2005 Annual report - Virbac

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38 Operating profit amounted to €5.6 million compared to €2 million in 2004. This rise stems from an improvement in margins (purchases consumed rose by 10.5% whereas sales rose by 12.3%) and a general control of operating expenses. Net finance expenses amounted to €18.1 million, up 32.8%. It benefited from a slight improvement in dividends and a net provision reversal on equity securities of €2.4 million compared to a net allowance of €1 million in 2004. Net extraordinary income amounted to -€6.7 million and was largely comprised of: ◆ provisions on intangible assets of €4.5 million, determined by the difference between the carrying amount of assets in the balance sheet and their economic value, ◆ accelerated amortisation of €1.7 million stemming from the application of CRC regulation 2002-10 (see below). In 2005, the company sold 173,319 treasury shares for a gross amount of €2,460 thousand. The net gain on these sales amounted to €1,156 thousand. These sales were related to the exercise of purchase options by Group employees. Net profit after tax amounted to €15.8 million compared to €13.4 million in 2004. Proposals by the Executive board ❖ Allocation of the net profit of Virbac SA The net profit of the Virbac SA parent company amounted to €15,821,047. The annual shareholders meeting will be asked to grant a dividend of €0.65 for each share with a nominal value of €1.25. Pursuant to the provisions of article 243 A of the French General Tax Code, it should be noted that all of the dividends distributed qualify for the 40% discount mentioned in article 158, section 3, subsection 2 of the French General Tax Code, it being added that this allowance only benefits individual shareholders who are resident in France. The net profit for the period will be allocated as follows: Dividend distribution €5,664,329 Retained earnings €10,156,718 Total equal to net profit for the period €15,821,047 The amount of the dividend relating to treasury shares at the date of payment will be allocated to the “Retained earnings” account. The dividends paid out over the past three financial years are as follows: Year Net dividend Tax credit Total income Amount distributed 2002 (*) 0.63 0.32 0.95 5,234,220.18 2003 0.48 0.24 0.72 3,988,153.92 * The share’s nominal value was divided by 4 as from 29 July 2002 Year Net dividend Income distributed Income distributed not Amount distributed giving a right giving a right to half-basis to half-basis 2004 0.55 0.55 NA 4,617,723.00 The 2004 French Finance Act removed the tax credit from which certain individuals benefited. Instead, from the taxing of 2005 income, only 50% of the income distributed was taken into account for tax purposes (half-basis). The 2006 French Finance Act increased this percentage to 60% for income received from 1 January 2006. This system is also combined with a tax credit equal to 50% of the income received, limited to €115 or €230 depending on family circumstances. The table above takes account of this system, which does not apply to corporate entities. ❖ Share buyback scheme The General shareholders meeting of 14 October 2005, authorised the Virbac SA parent company to buy back its own shares pursuant to article L225-209 of the French Commercial Code and in accordance with the buyback plan set out in the prospectus published in the financial press on 17 October 2005 and available from the AMF (Autorité des marchés financiers) website. At 31 December 2005, Virbac SA held 231,559 treasury shares, purchased for a total of €4,408,729, net of purchase costs, at an average share price of €19.04. The company did not buy or sell treasury shares during the financial year with the exception of shares held under a liquidity agreement, the value of which is not material. The treasury shares at 31 December 2005 represented 2.7% of the share capital of Virbac SA and are primarily held for the purposes of the stock option plans. At 31 March 2006, the number of treasury shares amounted to 201,028 as a result of the exercise of stock option plans granted to employees.
