Notes to the Consolidated Financial Statements continued
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Reportofthe Reportofthe Financial Other
Contents Overview Executive Board Supervisory Board Statements Information
Commodity price risk
Commodity price risk is the risk that changes in commodity prices will affect HEINEKEN's income. The objective of commodity price risk management
is to manage and control commodity risk exposures within acceptable parameters, while optimising the return on risk. The main commodity exposure
relates to the purchase of cans, glass bottles, malt and utilities. Commodity price risk is in principle addressed by negotiating fixed prices in supplier
contracts with various contract durations. So far. commodity hedging with financial counterparties by HEINEKEN has been limited to aluminium
hedging and to a limited extent gas and grains hedging, which are done in accordance with risk policies. HEINEKEN does not enter into commodity
contracts other than to meet HEIN EKEN's expected usage and sale reguirements. As at 31 December 2015, the market value of commodity swaps
was EUR70 million negative (2014: EUR10 million negative).
Sensitivity analysis for aluminium hedges
The table below shows an estimated pre-tax impact of 10 per cent change in the market price of aluminium.
In millions of EUR
Equity
10 per cent 10 per cent
increase decrease
31 December 2015
Aluminium hedges
40 (40)
Cash flow hedges
The following table indicates the carrying amount of derivatives and the periods in which all the cash flows associated with derivatives that are cash flow
hedges are expected to occur:
In millions of EUR
Carrying
amount
Expected
cash flows
Less than
1 year
1-2 years
2-5 years
2015
More than
5 years
Interest rate swaps
Assets
Liabilities
(2)
(2)
Cross-currency interest rate swaps
Assets
215
1,220
90
53
1,077
Liabilities
(953)
(68)
(38)
(847)
Forward exchange contracts
Assets
37
1,437
1,289
148
Liabilities
(39)
(1,453)
(1,301)
(152)
Commodity derivatives
Assets
1
1
1
Liabilities
(71)
(70)
(42)
(20)
(8)
142
180
(33)
(9)
222
123 Heineken N.V. Annual Report 2015