Unilever 2014 Annual Report Download - page 84

17A. FINANCIAL ASSETS ONTINUED
ash and cash equvalents reconclaton to the cash flow statement
 mllon
2014
 mllon
2013
ash and cash equvalents per balance sheet 2,151 2,285
Less bank overdrafts (241) (241)
ash and cash equvalents per cash flow statement 1,910 2,044
Approxmately 17 bllon (or 81%) of the roup’s cash and cash equvalents are held n foregn subsdares whch repatrate
dstrbutable reserves on a regular bass For most countres ths s done through dvdends free of tax In a few countres we face
cross-border foregn exchange controls and/or other legal restrctons that nhbt our ablty to make these balances avalable n any
means for general use by the wder busness The amount of cash held n these countres was 452 mllon (2013 243 mllon) The
cash wll generally be nvested or held n the relevant country and, gven the other captal resources avalable to the roup, does not
sgnfcantly affect the ablty of the roup to meet ts cash oblgatons
17B. CREDIT RISK
redt rsk s the rsk of fnancal loss to the roup f a customer or counter-party fals to meet ts contractual oblgatons Addtonal
nformaton n relaton to credt rsk on trade recevables s gven n note 13 These rsks are generally managed by local controllers
redt rsk related to the use of treasury nstruments s managed on a roup bass Ths rsk arses from transactons wth fnancal
nsttutons nvolvng cash and cash equvalents, deposts and dervatve fnancal nstruments The maxmum exposure to credt rsk
at the reportng date s the carryng value of each class of fnancal assets To reduce ths rsk, Unlever has concentrated ts man
actvtes wth a lmted number of counter-partes whch have secure credt ratngs Indvdual rsk lmts are set for each counter-
party based on fnancal poston, credt ratng and past experence redt lmts and concentraton of exposures are actvely montored
by the roup’s treasury department Nettng agreements are also put n place wth Unlever’s prncpal counter-partes In the case of
a default, these arrangements would allow Unlever to net assets and labltes across transactons wth that counter-party To further
reduce the roup’s credtexposures on derivative financial instruments, Unilever has collateral agreements with Unilever’s principal
counter-parties in relation to derivative financial instruments. Under these arrangements, counter-parties are required to deposit
securities and/or cash as a collateral for their obligations in respect of derivative financial instruments. At 31 December 2014 the
collateral held by Unilever under such arrangements amounted to€24 million (2013:€9 million), of which €24 million (2013: €5 million)
was in cash, and €nil (2013: €4 million) was in the form of bond securities. The non-cash collateral has not been recognised as an asset
in the Group’s balance sheet.
Further details in relation to the Group’s exposure to credit risk are shown in note 13 and note 16A.
18 FINANIAL INSTRUMENTS FAIR VALUE RISK
The Group is exposed to the risks of changes in fair value of its financial assets and liabilities. The following table summarises the fair
values and carrying amounts of financial instruments.
Far values of fnancal assets and fnancal labltes
 mllon
Far
value
2014
€ million
Fair
value
2013
 mllon
arryng
amount
2014
€ million
Carrying
amount
2013
Fnancal assets
Cash and cash equivalents 2,151 2,285 2,151 2,285
Held-to-maturity investments 89 75 89 75
Loans and receivables 208 104 208 104
Available-for-sale financial assets 671 760 671 760
Financial assets at fair value through profit or loss:
Derivatives 296 294 296 294
Other 122 32 122 32
3,537 3,550 3,537 3,550
Fnancal labltes
Preference shares (108) (114) (68) (68)
Bank loans and overdrafts (1,119) (1,067) (1,114) (1,067)
Bonds and other loans (11,417) (10,162) (10,573) (9,594)
Finance lease creditors (224) (217) (199) (204)
Derivatives (350) (299) (350) (299)
Other financial liabilities (418) (269) (418) (269)
(13,636) (12,128) (12,722) (11,501)
The fair value of trade receivables and payables is considered to be equal to the carrying amount of these items due to their short-term
nature. The instruments that have a fair value that is different from the carrying amount are classified as Level 2 for both 2013 and 2014.
121Unilever Annual Report and Accounts 2014 Financial statements