NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT 4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Risk exposures and responses (continued) (i) Interest rate risk (continued) (ii) Commodity price risk Interest rate swap contracts outlined in note 20, with a fair value of $4,650,000 (31 December 2012: $6,079,000; 31 March 2012: $1,674,000) are  exposed to fair value movements if interest rates change� Our policy is to manage our finance costs using a mix of fixed and variable rate debt� In  accordance with our bank covenant obligations we maintain at least 50% of our borrowings at fixed rates which are carried at amortised cost and  it is acknowledged that fair value exposure is a by-product of our attempt to manage our cash flow volatility arising from interest rate changes� To  manage this mix in a cost-efficient manner, we enter into interest rate swaps, in which we agree to exchange, at specified intervals, the difference  between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount� At 31 March 2013, after  taking into account the effect of interest rate swaps, approximately 50% (31 December 2012: 50%; 31 March 2012: 75%) of our borrowings are at  a fixed rate of interest� We regularly analyse our interest rate exposure� Within this analysis consideration is given to potential renewals of existing  positions, alternative financing and the mix of fixed and variable interest rates�  The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date: The movements in profit are due to the movement in fair value of interest rate swaps, variable rate debt and cash balances, based on movements  in interest rates only� Significant assumptions used in the interest rate sensitivity analysis include: In compliance with bank covenants we have hedged our interest rate exposure arising out of the bank facility agreement� In the 2011 year we  entered into three year interest rate swaps of $200 million� This resulted in a $1,428,405 movement in other comprehensive income in the three  months to 31 March 2013 (twelve months to 31 December 2012: $3,829,096; three months to 31 March 2012: $2,017,030)� We have transactional commodity price risk primarily in the sale of cattle and beef (refer note 20)� Other exposures include cropping (principally  cotton), feed inputs for its feedlot operations, and diesel� Purchases of commodities may be for a period of up to 12 months and partial hedging of  these inputs may be for periods of up to 24 months� Annual Report 2013 69  Reasonably possible movements in interest rates were determined based on the Group’s current credit rating and mix of debt in Australia,  relationships with finance institutions, the level of debt that is expected to be renewed as well as a review of the last two year’s historical  movements and economic forecaster’s expectations�   A price sensitivity of derivatives based on a reasonably possible movement of interest rates at balance dates by applying the change as a  parallel shift in the forward curve�   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�  Judgements of reasonably possible movements: Effect on profit  before tax $000 Effect on equity (excluding profit) $000 31 March 2013 +1% (100 basis points) (485) (4,000) -1% (100 basis points)  485 4,000 31 December 2012 +1% (100 basis points) (1,783) (4,000) -1% (100 basis points)  1,783 4,000 31 March 2012 (reviewed) +1% (100 basis points) 391 (6,000) -1% (100 basis points)  (391) 6,000