ANNUAL REPORT 2021

LUNDBECK ANNUAL REPORT 2021 = CONTENTS FINANCIAL STATEMENTS OF THE PARENT COMPANY NOTES 18-20 103/111 18 RELATED PARTIES - CONTINUED The Parent company had transactions with subsidiaries during 2021. The Parent company's share of ownership of all subsidiaries is 100%. The Parent company did not enter into any transactions with other related parties that were not on an arm's length basis. 19 SUBSEQUENT EVENTS See note 24 Subsequent events in the consolidated financial statements. 20 SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Parent company H. Lundbeck A/S have been prepared in accordance with the Danish Financial Statements Act applying to enterprises in reporting class D. The financial statements are presented in Danish kroner (DKK). All amounts have been rounded to the nearest DKK million, unless otherwise indicated. The accounting policies for the financial statements of the Parent company remain unchaged from the previous financial year. Differences relative to the accounting policies for the consolidated financial statements The Parent company's accounting policies for recognition and measurement are consistent with the accounting policies for the consolidated financial statements with the exceptions stated below. For a description of the accounting policies of the Group, please refer to the consolidated financial statements. Statement of profit or loss Income from investments in subsidiaries Income from investments in subsidiaries includes dividends from subsidiaries, which are recognized in the Parent company's statement of profit or loss when the Parent company's right to receive such dividends has been approved. Further, income from investments in subsidiaries includes proceeds from liquidation of subsidiaries and any impairment losses or reversals of impairment losses on investments in subsidiaries. Exchange gains/losses Exchange gains/losses on translation of receivables from and payables to subsidiaries that are considered part of the overall investment in subsidiaries are recognized in profit or loss under financial income or financial expenses. Exchange gains/losses on that part of the bank debt in foreign currency which is used for hedging of the net investments in subsidiaries and which provides an effective hedging of the exchange gains/losses of the net investments are recognized in profit or loss under financial income or financial expenses. Statement of financial position Investments in subsidiaries Investments in subsidiaries are measured at cost in the Parent company's financial statements. Where the recoverable amount of the investments is lower than cost, the investments are written down to this lower value. In addition, cost is written down to the extent that dividends distributed exceed the accumulated earnings in the subsidiary since the acquisition date. Other financial assets On initial recognition, investments are measured at cost, corresponding to fair value plus directly attributable costs. Subsequently, they are measured at fair value at the balance sheet date. Any fair value adjustments on equity investments recognized in other comprehensive income in the consolidated financial statements are recognized under financial income or financial expenses in the Parent company's statement of profit or loss. Statement of changes in equity Pursuant to the Danish Financial Statements Act, entries recognized in the statement of comprehensive income in the consolidated financial statements are recognized directly in the statement of changes in equity in the Parent company's financial statements, except for entries concerning exchange gains/losses on translation of receivables from and payables to subsidiaries, entries providing an effective hedge against foreign exchange gains/losses on the net investment and entries concerning other financial assets. Statement of cash flows In accordance with the exemption clause in section 86(4) of the Danish Financial Statements Act, no separate statement of cash flows has been prepared for the Parent company as it is included in the consolidated statement of cash flows.

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