The cost of new buildings and erection by the company of its own technical installations and machinery includes the cost of materials, direct wages and a share of indirect costs. Tangible fixed assets are written off on a straight-line basis over the expected useful lives of the assets, which are expected to be as follows: Buildings . . . . . . . . . . . . . . . . . . . . . . . . 30 years Installations . . . . . . . . . . . . . . . . . . . . . 10 years Technical plant and machinery . . . 3-10 years Other fixtures and fittings, tools and equipment . . . . . . . . . . . 3-10 years Writedowns are made on tangible fixed assets whose utility value is believed permanently to be much lower than the book value based on the above periods of depreciation. Writedowns are charged to the profit and loss account under the same items as the associated depreciation. Acquisitions at a cost not exceeding DKK 50,000 per unit are charged to the profit and loss account in the year of acquisition. Gains or losses on the disposal or scrapping of tangible fixed assets are calculated as the difference between book value and sales price reduced by dismantling and sales costs. Gains and losses are included in the profit and loss account under the same items as the associated depreciation. Financial fixed assets Shareholdings in subsidiaries are stated in the parent companys accounts according to the equity method. This means that the shareholdings are included in the balance sheet at the parent companys proportional share of the companies equity value plus Group goodwill. The parent companys share of the companies results after deduction of unrealised intercompany gains and losses and after deduction of write-off on Group goodwill is included in the parent companys profit and loss account as the result of participating interests before tax and as the tax of the results, respectively. The net revaluation of shareholdings in subsidiaries is taken to the reserve for net revaluation according to the equity method under capital and reserves to the extent that the net revaluation exceeds the dividends declared by the companies. Other shareholdings and receivables are valued at cost less writedown as a result of a significant diminution in value. The cost of shares denominated in foreign currencies is translated at the exchange rate ruling on the balance sheet date. Exchange rate adjustments are included in the profit and loss account as financial items. Stocks Raw materials, packaging and goods for resale are valued at the latest known cost at the balance sheet date, which approximates cost computed according to the FIFO principle. Work in progress and goods produced by the company are valued at cost, ie the cost of materials, direct wages and a share of indirect production costs, including the cost of operating and depreciating manufacturing facilities. Writedown to net realisable value is made if lower than the purchase price or production cost, respectively. Receivables Receivables are stated at nominal value less writedowns to counter the risk of loss calculated on the basis of an individual evaluation. Securities Securities shown as current assets are valued at the stock market price ruling at the balance sheet date. Both realised and unrealised capital gains and losses are included in the profit and loss account under financial items. Debt Mortgage debt and other debt where there is a difference between the nominal value and the market value are valued at the stock market price ruling at the balance sheet date or market value. Other debt liabilities are stated at the nominal value. Guarantee commitments No provision is made to cover return obligations imposed on the industry as these are not found to be of material importance to the accounts. Statement of sources and application of funds The consolidated cash flow statement is presented according to the indirect method and shows the composition of the Groups cash flow, divided into operating, investing and financing activities, respectively, and the Groups cash at the beginning and end of the year. Cash flow from operating activities is calculated as the Groups results before financial items adjusted for non-cash operating items, any change in the operating capital, financial and extraordinary items paid and corporation taxes paid. Cash flow from investing activities includes payments in connection with purchases and sales of fixed assets. Cash flow from financing activities includes payments to and from shareholders and the raising of and repayments of mortgage debt and other long-term debt. Cash includes liquid funds. Liquid funds also include securities shown as current assets in the balance sheet. They are exclusively Danish listed bonds. Despite the fact that they involve a risk of price changes, these bonds are included in cash because they actually function as liquid funds due to the special liquid nature of the Danish exchange market. Cash flow denominated in foreign currencies, including cash flow in foreign subsidiaries, are translated at the average exchange rates ruling during the year, because they essentially reflect the rate ruling at the date of payment. Cash at year-end is translated at the rate ruling at the balance sheet date, and the effect of exchange rate adjustments on cash is shown as a separate item in the cash flow statement. 53 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