Offering Circular 2002

OFFERING CIRCULAR 2002

PARKEN SPORT & ENTERTAINMENT A/S Offering Circular dated 16 April 2002

This Offering Circular has been translated into English from the Danish language. However, the original Danish text shall be the governing text for all purposes, and in case of any discrepancy the Danish wording shall be applicable.

Offer of 600,000 new shares of DKK 20 nominal value each in PARKEN Sport & Entertainment A/S

This Offering Circular has been prepared in connection with the offer (the “Offer”) of 600,000 new shares of DKK 20 nominal value each, total DKK 12,000,000 nominal value, in PARKEN Sport & Entertainment A/S (the “Company”).

Carnegie Bank A/S (“Carnegie” or the “Manager”) has furthermore been granted an option (the “Option”) exercisable during a period of up to 30 days after the execution by the Manager and the Company of an underwriting agreement (the “Underwriting Agreement”) to procure the sale of up to 90,000 new shares solely to cover any overallotment of shares, which may increase the Offer to a total of 690,000 shares. It is expected that the Underwriting Agreement will be executed on 6 May 2002. LD Pensions has made a binding advance commitment to subscribe for 240,000 new shares.

The new shares rank pari passu with the existing shares in PARKEN Sport & Entertainment A/S and are eligible for any dividends payable in respect of the financial year ending 30 June 2002, and all dividends declared and paid thereafter.

The offer period commences on Monday, 29 April 2002 and closes on Monday, 6 May 2002, unless the Offer is closed earlier. However, the Offer will not be closed before 29 April 2002 at 4:00 p.m., Copenhagen time. The offer price will be determined based on the bookbuilding method on the basis of indications of interest received during the bookbuilding period. It is expected that the offer price will be announced through the Copenhagen Stock Exchange on 7 May 2002, at the latest. It is expected that the new shares will be admitted for listing on the Copenhagen Stock Exchange and that dealings in the new shares will commence on 8 May 2002.

In connection with the Offer, Carnegie Bank A/S may, during a period of 30 days from the execution of the Underwriting Agreement, effect transactions which stabilise or maintain the market price of the Company’s shares at a level which might not otherwise prevail. Such stabilisation, if commenced, may be discontinued at any time. Any profit or loss on such stabilisation shall be for the account of the Manager.

Potential investors are requested to examine all relevant risks and legal requirements, including any tax consequences and exchange control regulations that might be relevant to the acquisition of the shares. The relevant risks are described in “Risk factors” in this Offering Circular.

It is expected that registration in the investor’s account with the Danish Securities Centre will take place not later than 13 May 2002. In addition, settlement may be handled through the Euroclear System and Cedel Bank S.A.

The Offer is being made in compliance with Danish law. This Offering Circular has been prepared in compliance with the standards and requirements of Danish law, including the rules issued by the Copenhagen Stock Exchange.

Carnegie Bank A/S

1 This Offering Circular does not constitute an offer or an invitation from the Company or the Manager to purchase or subscribe shares in the Company. In certain jurisdictions outside Denmark, the distribution of this document or the offer or sale of the shares may be restricted by law. The Company and the Manager request that persons in possession of this document obtain information as to any such restrictions and ensure that such restrictions are observed.

The offer shares have not been and will not in connection with the Offer be registered under the United States Securities Act of 1933, as amended, and, subject to certain exceptions, the shares may not be offered or sold within the United States or to, for the account of or in favour of U.S. persons except in pursuance of an exemption from or in a transaction not subject to the registration requirements pursuant to the Securities Act. Accordingly, the shares are solely offered and sold pursuant to offers and sales taking place outside the United States in reliance on Regulation S to persons who are not U.S. persons, and this Offering Circular may not be delivered in the United States or to any U.S. person.

This document may not be delivered or passed on to any persons in the United Kingdom, unless such persons are of a cate- gory described in section 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1997, as amended, whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995. The shares may solely be sold to and the Offering Circular may solely be passed on or delivered to such persons.

No person has been authorised to give any information or to make any representation in connection with the Offer, other than as contained in this document. If given or made, such information or representation must not be relied upon as having been authorised by the Company, the Company’s Directors or the Manager. Neither the delivery of this Offering Circular nor any sale of the shares offered hereby shall create any implication that the information contained in this Offering Circular is correct as of any time subsequent to the date of this document, or that no changes have occurred in the Company after the date hereof. Any major change compared with the contents of this Offering Circular will be published as a supplement pursuant to legislation in force.

Summary of the Offer

Offer price Indicative timetable

The offer price will be determined based on the bookbuilding Offer period 29 April – 6 May 2002 method on the basis of indications of interest received during Final offer price 7 May 2002 the bookbuilding period. It is expected that the offer price will be First trading day 8 May 2002 announced on 7 May 2002, at the latest. Payment date 13 May 2002

Expected publication of financial information

PARKEN Sport & Entertainment A/S expects to publish information in respect of the financial year ending 30 June 2002 as follows:

Profit announcement for the full year 30 September 2002 Annual report for 2001/02 31 October 2002 Annual general meeting 28 November 2002

PARKEN Sport & Entertainment does not currently issue quarterly financial statements as the Directors do not believe that issuing quarterly reports would increase the disclosure level at present.

2 CONTENTS

Responsibility statements ...... 4

Definitions ...... 6

Summary ...... 7

Reasons for the capital increase and use of proceeds ...... 11

The acquisition of the Office Towers ...... 13

PARKEN Sport & Entertainment A/S ...... 14

Financial performance and other financial information ...... 24

Prospects ...... 27

Supervisory Board and Executive Board ...... 27

Risk factors ...... 29

Share capital and ownership ...... 31

General information on the Company ...... 32

Rights attaching to the shares ...... 34

Description of the Offer ...... 35

Interim report for the six months ended 31 December 2001 ...... 39

Consolidated financial statements ...... 43

Articles of Association ...... 60

Advisers ...... 64

3 RESPONSIBILITY STATEMENTS

The Company’s statement

We hereby declare that, to the best of our knowledge and belief, the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of such information, and that all relevant information contained in the minutes of the Supervisory Board, audit book comments and any other internal documents is contained herein.

Copenhagen, 16 April 2002

PARKEN Sport & Entertainment A/S

Supervisory Board

Peter Norvig Flemming Østergaard Michael Kjær (Chairman)

Niels-Christian Holmstrøm Aldo Petersen Benny Olsen

Harald Nielsen

Executive Board

Flemming Østergaard Niels-Christian Holmstrøm

4 Auditors’ statement

Financial statements Danstrup & Wyrwik, State Authorised Public Accountants, represented by Jens Danstrup Larsen and Lisbeth Wyrwik, and KPMG C. Jespersen, State Authorised Public Accountants, represented by Bjarne Fabienke, have audited the financial statements for the years ended 30 June 1999 and 2000 presented by the Directors. DL Revisionsfirma, State Authorised Public Accountants, represented by Jens Danstrup Larsen, and KPMG C. Jespersen, State Authorised Public Accountants, represented by Bjarne Fabienke, have audited the financial statements for the year ended 30 June 2001 as presented by the Directors. The financial statements were provided with unqualified audit reports without any emphasis of matter.

Offering Circular Basis of opinion We have reviewed the financial information set out in this Offering Circular, including the financial highlights, key ratios, etc. and have ensured that such information is in accordance with the audited financial statements, and is correctly extracted and reproduced.

In accordance with usual practice our review did not include the Directors’ assessments of the prospects of the Company and therefore we do not report thereon. Furthermore, in accordance with usual practice, we have not audited the Company’s interim financial statements, and, accordingly, we do not report hereon.

Opinion We hereby confirm, in accordance with the Copenhagen Stock Exchange Rules, that the Offering Circular includes all significant matters relating to the Company of which we are aware and which may, in our opinion, affect the assessment of the assets and liabilities, the financial position and the results of the Company and the Group.

Copenhagen, 16 April 2002

DL Revisionsfirma KPMG C. Jespersen

Jens Danstrup Larsen Bjarne Fabienke State Authorised Public Accountant State Authorised Public Accountant

Statement by the Manager

As Manager we hereby confirm that the issuer and its accountants have made available to us all information requested and deemed necessary by us. The data provided or disclosed to us including, inter alia, the data on which the financial information, market information, etc. are based – have not been independently verified by us; however, we have gone through the information and compared it with the information contained in this Offering Circular and have found nothing that is incorrect or inconsistent. Copenhagen, 16 April 2002

Carnegie Bank A/S

5 DEFINITIONS

The following definitions are used throughout this Offering Circular: ”B1903” Boldklubben 1903. One of the amateur clubs behind the foundation of F.C. Copenhagen. “Carlsberg, Fredgaard and B Stands” PARKEN’s three new stands, which were built in 1991/92. “Carnegie” Carnegie Bank A/S. “Coca-Cola Stand” The original main stand at PARKEN, built in 1956. “Copenhagen Stock Exchange” Københavns Fondsbørs A/S. “DBU” The Danish Football Association. The association represents Danish football at national and international level. “Directors” The Supervisory Board and Executive Board acting together. “EURO League” An initiative by leading Dutch and Scottish football clubs to create a pan-European multi- national league, possibly with participation by top clubs from Portugal, Belgium, Sweden, Denmark, the Netherlands and Scotland. The initiative has not yet materialised. “F&B” Food and beverages. Sales of food and beverages in connection with events such as football matches and concerts. “F.C. Copenhagen” Football Club København or F.C. København. The name of the Company’s football activities, primarily involving participation in the SAS League. “Group” PARKEN Sport & Entertainment A/S and subsidiaries. “KB” Kjøbenhavns Boldklub. The other amateur club behind the foundation of F.C. Copenhagen. “Liability of Reversion” A right registered by a number of Danish municipalities to buy back land sold by them. A liability of reversion typically gives the municipality a right to buy back the land at a specified time and at a very low price, compared with today’s prices. “Manager” Carnegie Bank A/S. “Net Transfer Income” Transfer income less transfer costs. Transfer costs concern contract rights not yet amortised at the time of sale less any sales costs. “Offering Circular” This document. “Offering Circular Date” The date of this document, as stated on page 1. “Office Towers” The three buildings located at the three corners of PARKEN, containing office space, etc. and which were acquired by the Company on 1 April 2002. “PARKEN” The Danish national stadium and the home grounds of F.C. Copenhagen and the Danish national football team. The term is used in this Offering Circular for the stadium including its conference facilities, executive boxes and adjacent restaurant facilities. “PARKEN Complex” PARKEN and the Office Towers. “PARKEN Sport & Entertainment” or the “Company” The listed parent company PARKEN Sport & Entertainment A/S. “Revenue from Revenue (sponsorship revenue, etc.) received by the Group from companies through partner- Business Partners” ship agreements covering exposure and services in connection with the Group’s activities. “SAS League” The top league in Danish football. Formerly called the Super League or the Faxe Kondi League. “UEFA” Union of European Football Associations. “UEFA Cup” European tournament with participation by teams that have finished at the top of their respective national tournaments. “Øresund Region” A region comprising Scania in Sweden, and Zealand in Denmark, with Copenhagen-Malmo as the core area. Population of approximately 3.5 million people within a radius of about 100 km. “Østerbro Sports Centre” The area in Copenhagen bordered by Øster Allé, P.H. Lings Allé, Gunnar Nu Hansens Plads and Østerbrogade. The area currently contains the PARKEN Complex, the Østerbro Skating Arena, the Østerbro Stadium, and various other sporting facilities.

6 SUMMARY

The following summary is qualified in its entirety by, and is subject to, the more detailed information and financial statements contained elsewhere in this Offering Circular.

PARKEN Sport & Entertainment A/S create the best possible conditions for sporting, entertain- The Directors believe that PARKEN Sport & Entertainment is ment and other events at PARKEN, and to exploit and currently the leading provider of major sporting and enter- develop the entire PARKEN Complex for the benefit of the tainment events in Denmark and the Øresund Region. Company’s shareholders. The development of the PARKEN Complex will, inter alia, be based on the prime Copen- The Company’s operations comprise F.C. Copenhagen, one hagen location of the Complex and the potential synergies of the most prominent football clubs in Denmark. In addi- available from the many and large events that take place tion to the sporting operations, the Group’s activities mainly at PARKEN. Furthermore, the acquisition of the Office comprise the operation of Denmark’s national stadium, Towers enhances the Group’s opportunities to participate PARKEN. PARKEN is the home grounds of F.C. Copenhagen actively in developing the Østerbro Sports Centre to poten- and of the Danish national football team. It is also used as tially include a multi-sports complex, as the Group now a venue for major concerts and other events. PARKEN was owns all the title numbers in the area that are not owned acquired in 1998. After a retractable roof was installed in by the City of Copenhagen. 2001, PARKEN can now be used both as an outdoor and a heated indoor arena. PARKEN’s corner Office Towers were The Company finances the acquisition of the Office Towers acquired in 2002, and the Group now owns the entire by a mortgage loan of about DKK 250 million and internal- PARKEN Complex. The Group runs a conference centre adja- ly generated funds. Prior to this Offer, the Company there- cent to PARKEN and its other activities also include manag- fore has net interest-bearing debt of approximately DKK ing the Circus Building in central Copenhagen. 300 million.

The Company expanded its business in the current financial In view of potential future projects, the Directors wish to year, acquiring the activities of Rockshow, promoters of an strengthen the Group’s capital base by making the present annual outdoor concert tour to major Danish cities, and a capital increase. In recent years, the Group has launched majority interest in e-billetter A/S, a company providing tick- a process of related diversification, in which new business et sales for sporting and entertainment events throughout areas are added as and when substantial synergy and/or Denmark. The Company has also acquired a 15% interest in rationalization benefits can be achieved. The Group aims Euro Media A/S, which includes the DK4 television station to expand in business areas where the interaction with the and Prime Vision, a production company. Group’s existing physical assets, competencies and/or relations serve to optimise the probability for generating above-average returns in the business area in question. Reasons for the capital increase The Directors believe that having sufficient financial PARKEN Sport & Entertainment acquired the Office Towers resources is still crucial for the Group if it is to be able to at the corners of the PARKEN Complex from Jeudan, a efficiently exploit future investment opportunities and Danish property company, effective 1 April 2002 for a total make necessary investments in modern facilities. The consideration of approximately DKK 310 million. The Office Directors believe that, with the acquisition of PARKEN and Towers were built concurrently with the Carlsberg, Fredgaard the installation of the retractable roof, the Company has and B Stands at PARKEN in 1991/92. demonstrated that there are good opportunities available to a financially strong player with a significant existing cus- The background for the acquisition was the Directors’ belief tomer base and extensive expertise in the sports and that it would create substantial value to the Company if it entertainment industry. had the freedom to develop the PARKEN Complex so as to

7 FIVE-YEAR FINANCIAL HIGHLIGHTS AND KEY RATIOS

The table below shows a summary of the Group’s financial performance in the financial years ended 30 June 1997 to 2001. The information has been extracted from the audited financial statements for this period. The key ratios below are also based on the Group’s annual financial statements. For developments in interim financial figures, see “Interim report for the six months ended 31 December 2001”.

DKK ’000 1996/97 1997/98 1998/99 1999/00 2000/01 Profit and loss account Sports revenue 24,013 35,114 35,143 18,739 33,318 Business partners 9,212 14,433 31,199 39,360 37,114 Rental income – – 23,311 25,368 38,400 Restaurant, F&B and conferences – – 64,970 61,501 63,261 Other revenue 1,003 1,355 5,310 7,907 8,026 Total revenue 34,228 50,902 159,933 152,875 180,119 Staff costs 16,677 20,352 50,336 51,209 58,615 Other operating costs 12,378 20,565 67,994 65,904 76,182 Profit before amortisation/ depreciation and interest 5,173 9,985 41,603 35,762 45,322 Amortisation/depreciation 4,253 7,303 18,914 14,788 25,083 Operating profit 920 2,682 22,689 20,974 20,239 Profit before tax 929 5,642 21,014 17,962 22,065 Profit after tax 929 5,642 20,064 14,862 16,017

Balance sheet Contract rights 9,600 18,209 13,543 26,776 32,499 PARKEN – – 139,898 140,850 249,374 Other fixed assets 2,673 5,532 17,539 17,356 16,955 Current assets 7,449 85,956 179,986 67,073 60,248 Total assets 19,722 109,697 350,966 252,055 359,076 Shareholders’ equity 12,412 100,400 183,143 197,125 300,742

Key ratios Operating margin (%) 2.69 5.27 14.19 13.72 11.24 Earnings per share (DKK) 1.60 4.86 14.89 10.54 10.47 Net asset value per share (DKK) 21.40 86.55 129.89 139.80 162.67 Equity ratio (%) 63 92 52 78 84

Other financial data Profit before tax and transfer activities (DKK) (6,172) (821) 25,310 27,155 36,706 Average number of employees 38 45 127 126 127 Of whom football players 25 35 32 30 29 Investments in Sporting facilities – – 142,297 4,180 114,414 Contract rights 12,441 16,679 21,812 22,855 35,483

Note: All financial information has been restated to reflect the accounting policies used in 2000/01. Transfer activities include transfer income and expenses, rental income and expenses, and amortisation of contract rights regarding football players and coaches. All ratios have been calculated in accordance with “Recommendations & Ratios”, issued by the Danish Association of Financial Analysts.

8 Prospects Risk Factors Outlook for the financial year ending 30 June 2002 Prospective investors should be aware that an investment in For the current financial year, the Group expects a turnover the Company may involve risk and should therefore only be of approximately DKK 240-260 million, profit before tax of made by investors with the necessary expertise to evaluate approximately DKK 70 million and profit after tax of approx- such investment. Investors contemplating an investment in imately DKK 50 million. shares in the Company should carefully consider the section “Risk factors” elsewhere in this Offering Circular. It is not However, there are many variables involved in the forecast possible to provide sufficient and adequate information on of the profit for the year. In random order, these are: the this section other than by reproducing it in its entirety, for number of events at PARKEN, the level of attendance at which reason it has been omitted from this summary. the events, F.C. Copenhagen’s football results and any transfer income and expenses. Several elements of the results may be characterised as one-off major events and Summary of the Offer occurrences, which occur at various intervals. On the basis The Offer of the activities and events known at present, it is assumed The Offer comprises 600,000 new shares of DKK 20 nomi- that the results will be at the above mentioned level. nal value each and is based on bookbuilding.

No events have occurred since the release of the interim Carnegie has furthermore been granted an option exercis- report for the six months ended 31 December 2001, which able during a period of up to 30 days after the execution by would change the outlook. Carnegie and the Company of an Underwriting Agreement (see “Underwriting” below) to procure the sale of up to Outlook in the longer term 90,000 new shares of DKK 20 nominal value solely to cover The Directors expect to retain and consolidate the Group’s any overallotment of shares, which may increase the Offer position as the leading supplier of major sporting and to a total of 690,000 shares. entertainment events in Denmark and the Øresund Region. It is expected that the allocation of shares will be The acquisition of the Office Towers increases the Group’s announced on 7 May 2002, at the latest. level of freedom regarding the development of the PARKEN Complex, including the closely related development of the Offer period Østerbro Sports Centre. The Group intends to participate as The offer period commences on Monday, 29 April 2002 and an active partner to the City of Copenhagen in the City’s closes on Monday, 6 May 2002, unless the Offer is closed considerations regarding the establishment of a multi- earlier. However, the Offer will not be closed before 29 April sports complex connected to PARKEN’s facilities. The 2002 at 4:00 p.m., Copenhagen time. Any closure before Directors believe that integrated operation of PARKEN and 6 May 2002 will be announced through the Copenhagen a new multi-sports complex holds significant financial Stock Exchange. The Offer in respect of applications for sub- potential to the Group. scription for amounts up to and including DKK 2 million may be closed before the remainder of the Offer. Any such The Directors expect that F.C. Copenhagen will win a posi- early closing will be announced through the Copenhagen tion as one of the most dominant clubs in Scandinavia Stock Exchange. within the next few years, and that this will produce substantial revenue from events such as matches in European Offer price tournaments and from transfer income. The offer price will be determined through bookbuilding. Bookbuilding is a process in which the Manager receives New Group activities, including e-billetter and RockShow, indications of interest from investors and any adjustments are expected to contribute to Group earnings in the years thereof. It is expected that the offer price will be announced ahead. Following the acquisition of RockShow, the Group through the Copenhagen Stock Exchange on 7 May 2002, now also organises major entertainment events in-house. at the latest. The shares will be settled free of brokerage. In the longer term, own entertainment events also hold an attractive potential in connection with the utilisation of Applications for shares PARKEN’s facilities. All applications made at a price equivalent to the offer price or a higher price will be settled at the offer price following It is the Directors’ overall objective that the expected con- allocation, if any. tinuing expansion of the Group’s activities and the continued increase of earnings in the Group should form the Applications for subscription for amounts (of up to and basis of a reasonable increase in the value of the including DKK 2 million) Company’s shares. Applications for subscription for amounts of up to and including DKK 2 million are binding and cannot be changed

9 or cancelled by the investor. The Offer in respect of such Underwriting binding applications may be closed before the remainder of At the time the offer price is determined, the Company and the offer. Any such early closing will be announced through the Manager are expected to enter into an Underwriting the Copenhagen Stock Exchange. Applications should be Agreement containing the terms governing the Offer. LD submitted in writing to the investor’s own account-holding Pensions has made a binding advance commitment to sub- institution. scribe for 240,000 new shares.

