Contingent assets and liabilities

Pledges and guarantees

The nominal pledge for the bank debt and mortgage debt given by credit institutions per December 31, 2020 amount a total of DKK 1,778 million (31 December 2019: DKK 1,858 million), the nominal value of the loans amounts a total of DKK 1,307 million (December 31, 2019: DKK 1,433 million) in the group's investment properties and domiciles with a book value totalling DKK 2,327 million (31 December 2019: DKK 2,359 million).

The nominal pledge for the bank debt and mortgage debt given by credit institutions per December 31, 2020 amount a total of DKK 8.3 million (31 December 2019: DKK 8.3 million), in the group's deposited mortgage deeds with a book value totalling DKK 8.0 million (31 December 2019: DKK 8.3 million).

Litigations and disputes

In connection with the sale of a property (building rights) in 2016, it was agreed that if, in connection with the buyer's settlement there is a proof that the property is contaminated, Park Street Nordicom must reimburse the costs that may be needed to get property released for the buyer's purpose. Park Street Nordicom consider the agreement as a contingent liability as stated in Note 26 of the consolidated financial statements.

No additional significant litigations and disputes are acknowledged by the Group at December 31, 2020 other than the ones indicated in Note 26 of the consolidated financial statements.

Conditional debt relief and contingencies

Contingent assets

Lease commitments

There are operating leases for cars rental and printers.

	2020	2019
Within 1 year from the balance sheet date	2	16
Between 1 and 5 years from the balance sheet date	3	8
After 5 years from the balance sheet date	0	1
Operating lease obligations at 31 December	5	16
Amounts in DKK 1000s
Minimum lease payments recognized in the profit and loss account for the year	242	792

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Note 19 – Financial risks and use of derivative instruments

Amounts in DKK 1000s	2020	2019
Mortgages and debentures	8,000	8,335
Intercompany loan	157,548	15,910
Financial assets measured at amortized cost	165,548	24,245
Receivables	18,710	13,523
Cash and equivalents	13,321	53,066
Loan and receivables	32,031	66,590
Credit institutions	3,548	3,548
Financial liabilities measured at fair value through profit or loss	3,548	3,548
Credit institutions	1,307,301	1,432,526
Deposits	31,102	39,661
Accounts payable	5,175	4,326
Other Debts	9,674	8,081
Financial liabilities measured at amortized cost	1,353,253	1,484,594

Risk management policy

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 Nordicom's liquidity risk consists on not being able to make regular payments and not being able to provide sufficient liquidity to cover the financing 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 Nordicom 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 December 31, 2020 DKK 13.3 million (31 December 2019: DKK 53.1 million). Park Street Nordicom forecasts that current and generated liquidity is sufficient to carry out the group's planned activities throughout 2020.

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

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
2020
Non-derivative financial instruments
Credit institutions	1,310,850	1,453,565	68,661	317,705	108,160	959,039
Trade payables	5,175	5,175	5,175	0	0	0
Deposits	31,102	31,102	24,166	3,063	3,389	484
Other debts	9,674	9,674	9,674	0	0	0
Total	1,356,802	1,499,517	107,677	320,768	111,549	959,523
2019
Non-derivative financial instruments
Credit institutions	1,436,074	1,589,187	73,126	343,667	88,970	1,083,425
Trade payables	4,326	4,326	4,326	0	0	0
Deposits	39,661	39,661	18,558	6,443	8,773	5,888
Other debts	8,081	8,081	8,081	0	0	0
Total	1,488,143	1,641,256	104,091	350,109	97,743	1,089,313

Interest rate risk

The interest rate risk as of December 31, 2020 primarily relates 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 Nordicom'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 continuously monitored with a view to optimizing the group's exposure to interest rate risks. Park Street Nordicom at December 31, 2019 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 December 31, 2020:
Mortgage debt	Cibor6	208	1.77%
Mortgage debt	F2	49	2.64%
Mortgage debt	F3	289	0.90%
Mortgage debt	F5	506	1.27%
Bank debt etc.	Fixed	254	2.54%
Others	Interest-free	4	0.00%
		1,310	1.57%

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

At December 31, 2019:

Mortgage debt	Cibor3	39	0.96%
Mortgage debt	Cibor6	235	1.67%
Mortgage debt	F2	52	2.44%
Mortgage debt	F3	836	1.23%
Bank debt etc.	Fixed	270	2.65%
Others	Interest-free	4	0.00%
		1,436	1.60%

The calculated weighted interest rate for all Park Street Nordicom loans are at 31 December 2020 1.57% per annum, and is based on the latest confirmed interest rates. The corresponding calculated weighted rate at 31 December, 2019 was 1.60% 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	2020	2019
Within six months	208	395
Between 6 and 12 months	0	0
Between 1 and 2 years	299	727
Between 2 and 5 years	799	311
After 5 years	4	4
	1,310	1,436

Interest rate risk from Park Street Nordicom'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 million	2020	2019
Variable Interest rate loans:
Effect on income statement	-13.0	-11.6
Effect on equity	-13.0	-11.6

Currency risk

The group exposure is very limited to changes in currency rates.