39 A resolution will be submitted for the approval of the General shareholders meeting authorising the company to buy back up to 5% of its share capital. The purchases may be carried out to ensure the liquidity of the stock or support the price via a market maker acting independently under a liquidity agreement in line with the code of ethics approved by the AMF and in light of the proposed resolution regarding the free share grant submitted to the shareholders meeting. The maximum purchase price may not exceed €70 per share. When calculating the maximum number of shares, shares already purchased under the aforementioned prior authorisations will be included, together with those that may be purchased under the liquidity contract. Employee shareholding Pursuant to article L.225-102 of the French Commercial Code, we would like to inform you that employees of the company and affiliates held, at 31 December 2005, 76,519 Virbac shares, namely 0.88% of the share capital, via the company savings plan. Pursuant to articles L.225-129-1, L.225-129-6 paragraph 2, L.225-138-1 of the French Commercial Code and articles L.443-1 et seq. of the French Labour Code, a draft resolution will be submitted to the general shareholder meeting regarding an increase in the share capital reserved for employees of the company and affiliates. Expenses that cannot be deducted for tax purposes The non-deductible expenses referred to in article 39-4 of the French General Tax Code amounted to €44,210 for the financial year ending 31 December 2005. Material events after the balance sheet date None Management and supervisory bodies Positions held at 4 April 2006 Supervisory board ◆ Marie-Hélène Dick-Madelpuech, Chairwoman of the Supervisory board of Virbac SA. In 2005 Marie-Hélène Dick-Madelpuech was the permanent representative of Investec, a non-trading company. Other positions held: - Chairwoman of the Board of Directors and General manager of Panmedica SA (France), - Chairwoman of the Board of Directors of Panpharma SA (France). Compensation and benefits received for 2005 by Investec, a non-trading company: €18,250. ◆ Jeanine Dick, Vice-chairwoman of the Supervisory board of Virbac SA. Other positions held: - Manager of Investec, a non-trading company (France), - Manager of Racing Boat SARL (France). Compensation and benefits received for 2005: €26,750. ◆ Pierre Madelpuech, permanent representative of ASERGI SARL, member of the Supervisory board of Virbac SA. Other positions held: - Manager of ASERGI SARL, - Member of the Executive board of Manuest SA (France), - Director of Panpharma SA (France), - Director of Panmedica SA (France). Compensation and benefits received for 2005: Pierre Madelpuech: €3,950. ASERGI SARL: €1,300. ◆ François Guinot, member of the Supervisory board of Virbac SA. Other positions held: - Chairman of the Académie des Technologies (France), - Chairman of Chimie Industrielle (Registered voluntary association) (France), - Vice-chairman of the Fédération Française des Chimistes (France), - Director of the Centre National de la Recherche Scientifique (France). Compensation and benefits received for 2005: €15,250.
Page 1 and 2: 2005 Annual report Passionate about
Page 3 and 4: Bringing our expertise and care to
Page 5 and 6: 1 Contents A message from the Chair
Page 7 and 8: 3 Éric Marée Chairman of the Exec
Page 9 and 10: 5 Breakdown of shareholders in term
Page 11 and 12: 7 In 2005, 30% of sales were genera
Page 13 and 14: 9 Cash flow (in € million) 39.9 2
Page 15 and 16: 11 • A new freeze-dryer with a ca
Page 17 and 18: 13 Finance and stock market Share p
Page 20 and 21: 2005 Annual Report 16 Innovation Mo
Page 22 and 23: 2005 Annual Report 18 The customer
Page 24 and 25: 20 2005 Annual Report The Virbac-Pa
Page 26 and 27: 2005 Annual Report 22 Industrial co
Page 28 and 29: 2005 Annual Report 24 Human resourc
Page 30: 2005 Annual Report 26
Page 33 and 34: 29 Management report 2005 Virbac sa
Page 35 and 36: 31 ❖ Equine Equine products close
Page 37 and 38: 33 ❖ In Portugal 2005 sales at Vi
Page 39 and 40: 35 Acquisitions and disposals Virba
Page 41: 37 Consolidated balance sheet and f
Page 45 and 46: 41 - Member of the Management board
Page 47 and 48: 43 ◆ Investors and analysts are w
Page 49 and 50: 45 ◆ checking air emissions, ◆
Page 51 and 52: 47 Virbac in France Workforce Virba
Page 53 and 54: 49 Report of the Chairwoman of the
Page 55 and 56: 51 financial information, execution
Page 57 and 58: 53 This organisation, put in place
Page 59 and 60: 55 the recognition of transactions
Page 61 and 62: 57 The Industrial operations depart
Page 63 and 64: 59 Consolidated financial statement
Page 69 and 70: 65 Translation of financial stateme
Page 71 and 72: 67 Inventories and work-in-progress
Page 73 and 74: 69 In the case of exchange rate hed
Page 75 and 76: 71 Notes to the consolidated financ
Page 77 and 78: 73 Property, plant and equipment by
Page 79 and 80: 75 Note B7 - Deferred income tax As
Page 81 and 82: 77 Note B12 - Employee benefits (
Page 83 and 84: 79 Note R1 - Sales Sales breakdown
Page 85 and 86: 81 Note R6 - Breakdown of net incom
Page 87 and 88: 83 Note A4 - Composition of Virbac
Page 89 and 90: 85 Note A10 - Consolidation scope a
Page 91 and 92: 87 Transition to IFRS Consolidated
Page 93 and 94:
89 Transition to IFRS LIABILITIES A
Page 95 and 96:
91 Transition to IFRS Breakdown of
Page 97 and 98:
93 Supervisory board report The Exe
Page 99 and 100:
95 As required by law, details of t
Page 101 and 102:
97 ❖ to record the finalisation o
Page 103 and 104:
99 Index Page 5 ◆ Shareholder str
Page 105:
Virbac 13 ème rue LID - BP 27 0651
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2005 Annual report - Virbac

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