Indications of interest based on bookbuilding (for amounts Withdrawal of the Offer of more than DKK 2 million) If circumstances so warrant, the Offer may be withdrawn Investors who wish to apply for subscription for amounts of up to the time of allocation. Furthermore, the Manager may, more than DKK 2 million can indicate their interest to the in the event of extraordinary and unforeseeable circum- Manager during the subscription period. During the sub- stances, withdraw the Offer until payment for and delivery scription period, investors can continuously change or with- of the shares in the Danish Securities Centre has taken draw their indications of interest. Immediately after the place. determination of the offer price, investors will be asked to confirm to the Manager their purchase at the offer price Listing on the Copenhagen Stock Exchange within the limits of the investor’s most recently submitted or Application will be made for the new shares to be admitted adjusted indication of interest. for listing on the Copenhagen Stock Exchange. It is expected that the new shares will be listed on the Copenhagen Stock Submission of application form Exchange on 8 May 2002 at the latest and that dealings in Applications must be received by the selling agents on or the new shares will commence on that date. If the Offer is before 6 May 2002 at 4:00 p.m. The Offer may be closed closed before 6 May 2002, the listing date may be moved earlier. See “Offer period” and “Applications for shares”. forward accordingly.

Oversubscription and reduction Payment and registration with the Danish Securities If applications for subscription for shares at the offer price Centre exceed in aggregate the number of shares offered, applica- Shares will be registered in the investor’s account with the tions for subscription of amounts of up to and including Danish Securities Centre (Værdipapircentralen) against pay- DKK 2 million will be scaled back according to a mathemati- ment, which is expected to take place on or before 13 May cal formula. Shares may be allocated based on a fixed allo- 2002. If the offer is closed before 6 May 2002, the pay- cation per applicant. ment date will be moved forward accordingly.

For indications of interest for subscription of amounts of Proceeds more than DKK 2 million, shares will be allocated on an After payment of the expenses relating to the Offer, the net individual basis. Shares will be allocated between applica- proceeds to be received by the Company are expected to tions and indications of interest at the discretion of the amount to approximately DKK 144 million, assuming the Company and the Manager. The Company and the Manager Option is not exercised. reserve the right to fix an individual allocation in respect of indications of interest irrespective of the volume of applica- Subscription agent tions received. Carnegie Bank A/S

In allocating shares under indications of interest for sub- For a full description of the offer terms, please see scription of amounts of more than DKK 2 million, prefer- “Description of the Offer” elsewhere in this Offering Circular. ence may be given to investors who, inter alia, are deemed to have a longer investment horizon than other investors, Rounded figures and to applications submitted early in the offer period. Some of the financial and other information in this Offering Circular is given in rounded figures. Accordingly, the sum of certain numbers presented may not conform to the stated total and percentages may not precisely reflect absolute figures.

10 REASONS FOR THE CAPITAL INCREASE AND USE OF PROCEEDS

Reasons for the capital increase being the sole owner of the entire PARKEN Complex. PARKEN Sport & Entertainment acquired the Office Towers Furthermore, the acquisition of the Office Towers enhances at the corners of the PARKEN Complex from Jeudan, a the Group’s opportunities to participate actively in develop- Danish property company, effective 1 April 2002 for a total ing the Østerbro Sports Centre to potentially include a multi- consideration of approximately DKK 310 million. The Office sports complex, as the Group now owns all the title num- Towers were built concurrently with the Carlsberg, Fredgaard bers in the area that are not owned by the City of Copen- and B Stands at PARKEN in 1991/92. hagen.

The Office Towers and PARKEN were originally a single prop- Against this background, the Directors have been attentive erty unit. In 1998 when the Company acquired the stadium to the opportunity to acquire the Office Towers, and in late part of the complex (PARKEN) for DKK 138 million, its capi- 2001 the Directors began negotiating a potential purchase tal structure and cash position at the time did not allow it to of the Office Towers from the then existing owners. The take over the entire PARKEN Complex, and the Office decision to purchase the Office Towers became final in Towers were therefore hived off from PARKEN. January 2002.

In the spring of 2001, the installation of a retractable roof The investment in the three Office Towers is an attractive at PARKEN was completed, and PARKEN can now be used investment in itself, producing a good operating profit and a both as an outdoor and a heated indoor arena. The new good cash flow, which will significantly enhance the roof represented a value of approximately DKK 110 million Company’s future operating results. Furthermore, the and contributed to the decision by the Danish Broadcasting Directors believe the Office Towers involve significant poten- Corporation to host the Eurovision Song Contest at PARKEN tial for creating value in connection with the continuing in May 2001. Since the retractable roof was installed, development of the PARKEN Complex. demand for large indoor events at PARKEN has exceeded the Directors’ expectations. Large events normally require a The Company finances the acquisition of the Office Towers long planning period, but PARKEN has already housed sev- by a mortgage loan of about DKK 250 million and internally eral indoor events with large audiences, including concerts generated funds. Prior to this Offer, the Company therefore with Depeche Mode and Red Hot Chili Peppers, large corpo- has net interest-bearing debt of approximately DKK 300 mil- rate events with food catering for several thousand guests lion. and the boxing match between Brian Nielsen of Denmark and Mike Tyson in October 2001. In view of potential future projects, the Directors however wish to reduce the Group’s net debt by making the present Since 1998, and especially since the spring of 2001, the capital increase. The Directors believe that having sufficient Directors have wished to organise the entire PARKEN financial resources is still crucial for the Group if it is to be Complex as a single unit under PARKEN Sport & Entertain- able to efficiently exploit future investment opportunities ment. and make necessary investments in modern facilities. The Directors believe that, with the acquisition of PARKEN and The reason is that the Directors believe that it would create the installation of the retractable roof, the Company has substantial value to the Company if it had the freedom to demonstrated that there are good opportunities available to develop the PARKEN Complex so as to create the best pos- a financially strong player with a significant existing cus- sible conditions for sporting, entertainment and other tomer base and extensive expertise in the sports and enter- events at PARKEN, and to exploit and develop the entire tainment industry. PARKEN Complex for the benefit of the Company’s shareholders. The development of the PARKEN Complex will, inter alia, be based on the prime Copenhagen location of the Use of proceeds Complex and the potential synergies available from the The Offer is expected to produce gross proceeds of approxi- many and large events that take place at PARKEN. mately DKK 150 million. In the short term, the proceeds from the Offer will be used to strengthen the Group’s finan- The Directors believe that the development and optimal use cial position so as to ensure that the Group will continue to of PARKEN as an indoor as well as an outdoor arena has to have significant liquid resources. a great extent been hampered by the third-party ownership of the Office Towers. As an example, two of the three Office In the longer term, the proceeds will contribute to enabling Towers have large terraces with a view of PARKEN’s arena. the Group to make a number of expected investments with- Optimal utilisation and development of these attractive in sports and entertainment, which would have the potential parts of the complex in connection with events at PARKEN to enhance the Group’s market position in Denmark and the requires common ownership of the Office Towers and Øresund Region and contribute to increasing Group earn- PARKEN. In addition, the Directors believe that the Company ings. could gain significant operating benefits and synergies from

11 At present, plans and ideas exist for the further develop- of organisational competencies. The Directors believe that ment of the entire area adjacent to the PARKEN Complex a multi-sports complex could potentially attract a significant (the Østerbro Sports Centre). One of the facilities just next number of attractive events to Copenhagen, for the benefit to PARKEN is an ice skating arena. The plans include of the City, the citizens and business operators in Copen- replacing the existing ice skating arena with a multi-sports hagen. complex with ice hockey rinks at two levels and a flexible wooden floor that can be inserted above the upper skating The Directors believe that the multi-sports complex and rink for traditional indoor sports such as handball, basket- PARKEN would only compete for the same events to a limit- ball and others, as well as for other indoor events such as ed extent, as the multi-sports complex would primarily be concerts, conferences, and the like. The plans for the multi- suitable for rather smaller events than those targeted by sports complex include an expected audience capacity of PARKEN, and for the indoor sports. A multi-sports complex 8,000 to 10,000. immediately adjacent to PARKEN would concurrently create several synergies and allow more efficient utilisation of the The building of the multi-sports complex is initially subject facilities. to the position of the City of Copenhagen with regard to such a project. The City owns and finances the existing ice Furthermore, the Directors expect that PARKEN’s Coca-Cola skating arena and the adjacent areas. The project would Stand will be replaced by a new stand within a few years – require a local planning and a hearing phase, which would probably with an underground parking facility and possibly presumably take about a year. The Company has solely par- integrated with a hotel. Such a project is expected to ticipated in drawing up plans for a multi-sports complex in include a new tower in the last corner of PARKEN, where a connection with the development of the Østerbro Sports hotel could be built. The total project costs for a new Coca- Centre and has expressed its interest in managing such a Cola Stand and a tower would be approximately DKK 300 multi-sports complex. The realisation of such a project million. Even though such a combined project would be car- would require the investment of significant capital by third ried through in collaboration with one or more financially parties. The Directors believe that there are several reasons strong third parties, the project would still make up a signifi- why the Group has the capability to contribute to the cant investment for the Company. profitable operation of such a facility, including a number

12 THE ACQUISITION OF THE OFFICE TOWERS

The Company concluded an agreement with Jeudan A/S in in the Office Towers have been concluded with external January 2002 to acquire the Office Towers in the PARKEN lessees. The biggest third-party lessee is F Group A/S, Complex effective 1 April 2002. The acquisition is being which leases approximately 4,079 sq.m., which can be ter- made by the Group acquiring GFKJura 927 A/S, a company minated by one-seventh each year over seven years. The whose sole asset, in addition to minor liquid assets, is the leases have remaining periods of interminability that are Office Towers. The purchase price will be paid when a final evenly distributed between two and eight years.. The leases deed of conveyance for the Office Towers has been regis- were reviewed in connection with the acquisition and form tered. It is expected that payment will be effected on 22 the basis for the determination of the price. April 2002, but it may be further postponed. The price of the Office Towers is based on a rate of return of The Office Towers comprise three towers located on either 7%. In the Directors’ experience, there is a strong demand side of the B Stand (Office Towers D and E) and the Office for leases at the PARKEN complex, which is confirmed by Tower located between the Fredgaard and Coca-Cola Stands the letting rate, which is almost 100%. The Directors believe (Office Tower F). that there is a potential for generating additional rent from the Office Towers, partly as a result of future adjustments of When they were built in 1992, the Office Towers were origi- some of the leases and partly by letting the large terraces in nally part of a single title together with PARKEN. Following the Office Towers overlooking PARKEN. the acquisition of PARKEN by the Company in 1998, a process to divide PARKEN and the Office Towers into sepa- The owner of the Office Towers until now has handled the rate title numbers was initiated. The registration as sepa- management of the buildings, leases, etc. Following the rate title numbers was completed on 22 February 2000. acquisition, the Group now manages the entire PARKEN The Office Towers and PARKEN are the only title numbers in Complex. The Directors expect that the operating profits of the Østerbro Sports Centre not owned by the City of the Office Towers can be improved in the future by using the Copenhagen. premises in combination with PARKEN.

Office Tower D includes 9,026 sq.m. and comprises two Like PARKEN, the Office Towers are subject to a Liability of freehold flats. The Company has owned one of the freehold Reversion to the City of Copenhagen in 2020. However, the flats, of 2,263 sq.m. since 1998, as the freehold flat was period can be extended for another 40 years until 2060 for included in the acquisition of PARKEN. This freehold flat a consideration of DKK 1 million. The Company wishes and includes the PARKEN Sports Cafe with bowling alleys and expects to conclude an agreement with the City of Copen- other facilities. Freehold flat 2 in Office Tower D covers an hagen to further postpone the Liability of Reversion in area of 6,763 sq.m. In addition to the ownership of freehold respect of both PARKEN and the Office Towers within a few flat 1, the Group also leases 2,182 sq.m. in Office Tower D. years. The leased premises are used for the Group’s offices, conference rooms and a restaurant. The latest operating accounts for the Office Towers, i.e. for the year ended 31 December 2001, showed total revenue Office Towers E and F comprise 9,060 sq.m. and 4,261 of approximately DKK 21 million and an operating profit sq.m., respectively. In addition to ordinary office premises before financial expenses of DKK 20.5 million. In the and adjacent facilities, Office Towers E and F also house a Group’s financial statements, the Office Towers will be fitness centre and a café (the Central Park Café) and the accounted for as investment property, and depreciation Group’s merchandise shop, which is outsourced to the com- charges will consequently not be taken in respect of the pany X-Large A/S. Office Towers. Conversely, the Office Towers will be revalued to their fair value on a regular basis. In the Group’s tax Accordingly, the total floor space of the Office Towers is accounts, depreciation charges will be taken in respect of approximately 22,347 sq.m., of which the Group uses the Office Towers, and such depreciation charges are approximately 4,500 sq.m. The Directors believe that a total expected to amount to about DKK 10-12 million in each of of 386 sq.m. is currently vacant and available for letting, the next few years. This will reduce tax payable in the years and that the letting rate is currently approximately 98%, cal- ahead, but full provision will be taken for the deferred tax culated on the basis of the rental income. Nineteen leases liability.

13 PARKEN SPORT & ENTERTAINMENT A/S

Company history end of 2001 it acquired a 15% interest in Euro Media A/S, The Company began its football operations in 1992, when which includes the DK4 television station and Prime Vision, Football Club Copenhagen (F.C. Copenhagen) was founded a production company. in a superstructure agreement between B1903 and KB, two clubs playing in the Danish football divisions. Founded in In 2002, the Group acquired a 51% stake in e-billetter A/S, 1876, KB was the first football club outside of Great Britain, a company selling tickets to sporting and entertainment and B1903, as the name indicates, was founded in 1903. events throughout Denmark, as well as PARKEN’s corner KB has won a total of 15 Danish championships, the most Office Towers, so the Group now owns the entire PARKEN won by any Danish club to date. B1903 has won seven Complex. national championships.

F.C. Copenhagen was established with a view to building a Strategy and goals football club in Copenhagen capable of drawing crowds and PARKEN Sport & Entertainment’s overall goal is to be the attracting sponsors on a large scale, and thereby creating a leading provider of major sporting and entertainment events solid and permanent foundation for professional football. in Denmark and the Øresund Region. The construction of PARKEN in 1991/92 was one of the reasons F.C. Copenhagen was formed, as a modern stadium The Company expects to achieve earnings growth by was considered to be the ideal setting for a merged football expanding its business within profitable segments of the club in Copenhagen. Since being founded in 1992, F.C. sports and entertainment industry. Copenhagen are twice winners of both the national championship, in the 1992/93 and 2000/01 seasons, and of the The Company has divided its operational strategy and goals Danish cup tournament, in 1994/95 and 1996/97. into a number of areas:

In 1997, the Company was listed on the Copenhagen Stock Expansion and new business activities Exchange, welcoming more than 6,500 new shareholders The Group’s core competencies lie in being a provider of on that occasion and strengthening its capital base sub- major sporting and entertainment events and in operating stantially. Since the IPO, the Directors have focused on and marketing large facilities for sporting events, congress- expanding the Company’s activities and revenue base, so as es, concerts and other entertainment events. Future expan- to reduce the Company’s reliance on its football results. sion will be based on this core competency and on a large and growing customer base. As part of this strategy, in 1998, the Company acquired PARKEN, which comprises the Carlsberg, Fredgaard and the The acquisition of the RockShow and e-billetter activities B Stands built in 1991/92 with lounge, restaurant, confer- reflect the Group’s intention to expand its position in the ence and other facilities, the Coca-Cola Stand, which is also entertainment industry in Denmark. Being a recognised the former main stand, and related facilities, the football provider of one of Denmark’s largest outdoor concert tours, pitch, as well as ownership of the Sportscafé along with a RockShow strengthens the Group’s opportunities for and bowling alley and adjacent premises. enhances its expertise in organizing major entertainment events in-house. The acquisition of e-billetter has given the After acquiring PARKEN and expanding its revenue base, Group direct access to customers and a key position in tick- the Group has generated less than half of its revenue direct- et sales in Denmark. The acquisition has also helped the ly from F.C. Copenhagen in recent years. To reflect this situ- Group fulfil its goal of gaining access to and to control as ation, the Company’s name was changed in 1999 from much of the revenue from its large events as possible. Football Club Copenhagen A/S to PARKEN Sport & Entertainment A/S. As television is often a key factor in making major sporting and entertainment events profitable, the Directors monitor In 2001, a retractable roof was added to the PARKEN struc- TV and media aspects on an ongoing basis. The equity ture, and the stadium can now be used as a covered, heat- interest taken in Euro Media A/S is a reflection of the ed indoor arena. Representing an investment of approxi- Group’s ongoing review of opportunities to increase earn- mately DKK 110 million, the retractable roof has already ings by organising various kinds of events at PARKEN. The been instrumental in PARKEN being chosen to host several Group is continuously involved in producing television and major indoor events, including the 2001 Eurovision Song radio programs targeting mainly F.C. Copenhagen fans, and Contest. through F.C. Copenhagen the Group holds a stake in attractive television rights. The Directors are aware that it is In November 2001, the Company expanded its business, essential for the Group to optimise the return on these acquiring the activities of Rockshow, promoters of an annu- rights. al outdoor concert tour to major Danish cities, and at the

