Vetoquinol - Universal Registration Document - 2021

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 68 Vetoquinol Universal Registration Document 2020 Financial report 6 6.5 Notes to the consolidated financial statements 6.5.1 Overview Vetoquinol is a leading global player in the animal health sector serving both the livestock (cattle and pigs) and pet (dogs and cats) markets. As an independent pure player, Vetoquinol designs, develops and sells veterinary drugs and non-medicinal products in Europe, the Americas and the Asia Pacific region. Since its foundation in 1933, Vetoquinol has pursued a strategy combining innovation with geographical diver- sification. The Group’s hybrid growth is driven by the reinforcement of its product portfolio coupled with acqui- sitions in high-potential growth markets. Vetoquinol employs 2,400 people. Vetoquinol has been listed on NYSE Euronext Paris since 2006 (symbol: VETO). The parent company, Vetoquinol SA, is a French public limited company (société anonyme) with head office in Magny-Vernois, 70200 Lure, France. Vetoquinol SA, the Group parent company, is controlled by Soparfin. The Vetoquinol Group consolidated financial statements were approved by the Board of Directors on March 30, 2021. They will be submitted for shareholder approval at the next Ordinary General Meeting, due to be held on May 27, 2021. 6.5.2 Key events On August 1, 2020, Vetoquinol acquired the Profender ® and Drontal ® product families, the intellectual property, registrations and other rights currently owned by Bayer AG Animal Health for Europe and the UK. The Profen- der ® and Drontal ® families of products are spot-on and tablet de-wormer products for cats and dogs. This payment was made using some of the surplus cash available and by taking out a loan of €110 million. The purchase of Profender ® and Drontal ® by Vetoquinol is related to Elanco’s acquisition of Bayer AG Animal Health, which was completed on August 1, 2020. This acquisition has been treated in accordance with IAS 38. 6.5.3 Accounting principles 6.5.3.1 Background and environment The consolidated financial statements for the year ended December 31, 2020 have been prepared in accordance with the international accounting standards and inter- pretations (IAS/IFRS) adopted by the European Union and applicable at December 31, 2020. These standards and interpretations have been applied consistently over the years presented. The application of the other standards, amendments and interpretations that came into force on January 1, 2020 did not have a material impact on the Group’s financial statements. The financial statements have been prepared on a histo- rical cost basis, except for financial assets and liabilities measured at fair value through profit or loss (including derivatives). Preparation of IFRS financial statements requires the use of certain accounting estimates, the most important of which are described in Note 6.5.6.