Danone // 2020 Universal Registration Document

4 103 DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 4.1 Consolidated financial statements and notes to the consolidated financial statements Note 13. Organization of financial risks and derivatives management Note 12.2. Other financial assets Main changes during the period In 2020 as in 2019, theGroup did not carry out anymaterial transactions. Carrying amount As of December 31 (in € millions) 2019 2020 Investments in other non-consolidated companies 131 225 Bonds and money-market funds (a) 111 112 FPS Danone Communities 13 13 Other (b) 213 207 Other financial assets 337 332 Long-term loans 14 12 Other financial assets 482 569 (a) Bonds and money-market funds held as the counterpart to certain “damage and personal protection” risk provisions. (b) Comprises mainly deposits with uncertain maturity dates pursuant to the applicable regulations of certain countries in which the Group operates. Note 12.3. Other financial income and Other financial expense Accounting principles Other financial income and Other financial expense correspond to financial income and expense other than income and expense related to net financial debt. They include in particular: • the ineffective portion of hedges, in particular hedges of currency risk related to operations and hedges in respect of the acquisition/ disposal of companies and equity investments in accordance with IFRS 9 Financial Instruments ; • the impact of the accretion of the present value of commitments net of the expected return on plan assets of retirement commit- ments and other long-term benefits; • bank commissions, including commissions for the non-use of committed credit facilities; • changes in the fair value of Investments in other non-consoli- dated companies classified as at fair value through profit or loss; • gains or losses on the net monetary position resulting from the application of IAS 29. NOTE 13. ORGANIZATION OF FINANCIAL RISKS AND DERIVATIVES MANAGEMENT Note 13.1. Organization of financial risks management As part of its normal business, the Group is exposed to financial risks, especially foreign currency, financing and liquidity, interest rate and counterparty risks, securities-related risks and commodity risks. Financial risks The Group’s policy consists of (i) minimizing and managing the impact that its exposure to financial market risks could have on its results and, to a lesser extent, on its balance sheet, (ii) monitoring and managing such exposure centrally, (iii) whenever the regulatory andmonetary frameworks so allow, executing financial transactions locally or centrally, and (iv) using derivative instruments only for the purpose of economic hedging. Through its Treasury and Financing Department, which is part of the Group Finance Department, the Group possesses the expertise and tools (trading room, front and back office software) to act on different financial markets following the standards generally implemented by first-tier companies. In addition, the Internal Control and Internal Audit Departments review the organization and procedures applied. Lastly, a monthly treasury and financing report is sent to the Group Finance Department, enabling it to monitor the decisions taken to implement the previously approved management strategies. Commodity risks The Group has implemented a commodity purchasing policy (Market Risk Management). Themonitoring of exposures and the implemen- tation of this policy are carried out for each rawmaterials category by the central purchasing team. This teamnegotiates forward purchase agreements mainly with suppliers. Forward purchase agreements are reviewed by the Market Risk Management Committee for each year-end closing.