14 The Group expects to expand its sporting activities to com- Copenhagen. The Group has expressed a desire to operate prise other sports than just football, but the Group is cur- such a multi-sports complex and would be an active busi- rently waiting for an opportunity to develop modern facili- ness partner to the City of Copenhagen in redeveloping the ties, including for ice hockey, adjacent to PARKEN’s area. facilities. Further development of the sports department New events at PARKEN (F.C. Copenhagen) The Directors believe that the retractable roof will attract F.C. Copenhagen is an important factor in the use of greater activity in terms of large conferences and congress- PARKEN’s facilities. F.C. Copenhagen are reigning Danish es to be held at PARKEN, given the fact that PARKEN is now champions (2000/2001 season) and the team remains at among the largest heated indoor arenas in Europe. the top of the SAS League. The goal is for F.C. Copenhagen Previously, Copenhagen and the Øresund region did not to be among the most dominant clubs in Scandinavia. The have the facilities to host very large conferences. Directors believe that F.C. Copenhagen’s position in the Danish football market has improved considerably in recent The Eurovision Song Contest at PARKEN in May 2001 had a years. The improvement is based on continuing develop- television audience of more than 100 million throughout ment of the football organisation and of talent promotion in Europe, making this event a valuable platform on which to F.C. Copenhagen, including through a football school in promote PARKEN as a venue for similar events or major South Africa, combined with negative financial performanc- congresses in the years ahead. Since the retractable roof es by almost all competing clubs in Denmark. was installed, demand for large indoor events at PARKEN has exceeded the Directors’ expectations. F.C. Copenhagen and Brøndbyernes I.F. Fodbold A/S have received invitations to participate in establishing a pan- The Group may elect to organise new, major entertainment European league (the Euro League) together with major or other events itself at PARKEN sometime in the future. Dutch, Belgian, Scottish, Swedish and Portuguese teams. Any bookings for new, major events organised by PARKEN Participating in an international league of this kind would will be subject to careful evaluation of the financial potential hold a substantial sporting and financial potential for F.C. and risks of such events. Copenhagen, but establishing the league is subject to approval by a number of football organisations and is out- Developing the PARKEN Complex and side the Company’s control. Therefore, F.C. Copenhagen has the Østerbro Sports Centre taken a tentative stance on this issue. It is not expected The acquisition of the Office Towers has given the Group that a truly pan-European league will be established in the greater freedom to develop the PARKEN Complex so as to near future, but F.C. Copenhagen expects to see positive create the best possible conditions for sporting, entertain- changes to the framework of existing European tournament and other events at PARKEN, and to exploit and devel- ments over the next few years. op the entire PARKEN Complex for the benefit of the Company’s shareholders. The development of the PARKEN The Group has considered acquiring an ownership interest Complex will, inter alia, be based on the prime Copenhagen in foreign football clubs and to use the expertise built from location of the Complex and the potential synergies avail- running F.C. Copenhagen, and the Directors believe that able from the many and large events that take place at there would be substantial synergies from running several PARKEN. football clubs. Such an ownership interest must be carefully considered in a realistic assessment of the risks as well as The Directors are aware of the risks to which the Group may the financial and operational requirements that would pose be exposed as a result of major investments, and the for the Group. The Group has no current plans of taking an Directors focus on maintaining the prudent and profitable ownership interest in foreign football clubs. development the Company has experienced since the initial public offering in 1997. Redevelopment of the PARKEN Transfer activities Complex is expected to take place in cooperation with sever- Generally, football clubs have opportunities to generate sub- al business partners, including the City of Copenhagen, stantial revenue from player sales, when players and the which is essential for ensuring attractive development of club get a chance to profile themselves in international areas adjacent to PARKEN. matches. Although the Group does not rely on transfer income to achieve a profit, the Directors are very much This area (Østerbro Sports Centre), which is owned by the aware of the importance of creating optimal opportunities City of Copenhagen, is in many ways run down and expen- for future transfer income. sive to operate in its current condition. Through a multi- sports complex, new life would come to this area and would The goal is for the Group, over a number of years, to have contribute to attracting several major events to average income from player sales exceeding the average

15 costs of player acquisitions. A key requirement for achieving transfer activities of DKK 36.3 million, equal to a 34% such transfer income is for F.C. Copenhagen to achieve improvement on the financial year ended 30 June 2000. good results in European tournaments. Profit before tax for the year ended 30 June 2001 was DKK 22.1 million, representing a 23% increase. Commercial business partners and match attendances Revenue from Business Partners (sponsorship and other Profit before transfer activities provided approximately a revenue) in F.C. Copenhagen and PARKEN has risen sub- 15.7% return on average shareholder’s equity in the finan- stantially in recent years, and the Group now has partner- cial year ended 30 June 2001. The return on equity will in ship agreements with about 300 businesses. At the initial the future be influenced by the capital increase made public offering in 1997, the objective was to generate rev- towards the end of the most recent financial year and by enue of more than DKK 20 million in 2000. In the financial the present capital increase, which finance the investment year ended 30 June 2001, Revenue from Business Partners in a retractable roof and the acquisition of the Office was DKK 37.1 million and the amount is expected to be Towers. The full return from these investments is not expect- approximately DKK 43 million in the current financial year, ed to materialise until in the course of a number of years, based on existing agreements. The combination of PARKEN for which reason the return on equity may be reduced for a and F.C. Copenhagen clearly represents an attractive prod- period of time. uct for businesses wishing to use sports and entertainment in their general marketing efforts and to strengthen their The impact from player acquisitions and sales is expected relations to various stakeholders. The Group will continue to to vary considerably from year to year, depending especially develop commercial partnership concepts and to strengthen on the timing of and the income from player sales, but it is its bonds to business partners. The Directors expect, as the the Directors’ goal that, over a number of years, average activities are expanded, to benefit both from the close rela- revenue from the sale of players should exceed the costs of tions to businesses and from the customer service know- acquiring players (by way of amortisation of contract rights). how it builds up. Accordingly, the Group requires, over time, average net revenues from player trading. One of the most important parameters for the market position of a sporting and entertainment business is the specta- The return on equity is also affected by the capital structure, tor interest, as its attraction is proportional to the number of as, considering potential future projects, the Directors have spectators. F.C. Copenhagen has attracted a large increase resolved to have a relatively strong financial position with in match attendances in recent years. At the initial public limited net interest-bearing debt following this capital offering in 1997, the goal was to lift the average attendance increase. The Directors expect that the Group will eventually at F.C. Copenhagen’s home matches from less than 10,000 have a capital structure with a debt ratio above the current to more than 15,000 by 2000 and this goal was met. In the level, and that could strengthen the return on equity. 2000/2001 season, F.C. Copenhagen’s home game average in the Faxe Kondi League was 17,364. The Directors At the same time, the Directors’ overall objective is for the have a goal that by further developing F.C. Copenhagen and expected continuing expansion of the Group’s activities and the matchday activities, the Group will in future draw aver- continued increase of earnings in the Group to form the age crowds that are about 15%-20% higher than the current basis of a reasonable increase in the value of the level. Company’s shares.

Outsourcing and business partners Previously, the Group’s activities also included a merchan- Competition dising shop and a bowling centre at PARKEN. Management The Group operates in different business areas, each with of these activities was outsourced to external business part- its own special characteristics, competition and competitive ners at the beginning of 2001 in return for the Group receiv- parameters. ing a share of the net profits. In future, the Directors will continue to focus on exploiting the Group’s core competen- PARKEN is Denmark’s largest stadium and the retractable cies and to a large extent set up partnerships with compa- roof allows PARKEN to be used both as an outdoor and as a nies able to complement the Group’s core competencies. heated, indoor arena. The main competition parameters for attracting events are PARKEN’s capacity, the central Financial targets and financing policy Copenhagen location and the ability to stage major events, In the evaluation of the Group’s operating performance, the including handling television stations and the international Directors focus on both “Profit before tax” and “Profit before press. PARKEN’s main competitors in Denmark include the transfer activities,” which shows profit (before tax and) Forum as well as, for major congresses and conferences, before the effects of player trading. In the financial year the Bella Center in Copenhagen, and, for sporting events ended 30 June 2001, the Group achieved a profit before and concerts, other Danish stadiums or sporting arenas.

16 PARKEN’s capacity to host a crowd of about 50,000 people Revenue split depending on the event has in many cases been a principal (2000/2001) factor in PARKEN being awarded the event. Especially for indoor entertainment events, PARKEN has a capacity that is Other revenue Sports substantially above that offered by the competition. 4% revenue 18% Characteristic of the F.C. Copenhagen football operations is the club’s strong position as one of the top teams in Danish Restaurant, football. F.C. Copenhagen are reigning Danish champions. F&B and The financial resources available to a club are becoming conferences increasingly important in the football industry, and this pro- 36% Business vides an advantage to clubs based in the largest cities with partners the greatest backing from supporters and the business 21% community. Based in Denmark’s capital and largest city, Copenhagen, and playing at Denmark’s largest stadium, F.C. Copenhagen is well positioned in this respect. Several of F.C. Copenhagen’s competitors have experienced finan- Rental income cial difficulties in recent years, suffering losses that have 21% reduced their capital base. The Directors believe that this is one of the reasons why F.C. Copenhagen’s competitive Sports revenue strength in Denmark has improved considerably in recent Sports revenue consists of match receipts and television years. In international terms, the Group’s stable financial income, transfer income from player sales and merchandis- performance is also remarkable compared with several larg- ing revenue. er football clubs, and the Directors therefore believe that F.C. Copenhagen’s international position has also improved. The Group’s match receipts and television income mainly The Company leases the Office Towers to external lessees relate to F.C. Copenhagen’s matches in the SAS League and in competition with a large number of other providers of international matches in European tournaments. Match Copenhagen office premises. The Directors believe that the receipts and, in particular, television income depend strong- Group enjoys a strong competitive position with respect to ly on whether F.C. Copenhagen qualify for European tourna- retaining existing lessees and, if necessary, to attracting ments and draws attractive teams from some of the large new lessees thanks to the location at PARKEN and the facil- countries in Western Europe. For example, F.C. ities and the quality of the Office Towers. Copenhagen’s matches against Chelsea in the Cup Winners Cup generated strong gate receipts and television income in the financial year ended 30 June 1999. F.C. Copenhagen Business areas did not qualify for European tournaments in the financial The Group generates many different types of revenue, years ended 30 June 2000 and 2001. including from organizing football matches, stadium rentals and catering to customers in the stadium’s restaurants and F.C. Copenhagen match attendances have risen strongly in fast food stands. The Group divides its revenue into these recent years. The average home match attendance includ- five general segments: Sports revenue, Business partners, ing sponsors in the SAS League has increased from 8,721 Rental income, Restaurant, F&B and conferences and Other in the 1995/96 season to 17,364 in 2000/2001. The revenue. improvement has been achieved through a focused effort by

Sports revenue

DKK ’000 1996/97 1997/98 1998/99 1999/00 2000/01

Match receipts and television income 9,674 14,684 19,870 12,408 15,769 Transfer income 12,291 16,917 9,829 579 13,626 Merchandising1 2,048 3,513 5,444 5,752 3,923 Total sports revenue 24,013 25,114 35,143 18,739 33,318

1: Merchandising was outsourced at 1 January 2001. Accordingly, merchandising revenue is only included for six months of the financial year ended 30 June 2001. As from 1 January, the Group recognises a net income amount from merchandising sales.

17 the Company to market F.C. Copenhagen in a professional Transfer income has historically been very important for manner and by providing good facilities at PARKEN and the Company, and prior to the acquisition of PARKEN, the more comprehensive entertainment for spectators than Company’s profits hinged on such income. However, as what is traditionally seen at Danish stadiums. reliance on transfer income is an indication of a defensive and short-term strategy, the Directors have focused on elim- For example, F.C. Copenhagen was the first club in inating this situation. Denmark to offer a dedicated family stand at its home matches with specially designed family facilities and On the other hand, transfer income provides an attractive services, where the club organises various activities for earnings opportunity for football clubs and the Directors children before the game and at half-time. In cooperation make every effort to exploit such opportunities for substan- with Carlsberg, the club has also established the Carlsberg tial transfer income. A key to achieving substantial transfer Corner under the Fredgaard Stand, providing post-match income is for the Group to avoid having to sell players for entertainment, music and other events directed at F.C. economic reasons and for the players to be signed under Copenhagen fans. long-term contracts that do not expire in the foreseeable future. In addition to the stadium marketing initiatives already mentioned, the Company is making a dedicated effort to In the six months to 31 December 2001, the Group recog- strengthen fan and customer relations during periods nised income from player sales totalling DKK 51.3 million, between marketing activities. For example, a radio station including from the sales of Christian Poulsen and Thomas broadcasts a regular one-hour program from PARKEN on Rytter. These transactions illustrate the potential of player weekdays at 5:00 pm providing news, debate and entertain- sales, especially when F.C. Copenhagen’s players get an ment relating to F. C. Copenhagen. opportunity to show their worth in European tournaments against some of Europe’s best players, which was the case Match receipts and television income will continue to rely in 2001. heavily on F.C. Copenhagen qualifying for European tournaments. In the autumn of 2001, F.C. Copenhagen played five Negotiations have been held in recent years on revising the home matches in European tournaments, resulting in match player transfer system, because the EU Commission receipts and television income of DKK 25.6 million in the believes that the football industry fails to meet certain provi- six months ended 31 December 2001, as compared with sions of the Treaty of Rome. On 5 March 2001, the EU DKK 8.4 million in the six months to 31 December 2000 Commission, UEFA and FIFA, the world football association, when F.C. Copenhagen had not qualified for European tour- agreed on a revised transfer system. The Directors believe naments. that under this agreement the Company will continue to

F. C. Copenhagen match attendance

18,000

16,000

14,000

12,000

10,000

8,000

6,000

in the SAS League 4,000

2,000 Average home Average match attendance 0 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01

18 have a potential for achieving substantial transfer income, number of entertainment events at PARKEN, such as con- and that it will not have a material influence on the certs. Company’s financial position. The transfer income generated in the six months to 31 December 2001 illustrates the potential for substantial transfer income, also after the revi- Rental income sion of the player transfer system. Since PARKEN was acquired in 1998, renting the stadium part of PARKEN to different users has come to play a sub- Merchandising revenue has undergone strong growth in stantial role for the Group’s activities. PARKEN is rented out recent years, but growth flattened in the financial year end- for football matches, concerts and other events. In the ed 30 June 2000. Merchandising was outsourced to X-Large financial year ended 30 June 2001, total rental income was A/S at 1 January 2001, which impacted merchandising rev- DKK 38.4 million, a 51.4% increase relative to the year-ear- enue for the financial year ended 30 June 2001. The Group lier period. now receives a net revenue amount from merchandising sales. The Directors believe that had full-year merchandis- When PARKEN was built in 1992, the owners at the time ing sales been included in the financial year ended 30 June concluded a 15-year agreement with the Danish Football 2001 when F.C. Copenhagen became Danish champions, Association according to which PARKEN would be used as merchandising revenue would have risen substantially. Denmark’s national stadium and as the venue for Denmark international matches. The Danish national team typically play three to five matches at PARKEN a year, and the Business partners Danish Cup Final is traditionally played at PARKEN on The Group’s Revenue from Business Partners (including Ascension Day. PARKEN is a four-star stadium on UEFA’s sponsorship revenue) derives from partnership agreements Stadia Pool List, the top classification for stadiums with up on exposure and services in relation to the Group’s activi- to 50,000 seating capacity, which ranks PARKEN among ties. Partnership agreements have various categories, each about the 30 top stadiums in Europe. Accordingly, PARKEN with different services in relation to F.C. Copenhagen and is approved for major European matches organised by the Group’s other business activities. Other agreements UEFA. PARKEN was the venue for the 1994 Cup Winners’ involve the four stands at PARKEN, the Carlsberg, Fredgaard Cup and the UEFA Cup Final in 2000. and Coca-Cola Stands, and the B Stand, which until 31 December 2002 is named the Ekstra Bladet stand. A new Being Denmark’s largest concert arena, PARKEN is very agreement is expected to be reached in respect of the often the place where international artists give their con- B Stand with effect from 1 January 2003. Revenue from certs when in Denmark. For example, PARKEN has been the Business Partners also includes rental income from the 20 venue for concerts held by Tina Turner, Bruce Springsteen, executive boxes with a total of 230 seats. Elton John, Rolling Stones, Michael Jackson, Pink Floyd, Rod Stewart, Whitney Houston and others, offering a capacity of Carlsberg has been F.C. Copenhagen’s main sponsor since up to 50,000 people. In addition, Verdi’s opera Aïda has 1 July 1999 under a four-year agreement. Before becoming been performed at PARKEN. main sponsor, Carlsberg was already PARKEN’s biggest business partner and its largest supplier. Effective 1 With the new retractable roof, PARKEN can be transformed November 2001, F.C. Copenhagen has held the rights to into one of Europe’s largest heated indoor arenas. As F.C. Copenhagen’s player kit. F.C. Copenhagen and NIKE already mentioned, the Danish Broadcasting Corporation have signed a new agreement running until 31 May 2003 selected PARKEN as the venue for the Eurovision Song for the supply of footballs, footwear and shin pads. Contest in May 2001, one of the reasons being the option of covering the stadium. Through major events such as the The Group’s Revenue from Business Partners was on an Eurovision Song Contest, the boxing match between Brian upward trend during the period. Following a temporary Nielsen of Denmark and Mike Tyson as well as major foot- downturn in the financial year ended 30 June 2001, ball matches, such as the 1994 Cup Winners Cup and the Revenue from Business Partners has recovered, improving UEFA Cup Final in 2000, the Group has developed consider- by about 25% to DKK 21.7 million in the six months to 31 able expertise in handling and servicing large numbers of December 2001 from DKK 17.3 million in the year-earlier international television stations and members of the press period. The Group’s business partner concept highlights the at PARKEN’s facilities. The Directors believe that this expert- synergies between F.C. Copenhagen, PARKEN’s facilities ise provides the Group with a competitive advantage when it and the Group’s other events. The Directors believe that the comes to finding a venue for major international events in Company enjoys significant strength from being able to offer the region. its business partners marketing services in connection with different sporting events, including F.C. Copenhagen and The retractable roof has also given PARKEN an opportunity Denmark’s international matches at PARKEN and a large for hosting large events requiring a heated indoor venue.

19 Such events include congresses and conferences. The F&B sales from events at PARKEN are expected to improve Directors expect that the facilities to cover and heat up the further in future, mainly because of an increased number of stadium will allow for PARKEN to host a small number of events, but also because of a greater range of products and large sporting or entertainment events during the winter services provided. The Group has developed substantial months, which has otherwise been a period of moderate expertise in F&B sales to large crowds over a short period of activity for PARKEN. time. For example, at a football match with 40,000 spectators, there are some 60 vending locations at the stadium Following the acquisition of the Office Towers, future rental staffed with about 400 employees paid by the hour. F&B income will also include rent from office premises and other activities related to events generally have a variable cost facilities in the Office Towers. Annual rental income from the structure. Office Towers amounts to approximately DKK 21 million. The existing lease with the City of Copenhagen regarding the Circus Building expires on 1 January 2003. The one-year Restaurant, F&B and conferences lease was concluded in September 2001 to replace a man- The Group handles F&B sales to spectators attending agement agreement that expired on 31 December 2001. events at PARKEN, including the sale of beer, soft drinks, The lease was concluded in order to enable the City of hot drinks, popcorn, fast food and confectionary. The Group Copenhagen to invite tender bids to lease the Circus also runs a conference centre and a restaurant at PARKEN Building effective from 2003. with the capacity to serve up to approximately 6,500 guests at each event in PARKEN. In addition, the Group has leased In November 2001, the City of Copenhagen invited tenders, the Circus Building in central Copenhagen from the City of receiving four bids including the Group’s bid for the right to Copenhagen. Until 1 January 2001, the Group also operat- lease the Circus Building. The City of Copenhagen has noti- ed the PARKEN Sportscafé and Bowling Centre. fied the Group that it will be inviting bids for a new round of tenders, allegedly because another bid submitted in the first round did not comply with the tender documents and Restaurant, F&B and conferences that, as a result, the City of Copenhagen will be re-inviting (2000/2001) tenders on the basis of new tender documents. The Group intends to submit a bid in the new tender round, as well. Sportscafé and bowling According to the tender documents, the City of Copenhagen 10% will make its decision by 1 July 2002. The Circus Building contributes a small profit to the Group’s accounts, and the Circus Directors believe that overall it is of limited importance for Building the Group. 19% Other revenue The Group’s other revenue relates to different kinds of other revenue streams, including from various equipment rentals Conferences, incl. F&B such as lighting equipment, a movable stage, equipment to 71% cover the pitch in connection with concerts and non-recur- ring compensation, among other things.

