NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT 4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Risk exposures and responses (continued) (iii) Foreign currency risk (continued) (iii) Price risk (iv) Credit Risk (v) Liquidity risk Annual Report 2013 71 The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows of financial instruments� Leasing  obligations, trade payables and other financial liabilities mainly originate from the financing of assets used in our ongoing operations such as  property, plant and equipment and investments in working capital (e�g�, inventories and trade receivables)� These assets are considered in the  Group’s overall liquidity risk�  However, where the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which we can be  required to pay� When we are committed to make amounts available in instalments, each instalment is allocated to the earliest period in which we  are required to pay� The following liquidity risk disclosures reflect all contractually fixed repayments and interest resulting from recognised financial liabilities and  derivatives as of 31 March 2013� The timing of cash flows for liabilities is based on the contractual terms of the underlying contract� We manage our liquidity risk by monitoring the total cash inflows and outflows expected on a monthly basis� We have established comprehensive  risk reporting covering our business units that reflect expectations of management of the expected settlement of financial assets and liabilities�  Our objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and finance leases� Liquidity risk arises from our financial liabilities and our subsequent ability to repay the financial liabilities as and when they fall due�  With respect to receivables, the majority of our credit risk is in Australia and is generally concentrated in the meat processing industry� We manage  our credit risk by maintaining strong relationships with a limited number of quality customers� The risk is mitigated by paying an annual premium to  a third party to accept credit risk in relation to certain sales overseas� In addition, receivable balances are monitored on an ongoing basis with the  result that our experience of bad debts has not been significant� We have no significant concentrations of credit risk� Credit risk arises from our financial assets, which comprise cash and cash equivalents, trade and other receivables and derivative instruments� Our  exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the carrying amount of the financial  assets (as outlined in each applicable note)� We do not hold any credit derivatives to offset our credit exposure�  We enter into forward purchase contracts for grain commodities� This practice mitigates the price risk for the Group� As at 31 March 2013 we had  forward purchased approximately 66% (31 December 2012: 80%; 31 March 2012: 23%) of our expected grain usage for the coming 12 months�  These contracts are entered into and continue to be held for the purpose of grain purchase requirements; and are classified as non-derivative, and  are not required to be fair valued� Our exposure to derivative commodity price risk is minimal� We do not currently apply hedge accounting to our beef and cotton commodity price  exposures as the derivatives do not meet the accounting standard requirements for hedge accounting� However, we have a policy whereby we will  forward sell a significant proportion of our feedlot cattle sales for a period of up to 6 months and a significant portion of our cotton production�  These contracts are entered into and continue to be held for the purpose of delivery of feedlot cattle and cotton arising from our expected sale  requirements; and are classified as non-derivative, and are not required to be fair valued� Significant assumptions used in the foreign currency exposure sensitivity analysis include:  Reasonably possible movements in foreign exchange rates were determined based on a review of the last two years historical movements and  economic forecaster’s expectations�  The reasonably possible movement was calculated by taking the foreign currency spot rate as at balance date, moving this spot rate by the  reasonably possible movements and then re-converting the foreign currency into AUD with the “new spot rate”� This methodology reflects the  translation methodology undertaken by the Group� A price sensitivity of derivatives has been based on a reasonably possible movement of spot rates at reporting dates not on forward rates� The net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the next twelve months from  balance date�  The sensitivity does not include financial instruments that are non-monetary items as these are not considered to give rise to currency risk