Vetoquinol - Universal Registration Document - 2021

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 74 Vetoquinol Universal Registration Document 2020 Financial report 6 6.5.5 Capital management The Group’s policy is to maintain a strong capital base in order to maintain the confidence of investors, credi- tors and the market and to support the future growth of its business. Assisted by senior management, the Board of Directors monitors the number and diversity of the Group’s shareholders, return on equity and the amount of dividends paid to holders of common stock. Occasionally, the Group purchases its own shares on the market. The timing of these purchases depends on the prevailing market prices. These shares are pri- marily used in connection with stock option and bonus share programs. Decisions to buy and sell are made by the Chairman and/or the CEO on a case by case basis. The Group has no defined share buyback program. Apart from these occasional practices, the Group has a liqui- dity contract (see Note 6.5.30). The Group did not change its capital management policy during the course of the year. 6.5.6 Information on judgments and estimates Management must exercise judgment and make esti- mates and assumptions that could affect the value of assets, liabilities, income and expenses and disclosures of the Company’s contingent assets and liabilities when preparing the financial statements. Estimates made and underlying assumptions adopted are based on past expe- rience and other factors deemed reasonable in light of current circumstances and forecasts. As a result, actual values may differ from estimated values. Estimates and assumptions made on the basis of infor- mation available at the balance sheet date primarily relate to: • trade receivable bad debt and year-end rebate provisions; • the provision for expected credit losses (IFRS 9); • the length of product life cycles; • provisions for restructuring and environmental and litigation risks; • valuation of goodwill, intangible assets and property, plant and equipment acquired as well as their esti- mated useful life; • pension commitments.