In addition, the Group has invested in new activities in the As from 2001, an external business partner has leased the current financial year, including RockShow and e-billetter. Sportscafé and Bowling Centre, and the Group receives a The new investments are reviewed in the following. The net amount based on the profit from these activities. investment in new activities is expected to increase the Developments to date have confirmed that such a lease Group’s ’Other revenue’ in the years ahead. agreement enhances the Group’s earnings from these activities and that it releases management resources that can New activities in the financial year ending 30 June 2002 be refocused on the Group’s core business areas. Turnover In the current financial year, the Group has, in addition to from the Sports Café and the Bowling Centre is only includ- acquiring the Office Towers, invested in companies and ed for the first half of the year ended 30 June 2001 as a activities to complement and extend the Group’s presence result of the management contract. When disregarding the in the entertainment industry. The new activities described Sports Cafe and the Bowling Centre, revenue from below represent Group investments totalling approximately Restaurant, F&B and conferences increased by approxi- DKK 24 million. mately 17% in 2000/01.

20 RockShow e-billetter A/S is expected to generate revenue in the single- In November 2001, the Group acquired the activities of digit millions of kroner and to balance costs and revenue RockShow, which the Directors believe is one of the three towards the end of the year. The Directors expect that e-bil- largest outdoor concert tours in Denmark. RockShow 2001 letter will eventually be a positive contributor to Group earn- attracted crowds of about 65,000 people. ings. In March 2002, e-billetter won the tender round for the management as from 1 May 2003 of the subscription Rockshow 2002 will feature concerts in Copenhagen, Århus scheme for the Theatre Cooperation of Greater Copenhagen and Odense. Backed by a number of very attractive Danish (Det Storkøbenhavnske Teaterfællesskab (DST). This task is bands, i.e. eyeQ, Den Gale Pose, Cowgirls, Saybia and TV2, currently handled by ARTE via BilletNet. The contract and by relocating the concert to the Fælledpark near the involves the handling of approximately 620,000 tickets PARKEN Complex in Copenhagen, the Group expects to annually in the subscription scheme of the theatres of attract 75,000 people to this year’s show. Greater Copenhagen, and the contract represents expected e-billetter turnover of more than DKK 35 million over four Budgeted revenue from RockShow 2002 is just over DKK years. 8 million, and this figure is expected to rise by about 50% when the program is expanded to five or six concerts in The Directors expect that the cooperation with PARKEN 2003 (from currently three). The profit margin from Sport & Entertainment will give e-billetter a better opportu- RockShow are expected to be at largely the same average nity to become a market leader in Denmark within a fore- level as the Group’s other business areas (apart from trans- seeable number of years. Similarly, ownership of e-billetter fer income). is expected to support the Group in its efforts to increase its customer base and thereby generate substantial added By acquiring RockShow, the Group has gained essential sales to the Group’s activities. competency in the event organiser business. The RockShow activities are handled by the Group’s subsidiary RockShow The main competitor to e-billetter is BilletNet, the dominant A/S. supplier of ticket distribution services in Denmark. Other competitors are e-billet A/S and VIP-Booking A/S (Billetma- Rockshow’s competition generally consists of other concert skinen). The Directors believe that e-billetter is the second- and entertainment events held during the Rockshow tour in largest player in the market measured by the number of May and June. The show’s attraction to a wide audience tickets sold. and to some extent the weather conditions are considered as the key factors for the size of the crowds drawn and for Euro Media how profitable Rockshow is. Other concert tours, such as In December 2001, the Group acquired a 15% stake in Grøn Koncert and the music festivals held during the sum- Euro Media A/S from Eurotrust A/S, the company that holds mer, are considered to provide only moderate competition, the remaining shares. Aldo Petersen, who is a member of as these events are traditionally held during different peri- the Company Supervisory Board, is the chief executive of ods and do not coincide with the Rockshow tour. Eurotrust A/S. Euro Media A/S comprises the DK4 television station and Prime Vision, a production company. e-billetter A/S DK4 is mainly distributed through TeleDanmark’s cable In January 2002, the Group agreed to contribute capital to television. Euro Media is a minor player on the Danish TV the company e-billetter Danmark A/S in return for a 51% market through DK4, whereas the major players are DR, stake in the company. At the time the Group subscribed TV2 and TV3 (MTG). Prime Vision is also a minor player in new shares, the company had a positive equity. The other the Danish production market. shares in the company are held by a holding company consisting of JBJ Group and Vestjysk Bank. The Group is continuously involved in producing television and radio programs mainly targeting F.C. Copenhagen fans. e-billetter Danmark A/S was founded in 2000 and launched Since 2000, Prime Vision has produced a fan television ticket sales for sporting and entertainment events through- program about F.C. Copenhagen broadcast on the DK4 out Denmark in the first quarter of 2001. The company sells channel. tickets via the Internet and through call centres (accepting ticket orders over the telephone) and it has concrete plans The investment in Euro Media will enable the Group to mon- to establish a nation-wide physical distribution channel. In itor developments in television, something that will continue 2001, e-billetter sold tickets to events such as Grøn to be of great importance to the Group, especially as Koncert, the Copenhagen Jazz Festival, RockShow and the regards sporting events. However, the television industry is Danish Dance Awards. The company has contracted with very competitive and capital-intensive and any further more than 130 organisers to sell tickets to more than 1,100 investments will only be made following a comprehensive events in 2002. evaluation of specific opportunities. The Group has no cur-

21 rent plans for making additional commitments or invest- F.C. Copenhagen ments in the television industry, but the Group is open to The Group’s sporting operations consist of F.C. Copen- new opportunities. hagen, a leading Danish football club with comprehensive talent promotion provided jointly by the parent clubs KB and Euro Media A/S is expected to generate revenue of DKK 80- B1903. In cooperation with the University of Port Elizabeth, 100 million in 2002. The Group is expected to receive a F.C. Copenhagen has also established a football school in modest profit before amortisation of goodwill from this busi- South Africa. ness in 2002.

Player Squad

Name Age/ Games played for National team Under 21 Date of birth F.C. Copenhagen appearances internationals

Goalkeepers: Benny Gall 31 (14.3.71) 0 Magnus Kihlstedt 31 (29.2.71) 29 3 Rune Pedersen 22 (9.10.79) 19 8 Defenders: Bo Svensson 22 (4.8.79) 37 2 Bora Zivkovic 27 (4.9.74) 0 Christian Traoré 19 (18.4.82) 1 Kim Madsen 24 (13.2.78) 93 6 Martin Albrechtsen 22 (31.3.80) 0 1 13 Peter Christiansen 27 (30.1.75) 28 Tomas Antonelius 29 (7.5.72) 0 6 Midfielders: Carsten Fredgaard 25 (20.5.76) 25 1 2 Christian Lønstrup 31 (4.4.71) 228 Christian Poulsen 22 (28.2.80) 39 1 8 Erik Mykland 30 (21.7.71) 0 78 Hjalte Nørregaard 21 (8.4.81) 7 Morten Bisgaard 27 (25.6.74) 28 8 Peter Hansen 19 (24.5.82) 0 Thomas Røll Larsen 25 (12.3.77) 26 Yüsüf Öztürk 23 (8.2.79) 19 Elrio van Herden 18 (11.7.83) 0 Strikers: Andreas Mortensen 22 (31.8.79) 1 Mikheil Ashvetia 24 (10.11.77) 3 4 Pascal Simpson 30 (4.5.71) 23 2 Peter Møller 30 (23.3.72) 43 17 Sibusiso Zuma 26 (23.6.75) 72 9 Todi Jónsson 30 (2.2.72) 123 41

Note: Sibusiso Zuma, Todi Jónsson, Erik Mykland and Mikheil Ashvetia have made national team appearances for South Africa, the Faroe Islands, Norway and Georgia, respectively. Pascal Simpson, Thomas Antonelius and Magnus Kihlstedt have made national team appearances for Sweden. Under 21 internationals not indicated for foreign players. Number of games played provided as at 1 March 2002.

22 Contracts with three of the above players expire in 2002 Coaching staff (including Christian Poulsen, who has been sold to FC Hans Backe (born 1952), head coach, joined the club on Schalke 04 effective 1 July 2002, and Kim Madsen, whose 17 September 2001 on a contract that runs until 30 June contract expires on 30 June 3003, and who will then contin- 2004 with an option for both parties to terminate the con- ue his career with Vfl Wolfsburg), and contracts with nine tract at 30 June 2003. In his active career, Hans Backe players expire in 2003, unless the parties agree to extend played for Swedish clubs AIK Stockholm, Spånga IS FK and these contracts before that time. The average term to expiry IF Brommapojkarna. He has completed coaching training at of the player contracts is about two years. the highest level provided by the Swedish Football Association and began his coaching career in 1979. He has The Directors work with the coaching staff to ensure that coached clubs such as Östers IF and AIK in Sweden and the player squad has the desired football qualities. The was assistant coach of Sweden’s national team after the Directors believe that, especially given the Group’s financial 1990 World Cup in matches against Denmark, Norway, position relative to other Danish clubs, it will be possible to Bulgaria and Germany. His past coaching jobs also include maintain a player squad with sufficient football skills to Aalborg BK (AaB), a team that he took to the third round of meet the Group’s football ambitions. the Champions League and helped to qualify for the UEFA Cup. Hans Backe’s most recent coaching job was for Members of the player squad are insured against career- Austrian club Salzburg. He is also a member of the Swedish ending injuries. Football Association’s technical committee and its coaching sub-committee.

Carsten V. Jensen (born 1963), assistant coach, has been on the F.C. Copenhagen coaching staff since 1 January 1999 and became assistant coach of the Faxe Kondi League team on 1 July 2000. Carsten V. Jensen made a total of 136 appearances for F.C. Copenhagen in his active career.

23 FINANCIAL PERFORMANCE AND OTHER FINANCIAL INFORMATION

Financial highlights and key ratios of the Group The table below shows a summary of the Group’s financial performance in the financial years ended 30 June 1997 to 2001. The information has been extracted from the audited financial statements for this period. The key ratios below are also based on the Group’s annual financial statements. For developments in interim financial figures, see “Interim report for the six months ended 31 December 2001”.

24 Management’s discussion and analysis of events. The management of the Bowling Centre and the financial condition and results of operations Sports Cafe was outsourced in the year ended 30 June The shares of PARKEN Sport & Entertainment A/S were list- 2001, and the Group will receive partly sales-based revenue ed on the Copenhagen Stock Exchange in November 1997. from these activities from the new external manager. At the time of the initial public offering, the Company’s Turnover from the Sports Café and the Bowling Centre is name was Football Club København A/S. At the time, the only included for the first half of the year ended 30 June Company’s sole activity was professional football operations 2001 as a result of the management contract. When dis- on the basis of a super-structure agreement between regarding the Sports Cafe and the Bowling Centre, revenue Danish football clubs B 1903 and KB. from Restaurant, F&B and conferences increased by approximately 17% in 2000/01. The conference centre is During the financial years until the year ended 30 June still operated by PARKEN. The Circus Building in Copen- 1998, professional football was the Company’s sole activity. hagen is managed by PARKEN Sport & Entertainment on a On 1 July 1998, the Company acquired PARKEN and all management/lease agreement with the owners, the City of activities involved, i.e. a bowling centre and sports cafe, a Copenhagen. The Circus Building is improving its results conference centre as well as the management contract for and is performing well. Compared with the other Group the Circus Building in central Copenhagen. operations, the financial results are moderate.

Profit and loss account The overall cost level is about DKK 135 million. Operating The acquisition of PARKEN in 1998 represented a signifi- costs for the stadium as well as match, marketing and cant increase in activity level and earnings. Turnover more administrative costs have increased by approximately 15%. than tripled from approximately DKK 50 million to approxi- The same applies to staff costs, which include players’ mately DKK 160 million. Operating profit increased by salaries. approximately DKK 20 million from DKK 2.6 million to DKK 22.6 million, and profit before tax increased from DKK 5.6 Depreciation charges increased significantly in 1998/99 in million to approximately DKK 21 million. connection with the acquisition of PARKEN. PARKEN is subject to a Liability of Reversion in 2060, at the latest. The Sports revenue fluctuates considerably. Sports revenue also property is depreciated over the period until then. The fluctuates with the football results of F.C. Copenhagen. Gate depreciation charges will increase in 2000/01 as a result of receipts and television income, which is recognised as a sharp increase in amortisation of contract rights, which sports revenue, is especially dependent on whether or not will increase from DKK 8.5 million to DKK 17.9 million. The the club qualifies for European tournaments. In 1998/99, increase in amortisation of contract rights is a result of a when F.C. Copenhagen played in the European tourna- greater focus on the sporting activities, which included the ments, including an attractive match against Chelsea F.C. at acquisition of a number of experienced players and helped PARKEN, gate receipts and television income totalled DKK FC Copenhagen become Danish national champions in the 19.9 million, compared with DKK 12.4 million and DKK 2000/01 season. 15.8 million, respectively, in the past two financial years. Transfer income is characterised by few, one-off transac- All in all, the operating profit shows a stable trend with sig- tions, often involving significant amounts. In 2000/01, nificant fluctuations within the individual elements. transfer income contributed significantly to total revenue for the year, i.e. DKK 13.6 million, compared with just DKK 0.6 Financial items were mainly affected by the major invest- million in 1999/00. The Directors have made a strategic ments made and the time of receiving proceeds from equity decision to make only very attractive player sales in order to issues to finance such investments. Thus, the acquisition of retain the strength of the squad at a very high level. PARKEN for approximately DKK 138 million was debt financed for about 18 months until the separation of the Rental revenue from letting the stadium for Denmark inter- title numbers was completed. This increased financial national football matches, concerts and other events is a expenses in the 1998/99 and 1999/00 financial years. major source of revenue, which was taken over in connection with the acquisition of PARKEN in 1998. The increase The tax provisions until 1999/00 were calculated in view of by approximately 50% in 2000/01 to DKK 38.4 million was the additional depreciation opportunities, which arose in to a great extent the result of the installation of a connection with the acquisition of PARKEN and the activi- retractable roof at PARKEN, which made it possible to stage ties involved. These opportunities were depleted in the Eurovision Song Contest at PARKEN in May 2001. 2000/01 and provisions were made for normal tax.

Restaurant, F&B and conferences is a more stable source Balance sheet of revenue, but this business area also relies on the number Total assets now amount to approximately DKK 360 million, of events held at PARKEN and on the attendance at such of which fixed assets account for approximately DKK 300 million.

25 The book value of PARKEN accounts for DKK 250 million Key ratios and additional information of the Group’s assets. Other significant fixed assets are In the evaluation of the operating performance, the the book value of contract rights of approximately DKK 32 Directors focus both on “Profit before tax” and on “Profit million. Only purchased contract rights are capitalised and before tax and transfer activities,” which shows profit amortised over the term of the contract. The book value (before tax and) before the effects of player trading. therefore does not reflect the estimated total value of the squad, which is significantly higher. Net profit from the acquisition and sale of players varies substantially from year to year. Transfer income is generated Current assets total approximately DKK 60 million, while from transactions of a one-off nature, each producing signif- current liabilities total approximately DKK 50 million. icant amounts. However, it is the Directors’ goal that, over time, average revenue from the sale of players should Cash resources furthermore include undrawn committed exceed the costs of buying players (by way of amortisation credit facilities of approximately DKK 80 million. of contract rights). As the net profit from the purchase and sale of players varies, “Profit before tax and transfer activi- Shareholders’ equity rose by DKK 290 million from 1 July ties” will inherently be more stable than the Group’s net 1997 to 30 June 2001, as specified below: profit.

DKKm “Profit/(loss) before tax and transfer activities” has Proceeds from equity issues 235 increased since 1996/97 from a loss of DKK 6.2 million Profits 1997/98 – 2000/01 55 to a profit of DKK 36.7 million. For 2000/01, a 33% increase was recorded. Total 290 The Group has made significant investments in both facili- The balance sheet at 30 June 1999 was affected by the ties and contract rights in recent years. The largest invest- fact that the separation of titles in connection with the ment in facilities was in the acquisition of PARKEN in 1998 acquisition of PARKEN had not been completed. Although and the installation of the retractable roof in 2000/01. the Company had significant cash and cash equivalents During the past five years, the Group has invested a total of available to pay for PARKEN, the transaction could not be DKK 109 million in contract rights, DKK 35 million of which closed until the separation of titles had been completed. was invested in 2000/01 alone. This investment was made The balance sheet total at 30 June 1999 was significantly in order to achieve successful football results in F.C. Copen- affected by this (approximately DKK 130 million) as were hagen, which was achieved when the team won the Danish the ratios related to the balance sheet. national championship in 2001. The successful football results are key to revenue growth for F.C. Copenhagen, including revenue from European matches and significant transfer income.

26 PROSPECTS

Outlook for the current financial year In addition, the Directors expect that the development of For the current financial year, the Group expects a PARKEN, including the construction of the retractable roof, turnover of approximately DKK 240-260 million, profit and the establishment of a multi-sports complex would before tax of approximately DKK 70 million and profit after have the effect that Copenhagen would be regarded as an tax of approximately DKK 50 million. attractive venue for many large international events. If a suitable multi-sports complex is established, the Directors However, there are many variables involved in the forecast also expect that the Group will be represented in other of the profit for the year. In random order, these are: the sports within the next few years. number of events at PARKEN, the level of attendance at these events, F.C. Copenhagen’s football results and any The Directors expect that F.C. Copenhagen will win a posi- transfer income and expenses. Several elements of the tion as one of the most dominant clubs in Scandinavia with- results may be characterised as one-off major events and in the next few years, and that this will produce substantial occurrences, which occur at various intervals. On the basis revenue from events such as matches in European tourna- of the activities and events known at present, it is ments and from transfer income. The revenue and profit for assumed that the results will be at the above mentioned the six months ended 31 December 2001 show the signifi- level. cant financial potential that may be realisable if sporting success is achieved. The Directors expect to make a few No events have occurred since the release of the interim financially very attractive player sales in the years ahead, report for the six months ended 31 December 2001, which may contribute significantly to Group performance. which would change the outlook. However, the timing of such sales is uncertain, and there may be financial years in which the Group does not make any significant player sales. Basically, the Directors expect Outlook in the longer term that, seen over a number of years, average transfer income The Directors expect to retain and consolidate the Group’s will, as a minimum, exceed the costs of buying players, by position as the leading supplier of major sporting and way of amortisation. entertainment events in Denmark and the Øresund Region. New Group activities, including e-billetter and RockShow, are expected to contribute to Group earnings in the years The acquisition of the Office Towers increases the Group’s ahead. Following the acquisition of RockShow, the Group level of freedom regarding the development of the now also organises major entertainment events in-house. PARKEN Complex, including the closely related develop- In the longer term, own entertainment events also hold an ment of the Østerbro Sports Centre. The Group intends to attractive potential in connection with the utilisation of participate as an active partner to the City of Copenhagen PARKEN’s facilities. in the City’s considerations regarding the establishment of a multi-sports complex connected to PARKEN’s facilities. It is the Directors’ overall objective that the expected contin- The Directors believe that integrated operation of PARKEN uing expansion of the Group’s activities and the continued and a new multi-sports complex holds significant financial increase of earnings in the Group should form the basis of a potential to the Group. reasonable increase in the value of the Company’s shares.

SUPERVISORY BOARD AND EXECUTIVE BOARD

Supervisory Board Butik Amager A/S, Dressman A/S, Dressmann Invest A/S The Supervisory Board consists of the following seven mem- and SHV Holding ApS. Business address: Nybolig, Gl. Konge- bers: vej 124, DK-1850 Frederiksberg C, Denmark.

