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16A. MANAGEMENT OF LIQUIDITY RISK ONTINUED
The followng table shows cash flows for whch cash flow hedge accountng s appled The dervatves n the cash flow hedge relatonshps
are expected to have an mpact on proft and loss n the same perods as the cash flows occur
 mllon
Due
wthn
1 year
 mllon
Due
between
1 and 2
years
 mllon
Due
between
2 and 3
years
 mllon
Due
between
3 and 4
years
 mllon
Due
between
4 and 5
years
 mllon
Due
after
5 years
 mllon
Total
 mllon
Net
carryng
amount of
related
dervatves(b)
2015
Foregn exchange cash nflows(a) 2,884 6 348 – – – 3,238
Foregn exchange cash outflows(a) (2,883) – (300) – – – (3,183) 41
Interest rate cash flows (2) (1) – – – – (3) (1)
ommodty contracts cash flows (11) – – – – – (11) (5)
2014
Foregn exchange cash nflows(a) 1,506 2 – 347 – – 1,855
Foregn exchange cash outflows(a) (1,503) (2) – (304) – – (1,809) 34
Interest rate cash flows (97) – – – – – (97) (100)
ommodty contracts cash flows (421) – – – – – (421) (15)
(a) Includng cash flows related to cross currency swaps
(b) See note 16
16B. MANAGEMENT OF MARKET RISK
Unlever’s sze and operatons result n t beng exposed to the followng market rsks that arse from ts use of fnancal nstruments
• commodty prce rsk
• currency rsk and
• nterest rate rsk
The above rsks may affect the roup’s ncome and expenses, or the value of ts fnancal nstruments The obectve of the roup’s
management of market rsk s to mantan ths rsk wthn acceptable parameters, whle optmsng returns enerally, the roup apples
hedge accountng to manage the volatlty n proft and loss arsng from market rsk
The roup’s exposure to, and management of, these rsks s explaned below It often ncludes dervatve fnancal nstruments,
the uses of whch are descrbed n note 16
POTENTIAL IMPAT OF RISK MANAEMENT POLIY AND
HEDIN STRATEY
SENSITIVITY TO THE RISK
(I) OMMODITY PRIE RISK
The roup s exposed to the rsk of
changes n commodty prces n relaton
to ts purchase of certan raw materals
At 31 December 2015, the roup had hedged
ts exposure to future commodty purchases
wth commodty dervatves valued at
221 mllon (2014 197 mllon)
The roup uses commodty forward contracts
to hedge aganst ths rsk All commodty
forward contracts hedge future purchases
of raw materals and the contracts are settled
ether n cash or by physcal delvery
ommodty dervatves are generally
desgnated as hedgng nstruments n
cash flow hedge accountng relatons
All commodty forward contracts are done
n lne wth approvals from the lobal
ommodty Executve whch s chared by the
Unlever hef Supply han Offcer (SO)
A 10% ncrease n commodty prces as
at 31 December 2015 would have led to
an 22 mllon gan on the commodty
dervatves n the cash flow hedge reserve
(2014 18 mllon gan n the cash flow
hedge reserve) A decrease of 10% n
commodty prces on a full-year bass
would have the equal but opposte effect
(II) URRENY RISK
urrency rsk on sales, purchases
and borrowngs
Because of Unlever’s global reach, t s
subect to the rsk that changes n foregn
currency values mpact the roup’s sales,
purchases and borrowngs
The roup manages currency exposures wthn
prescrbed lmts, manly through the use of
forward foregn currency exchange contracts
Operatng companes manage foregn
exchange exposures wthn prescrbed lmts
Local complance s montored centrally
As an estmaton of the approxmate mpact
of the resdual rsk, wth respect to fnancal
nstruments, the roup has calculated the
mpact of a 10% change n exchange rates
At 31 December 2015, the unhedged
exposure to the roup from companes
holdng fnancal assets and labltes other
than n ther functonal currency amounted to
60 mllon (2014 76 mllon)
Exchange rsks related to the prncpal
amounts of the US$ and Swss franc
denomnated debt ether form part of
hedgng relatonshps themselves, or are
hedged through forward contracts
The am of the roup’s approach to
management of currency rsk s to leave the
roup wth no materal resdual rsk Ths
am has been acheved n all years presented
Impact on ncome statement
A 10% strengthenng of the euro aganst key
currences to whch the roup s exposed
would have led to approxmately an
addtonal 6 mllon gan n the ncome
statement (2014 8 mllon gan) A 10%
weakenng of the euro aganst these
currences would have led to an equal but
opposte effect
122 Unilever Annual Report and Accounts 2015Financial statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS
UNILEVER ROUP ONTINUED