Vetoquinol - Universal Registration Document - 2021

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 82 Vetoquinol Universal Registration Document 2020 Financial report 6 6.5.15 Leases - IFRS 16 As of the transition date, most leases were classified as operating leases under IAS 17. For this transition, right-of-use assets were valued as of January 1, 2019 at the discounted present value of future lease payments. The main changes arising from application of IFRS 16 are as follows: • recognition of a right-of-use asset for €12.1 million at December 31, 2020 (€10.4 million at December 31, 2019) and a financial liability of €12.4 million at December 31, 2020 (€10.7 million at December 31, 2019); • lease expenses amounting to €5.0 million in respect of 2020 were eliminated. To offset this reduction, depre- ciation charges of €4.9 million and interest charges of €134,000 were recognized for 2020. • The principles are as follows: • the lease term corresponds to the non-cancelable lease period, unless the Group is reasonably certain to exercise the contractual extension or early termination options; • the discount rate applied to calculate the right-of-use asset and lease liability is determined in accordance with the incremental borrowing rate as of the begin- ning of the lease term; • • measurement of liabilities at the present value of remaining rent payments, discounted using the incre- mental borrowing rate of each lessee (per individual entity); • in the absence of a contractually defined implicit rate, the discount rate applied is the average 10-year incre- mental borrowing rate the lessee would have had to pay. The average discount rate for lease liabilities at December 31, 2020 was 0.8% (1.7% at December 31, 2019). This discount rate corresponds to the average rates weighted as per the amount of lease liabilities to which it relates. The main leases restated are real estate and transport vehicle leases. The Group applies the two exemptions provided for by IFRS 16, whereby short-term leases and leases of low-value assets are not recognized on the balance sheet. • Leases with a term of no more than 12 months. • Leases for low-value assets: leases for assets whose replacement value does not exceed USD 5,000. The following table shows right-of-use assets broken down by asset class: €000 Dec 31, 2020 Dec 31, 2019 Land 0 1 Buildings 8,196 6,712 Plant, machinery and equipment 12 26 Vehicles 3,784 3,469 Furniture, office equipment, hardware 157 178 TOTAL 12,150 10,386