Peter Norvig, Chairman (1961): Peter Norvig is an autho- Flemming Østergaard (1943): Flemming Østergaard is Chief rised estate agent, he owns several estate agencies under Executive of PARKEN Sport og Entertainment A/S, and chair- the Nybolig franchise chain and is chairman of Peter Norvig man of Flemming Østergaard Management A/S, Saloprint ApS. In addition, Peter Norvig is a board member of Holding A/S, Driftsselskabet Idrætsparken A/S and e-billetter Erhvervsklubben Kjøbenhavn, Cavan Venture A/S, CPP A/S, Danmark A/S. Furthermore, Flemming Østergaard is a board

27 member of Wonderful Copenhagen, Albatros Travel A/S, Directors’ remuneration J.L.G. Enterprise A/S, Hjelm Bang A/S, H.P. Strobel A/S, In the year ended 30 June 2001, the members of the Nobia AB, Nobia Nordiske Byggeinteriør AB and The Great Supervisory Board received directors’ fees totalling DKK Wall Marathon A/S. Business address: Øster Allé 50, 120,000, of which DKK 0 from subsidiaries. The remunera- DK-2100 Copenhagen Ø, Denmark. tion to the members of the Executive Board in the year ended 30 June 2001 totalled DKK 2,342,000, of which Michael Kjær (1956): Michael Kjær is chief executive of DKK 0 from subsidiaries. F Group A/S and a board member of Brødrene A & O Johansen A/S, Nissan Motor Danmark A/S, Attila Sport A/S, Directors’ interests in the Company Driftsselskabet Idrætsparken A/S and Dansk Handel & As at 16 April 2002 the members of the Supervisory Board Service. Business address: F Group A/S, Øster Allé 56, and Executive Board directly or indirectly held 360,025 DK-2100 Copenhagen Ø, Denmark. shares in the Company, equivalent to 19.5% of the share capital and votes. Niels-Christian Holmstrøm (1947): Niels-Christian Holmstrøm is Sports Director of PARKEN Sport og No loans, guaranties or other commitments have been Entertainment A/S and chief executive of Driftsselskabet granted by the Company to or on behalf of the Directors. Idrætsparken A/S. Niels-Christian Holmstrøm represents KB on the Company’s Supervisory Board. Business address: Øster Allé 50, DK-2100 Copenhagen Ø, Denmark. Other executive employees Dan Hammer (1963), Commercial Director Benny Olsen (1953): Benny Olsen is an inspector of Carsten Holdt (1967), Chief Financial Officer schools and represents B1903 on the Company’s Supervisory Board. Business address: Engholm Skole, Rådhusvej 5, DK-3450 Allerød, Denmark. Organisational structure The Group is organised with a Chief Executive Officer Harald Nielsen (1941): Harald Nielsen is chief executive of (Flemming Østergaard) and a Sports Director (Niels- Nielsen Group A/S. Furthermore, Harald Nielsen is chair- Christian Holmstrøm) who is responsible for the sports sec- man of Amardico 1028 A/S, ISN A/S, Planet Holding A/S tion of the Group (F.C. Copenhagen), and a Commercial and subsidiaries, Planet Haus GMbH and Scandinavian Bag Director (Dan Hammer), who is responsible for the Group’s Center A/S. In addition, Harald Nielsen is a board member commercial activities. of Active Sportswear Int. Holding A/S and subsidiaries, William S. Knudsen and Clara Elisabeth Knudsen’s Rebild Furthermore, the Group has a number of business units, Foundation, Se og Hør – Gunner Nu Foundation, Diana’s which each have a manager responsible for the revenue and Irene’s Foundation, Rebild, 1000 S Foundation, Rebild, and costs of the business unit. These business units Victor and Sanne Borge’s Thanks to Scandinavia Inc., include the Circus Building, F&B sales at PARKEN, business Nielsen Group A/S and subsidiaries. Harald Nielsen is presi- partners, letting of PARKEN, etc. New activities such as dent of the Rebild National Park Society, Inc. Business RockShow and e-billetter are organised in separate sub- address: Hvidørevej 63, DK-2930 Klampenborg, Denmark. sidiaries each with a director of its own. In addition, the Group has a number of support functions such as finance, Aldo Petersen (1961): Aldo Petersen is chief executive of human resources, communication, etc. Eurotrust A/S. Furthermore, Aldo Petersen is a board member of Eurotrust A/S, PSE 2123 A/S and the subsidiaries of these companies. Business address: Euro Trust A/S, Incentive plans Toldbodgade 63, ground floor, DK-1253 Copenhagen K, The Company has issued share options to three executive Denmark. employees, a total of 111,250 options. The option price is DKK 210-225. The options are exercisable beginning on 30 June 2002 and during selected periods until Executive Board December 2005. The options were issued on the basis of Flemming Østergaard (1943): See description under an authority granted to the Supervisory Board for a total of “Supervisory Board”. 120,000 options of DKK 20 during the period until 31 December 2004. It is expected that the remaining options Niels-Christian Holmstrøm (1947): See description under will also be used for incentive purposes to key employees “Supervisory Board”. of the Group.

28 RISK FACTORS

Prospective investors should carefully consider the following The opening of the Øresund fixed link expanded the Group’s risk factors before making a decision to invest in the geographical catchment area, making travel between Company’s shares. The Directors believe that the risk fac- Copenhagen and southern Sweden much easier. This pro- tors set forth below constitute the most significant risks to vides an opportunity to attract greater attendances to the be considered in analysing the Company and its business. Group’s events, but the Group will also feel the impact of The risks set out below may not be exhaustive nor are they entertainment events and competing existing and future facil- set out in any order of priority. ities in southern Sweden.

Should any of the risk factors set out below materialise, The Group strongly emphases that its facilities, especially at it could have a significant adverse effect on the Group’s PARKEN, must comply with customer and business partner financial condition and results of operation. requirements in order to optimise PARKEN’s potential for being the most attractive arena for major events in Denmark and southern Sweden. The investment in the retractable roof General risk factors reflects the Group’s commitment to adapting the facilities so Economic conditions as to make PARKEN a relevant venue for an increased num- Match attendances and revenue generated from the ber of events. Group’s activities are considered to rely to some extent on general economic conditions. A deterioration of economic Reliance on the general commercial letting market conditions, especially in the Group’s catchment area, could By acquiring the Office Towers, the Group has become a have an adverse impact on the Group’s earnings. lessor of sizeable office premises let to external lessees. Consequently, the Group is now exposed to the general trends in the commercial letting market, and a drop in com- Industry-specific risk factors mercial rents in the Copenhagen area could have an adverse Competition and market conditions in the sports and impact on the Group. entertainment industry Operating in the sports and entertainment industry, the Should the commercial letting market suffer a downward Group competes to some extent with a number of other trend, the Group will seek to exploit the synergy potential entertainment events in the Copenhagen area, in Denmark related to PARKEN and the added opportunities this will pro- and in the Øresund Region, including from cinemas, the- vide to the lessees, in order to optimise earnings from the atres, concerts and other sporting events. Public interest in commercial letting operations. Moreover, the Group is also attending the Group’s events, such as Denmark internation- among the large occupiers of PARKEN’s office premises, and als, F.C. Copenhagen’s home matches, concerts and other the Group could potentially use vacant leases to its advan- events is of major importance for the Group’s financial tage. developments. Third-party regulations The Directors believe that PARKEN’s facilities including the The Group is subject to a number of rules and regulations, option to cover the stadium make PARKEN an attractive including regulations imposed by local governments and foot- venue both locally and internationally, and that the Group ball organisations. holds special competencies in respect of organising major sporting and entertainment events, including competences For example, a change in the framework for organising major related to major international televised events. Against this events at PARKEN to the prejudice of the Group could have background, the Directors believe that it will be possible to material financial consequences for the Group. In addition, a attract and organise an increased number of major events number of the new opportunities available to the Group, such at PARKEN, especially after the retractable roof was as constructing a new stand at PARKEN, will be contingent on installed, but there can be no assurance that this will be the satisfactory approvals from parties such as the City of case. Copenhagen.

The number of major events held at PARKEN will also In terms of football regulations, new transfer rules and a revi- depend on how attractive Copenhagen is considered to be sion of the framework for European tournaments could be of in an international perspective as a venue for major con- importance to the Group. certs and congresses. This will depend on a number of factors beyond the Group’s control, such as traffic infrastruc- The Directors are active participants in meetings held to dis- ture, hotel capacity and how Denmark is generally perceived cuss the international football structure and also maintain an by the international community. The Group cooperates with active dialogue with the City of Copenhagen and other par- the Danish Tourist Board, Wonderful Copenhagen and a ties. This enhances the chances of shaping rules and regula- number of private sector business partners to attract major tions relative to the Group’s activities and, if needed, of events to Copenhagen and PARKEN. adapting the Group’s activities to comply with future changes.

29 Company-specific risk factors businesses can use as a basis for their operations, but there Football results can be no assurance that this framework will not be revised The Group generates a certain proportion of its revenue or challenged in a way that will be detrimental to the Group. from organising Denmark international matches and F.C. Copenhagen’s home matches at PARKEN. The Danish Reliance on key individuals national team’s and F.C. Copenhagen’s football results may In many instances, the Group relies on the ability of key indi- influence spectator attendance at the various matches at viduals, including the Directors and the management PARKEN. F.C. Copenhagen’s football results also influence employees, to attract events and sponsors, to negotiate and the amount of television income, especially if the club quali- conclude agreements with business partners, as well as to fies for European tournaments. manage and motivate the Group’s employees. In terms of football, F.C. Copenhagen relies on having a qualified and In order to enhance the quality of football played by F.C. diversified player squad in combination with having the right Copenhagen, the Group has made significant investments coaches and talent promoters. in new key players and a new head coach in recent years. The high expectations were met in 2001 when the club Should the Group lose key individuals and if the Group is became Danish champions, and the Directors expect that unable to sign qualified replacements, such a situation could F.C. Copenhagen will meet the football goal of becoming the have a material impact on the Group’s financial perform- dominant club of the SAS League and of making its mark in ance. By providing attractive working conditions and long- European tournaments, but there can be no assurance that lasting incentive programmes, among other things, the this will be the case. Group seeks to increase the likelihood that key employees remain with the Group for many years. Contracts, etc. To some extent, the Group’s revenue is based on fixed-term New business areas contracts with business partners, for example, on letting The Company’s future earnings base will change as new PARKEN, the Office Towers, the Circus Building and other sports are expectedly added to the sporting activities to com- facilities. plement football and as new business areas are added, such as organising conferences, trade fairs and possibly expand- For example, the Group has concluded a lease with the ing PARKEN to include hotel operations. Although the Danish Football Association under which the Danish Directors intend to cooperate with and recruit competent Football Association has undertaken to use PARKEN for its individuals with experience from these industries, the Denmark international matches until 1 September 2007. Company can give no assurance that this strategy will con- Nineteen leases in the Office Towers have been concluded tribute to enhancing the Company’s profitability. with external lessees. The leases generally have remaining periods of interminability of between two and eight years. Having acquired RockShow, the Group will increasingly begin Contracts with the some 300 business partners are primari- to organise entertainment events in-house. Organising major ly secured by way of one-year or multi-year contracts. entertainment events involves a great number of risks. For example, reliance on weather conditions is a specific risk The possibility of extending the contracts at expiry or signing attaching to large outdoor concerts such as RockShow. The new contracts on similar terms with new counterparties is acquisition of an established player with substantial experi- contingent on a number of factors, including the services ence in the industry reflects the Directors’ intention of reduc- and conditions provided by the Group and the alternatives ing the risk relating to the Group’s own events. available to such counterparties. By acquiring a majority stake in e-billetter, the Group has In addition, F.C. Copenhagen’s business activities are based also gained exposure to developments within Internet-based on contracts with players and coaches subject to the rules ticket sales, in particular. The risk attaching to this invest- of the football world, including the rules of the Danish ment should be seen relative to the fact that PARKEN is Football Association. Enforcement of these contracts relies already the dominant provider of major sporting and enter- strongly on football regulations, which may differ from ordi- tainment events. Through the investment in a minority stake nary labour market regulations. The Directors believe that in Euro Media A/S, the Group has gained exposure to devel- the revised transfer system mutually agreed by the EU opments in the television market, but the limited size of the Commission, UEFA and FIFA, the world football association, investment serves to limit the risk exposure to the overall defines a framework for player contracts that commercial Group.

30 SHARE CAPITAL AND OWNERSHIP

Movements in share capital Prior to the offer, the Company’s issued share capital amounted to DKK 36.976.000 divided into 1,848,800 shares of DKK 20 nominal value each.

Movements in PARKEN share capital Price Nominal amount of share capital (DKK ’000) Number per share Increase Share capital of shares

At 1 July 1997 5,800 5,800 30 Sept. 1997 Bonus issue (1:1) 5,800 11,600 11,600 30 Sept. 1997 Reduction of par value 580,000 18 Nov. 1997 Market price issue 150 11,600 23,200 1,160,000 20 Oct. 1998 Market price issue 260 5,000 28,200 1,410,000 1 Jan. 2001 Exercise of warrant programme 165 1,900 30,100 1,505,000 15 April 2001 Rights issue 220 6,876 36,976 1,848,800

Authorities be subscribed for cash at a price to be determined by the At the annual general meeting held on 28 November 2001, Supervisory Board, but the price must not be less than DKK the shareholders approved the following authorities to effect 105. There shall be no right of pre-emption to the Company’s capital increases. The authorities were finally adopted by shareholders in respect of such warrants, nor shall the the shareholders at the extraordinary general meeting held Company’s shareholders have pre-emption rights in respect on 20 December 2001. of the shares issued on exercise of the warrants. One warrant shall entitle the holder to subscribe one share at the The Supervisory Board is authorised to increase the price determined on the offer of the warrant. The Super- Company’s share capital by a nominal amount of DKK visory Board shall determine the terms and conditions for 3,157,320 divided into shares of DKK 20 nominal value acquisition of a share on exercise of a warrant, subject to each, see Article 3 C of the Company’s Articles of the provisions of Article 3 A of the Articles of Association. Association. The shares in the capital increase shall be The Supervisory Board shall determine the terms and condi- issued with pre-emption rights to existing shareholders. The tions of the warrant. Supervisory Board may determine to use the authority for one or more issues of shares. Payment for the new shares shall be made in cash. The new shares shall be subscribed Share capital in the existing share class. The shares in the capital Prior to the proposed capital increase, the issued share capi- increase shall be subscribed at a price which is not less tal of PARKEN Sport & Entertainment amounted to DKK than DKK 105 per share. The authority is valid until 31 36,976,000 divided into 1,848,800 shares of DKK 20 each. December 2001. The capital increase will increase the Company’s share capi- The Supervisory Board may furthermore determine to tal by up to DKK 13,800,000 nominal value. Following the increase the share capital by up to DKK 28 million through capital increase, the maximum amount of the Company’s shares with a nominal value of DKK 20 each, see Article 3 issued share capital will be DKK 50,776,000 divided into A of the Company’s Articles of Association. The authority to 2,538,800 shares of DKK 20 each. increase the share capital by DKK 28 million is valid until 31 December 2005. The Supervisory Board may determine to use the authority for one or more issues of shares. Ownership Payment for the new shares may be made in cash or in The following shareholders have given notification of an assets other than cash. The capital increase by up to DKK ownership interest of 5 per cent or more pursuant to section 28 million shall be made without pre-emption rights to the 29 of the Danish Securities Trading Act. According to the Company’s existing shareholders holding shares of the Company’s most recent information, the ownership interests Company’s existing share class. The shares in the capital are as follows: increase shall be subscribed at the market price, but the price must not be less than DKK 105 per share. Owner Shares Interest During the period from 1 May 2001 to 31 December 2004, LD Pensions 369,330 20.0% the Supervisory Board is authorised to issue up to 120,000 Danske Bank Group 183,944 10.0% warrants of DKK 20 each in one or more issues, see Article PSE 2123 A/S 168,344 9.1% 3 B of the Company’s Articles of Association. Warrants shall

31 Dividend policy Company during the period ending on the date of the next The Company has not paid dividends in the past five years. Annual General Meeting. The acquisition price must not deviate by more than 10 per cent from the price listed on The Supervisory Board intends to start paying dividends the Copenhagen Stock Exchange at the time of acquisition. when this can be done on a financially and commercially sound basis considering the Company’s investment plans As at 16 April 2002 the Company held 35,143 own shares. and financial position. Shareholders’ agreements Own shares The Directors are not aware of any shareholders’ agree- The Supervisory Board is authorised to allow the Company ments with respect to shares in the Company. to acquire up to 10 per cent of the share capital of the

GENERAL INFORMATION ON THE COMPANY

Name and registered office As from the financial year ending 30 June 2003, the PARKEN Sport & Entertainment A/S Company must present its annual reports according to the Øster Alle 50, 5 new Danish Financial Statements Act. This is not expected DK-2100 Copenhagen Ø to have any material effect on the results of operations, Denmark shareholders’ equity or the level of disclosure in general.

Tel +45 3543 7400 Fax +45 3543 7422 Latest general meetings Web sites: www.parken.dk, www.cirkusbygningen.dk, The Company’s latest annual general meeting was held on www.fck.dk, www.rockshow.dk, www.e-bil-letter.dk 28 November 2001, and the latest extraordinary general meeting was held on 20 December 2001. The Company’s registered office is situated in the City of Copenhagen. Bankers The Company’s principal bankers are Nordea Bank Date of incorporation Danmark. The Company was incorporated on 1 April 1991. Litigation Objects The Company is not involved in and does not expect to be The objects of the Company are, as set out in Article 2 of involved in any legal, arbitration or administrative proceed- the Company’s Articles of Association, to engage in profes- ings, including tax proceedings, which may have or may be sional sports, primarily football and related activities, includ- expected to have a material effect on the financial position ing trade, services and investments, that can naturally be of the Company, and the Directors are not aware of any carried out in combination with professional sports. such proceedings to be expected.

The objects of the Company are furthermore to engage in entertainment activities, including to organise concerts and Licences congresses, and activities derived therefrom. Under the regulations of DBU, the Company is licensed to operate as a contract football club.

Registration The licence is based on the superstructure agreement The Company is registered with the Danish Commerce and made between KB and B1903 in connection with the estab- Companies Agency under cvr. no. 15 10 77 07. lishment of the Company and F.C. Copenhagen, in which it was agreed that the Company could use B1903’s playing licence for an unlimited period of time. Accordingly, the Financial year Company’s playing licence is based on this legal relation- The Company’s financial year runs from 1 July to 30 June. ship with B1903.

