Vetoquinol Universal Registration Document 2019

64   Vetoquinol  Universal Registration Document 2019  Financial report 6 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 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 2,372 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 24, 2020. They will be submitted for shareholder approval at the next Ordinary General Meeting, due to be held on May 26, 2020. 6.5.2 Key events In 2019, the Vetoquinol Group purchased a 90% equity stake in Clarion Biociencias Ltda, thereby significantly strengthening its foothold in Brazil, the world’s third largest animal health market. Vetoquinol has operated in Brazil since 2011 through its subsidiary Vetoquinol Saude Animal and has hitherto focused on developing Essentials products designed for meat and dairy cattle, pigs and pets. Clarion Biociencias has a strong deve- lopment pipeline of products for cattle and pets that are nearly ready for launch; some of these products may also be used on pigs, a species not covered by Clarion at present; all of these promising projects, highly comple- mentary to those of Vetoquinol, are expected to generate powerful sales synergies. This acquisition was financed by Vetoquinol SA as the Group parent company. In late 2019, the Vetoquinol Group established a new subsidiary in New Zealand: Vetoquinol New Zealand Ltd. This move is in line with the Group’s policy to better serve this buoyant and growing market via a local ope- ration and by promoting sales of Essentials products to veterinary clinics in New Zealand. One R&D project was discontinued in 2019, leading to a €3.5 million impairment charge recorded under non-re- curring expenses. 6.5.3 Accounting principles 6.5.3.1 General accounting principles and standards – new standards and amendments applicable in 2019 The 2019 consolidated financial statements of Veto- quinol were prepared in accordance with the framework published by the IASB and with IFRS as adopted by the European Union as of December 31, 2019. The IFRS adopted by the European Union as of December 31, 2019 may be consulted in the section on IAS/IFRS standards and interpretations on the European Commis- sion website: ec.europa.eu . 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. The principal accounting methods and policies applied in the preparation of the consolidated financial statements are presented below.