The consolidated accounts are prepared on the basis of the accounts of the parent company and the subsidiaries, which are all prepared in accordance with the Groups accounting policies. The consolidated accounts are prepared by adding up items of a uniform nature. In the consolidation, intercompany income and expenses, intercompany shareholdings, balances and dividends as well as unrealised gains and losses on transactions between the consolidated companies are eliminated. Account is taken of deferred tax on these eliminations. In the consolidated accounts, the book value of the parent companys shareholdings in the subsidiaries has been set off against the parent companys share of the equity value at the time of acquisition, calculated at the market value of assets and liabilities. If the cost exceeds the share of the equity value thus computed, the difference is shown as Group goodwill in the balance sheet. Group goodwill is written off systematically over the profit and loss account following an individual assessment of the economic life of the asset, with a maximum of 20 years. So far no Group goodwill has been recorded in connection with the acquisition of subsidiaries. Newly acquired subsidiaries are included in the profit and loss account from the date of acquisition. Subsidiaries sold or wound up are included up to the time of sale or winding up. Comparative figures are not restated for newly acquired or sold businesses. Balances denominated in foreign currencies are translated at the exchange rates ruling at the balance sheet date. Forward contracts and other derivative financial instruments are stated in the balance sheet at market value. Both realised and unrealised exchange rate differences are included in the profit and loss account as financial items. Non-monetary assets, including Group goodwill, acquired in foreign currencies, are translated at the exchange rates ruling at the time of acquisition. All foreign subsidiaries are regarded as integral entities, which means that the transactions are dealt with as if they had been executed in the parent company. For consolidation purposes, the accounts of foreign subsidiaries are translated according to an adapted temporal method. Profit and loss account items are translated at the average exchange rates ruling during the year because these essentially reflect the exchange rates ruling at the transaction date. Exchange rate differences arising from the translation of both the balance sheet and the profit and loss accounts of the foreign entities are included in the Groups profit and loss account as financial items. Provision is made for deferred tax according to the balance sheet oriented liability method on all temporary differences between valuations as stated in the accounts and as computed for taxation purposes, except differences relating to shareholdings in subsidiaries and Group goodwill which are not deductible for tax purposes. The tax value of losses expected to be available for set off against future taxable income is set off against the deferred tax within the same legal tax unit and jurisdiction. Any deferred tax assets (net) are stated on the basis of a prudent valuation in the balance sheet. Deferred tax is calculated on the basis of the current tax rules and tax rates in the respective countries, and the effect on deferred tax of any changes in tax rates is included in the profit and loss account. Further, provision is made for deferred tax on reversal of tax benefit arising from assets in jointly taxed foreign subsidiaries. Deferred tax on investments in subsidiaries or associated companies is not disclosed because the calculations are very resourceconsuming and comprehensive with many alternatives, and the usefulness to the readers is limited compared with the amount of work involved. Tax The parent company is jointly taxed with the two Danish and some of the foreign subsidiaries. The tax payable computed on the joint taxation income is included in the parent companys profit and loss account in accordance with the parent company method. The jointly taxed Danish companies are included in the Danish provisional tax scheme. Tax on the profit or loss for the year comprises current tax and the years change in deferred tax. Additions, deductions and allowances relating to the Danish provisional tax scheme are included in current tax. Tax on the profit or loss for the year relates to the profits or losses on ordinary and extraordinary activities. Current tax comprises tax payable calculated on the basis of the expected taxable income for the year and any adjustment of tax payable for previous years. Pension commitments The Group has entered into pension agreements and similar agreements with the majority of the Groups employees. Periodical payments to defined contribution pension plans are included in the profit and loss account at the due date and any contributions payable are included in the balance sheet under other debt. The present value of the Groups commitments relating to future pension payments according to defined benefit pension plans is calculated on an actuarial basis at intervals of not more than three years on the basis of the pensionable period of employment up to the time of the actuarial valuation, using the projected unit credit method. Foreign currencies Transactions denominated in foreign currencies are translated by using standard rates which essentially reflect the exchange rates ruling at the transaction date. Exchange rate differences arising between the rate of the transaction day and the date of payment are included in the profit and loss account as financial items. 