32 B1903 cannot use the playing licence itself as long as the of Copenhagen. The officially assessed value of PARKEN Company is using the licence. and the Office Towers as at 1 January was DKK 166.5 million and DKK 219.5 million, respectively. The book value of The agreement between B1903 and the Company was con- PARKEN as at 31 December 2001 was DKK 247.5 million. firmed in an agreement of 30 September 1997, under The Company did not own the Office Towers at the end of which the Company’s rights are exclusive, interminable and the past financial year, they were acquired for DKK 310 mil- apply for an unlimited period as long as the Company exists lion on 1 April 2002. and uses the playing licence. The agreement of 30 September 1997 is a continuation of the agreement, which As at 16 April 2002, the Company further owns three hous- has been in force since F.C. Copenhagen was formed. es and a flat, which have been made available to contract players. The book value of the houses and the flat as at 31 December 2001 was DKK 10.5 million. The officially Other material agreements and contracts assessed cash value as at 1 January 2001 was DKK 8.7 The Group has concluded a lease with the Danish Football million. Finally, the Company owns a sports complex in Association under which the Danish Football Association South Africa as at 16 April 2002. The book value of this has undertaken to use PARKEN for its Denmark internation- complex was DKK 2.3 million as at 31 December 2001. al matches until 1 September 2007. The Group has a lease with the City of Copenhagen regarding the Circus Building, which expires on 1 January 2003. Subsidiaries and associated companies In Denmark: Nineteen leases in to the Office Towers have been conclud- Driftsselskabet Idrætsparken A/S ed with external lessees, generally with a period of inter- (CVR. no. 14 37 45 74) (100%) minability of between two and eight years. RockShow A/S (CVR. no. 15 69 99 30) (100%) Furthermore, the Group has concluded some 300 individual GFKJura 927 A/S agreements with partners (sponsors), the most important of (CVR. no. 26 33 43 06) (100%) which is the main sponsorship agreement with Carlsberg. e-billetter Danmark A/S The main sponsorship agreement expires on 1 July 2003. (CVR. no. 25 61 56 70) (51%) Other agreements with partners are primarily secured by Euro Media A/S one-year or multi-year contracts. (CVR. no. 13 48 96 96) (15%)

Furthermore, an agreement has been concluded between In South Africa: KB and F.C. Copenhagen regarding the use of KB’s football RoBow Investments no. 93 Limited grounds. Under this agreement, F.C. Copenhagen is entitled (Reg. no. 2000/021482/07) (100%) to use KB’s football grounds for day-to-day practice. The UPE-FCK Soccer School of Excellence Limited lease is interminable by either party until 31 December (Reg. no. 1999/023343/07) (40%) 2007. Documents Facilities and real property The following documents are available for inspection at the The Company owns PARKEN, which comprises the Company’s office, and copies may be obtained on request: Carlsberg, Fredgaard, and B Stands built in 1991/92 including executive boxes, restaurant and conference facilities, • Annual reports and financial statements for the years the former main stand – the Coca-Cola Stand – with related ended 30 June 1998, 1999, 2000 and 2001. facilities, the football pitch and the Sports Cafe with a bowl- • A report by the Supervisory Board pursuant to section ing centre. Moreover, the Group owns the Office Towers, 29 (2) of the Danish Companies Act with an attached consisting of the three Office Towers at the corners of statement by the accountants. PARKEN. These properties are subject to a Liability of Reversion to the City of Copenhagen in 2020. However, the The Company’s articles of association and the consolidated period can be extended for another 40 years until 2060 for financial statements for the year ended 30 June 2001 and a consideration of DKK 1 million for PARKEN and DKK 1 the interim financial statements for the six months ended million for the Office Towers. The Company is aware that it 31 December 2001 form an integral part of this Offering may be favourable to start negotiations sometime about a Circular. full purchase of this future Liability of Reversion to the City

33 RIGHTS ATTACHING TO THE SHARES

Rights shareholder’s account-holding institution. On distribution of No shares confer any special rights upon their holders. The dividends, the Company withholds 28 per cent tax pursuant new shares carry the same right of pre-emption on future to current Danish legislation. Dividend which remains capital increases as the existing shares in the Company and unclaimed for five years after the due date shall accrue to rank pari passu with the existing share capital in all the Company’s reserves. respects. The new shares are eligible for any dividends payable in respect of the financial year ending 30 June 2002, and all Share denomination dividends declared and paid thereafter. The share capital is divided into shares of DKK 20 each. Redemption Voting rights No shareholder is under an obligation to permit his shares Each share of DKK 20 nominal value is entitled to one vote to be redeemed in full or in part. at the Company’s general meetings. As long as they are shareholders in the Company, each of KB and B1903 appoints a member of the Company’s Supervisory Board. Registered shares The shareholders at the general meeting elect the other The Company’s shares are issued to bearer but may be reg- members of the Supervisory Board by a simple majority of istered in the name of the holder in the Company’s register votes. of shareholders. Requests for registration by name must be submitted to the shareholder’s own account-holding institution. Transferability No restrictions apply to the transferability of the shares. Listing The Company’s existing shares are listed on the Negotiability Copenhagen Stock Exchange. The shares are negotiable instruments. Registrar of shareholders and issuing agent Dividend The Company has authorised Nordea Bank Danmark to act Dividends are paid out by the Company through the Danish as issuing agent through the Danish Securities Centre and Securities Centre (Værdipapircentralen) to the credit of the to act as the Company’s registrar.

34 DESCRIPTION OF THE OFFER

Authority and resolution to exercise authority the Company, to procure the sale of up to 90,000 new The share capital is increased in pursuance of the authority shares of DKK 20 nominal value each solely to cover any set out in Article 3 A of the Company’s Articles of Associa- overallotment of shares. This may increase the Offer to a tion: total of 690,000 shares. It is expected that the Under- writing Agreement will be executed in connection with the “The Supervisory Board may determine to increase the determination of the offer price. share capital by up to DKK 28 million through shares with a nominal value of DKK 20 each. The authority to The Manager will allocate the shares comprised by the increase the share capital by DKK 28 million is valid Offer upon consultation with the Company. It is expected until 31 December 2005. The Supervisory Board may that allocation of shares will be announced through the determine to use the authority for one or more issues Copenhagen Stock Exchange on 7 May 2002, at the latest. of shares. If the Offer is closed before 6 May 2002, announcement of allotment of shares will be moved forward accordingly. Payment for the new shares may be made in cash or in assets other than cash. The new shares will rank pari passu with the existing shares in all respects. The capital increase by up to DKK 28 million shall be made without pre-emption rights to the Company’s existing shareholders holding shares of the Company’s Offer period existing share class. The offer period commences on Monday, 29 April 2002 and closes on Monday, 6 May 2002 at 4:00 p.m., The new shares shall be negotiable instruments. No Copenhagen time, unless the Offer is closed earlier. restrictions shall apply to the transferability of the However, the Offer will not be closed before 29 April 2002 shares, and no shareholders shall be under an obliga- at 4:00 p.m., Copenhagen time. Any closure before 6 May tion to permit their shares to be redeemed in full or in 2000 will be announced through the Copenhagen Stock part. No new shares shall confer any special rights Exchange. The Offer in respect of applications for subscrip- upon their holders. The new shares shall be issued to tion for amounts up to and including DKK 2 million may be bearer but may be registered in the name of the holder closed before the remainder of the Offer. Any such early in the Company’s Register of Shareholders. closing will be announced through the Copenhagen Stock Exchange. The shares in the capital increase shall be subscribed at the market price, but the price must not be less than DKK 105 per share.” Offer price The offer price will be determined through bookbuilding. At a meeting to be held on 6 May 2002 the Company’s Bookbuilding is a process in which the Manager receives Supervisory Board expects to make a resolution to exercise indications of interest from investors and any adjustments this authority by increasing the share capital by up to DKK thereof. See “Applications for shares”. Indications of inter- 13.8 million nominal value, equivalent to up to 690,000 est and any adjustments will be reported to the Manager shares of DKK 20. The shares will be offered in a market on a daily basis. price issue on the basis of bookbuilding. At the end of the offer period, the offer price will be determined by the Manager in consultation with the Company The Offer based on indications of interest under the bookbuilding The Offer consists of a public and institutional offer in system during the offer period. It is expected that the offer Denmark and private placements outside Denmark. See price will be announced through the Copenhagen Stock “Selling restrictions”. Exchange on 7 May 2002, at the latest. The shares will be settled free of brokerage. The Offer comprises new shares with a nominal value of up to DKK 12,000,000 (600,000 shares of DKK 20 each) based on bookbuilding without pre-emption rights to exist- Applications for shares ing shareholders. The new shares shall rank pari passu with All applications made at a price equivalent to the offer the existing shares in the Company. price or a higher price will be settled at the offer price following allotment, if any. The Manager has furthermore been granted an Option, exercisable during a period of up to 30 days after the exe- The Manager reserves the right to request documentation cution of the Underwriting Agreement by the Manager and of the authenticity of all orders, including information on

35 the name and address of the applicant, and shall be enti- individual basis. Shares will be allocated between applica- tled to pass on such information to the Company. tions and indications of interest at the discretion of the Company and the Manager. The Company and the Manager Applications for subscription (for amounts of up to and reserve the right to fix an individual allocation in respect of including DKK 2 million) indications of interest irrespective of the volume of applica- Applications for subscription for amounts of up to and tions received. including DKK 2 million are binding and cannot be changed or cancelled by the investor. The Offer in respect of such In allocating shares under indications of interest for sub- binding applications may be closed before the remainder of scription of amounts of more than DKK 2 million, prefer- the Offer. Any such early closing will be announced through ence may be given to investors who, inter alia, are deemed the Copenhagen Stock Exchange. Applications should be to have a longer investment horizon than other investors, submitted in writing to the investor’s own account-holding and to applications submitted early in the offer period. institution. Applications may be made indicating a maximum price. If the offer price exceeds the maximum price indicated, no shares will be allocated to the investor. Where Underwriting no maximum price is indicated, the application will be It is expected that the Company and the Manager will exe- deemed to have been made at the offer price. cute an Underwriting Agreement relating to the sale of the new shares and underwriting thereof, respectively. Pursuant Indications of interest based on bookbuilding (for amounts to practice, the sale will only be underwritten when a final of more than DKK 2 million) Underwriting Agreement to this effect has been executed, Investors who wish to apply for subscription for amounts of which is expected to take place immediately following the more than DKK 2 million can indicate their interest to the determination of the offer price. Manager during the subscription period. During the subscription period, investors can continuously change or with- LD Pensions has made a binding advance commitment to draw their indications of interest. Immediately after the subscribe for 240,000 new shares. determination of the offer price, investors will be asked to confirm to the Manager their purchase at the offer price within the limits of the investor’s most recently submitted or Listing on the Copenhagen Stock Exchange adjusted indication of interest. Application will be made for the new shares to be admitted for listing on the Copenhagen Stock Exchange. It is expected that the new shares will be listed on the Copenhagen Stock Submission of application form Exchange on 8 May 2002 at the latest and that dealings in Applications must be received by the subscription agent on the new shares will commence on that date. If the Offer is or before 6 May 2002 at 4:00 p.m. The Offer may be closed closed before 6 May 2002, the listing date may be moved earlier. See “Offer period” and “Applications for shares”. forward accordingly.

Manager and subscription agent Payment and registration with the Danish The Manager of the issue is: Securities Centre Shares will be registered in the investor’s account with the Carnegie Bank A/S Danish Securities Centre (Værdipapircentralen) against pay- Overgaden neden Vandet 9B ment, which is expected to take place on or before 13 May DK-1414 Copenhagen K 2002. If the Offer is closed before 6 May 2002, the pay- Denmark ment date will be moved forward accordingly.

Oversubscription and reduction Trading in and settlement of shares in the If applications for subscription for shares at the offer price Company exceed in aggregate the number of shares offered, applica- In connection with the Offer, the shares will be registered tions for subscription of amounts of up to and including electronically in accounts maintained in the computer sys- DKK 2 million will be scaled back according to a mathemati- tem of the Danish Securities Centre, which acts as an elec- cal formula. Shares may be allocated based on a fixed allo- tronic central record of ownership and as the clearing cen- cation per applicant. tre for all transactions relating to the Offer. Shares may also be settled via Euroclear and Cedel Bank S.A., which main- For indications of interest for subscription of amounts of tain custody accounts with the Danish Securities Centre. more than DKK 2 million, shares will be allocated on an Settlement in connection with trading on the Copenhagen

36 Stock Exchange takes place on the third business day after The Copenhagen Stock Exchange will immediately be noti- the purchase or sale transaction. Upon settlement, the fied of any such withdrawal, which will also be announced account-holding institution sends a transaction statement to in the daily newspapers in which the Offer was advertised. the investor. For shareholders who hold shares through Euroclear or Cedel Bank S.A., the respective institution will appear as the holder of record. Stabilisation In connection with the Offer, the Manager may during a period of 30 days from the execution of the Underwriting Securities codes (ISIN codes) Agreement, effect transactions which stabilise or maintain Shares (existing code) DK001023764-3 the market price of the Company’s shares at a level which New shares (temporary code) DK001028995-8 might not otherwise prevail. Such stabilisation, if commenced, may be discontinued at any time. Any profit or The new shares under the Offer will be traded under the loss on such stabilisation shall be for the account of the temporary securities code until the capital increase has Manager. been registered with the Danish Commerce and Companies Agency. Following such registration, the Company’s shares will be merged under securities code DK 001023764-3 Selling restrictions under the name of PARKEN Sport & Entertainment A/S. General information No action has been taken or will be taken in any jurisdic- The same securities codes will be used by Euroclear System tion other than Denmark that would permit a public offer- and Cedel Bank S.A. for settlement of the Company’s ing of the offer shares. Sales to international institutional shares. investors are subject to the rules on private placements in force from time to time in the relevant jurisdictions.

Expenses United States If the offer results in gross proceeds of DKK 150 million to The shares have not been and will not in connection with the Company, the Company’s expenses in connection with the Offer be registered under the United States Securities the Offer are expected to be as follows: Act of 1933, as amended (“Securities Act”) and, subject to certain exceptions, the shares may not be offered or sold (DKK million) Expenses within the United States or to, for the account of or in favour of U.S. persons except in pursuance of an exemption Fees to financial intermediaries 4.5 from or in a transaction not subject to the registration Advertising and printing of Offering Circular 0.5 requirements pursuant to the Securities Act. Accordingly, Fees to accountants and legal advisers 1.0 the shares are only offered and sold pursuant to offers and Other expenses 0.2 sales taking place outside the United States in reliance on Total expenses 6.2 Regulation S to persons who are not U.S. persons.

United Kingdom Commissions to account-holding institutions are included in The Manager has represented and agreed to the Company, “Fees to financial intermediaries”. 1. that it has not offered or sold and prior to the date six months after the date of payment will not offer or sell Proceeds any shares to persons in the United Kingdom except to After payment of the expenses relating to the Offer, the net persons whose ordinary activities involve them in proceeds to be received by the Company are expected to acquiring, holding, managing or disposing of invest- amount to approximately DKK 144 million, assuming the ments (as principal or agent) for the purposes of their Option is not exercised. businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Withdrawal of the Offer Public Offers of Securities Regulations 1995; If circumstances so warrant, the Offer may be withdrawn up to the time of allocation. Furthermore, the Manager may, in 2. that it has complied and will comply with all applicable the event of extraordinary and unforeseeable circum- provisions of the Financial Services Act 1986 as stances, withdraw the Offer until payment for and delivery of amended with respect to anything done by it in respect the shares in the Danish Securities Centre has taken place. of the shares in, from or otherwise involving the United The Offer may also be withdrawn in the event that the terms Kingdom; and and conditions of the Underwriting Agreement are not met.

37 3. that it has only issued or passed on and will only issue Applicable law or pass on in the United Kingdom any document The Offer is being made in compliance with Danish law. This received by it in connection with the issue of the shares Offering Circular has been prepared in compliance with the to a person who is of a kind described in Article 11(3) standards and requirements of Danish law, including the of the Financial Services Act 1986 (Investment rules issued by the Copenhagen Stock Exchange. Any dis- Advertisements) (Exemptions) Order 1997 or is a per- pute that may arise as a result of the Offer shall be brought son to whom such document may otherwise lawfully be before the ordinary courts of Denmark. issued or passed on.

38 INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2001

The Company issued the following interim report on 28 February 2002:

PARKEN SPORT & ENTERTAINMENT A/S INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2001 CONSOLIDATED FINANCIAL HIGHLIGHTS AND KEY RATIOS

DKKm H1 H1 H1 Full year Full year 2001/02 2000/01 1999/00 2000/01 1999/00

Turnover 155.5 85.4 72.6 180.1 152.9 Operating profit 56.4 9.9 9.0 20.2 21.0 Profit before tax 56.4 9.5 7.1 22.0 18.0 Profit for the period 39.4 6.7 6.1 16.0 14.9 Shareholders’ equity 340.2 220.6 189.2 300.7 197.1

Earnings per share (DKK) 21.31 4.75 4.33 10.47 10.54 Net asset value per share (DKK) 184.01 146.58 134.18 162.67 139.80 Equity ratio (%) 83 75 54 84 78 Average number of employees 120 125 125 127 126 Of whom football players 32 31 35 29 30 Investments in Contract rights (DKKm) 30.1 22.5 4.5 35.5 22.9 Tangible fixed assets (DKKm) 8.5 4.6 6.7 115.6 10.9 Long-term financial assets (DKKm) 12.0 0.0 0.0 0.0 0.7

Legal structure and activities PARKEN Sport & Entertainment A/S Operates the FCK football club and PARKEN, Denmark’s national stadium. From 1 April 2002, the Company also lets approximately 20,000 sq.m. of office space at PARKEN’s three Office Towers.

Driftsselskabet Idrætsparken A/S Conference operations, events at PARKEN and management of the Circus Building.

Robow Inv. 93 Ltd., South Africa Manages properties let to the Soccer School of Excellence in Port Elizabeth, South Africa.

UPE-FCK Soccer School of Excellence Ltd. Manages a football school at Port Elizabeth, South Africa. e-billetter A/S Sells tickets for entertainment and sporting events in Denmark.

RockShow A/S Organises rockshow tours.

Euro Media ApS TV production and Danish TV channel DK4.

The above companies are wholly owned except for e-billetter A/S (51%), Euro Media ApS (15%) and Soccer School of Excellence Ltd. (40%).

39 Expected publication of financial information final matches of the 2001/02 SAS League. A good level of The Company expects to publish financial reports for the activity is expected within all the Group’s business areas. year ending 30 June 2002 as follows: The Group has furthermore expanded its activities by Profit announcement for the full year Monday, 30 acquiring RockShow A/S, a 51% stake in e-billetter A/S and September 2002 a 15% stake in the Euro Media ApS TV group. Annual report 2001/02 Friday, 31 October 2002 These activities had an insignificant effect on the results for the period. The Company does not currently publish quarterly financial statements. Outlook for the financial year ending 30 June 2002 Share price performance The Group expects a profit before tax of approximately DKK The Company’s shares were admitted for listing on the 70 million and a profit after tax of approximately DKK 50 Copenhagen Stock Exchange in November 1997, and the million for the full year. However, there are many variables price of the shares offered in the initial public offering was involved in the forecast of the profit for the year. In random DKK 150 per share of DKK 20. The price has subsequently order, these are: the number of events at PARKEN, the level risen steadily. During the six months to 31 December 2001, of attendance at the events, F.C. Copenhagen’s football the price of the Company’s shares has ranged from DKK results and any transfer income and expenses. Several ele- 203 to DKK 273. The closing price per share on 31 ments of the results may be characterised as one-off major December 2001 was DKK 225. events and occurrences, which occur at various intervals. On the basis of the activities and events known at present, it is assumed that the results will be at the above men- Summary of main events during the six months tioned level. to 31 December 2001 The Supervisory Board has decided to acquire the three Office Towers located at the corners of PARKEN. The Performance of sporting activities Towers, which are primarily let for office premises, were sep- As Danish champions, F.C. Copenhagen qualified for the arated into a separate title when PARKEN Sport & Entertain- Champions League qualification matches. The beginning of ment A/S acquired the stands and the pitch in 1998. The the season was highly affected by these matches. In the Directors expect that the investment will provide a good first match (the second qualification round), F.C. direct return and further believe that synergies could be Copenhagen defeated Georgian club Kutaisi, after which achieved through joint ownership and integrated operation F.C. Copenhagen drew one of Europe’s best club teams – of all the facilities at Øster Allé. Accordingly, the acquisition SS Lazio from Rome in the lots. After two even matches, the is also very much a strategic acquisition. The purchase price Romans won 5-3 on aggregate, and F.C. Copenhagen con- is DKK 310 million, and the effective date of the acquisition tinued in the UEFA Cup. In this tournament, the team is 1 April 2002. The purchase price will be partially financed defeated Yugoslav team F.C. Obelic. In the next round, the by an expected equity issue at market price in the spring of team played Ajax Amsterdam, traditionally considered one 2002 of approximately DKK 150 million. The rest will be of the best teams in Europe. After two even matches, F.C. financed by mortgage-backed loans. Copenhagen won 1-0 on aggregate, and in the next round F.C. Copenhagen again played one of the leading teams in A pre-tax profit of DKK 56.4 million was posted for the peri- Europe, namely Borussia Dortmund of Germany. The od (2000/01: DKK 9.5 million). The profit included a DKK Germans won after two very even matches. In these 36.6 million profit from transfer activities (2000/01: a loss European matches, F.C. Copenhagen proved that they are of DKK 4.9 million). not far from the European top, which promises well for the future. The sporting activities during the period were mainly affected by the Champions League qualification matches and After this year’s nineteen matches in the Danish SAS UEFA Cup matches. The international matches were a great League, F.C. Copenhagen is in second place in the league. success. To this should be added the participation in the The team is in the quarter finals in the Dong Cup, where we SAS League, which produced satisfactory results. drew the Næstved team in the lots.