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

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.

Credit risk on receivables at December 31, 2020 is further described in note 20 of the consolidated financial statements.

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 1,307,302. 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 the fair value estimated by an independent reviewer (estimated rate of 31.30 at December 31, 2020).

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	Level 3
2020
Mortgages and debentures	8,000	0	0	8,000	0
Intercompany loan	157,548			157,548
Total financial assets	165,548	0	0	165,548	0
Credit institutions	3,548	0	0	0	3,548
Total financial liabilities	3,548	0	0	0	3,548
2019
Mortgages and debentures	8,335	0	0	8,334	0
Intercompany loan	15,910			0	15,910
Total financial assets	24,245	0	0	8,334	0
Credit institutions	3,548	0	0	0	3,548
Total financial liabilities	3,548	0	0	0	3,548

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Amounts in DKK million	2020	2019
Carrying amount per. 1st of January	3,548	3,548
Gains / losses in the income statement	0	0
Redemptions	0	0
Transfer to Level 3	0	0
Transfer from Level 3	0	0
Balance at 31st of December	3,548	3,548
Gain / loss in the income statement for liabilities held at 31st of December	0	0

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.

Note 20 – Changes in other working capital

Amounts in DKK 1000s	2020	2019
Change in receivables	-4,903	4,464
Change in project holdings	0	0
Change in provisions	0	-800
Change in deposit	-8,557	1,745
Change in trade payables and other liabilities	2,910	-7,841
Change in total working capital	-10,550	-2,432

Note 21 – Related parties

Amounts in DKK 1000s	2020	2019
Other related parties
Intangible assets	3,249	2,172

There have been no other transactions, etc. with related parties during the period.

Park Street Nordicom | Notes to Park Street Nordicom A/S Financial Statements

Note 22 – Accounting policies

Park Street Nordicom 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 acquisition 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 "Reserve 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 disposal 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
Result of continuing activities per. share (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 Nordicom | Property Overview

PROPERTY OVERVIEW

Park Street Nordicom Group owns at 31 December 2019, 56 properties with a total floor area of 262,303 square meters.

Property	ZIP code	City	Area (sqm.)	Type
Albuen 19	6000	Kolding	3,238	Retail
Algade 13	4000	Roskilde	5,843	Hotel
Allerød Vestcenter	3450	Allerød	1,636	Office Residential (* sold in 2021)
Ballerup Idrætsby Residentialer	2750	Ballerup	109
Ballerup Hotel	2750	Ballerup	3,400	Hotel
Banetorvet 3, ejl. nr. 2	3450	Allerød	1,404	Office
Birkemose Allé 23-35	6000	Kolding	6,708	Office
Birkemose Allé 21	6000	Kolding	5,007	Land
Birkemosevej 9	6000	Kolding	1,049	Office
Blegdammen 7-13	4700	Næstved	6,564	Storage
Dannebrogsgade 2	5000	Odense C	35,680	Office
Dyssegårdscentret	4700	Næstved	2,419	Retail
Dæmningen 34	7100	Vejle	3,869	Retail
Engdahlsvej 2 A-B, ejl. 1+2	7400	Herning	1,917	Retail
Femøvej 3	4700	Næstved	5,572	Office
Havnegade 50	4700	Næstved	2,583	Storage
Halfdans Vænge	4700	Næstved		Land
Hejrevej 26-28, Ørnevej 33-35	2400	København NV	8,250	Office
Hejrevej 30	2400	København NV	4,369	Office
Hejrevej 8-10	2400	København NV	10,760	Residential
Helligkorsgade 1, Naverstræde 3	6000	Kolding	1,362	Residential
Hersegade 23, Jernbanegade 6 A + B	4000	Roskilde	1,054	Retail
Jernbanegade 33-35	6000	Kolding	2,740	Residential
J.C. Christensens Gade 5B	2300	København S		Parking
L.C. Worsøesvej 2	4300	Holbæk	3,063	Retail
Loftbrovej 17	9400	Nørresundby	13,098	Retail
Mosede Centret	2670	Greve	1,705	Retail

