Vetoquinol Universal Registration Document 2019

86   Vetoquinol  Universal Registration Document 2019  Financial report 6 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 6.5.22 IFRS 5 Not applicable as of December 31, 2019. 6.5.23 Other financial assets Other financial assets at December 31 include equity investments in PAT (Plant Advanced Technologies) amounting to €400,000. In November 2017 Vetoquinol acquired a stake in PAT, a company headquartered in Vandœuvre-lès-Nancy. The transaction was carried out via a €500,000 reserved capital increase at a price of €25 per share, following which Vetoquinol held an equity stake of just over 2% in PAT. An impairment charge of €100,000 was recorded for this investment in 2018. PAT is specialized in the identification, optimization and production of rare vegetable biomolecules previously inaccessible, for use in the cosmetics, pharmaceutical and agrochemicals industries. PAT develops globally-pa- tented unique and eco-friendly technologies (PAT plantes à traire ® and Target Binding ® ). The company is listed on Euronext Growth Paris. Other financial assets mainly consist of deposits and guarantees paid. Because they are treated as recei- vables, they are measured at cost less repayments and impairment. Other financial assets are not material in relation to the Group. 6.5.24 Derivatives As of December 31, 2018, there were two interest rate swaps outstanding with €25,000 negative fair value. As of December 31, 2019, there were no swaps outstanding. To hedge its currency and interest rate exposure, the Group sometimes enters into derivative contracts. Such derivatives are used only as part of centralized head office cash management for the purpose of hedging risk. The main currency hedges used are the purchase of forward contracts expiring in less than one year. To hedge interest rates, the Group primarily uses swaps. For hedging transactions, the Group applies hedge accounting as prescribed under IAS 39, i.e. derivatives are measured at fair value as of the balance sheet date based on how the hedge is classified: • with a cash flow hedge, any change in the fair value of the derivative is recorded in a separate equity account called “Cash flow hedge reserve” that is transferred to the income statement as the risk crystallizes (in respect of the effective portion of the hedge; while the ineffective portion is recognized in the income statement); • with a fair value hedge, any change in the fair value of the derivative is recorded in the income statement, as is any change in the fair value of the hedged item. • At each balance sheet date, the fair value of the ins- truments used is determined by reference to market value. €000 Dec 31, 2019 Dec 31, 2018 Notional Positive fair value Negative fair value Notional Positive fair value Negative fair value Forward currency contract - - - - - - Over-the-counter currency options - - - - - - Currency derivatives - - - - - - Interest rate swaps - - - 6,378 - (25) Interest rate options - - - - - - Interest rate derivatives - - - 6,378 - (25)