Pre-tax profit for the year ending 30 June 2002 is expected It is F.C. Copenhagen’s sporting ambition to be among the to be approximately DKK 70 million. In the second half of top two teams in the SAS League and/or to win the Dong the year, F.C. Copenhagen will play in the Dong Cup and the Cup. If the team meets one of these goals, the club will

40 qualify for one of the coming year’s European tournaments. The club played against Torpedo Kutaisi of Georgia and S.S. Lazio of Rome, Italy, respectively. After a narrow defeat to Chief Coach Roy Hodgson broke his two-year contract with the latter, F.C. Copenhagen continued in the UEFA Cup, F.C. Copenhagen a few weeks before the start of the sea- where the team met F.K. Obilic of Yugoslavia, Ajax son. Kent Karlsson came back, but had to resign for person- Amsterdam of the Netherlands and Borussia Dortmund of al reasons. The new Chief Coach is Hans Backe, who was Germany. Accordingly, five European club matches were released from his contract with Austrian SV Wüstenrat played at PARKEN, which contributed significantly to an Salzburg against compensation to the club. increase in match receipts and television income for the period, from DKK 8.4 million to DKK 25.6 million. Moreover, F.C. Copenhagen was very active in the transfer market dur- the club generated substantial revenue from the sale of ing and after the end of the period. The team’s participation contract rights: DKK 51.3 million against DKK 12.6 million in European tournaments gave the players an opportunity to in the same period last year. measure up against some of the best players in Europe. After great interest from a number of foreign clubs, The table below shows a breakdown of the consolidated Christian Poulsen was sold to Schalke 04 in Germany, profit on transfer activities and other activities: where he will start up on 1 July 2002. Moreover, the contract rights for Thomas Rytter, Niclas Jensen and Jacob H1 H1 Laursen were sold to Wolfsburg in Germany, Manchester DKKm 2001/2002 2000/2001 City and Leicester City, both in England. The contract with Thomas Thorninger was not extended. Heine Fernandez Profit before tax 56.4 9.5 continues his career with AB and Donatas Vencevicius con- Of which transfer activities 36.6 (4.9) tinues his career with Norwegian club I. K. Start. Profit before transfer activities 19.8 14.4

A contract has been concluded with Peter Møller who came from Oviedo in Spain, Mikheil Ashvetia from Torpedo Kutaisi A total of 25 major events were held at PARKEN during the in Georgia and Magnus Kihlstedt from Brann Bergen in six months to 31 December 2001 compared with 15 in the Norway. same period last year. The events were related inter alia to SAS League matches, Denmark international matches, the The contract with Christian Lønstrup has been extended for club’s European Cup matches, the boxing match between four years. Brian Nielsen and Mike Tyson and two major concerts. The combined attendance for the above events was approxi- F.C. Copenhagen has acquired Norwegian national team mately 400,000. player Erik Mykland from 1860 München, Martin Albrechtsen from AB and Thomas Antonelius from Coventry It is the Group’s business goal to retain and develop its City. To this should be added that Bora Zivkovic from Danish position as the leading provider of major sporting and enter- club Silkeborg IF will join F.C. Copenhagen. All four players tainment events in the region. A major element in the strat- joined the club as from 1 January 2002. Diego Tur has been egy is new business areas within popular sports and enter- hired out to AB for the spring season. tainment. Further to this, the Group has acquired the entire capital of RockShow A/S, a 51% stake in e-billetter A/S and The football results of the football project in Port Elizabeth, a 15% stake in the TV group Euro Media ApS. Last but not South Africa, were in line with the plans. The ambition is to least, the Company has acquired the three Office Towers develop talents for top level international football. In the located at the corners of PARKEN after the end of the peri- spring of 2002, one of the major talents will be transferred od. The effective date of the acquisition is 1 April 2002. The to FCK in Copenhagen for further development. direct return on the investment is expected to be approximately 7%, and the acquisition is also of strategic importance to the development of the entire area at Øster Allé Financial performance and thus to the development of the entire Group. The pur- Profit before tax for the period amounted to DKK 56.4 mil- chase price for the Office Towers was DKK 310 million, lion (same period last year: DKK 9.5 million). which was financed by mortgage-backed loans of DKK 160 million and through an equity issue of DKK 150 million to The financial performance during the period was very good. be made in the spring of 2002. All activities showed growth, and the profit for the period is considered very satisfactory. Accounting policies As Danish champions, F.C. Copenhagen qualified for the The interim financial statements are prepared in compli- qualification matches in the attractive Champions League. ance with the Copenhagen Stock Exchange guidelines for

41 issuers of listed securities, including Danish accounting Amortisation and depreciation can be specified as shown standards. below:

In the preparation of the financial statements, the account- Contract rights 13.5 ing policies applied were identical to those used for the Operating equipment, fixtures, fittings Company’s financial statements for the year ended 30 June furniture and equipment 1.9 2001. The PARKEN sports facility 2.5 17.9 In accordance with normal practice, the Company’s independent accountants have not audited the interim financial The contract rights increased in connection with the acqui- statements. sition of Magnus Kihlstedt, Hans Backe, Peter Møller, Mikheil Ashvetia and Morten Bisgaard. Disposals represent Christian Poulsen, Thomas Rytter and Roy Hodgson. Financial review Gate receipts and television income increased compared Properties. Specification of book value: with the same period last year as a result of a number of European tournament matches against attractive teams. The PARKEN sports facility 247.5 Properties leased to contract players 10.5 Business partners relates to sponsorship revenue and rev- Properties acquired in South Africa in connection enue from stationary advertisements at PARKEN. with the Soccer School of Excellence 2.3 260.2 Transfer income represents revenue from the sale of the contract rights for Christian Poulsen, Roy Hodgson and Own shares represent 3,875 shares stated at the officially Thomas Rytter. quoted market price at the balance sheet date.

Letting of the stadium. The number of events at PARKEN Movements in shareholders’ equity are shown below: was greater than last year. Shareholders’ equity at 1 July 2001 300.8 Other revenue primarily represents revenue from the con- Profit for the period 39.4 ference activity and the Circus Building. 340.2

Other expenses mainly represents cost of goods sold relating to the conference activity, marketing and administrative costs and operating costs for the stadium.

42 PARKEN SPORT & ENTERTAINMENT A/S CONSOLIDATED PROFIT AND LOSS ACCOUNT

DKKm 1/7-31/12 1/7-31/12 Full year 1/7-31/12 Full year 2001 2000 2000/01 1999 1999/00

Gate receipts and television income 25.6 8.4 15.8 5.7 12.4 Business partners 21.7 17.3 37.1 18.5 39.3 Transfer income 51.3 12.6 13.6 0.6 0.6 Letting of stadium 16.7 8.1 38.4 13.7 25.4 Other revenue 40.2 39.0 75.2 34.1 75.1 155.5 85.4 180.1 72.6 152.8

Match costs including travel costs 12.1 2.8 8.6 2.1 4.1 Transfer costs 1.2 8.0 9.3 1.1 1.1 Staff costs 34.8 27.6 58.7 24.4 51.2 Other costs 33.1 24.7 58.2 29.8 60.6 Amortisation and depreciation 17.9 12.4 25.1 6.2 14.8 99.1 75.5 159.9 63.6 131.8

Profit before financial items 56.4 9.9 20.2 9.0 21.0 Net financial items 0.0 (0.4) 1.8 (1.9) (3.0) Profit before tax 56.4 9.5 22.0 7.1 18.0 Corporation tax 17.0 (2.8) (6.0) (1.0) (3.1) Profit for the period 39.4 6.7 16.0 6.1 14.9

43 PARKEN SPORT & ENTERTAINMENT A/S CONSOLIDATED BALANCE SHEET

DKKm 31/12 30/6 31/12 30/06 31/12 2001 2001 2000 2000 1999

ASSETS

Fixed assets Intangible assets Contract rights 48.1 32.5 32.3 26.8 13.8 Goodwill 4.0 –––– Deposits 0.4 0.4 0.4 0.6 0.3

Tangible assets Operating equipment/fixtures, fittings, furniture and equipment 10.1 10.0 11.6 13.2 12.5 Properties 260.2 256.0 147.2 144.4 146.3 Installation in progress 0.0 0.0 31.1 0.0 0.0

Long-term financial assets Equity interest in associated company 12.0 0.0 0.7 0.7 0.0 Total fixed assets 334.8 298.9 223.3 185.0 172.9

Current assets Stocks 1.2 1.7 3.1 4.1 4.1 Debtors 64.8 45.7 51.2 48.6 34.6 Own shares 0.9 0.0 5.5 5.0 5.4 Cash and cash equivalents 8.2 12.8 9.3 9.4 136.3 Total current assets 75.1 60.2 69.1 67.1 180.4

TOTAL ASSETS 409.9 359.1 292.4 252.1 353.3

44 PARKEN SPORT & ENTERTAINMENT A/S CONSOLIDATED BALANCE SHEET

DKKm 31/12 30/6 31/12 30/06 31/12 2001 2001 2000 2000 1999

LIABILITIES AND EQUITY

Shareholders’ equity 340.2 300.7 220.6 197.1 189.2 Provisions 8.0 8.0 0.0 0.0 0.0

Long-term liabilities Mortgage debt 0.0 0.4 0.0 0.0 1.1

Current liabilities Bank loans and overdrafts 12.4 0.0 0.0 25.3 2.9 Trade creditors and prepayments 23.3 37.4 48.9 1.4 5.8 Debt Gefion 0.0 0.0 0.0 0.0 145.6 Corporation tax 17.0 – – 2.6 – Other liabilities 9.0 12.6 22.9 25.7 8.7 Total liabilities 61.7 50.4 71.8 55.0 164.1

TOTAL LIABILITIES AND EQUITY 409.9 359.1 292.4 252.1 353.3

45 PARKEN SPORT & ENTERTAINMENT A/S CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2001

MDKK

Profit for the period before tax 56.4 Amortisation and depreciation 17.9 Realisation gains (50.4) 23.9 Changes in working capital Reduction in stocks 0.5 Reduction in trade creditors, other liabilities and prepayments (17.7) Increase in debtors (19.1) (36.6)

Cash flow from operating activities (12.4)

Investing activities Investment in contract rights (30.1) Investment in goodwill (4.0) Investment in operating equipment (1.0) Investment in properties (6.9) Investment in installation at PARKEN (0.6) Investment in equity interests in associated company (12.0) Sales of contract rights 51.3 (3.3) Financing activities Repayments to credit institution 0.4 Increase of short-term bank loans and overdrafts 12.4 12.0

Reduction of cash and cash equivalents (3.7) Cash and cash equivalents at beginning of period 12.8 Cash and cash equivalents at end of period 9.1 Undrawn committed facilities at end of period 78.4

46 PARKEN SPORT & ENTERTAINMENT A/S PARENT COMPANY PROFIT AND LOSS ACCOUNT

DKKm 1/7-31/12 1/7-31/12 Full year 1/7-31/12 Full year 2001 2000 2000/01 1999 1999/00

Gate receipts and television income 25.6 8.4 15.8 5.7 12.4 Business partners 21.7 17.3 37.1 18.5 32.4 Transfer income 51.3 12.6 13.6 0.6 0.6 Letting of stadium 5.0 5.0 18.6 5.0 9.0 Other revenue 1.2 7.9 7.7 2.9 13.7 104.8 51.2 92.8 32.7 68.1

Match costs including travel costs 12.0 2.8 8.6 2.1 4.1 Transfer costs 1.2 8.0 9.3 1.1 1.1 Staff costs 20.2 15.4 33.2 12.6 27.2 Other costs 7.2 9.1 16.9 9.3 15.7 Amortisation and depreciation 16.9 11.2 22.6 5.0 12.4 57.5 46.5 90.6 30.1 60.5

Profit before financial items 47.3 4.7 2.2 2.6 7.6 Profit from equity interests 6.2 3.7 12.4 5.5 11.0 Net financial items (0.1) (0.4) 2.0 (2.0) (3.1) Profit before tax 53.4 8.0 16.6 6.1 15.5 Corporation tax 14.0 (1.3) (0.6) 0.0 (0.6) Profit for the period 39.4 6.7 16.0 6.1 14.9

47 PARKEN SPORT & ENTERTAINMENT A/S PARENT COMPANY BALANCE SHEET

MDKK 31/12 30/6 31/12 30/06 31/12 2001 2001 2000 2000 1999

ASSETS

Fixed assets Intangible assets Contract rights 48.1 32.5 32.3 26.8 13.8 Deposits 0.4 0.4 0.4 0.3 0.3

Tangible assets Operating equipment/fixtures, fittings, furniture and equipment 5.5 5.4 6.3 6.8 5.6 Properties 257.9 252.9 143.3 144.4 146.3 Installation in progress 0.0 0.0 31.1 0.0 0.0

Long-term financial assets Equity interests in subsidiaries 17.0 10.8 14.5 10.9 16.3 Equity interest in associated company 12.0 0.0 0.7 0.7 0.0 Total fixed assets 340.9 302.0 228.6 189.9 182.3

Current assets Stocks 0.0 0.0 2.1 2.7 3.3 Debtors 58.8 21.8 35.2 37.0 22.8 Intercompany accounts w. subsidiaries 7.0 4.9 5.0 0.7 0.3 Own shares 0.9 0.0 5.5 5.0 5.4 Cash and cash equivalents 7.3 6.8 1.6 3.2 128.8 Total current assets 74.0 33.5 49.4 48.6 160.6

TOTAL ASSETS 414.9 335.5 278.0 238.5 342.9

48 PARKEN SPORT & ENTERTAINMENT A/S PARENT COMPANY BALANCE SHEET

MDKK 31/12 30/6 31/12 30/06 31/12 2001 2001 2000 2000 1999

LIABILUTIRES AND EQUITY

Shareholders’ equity 340.2 300.7 220.6 197.1 189.2 Provisions 8.0 8.0 0.0 0.0 0.0

Long-term liabilities Mortgage debt 0.0 0.3 0.0 0.0 1.1

Current liabilities Bank loans and overdrafts 6.1 0.0 0.0 21.6 0.0 Trade creditors and prepayments 15.6 20.1 33.7 15.2 4.6 Intercompany accounts w. subsidiaries 28.6 2.9 20.7 0.0 0.0 Debt Gefion 0.0 0.0 0.0 0.0 145.6 Corporation tax 14.0–––– Other liabilities 2.4 3.5 3.0 4.6 2.4 Total liabilities 66.7 26.8 57.4 41.4 153.7

TOTAL LIABILITIES AND EQUITY 414.9 335.5 278.0 238.5 342.9

49 CONSOLIDATED FINANCIAL STATEMENTS The following is an extract of the Company’s latest annual financial statements.

Accounting policies BALANCE SHEET The financial statements for the year ended 30 June 2001 Intangible fixed assets were prepared in compliance with the provisions of the Contract rights are stated at historic cost (transfer sums Danish Company Accounts Act, Danish accounting stan- paid) less accumulated amortisation, see above. dards and the requirements by the Copenhagen Stock Exchange to the presentation of financial statements by Equity interests in subsidiaries listed Danish companies. Equity interests in subsidiaries are stated at net asset value according to the equity method in the parent company’s The accounting policies are unchanged from last year balance sheet. except for the accounting for equity interests in associated companies. The Group’s share of the company’s results is Equity interests in associated companies now recognised in the financial statements, and the interest Equity interests in associated companies are stated at net is stated in the balance sheet at the net asset value. The asset value. Any negative shareholders’ equity is set off effect on the profit and shareholders’ equity of this change against amounts owing to the parent company. is insignificant. The comparative figures for 1999/2000 have been restated to reflect this new accounting policy. Tangible fixed assets Tangible fixed assets are stated at historic cost less accumulated amortisation, see above. PROFIT AND LOSS ACCOUNT Transfer income and expenses Stocks Transfer income represents the Company’s share of transfer Stocks are stated at cost according to the FIFO principle. sums for contract rights sold. Obsolete and slow-moving goods are written down to net realisable value. Transfer costs represent contract rights not yet amortised at the time of sale less any sales costs. Own shares Own shares are stated as an asset in the balance sheet at Contract rights are amortised on a linear basis over the historic cost. Gains/losses on sales are recognised in the term of the contract. profit and loss account.

Operating equipment and fixtures, fittings, furniture and Debtors equipment Debtors are valued on the basis of an individual assessment Depreciation is charged on a straight-line basis over the of each account. expected useful economic lives of the assets. The expected useful economic lives are: Liabilities Liabilities are stated at nominal value IT: 3 years Machinery, fixtures, fittings, furniture and equipment, and Currency translation cars: 4-5 years Transactions denominated in foreign currencies are trans- Minor assets below DKK 9,500/9,800 are charged to the lated into Danish kroner at the exchange rate ruling at the profit and loss account in the year of acquisition. transaction date. Residential property is not depreciated. The PARKEN sports facility: 64 years (the period until the Debtors and creditors denominated in foreign currencies are Liability of Reversion crystallises) translated into Danish kroner at the exchange rate prevailing on the balance sheet date. All realised/unrealised exchange Corporation tax gains and losses are included in the profit and loss account Tax is provided on the profit for the year adjusted for non- under financial income and financial expenses. taxable income and expenses. The provisions include deferred tax on all temporary differences between account- Cash flow statement ing and tax values. Deferred tax concerns the PARKEN The cash flow statement presents the Group’s cash flows for sports facility in particular and is provided at 30% of the the year, change in cash and cash equivalents during the calculation base. year and cash and cash equivalents at the beginning and end of the year. Cash flows from operating activities are presented indirectly based on the profit for the year. The cash flow from investing activities comprises payments in connection with the purchase and sale of fixed assets. Cash flows from financing activities comprise long-term and short-term debt raised and repayments thereon as well as proceeds from equity issues.