51 Contents Supervisory Board and Board of Management A clear vision The way forward A continuously dev Supervisory Board Arne V. Jensen (Chairman) Jørgen Fakstorp (Vice-Chairman) Lars Bruhn Henrik He Board of Management Erik Sprunk-Jansen President Eva Steiness Executive Vice President Research an Georgios Peros, Abstract, 1990 A clear vision Lundbeck has a clear vision. We intend to become one The way forward Strategy is planning - the ability to see where we are, where we are going and how A visionary goal Our goal is to become one of the worlds leading companies in the treatment of psych A continuously developing organisation Lundbeck is a continuously developing company. Growing inter Group structure The Lundbeck Foundation H. Lundbeck A/S Synthesis factories Region Scandinavia &am The pharmaceutical industry Market conditions in the pharmaceutical industry In 1996, the global ph K. Nathanael, Sunset, 1997 Sales and marketing The sales figure for 1997 places Lundbeck as one of Lundbecks products Lundbecks research and development activities are concentrated on developing new Koprianos, Town, 1996 Lastly, Lundbeck has a promising substance under development for treatment of The Supervisory Boards Report Net turnover (DKKm) 3,000 2,662 Net turnover 2,500 2,000 1,500 1,000 During the last few years, the pharmaceutical industry has undergone marked changes, resulting in a The Supervisory Boards Report Average number of employees 2,500 Subsidiaries Parent companies 2,000 At the annual general meeting on 16 May 1997, the employee bonus/profit distribution scheme that had The Supervisory Boards Report Lundbeck International Psychiatric Institute As a specialist in psych Spyros Loukidis, Windows, 1995 17 Environmental Report The Managements Declaration Lundbeck regards openness about the companys healt Environmental Report 1997 In 1997, Lundbeck continued developing a health, safety and environmental Environmental Report Lundbeck - general Lundbeck has its headquarters, with its management, adminis K. Fyra, Abstract, 1994 The first steps in the process are often carried out in Seal Sands, while t Environmental Report Summary of the Groups environmental status Below a short summary is given of t the waste water, while the remaining approx. 1,200 tonnes are sent to a special chemical waste dispo The Lundbeck International Psychiatric Institute The Lundbeck International Psychiatric Institute Ex ment, education of patients and their families, and Quality Management within psychiatric treatment. Art can overcome prejudices In Greece, as in many other countries, the general attitude to psychiat Giannis Papadakis, Abstract, 1997 Strengthening local collaboration The exhibitions are held in col PsychiatryLink an Internet introduction http://www.psychiatrylink.com will give you the possibility Lundbeck presents http://www.psychiatrylink.com The development of the first version of Lundbecks ne EPOS EPOS: European Post-marketing Observational Serdolect®/Serlect® project: increasing our unders Giannis Pachis, Excommunication, 1997 Unlike controlled clinical trials, the EPOS project has been My dream changes from colour to black and white Depression is about the worst thing anyone can exper The pieces fall into place That was the start of a life with changing psychopharmacological drugs, a Lundbeck worldwide Parent company H. Lundbeck A/S Ottiliavej 9 DK-2500 Copenhagen - Valby Tel: +45 Slovenia Lundbeck Pharma AS Presernova 1 (2. nadstropje) SLO-2000 Maribor Tel/Fax: +386 62 221 943 R The Lundbeck Foundation Award for Outstanding Research The Lundbeck Foundation, which makes substant V. Kafivas, Garden, 1996 Accounts 37 Summary for the Group 1993-1997 Profit and loss account (DKKm) Net turnover Profit before R&D c Key figures Average number of employees Average number of shares (million)*) Earnings per share (DKK Comments on the accounts Profit for the year In 1997, profit developed positively. Profit for the y The limited effect of the policy changes in 1997 is due to the movement in the size and composition Comments on the accounts Under the changed accounting policies, the results of foreign subsidiaries At the end of 1997, Lundbecks new antipsychotic drug, Serdolect®/Serlect®, had been launched in 10 E Comments on the accounts Other operating income, net Other operating income, net, amounted to DKK 8 In 1997, capital investments totalled DKK 188 million against DKK 224 million in 1996. As in 1996, t Financial comments General In 1997, the Lundbeck Groups financial income and expenses were affected The Groups loans on mortgage credit-like terms at 31 December 1997 Outstanding debt CIBOR-based loan Financial comments At the present moment it is very likely that Italy, Spain and Portugal will also Lundbecks exchange rate index (1988 = 100) 104 102 100 98 96 94 92 90 88 (Jan.) 89 90 91 92 93 94 95 Accounting policies General The annual accounts and the consolidated accounts have been prepared in The consolidated accounts are prepared on the basis of the accounts of the parent company and the su Accounting policies Provision is made in the balance sheet for the present value of plans which are The cost of new buildings and erection by the company of its own technical installations and machine Profit and loss account for the year ended 31 December 1997 Parent company 1996 DKKm 1,411.1 503.6 Per share ratios (DKKm) 150 137 Net asset values Cash flow 125 100 80 82 114 Earnings per share Balance sheetat Assets Parent company 1996 DKKm 18.0 9.6 27.6 386.1 140.4 101.5 146.6 774.6 95.4 5. Balance sheetat Liabilities Parent company 1996 DKKm 110.0 56.1 1,086.2 1,252.3 1997 DKKm 110.0 77. Statement of sources and application of funds for the year ended 31 December 1997 Group Notes Oper Signatures Copenhagen, 12 March 1998 The Supervisory Board and the Board of Management have today c Notes to the profit and loss account 1 Net turnover Parent company 1996 DKKm 263.0 874.7 176.9 96.5 Production, distribution, administration, and research and development costs incl. depreciation etc. Notes to the profit and loss account 4 Other operating income Parent company 1996 DKKm 3.1 3.1 1997 6 Tax on the profit for the year Parent company 1996 DKKm 1.3 0.8 1997 DKKm 49.7 - 0.1 Tax due on th Notes to the balance sheet 7 Intangible and tangible fixed assets Group: Research and development c Land and buildings DKKm Technical plant and machinery DKKm Other fixtures and fittings, tools and Notes to the balance sheet 8 Shares in subsidiaries Total DKKm Book value at 1.1.1997 Adjustment du 8 Shares in subsidiaries - continued Net asset value at 31.12.1997 DKKm H. Lundbeck A/S, Norway H. L Notes to the accounts 9 Other shareholdings and other receivables Parent company Other shareholding 11 Capital and reserves Group 1996: Share capital DKKm Capital and reserves at 1.1.1996 Adjustment d Notes to the accounts 11 Capital and reserves - continued Parent company 1996: Share capital Revalu 12 Provisions for pensions Group: The Group operates with two types of pension plans: defined contri Notes to the accounts 13 Provisions for deferred tax Group: Temporary differences between calculati 13 Provisions for deferred tax - continued Parent company: Temporary differences between calculation Notes to the accounts 15 Contractual obligations Rentals and leasing obligations Lundbeck has commi Notes to statement of sources and applicational funds 17 Adjustments Group: 1997 DKKm Depreciation e Michalis Manolopoulos, Landscape, 1997 Lundbecks new logo Lundbeck has introduced a new logo that clearly expresses our identity, vision an