Vetoquinol Universal Registration Document 2019

102   Vetoquinol  Universal Registration Document 2019  Financial report 6 CONSOLIDATED FINANCIAL STATEMENTS Statutory auditors’ report on the consolidated financial statements Valuation of goodwill Risk identified As of December 31, 2019, the net value of goodwill amounted to €129.4 million. The accounting principles applied to the valuation of goodwill are set out in Note 6.5.19.1.1 “Goodwill” and the allocation per cash-ge- nerating unit (CGU) is presented in Note 6.5.19.2 to the consolidated financial statements. Your Group reviews the valuation of goodwill once a year or more fre- quently if circumstances indicate possible impairment, in accordance with the conditions set out in Note 6.5.3.5 “Impairment of assets” to the consolidated financial sta- tements. The recoverable amount was determined by reference to the value in use calculated on the basis of the discounted value of the estimated future cash flows expected from the group of assets comprising each cash-generating unit. We believe that the valuation of goodwill represents a key audit matter, in light of the materiality of these assets in the Group’s financial sta- tements and the level of judgment required on the part of management to determine the recoverable amount of these assets. Our response We conducted a critical analysis of the methods applied by management to determine the recoverable amount of goodwill. Our work involved: • reviewing the tests prepared by management with the help of external consultation; • assessing the reasonableness of the cash flow fore- casts by means of interviews with members of the Finance Department and comparisons with actual cash flows in 2019; • comparing the 2020 cash flows used in the tests with the 2020 budgets prepared by management; • assessing the consistency and reasonableness of the major assumptions made (including growth rate and discount rate); • performing a critical analysis of the tests carried out by management on the sensitivity of the value in use to changes in the main assumptions made. 6.6.5 Specific testing In accordance with professional standards applicable in France, we also carried out specific testing, as required by law and regulations, on the information relating to the Group provided in the management report approved by the Board of Directors on March 24, 2020. Management has informed us that it will communicate a message regarding events occurring and facts coming to light after the balance sheet date in relation to the impact of the Covid-19 crisis to the shareholders’ general meeting called to approve the financial statements. We have no comment to make regarding the accuracy of this information or its consistency with the consolidated financial statements. We hereby certify that the consolidated statement of non-financial performance provided for in Article L. 225- 102-1 of the French Commercial Code is included in the management report, on the understanding that, in accordance with the provisions of Article L. 823-10 of said Code, we have not assessed the information pro- vided in this statement for fairness or consistency with the consolidated statements and this information must be the subject of a report by an independent third-party body. 6.6.6 Disclosures required pursuant to other statutory and regulatory requirements Appointment of the statutory auditors PricewaterhouseCoopers Audit was appointed statutory auditor of Vetoquinol SA by the shareholders’ general meeting of May 23, 1990, while Mazars was appointed by the shareholders’ general meeting of May 30, 2017. As of December 31, 2019, PricewaterhouseCoopers Audit was in its 30th consecutive year as statutory auditor, including 14 years since the Company shares were admitted for trading on a regulated market, while Mazars was in its second year as statutory auditor.