50 GROUP PROFIT AND LOSS ACCOUNT

(DKK 1000) GROUP 2000/01 1999/00 1998/99

Note

Revenue Gate receipts and television income 15,769 12,408 19,870 Income from business partners 37,114 39,360 31,199 Transfer income 13,626 579 9,829 Letting of stadium 38,400 25,368 23,311 Bowling Centre and Circus Building Conference centre and sports cafe 63,261 61,501 64,970 1 Other revenue 11,949 13,659 10,754 Total revenue 180,119 152,875 159,933

Costs Operating costs, stadium 7,844 6,725 5,351 Match costs including travel costs 8,629 4,109 6,027 Transfer costs 9,331 1,140 1,399 Marketing costs 7,842 6,167 4,675 2 Administrative costs 10,451 12,229 10,672 3 Staff costs 58,615 51,209 50,336 4 Amortisation and depreciation 25,083 14,788 18,914 5 Other costs 32,085 35,534 39,870 Total costs 159,880 131,901 137,244

Profit before financial items 20,239 20,974 22,689

Financial items 6 Profit from equity interests (343) (150) – 7 Financial income 2,417 2,550 5,352 8 Financial expenses (248) (5,412) (7,027) Total financial items 1,826 (3,012) (1,675)

Profit before tax 22,065 17,962 21,014

9 Tax on profit for the year (6,048) (3,100) (950)

Profit for the year 16,017 14,862 20,064

51 GROUP BALANCE SHEET

(DKK ’000) GROUP 30/6 – 2001 30/6 – 2000 30/6 – 1999

Note ASSETS

Fixed assets

Intangible assets 10 Contract rights 32,499 26,776 13,543 Deposits 380 638 257

Tangible assets 11 Operating equipment, fixtures, fittings, furniture and equipment 9,960 13,198 11,591 12 Properties 255,989 144,370 145,589

Long-term financial assets 6 Equity interests in subsidiaries – – – Total fixed assets 298,828 184,982 170,980

Current assets Stocks 1,705 4,114 3,544

Debtors Trade debtors 27,856 16,991 14,805 Other amounts owing 10,290 26,512 12,149 Intercompany accounts with Group companies 1,535 – – Corporation tax receivable 901 – 1,300 Prepayments and accrued income 5,144 5,065 4,732

Cash and cash equivalents Bank deposits 12,817 9,407 143,456 Own shares – 4,984 – Total current assets 60,248 67,073 179,986

TOTAL ASSETS 359,076 252,055 350,966

52 GROUP BALANCE SHEET

(TDKK) GROUP 30/6 – 2001 30/6 – 2000 30/6 – 1999

Note LIABILITIES AND EQUITY

13 Shareholders’ equity 14 Share capital 36,976 28,200 28,200 15 Share premium 207,249 128,425 128,425 16 Retained profit 56,517 40,500 26,518 Total shareholders’ equity 300,742 197,125 183,143

Provisions Deferred tax 7,958 – –

Liabilities

Long-term liabilities 17 Credit institution 351 – 1,093

Current liabilities Bank loans and overdrafts – 25,281 – Prepayments – – 1,133 Trade creditors 36,790 1,279 12,337 Outstanding account with Gefion – – 141,095 18 Other liabilities 12,543 11,304 11,313 Corporation tax payable 25 2,550 – Accruals and deferred income 667 14,516 852 Total liabilities 50,376 54,930 167,823

TOTAL LIABILITIES AND EQUITY 359,076 252,055 350,966

19 Contingent liabilities, collateral, etc. 20 Supplementary information

53 GROUP CASH FLOW STATEMENT

(DKK ’000) GROUP 2000/01 1999/00 1998/99

Note

Profit for the year before tax 22,065 18,112 20,064 Amortisation and depreciation 25,083 14,788 18,914 Corporation tax paid (1,534) (750) – Realisation gains (6,098) 1,964 (6,665) 39,516 34,114 32,313

Changes in working capital Change of stocks 2,409 (570) (2,163) Change of debtors 3,743 (17,225) (21,308) Change of trade creditors, other liabilities, etc. 21,295 1,464 24,039 27,447 (16,331) 568 Cash flow from operating activities 66,963 17,783 32,881

Investing activities Investment in contract rights (35,483) (22,855) (21,812) Investment in operating equipment, fixtures, fittings, furniture and equipment (1,228) (5,888) (17,907) Investment in real property (114,414) (4,180) (10,247) Investment in associated company – (687) – Sale of fixed assets 535 3,471 2,582 Change of deposits 258 (381) 99 Sale of contract rights 19,125 579 22,297 (131,207) (29,941) (24,988)

Financing activities Proceeds from equity issues 87,600 – 62,679 Change of short-term bank loans and overdrafts (25,281) 25,281 – Change of long-term liabilities 351 (1,093) (13) Payment of short-term debt to Gefion – (141,095) – 62,670 (116,907) 62,666

Cash flow for the year (1,574) (129,065) 70,559 Cash and cash equivalents at beginning of year 14,391 143,456 72,897 Cash and cash equivalents at year-end 12,817 14,391 143,456 Undrawn committed facilities at year-end 80,000 – –

54 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(DKK ’000) GROUP 2000/01 1999/00 1998/99

Note

1 Other revenue Souvenir sales 3,923 5,752 5,444 Programme sales 227 194 218 Other revenue 7,799 7,713 5,092 11,949 13,659 10,754 2 Administrative costs Office expenses 3,461 2,048 1,957 Staff 1,035 943 834 Head office costs 2,014 3,564 4,410 Other costs 3,941 5,674 3,471 10,451 12,229 10,672 3 Staff costs Salaries and fees 57,863 50,207 49,546 Pensions 364 609 503 Social security costs 388 393 287 58,615 51,209 50,336 Average number of employees 127 126 127 Of whom football players 29 30 32

4 Amortisation and depreciation Contract rights 17,936 8,482 12,786 Operating equipment, fixtures, fittings, furniture and equipment 4,352 3,998 3,729 The PARKEN sports facility 2,791 2,308 2,399 Other buildings 4 – – 25,083 14,788 18,914 5 Other costs Cost of goods sold and production costs, conference, sports cafe and Circus Building 27,097 31,069 35,803 Cost of goods sold, souvenirs 1,645 3,950 3,650 Printing of programmes 598 515 417 Other 2,745 – – 32,085 35,534 39,870

6 Equity interests in associated company Represents ZAR 570,000 nominal value in the Soccer School of Excellence Ltd., South Africa (40% interest) Net asset value (493) (343) – Profit before tax (343) (150) – Profit after tax (343) (150) –

55 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(DKK ’000) GROUP 2000/01 1999/00 1998/99

Note

7 Financial income Bank deposits and bond portfolio 655 2,550 5,254 Gains on sales of own shares 1,762 – 98 2,417 2,550 5,352

8 Financial expenses Bank, etc. 248 185 95 Bridge finance, PARKEN – 5,185 5,606 Capital losses – 42 510 Other – – 816 248 5,412 7,027

9 Tax on the profit for the year Current corporation tax for the year 2,124 3,100 (950) Deferred tax 3,924 – 2,250 Total tax for the year 6,048 3,100 (1,300)

10 Contract rights Cost at 1 July 42,338 20,863 25,774 Additions 35,483 22,855 21,812 Disposals (19,716) (1,380) (26,723) Cost at 30 June 58,105 42,338 20,863 Amortisation at 1 July 15,562 7,320 7,565 Amortisation on disposals (7,892) (240) (13,031) Amortisation for the year 17,936 8,482 12,786 Amortisation at 30 June 25,606 15,562 7,320 Net book value at 30 June 32,499 26,776 13,543

11 Operating equipment, fixtures, fittings, furniture and equipment Cost at 1 July 48,363 42,592 40,363 Additions 1,228 5,888 8,012 Disposals (1,124) (117) (5,783) Cost at 30 June 48,467 48,363 42,592 Depreciation at 1 July 35,165 31,001 28,533 Depreciation on disposals (1,010) (166) (1,261) Depreciation for the year 4,352 3,998 3,729 Depreciation at 30 June 38,507 35,165 31,001 Net book value at 30 June 9,960 13,198 11,591

56 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(DKK ’000) GROUP 2000/01 1999/00 1998/99

Note

12 Properties Cost at 1 July 148,928 148,329 4,493 Additions 114,414 4,180 143,836 Disposals – (3,581) – Cost at 30 June 263,342 148,928 148,329 Depreciation at 1 July 4,559 2,740 341 Depreciation for the year 2,794 2,308 2,399 Reversed depreciation – (489) – Depreciation at 30 June 7,353 4,559 2,740 Net book value at 30 June 255,989 144,370 145,589 Book value of residential properties leased to contract players 3,520 3,520 5,691 Book value of the PARKEN sports facility 249,374 140,850 139,898 Book value of sports facility in South Africa 3,095 – 255,989 144,370 145,589 Officially assessed cash value 141,350 131,990 3,850 Plus book value of unassessed properties and installations 113,884 – 142,297

13 Shareholders’ equity Shareholders’ equity at 1 July 197,125 182,263 100,400 Proceeds from capital increase 87,600 – 62,679 Profit for the year 16,017 14,862 20,064 Shareholders’ equity at 30 June 300,742 197,125 183,143

14 Share capital Share capital at 1 July 28,200 28,200 23,200 Equity issue, warrant programme 1,900 – – Equity issue on market terms 6,876 – 5,000 Share capital at 30 June 36,976 28,200 28,200 Number of shares of DKK 20 1,848,800 1,410,000 1,410,000

15 Share premium Share premium at 1 July 128,425 128,425 70,746 Share premium on capital increase 82,535 – 60,000 Costs of capital increase (3,711) – (2,321) Share premium at 30 June 207,249 128,425 128,425

57 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(DKK ’000) GROUP 2000/01 1999/00 1998/99

Note

16 Retained profit Retained profit at 1 July 40,500 25,638 6,454 Allocated from profit for the year 16,017 14,862 20,064 Retained profit at 30 June 56,517 40,500 26,518

17 Credit institution The debt falls due within five years

18 Other liabilities VAT 1,107 3,204 3,977 Tax deducted from income at source (A-tax), labour market contribution (AM), supplementary capital pension tax (ATP), etc. 2,983 2,172 1,804 Holiday pay liability, etc. 3,652 2,519 3,282 Other 4,801 3,409 2,250 12,543 11,304 11,313

19 Contingent liabilities, collateral security, etc. Leases for property have been concluded on ordinary terms. Lease liabilities for equipment over a total of approximately 7 years amount to DKK 3.4 million.

20 Supplementary information Fees to auditors appointed by the shareholders in general meeting: DL Revisionsfirma, audit – – – KPMG C. Jespersen, audit – – – DL Revisionsfirma, non-audit services – – – KPMG C. Jespersen, non-audit services – – – –––

Costs in connection with equity issue Financial intermediaries 2,270 – 1,637 The Copenhagen Stock Exchange and Danish Securities Centre 133 – 117 Printing and advertising 236 – 80 Fees to accountants and lawyers 887 – 460 Other costs 185 – 27 3,711 – 2,321

Related parties: A loan of DKK 2,028 thousand has been provided to the Soccer School of Excellence Ltd., South Africa, which is recorded at DKK 1,535 thousand, so far free of interest and repayment.

58 59 ARTICLES OF ASSOCIATION

Name, registered office and objects The Company’s shares may be cancelled without a court order pursuant to the rules in force from time to time. Any Article 1 cancellation pursuant to this provision shall be for the shareholder’s account. Likewise, the issue of a new share certificate or registration with the Danish Securities Centre The name of the Company is PARKEN Sport & following cancellation shall be for the shareholder’s Entertainment A/S. The Company also operates under the account. Where the Supervisory Board is not satisfied that a following secondary names: share should be cancelled, the Supervisory Board may refer the shareholder to seek a court order for cancellation pur- Football Club København A/S suant to the rules in force. (PARKEN Sport & Entertainment A/S), PARKEN A/S (PARKEN Sport & Entertainment A/S), Article 3 A Football Club Copenhagen A/S (PARKEN Sport & Entertainment A/S), The Supervisory Board may determine to increase the share FCK A/S capital by up to DKK 28 million through shares with a nomi- (PARKEN Sport & Entertainment A/S), and nal value of DKK 20 each. The authority to increase the Fodboldklubben København A/S share capital by DKK 28 million is valid until 31 December (PARKEN Sport & Entertainment A/S). 2005. The Supervisory Board may determine to use the authority for one or more issues of shares. The registered office of the Company is situated in the City of Copenhagen. Payment for the new shares may be made in cash or in assets other than cash.

Article 2 The capital increase by up to DKK 28 million shall be made without pre-emption rights to the Company’s existing share- The objects of the Company are to engage in professional holders holding shares of the Company’s existing share sports, primarily football and related activities, including class. trade, services and investments, that can naturally be carried out in combination with professional sports. The new shares shall be negotiable instruments. No restrictions shall apply to the transferability of the shares, and no The objects of the Company are furthermore to engage in shareholders shall be under an obligation to permit their entertainment activities, including to organise concerts and shares to be redeemed in full or in part. No new shares congresses, and activities derived therefrom. shall confer any special rights upon their holders. The new shares shall be issued to bearer but may be registered in the name of the holder in the Company’s Register of The Company’s share capital Shareholders.

Article 3 The shares in the capital increase shall be subscribed at the market price, but the price must not be less than DKK The Company’s share capital amounts to DKK 36,976,000, 105 per share. say thirty six million nine hundred seventy six thousand Danish kroner only, divided into shares of DKK 20 each or Article 3 B multiples thereof. During the period from 1 May 2001 to 31 December 2004, The share capital is fully paid up. The shares are issued to the Supervisory Board shall be authorised to issue up to bearer, but may be registered in the name of the holder in 120,000 warrants of DKK 20 each in one or more issues. the Company’s register of shareholders. The Company’s shares are registered with the Danish Securities Centre Warrants shall be subscribed for cash at a price to be deter- (Værdipapircentralen). Dividends will be paid to such share- mined by the Supervisory Board, but the price must not be holders or rights holders as are registered with the Danish less than DKK 105. Securities Centre. There shall be no right of pre-emption to the Company’s The Company’s shares are negotiable instruments. shareholders in respect of such warrants, nor shall the Company’s shareholders have pre-emption rights in respect No shareholder shall be under an obligation to permit his of the shares issued on exercise of the warrants. shares to be redeemed in full or in part. No shares shall confer any special rights upon their holders.

60 One warrant shall entitle the holder to subscribe one share In addition to the date and time of the general meeting, the at the price determined on the offer of the warrant. The notice shall specify the agenda of the meeting and any reso- Supervisory Board shall determine the terms and conditions lutions to be considered by the meeting. for acquisition of a share on exercise of a warrant, subject to the provisions of Article 3 A of these Articles of The notice shall specify whether the meeting is convened to Association. consider resolutions that require a special majority of votes. Shareholder resolutions to be considered by the annual gen- The Supervisory Board shall determine the terms and condi- eral meeting shall be submitted to the Supervisory Board tions of the warrant. not later than one month after the end of the financial year.

Article 3 C No later than eight days before the general meeting, the agenda and the complete resolutions to be considered by The Supervisory Board shall be authorised to increase the the general meeting and, in the case of the annual general Company’s share capital by a nominal amount of DKK meeting, the financial statements with the auditors’ report 3,157,320 divided into shares of DKK 20 nominal value and the signatures of the Executive Board and the each. Supervisory Board shall be available for inspection by the shareholders at the Company’s office. The notice convening The shares in the capital increase shall be issued with pre- the meeting shall contain information to this effect. emption rights to existing shareholders. Article 5 The Supervisory Board may determine to use the authority for one or more issues of shares. An extraordinary general meeting shall be convened whenever resolved by the shareholders in general meeting or by Payment for the new shares shall be made in cash. The new the Supervisory Board, whenever requested by one of the shares shall be subscribed in the existing share class. Company’s auditors, or whenever requested in writing to the Supervisory Board by shareholders who between them hold The new shares shall be negotiable instruments. No restric- one-tenth or more of the share capital. tions shall apply to the transferability of the shares and no shareholder shall be under an obligation to permit his Such request shall specify the resolution(s) to be consid- shares to be redeemed in full or in part. No new shares ered by the general meeting. shall confer any special rights upon their holders. The new shares shall be issued to bearer but may be registered in The extraordinary general meeting shall be convened by the the name of the holder in the Company’s Register of Supervisory Board within 14 days after the request has Shareholders. been made. The shares in the capital increase shall be subscribed at a price which is not less than DKK 105 per share. Article 6

This authority shall be valid until 31 December 2001. The agenda of the annual general meeting shall include the following business:

Management of the Company 1. To appoint a chairman of the meeting. 2. To receive the Directors’ report. Article 4 3. To consider and, if thought fit, to adopt the profit and loss account and the balance sheet. 4. To pass a resolution for the distribution of profit or the General meetings shall be held in the municipality of the treatment of the loss, as the case may be, according to Company’s registered office or in Greater Copenhagen. The the adopted financial statements. annual general meeting shall be held each year not later 5. To consider and, if thought fit, to pass proposed resolu- than five months after the end of the financial year. tions. 6. To elect members of the Supervisory Board. General meetings shall be convened by not less than 14 7. To appoint the auditor. days’ and not more than four weeks’ notice given in two 8. To consider any other business. national newspapers and by letter sent to each shareholder registered as such with the Danish Securities Centre four weeks before the date of the general meeting.

61 Article 7 Article 10

All resolutions at general meetings shall be passed by a Minutes of general meetings shall be recorded in a minute simple majority of votes unless otherwise stipulated in the book authorised by the Supervisory Board and shall be Danish Companies Act or these Articles of Association. signed by the chairman of the meeting and attending mem- A poll shall be taken if requested by one of the attending bers of the Supervisory Board. A transcript of the minutes of shareholders or by the chairman of the meeting. the general meeting shall be made available for inspection by shareholders at the Company’s office no later than one A resolution to alter the Articles of Association or to liqui- month after the general meeting. date the Company voluntarily shall be passed only where three fourths of the share capital is represented at the gen- Dividends remaining unclaimed for five years after their due eral meeting and the resolution is carried by three fourths date shall accrue to the Company. both of the votes cast and of the share capital represented at the meeting. Where less than three fourths of the share capital is represented at the general meeting, and the reso- Supervisory Board and Executive Board lution is carried by a three fourths majority both of the votes cast and of the voting share capital represented at the Article 11 meeting, another general meeting shall be called without delay, which meeting can carry the resolution by a three The Company shall be managed by a Supervisory Board fourths majority of the votes cast, notwithstanding the consisting of from five to seven members. Each of KB and amount of the share capital represented. Unless explicitly B 1903 shall appoint one member. The shareholders in revoked, proxies for the first general meeting shall be valid general meeting shall elect the other members of the also for the adjourned general meeting. Supervisory Board by a simple majority of votes. Members of the Supervisory Board shall each serve for a term of one Article 8 year, and shall be eligible for re-election. The right for KB and B1903 contained in this Article can Each share of DKK 20 nominal value is entitled to one vote only be changed subject to the consent of KB and B1903, at general meetings. respectively, as long as KB and B1903, respectively, are shareholders in the Company. To attend a general meeting, shareholders must notify the Company’s office no later than five calendar days prior to The Supervisory Board shall elect a Chairman from among the date of the general meeting. In order to vote shares, its members and shall lay down its own rules of procedure. shareholders must register the relevant holding with the The proceedings of meetings of the Supervisory Board shall Danish Securities Centre no later than five calendar days be recorded in a minute book authorised by the Supervisory prior to the date of the general meeting. Board, which shall be signed by all members of the Supervisory Board attending the meeting. Shareholders are entitled to attend general meetings with one adviser. The Supervisory Board may grant powers to sign per procu- ration individually or jointly. Representatives of the press who have notified the Company’s office no later than three days before the date of the general meeting are entitled to attend general meetings Article 12 but not to speak. The Supervisory Board shall appoint an Executive Board Article 9 consisting of from one to three members to manage the day-to-day operations of the Company. General meetings shall be presided over by a chairman appointed by the Supervisory Board. The chairman of the meeting shall settle all matters relating to the transaction of Article 13 business and the voting. The Company shall be bound by three members of the Supervisory Board acting together, or by the Chairman of the Supervisory Board acting together with a member of the Executive Board, or by all members of the Supervisory Board acting together.

62 Accounting and audit Article 16

Article 14 The financial statements shall be made up in accordance with generally accepted accounting principles as applied in The Company’s financial statements shall be audited by two Denmark, making allowance for the prescribed and required state-authorised public accountants appointed by the share- depreciation and provisions. Any profit shall be distributed holders at the annual general meeting of each year. as determined by the shareholders based upon the recom- mendation of the Supervisory Board. The auditors shall be appointed for a term of one year, and shall be eligible for re-appointment. ______

Article 15 As adopted at the annual general meetings of the Company held on 30 September 1997, 23 October 1997, 5 November The Company’s financial year runs from 1 July to 30 June. 1997, extraordinary general meetings held on 21 August 1998, 9 September 1998, Supervisory Board meeting held on 9 September 1998, annual general meeting held on 28 October 1999 and subsequent extraordinary general meeting held on 25 November 1999 and Supervisory Board meeting held on 21 December 2000, extraordinary general meetings held on 21 February 2001 and 15 March 2001 and Supervisory Board meeting held on 15 March 2001 and extraordinary general meeting held on 20 December 2001.

63 ADVISERS

Manager Carnegie Bank A/S Overgaden neden Vandet 9B DK-1414 Copenhagen K Denmark

Legal adviser to PARKEN Sport & Entertainment DANIA Advokater A/S Bredgade 49 DK-1260 Copenhagen K Denmark

Legal adviser to the Manager Lind & Cadovius Advokataktieselskab Østergade 38 DK-1100 Copenhagen K Denmark

The Company’s independent accountants DL Revisionsfirma Vejlesøvej 36 DK-2840 Holte Denmark

KPGM C. Jespersen Borups Allé 177 DK-2000 Frederiksberg Denmark