2005 Annual report - Virbac

70
On the transition to IFRS, a provision was booked in respect
of the full amount of the Group’s commitment as at
1 January 2004, including actuarial gains and losses.
Other non-recurring revenues and expenses
This item includes revenues and expenses of particularly
significant amount and which are attributable to events or
transactions that fall outside the scope of the Group’s
ordinary activities. They are presented on a separate line
within the income statement to enable readers of the
financial statements to gain a better understanding of the
Group’s performance from ordinary activities.
Other financial income and expenses
This item comprises mainly interest and other similar income
and expenses.
It also includes foreign exchange gains and losses, which are
recognised in the income statement.
Earnings per share
Net earnings per share is calculated by dividing net profit-
Group share, by the total number of shares issued and
outstanding at the period end (i.e. net of treasury shares).
Net diluted earnings per share is calculated by dividing the
net profit-Group share, by the total number of shares
outstanding to which is added the maximum number of
shares that could be issued in the event of an issue of
dilutive instruments (on the conversion into ordinary shares
of instruments giving deferred access rights to Virbac’s
capital).
❖ distribution methods: the main distribution channels
depend more on the country than on the marketing segment.
Sales forces may, in certain cases, be common to
the two marketing segments,
❖ nature of the regulatory environment: the bodies authorising
the marketing of products are the same regardless of
the segment.
It is for these reasons that the Group will only use one
segment reporting format.
The Group’s worldwide organisation is divided into five
areas, determined on the basis of the location of the
Group’s assets and operations:
- Europe and the markets of Africa and the Middle East
- North America
- Latin America
- Asia
- SANZA, which includes the subsidiaries in New Zealand,
Australia and South Africa.
The transfer prices between the areas are those prices which
would have been used in arm’s length transactions with
third parties.
Segment information
The primary and only segment reporting format used by the
Group is geographical segments. The Group’s operating
activities are organised and managed separately depending
on the nature of the markets. There are also two marketing
segments – companion animals and food producing animals
– but they cannot be used as a secondary segment reporting
format for the following reasons:
❖ nature of the products: most of the therapeutic segments
are common to companion animals and food producing
animals (antibiotics, parasiticides, etc.),
❖ manufacturing processes: the production lines are common
to both segments and there is no significant differentiation
in the sources of supply,
❖ type or category of customers: a distinction is made
between the ethical sector (veterinarians) and over-thecounter
(general public),
❖ internal organisation: the management structures of
the Virbac Group are organised by geographical areas.
At Group level, there is no management structure based
on marketing segments,