Park Street Nordicom | Property Overview

Property	ZIP code	City	Area (sqm.)	Type
Møllergade 1	5700	Svendborg	1,051	Retail
Nørregade 21	4100	Ringsted	522	Retail
Nørregade 27 A + B	4100	Ringsted	778	Retail
Nørregade 31-33	4100	Ringsted	410	Retail
Omøvej 9	4700	Næstved	896	Office
Prøvestensvej 20	3000	Helsingør	830	Retail
Rebæk Søpark Retailscenter	2650	Hvidovre	12,639	Retail
Ringsted Centret	4100	Ringsted	10,528	Retail
Ro’s Have 11	4000	Roskilde	1,250	Retail
Ro’s Have 13	4000	Roskilde	1,100	Retail
Ro’s Have 8, 10, 12	4000	Roskilde	2,298	Retail
Silkeborgvej 102	7400	Herning	4,837	Retail
Sjællandsgade 12,16,18	7100	Vejle	10,817	Retail
Skråningshusene	3070	Snekkersten	-	Land
Stagehøjvej 22	8600	Silkeborg	4,430	Office
Stenbukken 1 (Center Syd)	9200	Aalborg SV	2,879	Retail
Svendborgvej 275	5260	Odense S	2,000	Retail
Toldbuen 6	4700	Næstved	1,950	Office
Tåsingegade 29	2100	København Ø	10,835	Residential
Tåstrup Stationscenter	2630	Taastrup	26,778	Retail
Vilhelmskildevej 1 C	5700	Svendborg	2,694	Office
Vordingborgvej 78	4700	Næstved	2,326	Storage
Vordingborgvej 80-82	4700	Næstved	4,785	Storage
Zahrtmannsvej 78	3700	Rønne	928	Retail
Ørnevej 18, Svanevej 12	2400	København NV	3,937	Office
Østergade 30 / Søndergade 2B	7600	Struer	978	Office
Aakirkebyvej 58-60	3700	Rønne	5,000	Retail
Århusvej 119-121, Ulrikkasvej 1	8900	Randers	907	Retail
2G Shopping Center	2600	Glostrup	10,521	Retail
56 properties			262,303

PARK STREET nordicom

Park Street Nordicom A/S
Svanevej 12
2400 København NV
tel. +45 33 33 93 03
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Park Street — Annual Report 2020

3453_rns_2021-03-25_9321bf8d-96e4-4c07-a362-369b50d40fe4.pdf

ANNUAL REPORT 2020

Contents

Main Activity

Results of the year 2020

Property acquisitions and sales

Organisation

Subsequent events after December 31, 2020

Outlook and Strategy for 2021

Background of 2020, and its impact

Portfolio Strategy 2021

Core Assets

Non-CoreAssets

Development JV Prospects

Portfolio Strategy 2021

Core Assets Outlook

Other Assets Outlook

Asset Management 2021

Core Assets Focus

Other Assets and Project Focus

Financial Highlights

Key figures

Financial ratios

Financial Results

Yearly result compared to expected development

Segment Information

Operation from Investment Properties

Consolidated Financial Review

PROFIT AND LOSS

BALANCE SHEET

CASH FLOWS FOR 2020

Uncertainty in connection with recognition and measurement

Parent company Park Street Nordicom A/S

Risk factors

Financial Risk

Other financial risks

Business risks

Properties market value

Market Rent

Vacancy

Maintenance

Sales of properties

Other risks

Insurance risks

Tax risks

Legal risks

IT risks

Statutory report CSR

Business model

Risks related to CSR

Policies, activities and results

Legal requirements for corporate governance

Statutory report on diversity in management

Internal control and risk management systems in relation to the accounting process

Management composition and remuneration

Remuneration to the Board of Directors and Executive Board

Board of Directors and Management

Pradeep Pattem (Indian Citizen), Director and CEO

Management Positions

Director positions

Andrew LaTrobe (UK citizen, chairman)

Management Positions

Director positions

Ohene Aku Kwapong (US citizen, Ghanaian citizen)

Management Positions

Director positions

Lars-Andreas Nilsen (Norwegian citizen)

Anita Nassar (formerly Kamal) (French citizen)

Shareholder structure

Appointment of board members

Rules for changing articles of association

Own shares

Dividends

Investor Relations

Stock exchange announcements in 2020 and 2021

Statement by Board of Directors and Management

Management

Board of Directors

Park Street Annual Report 2020