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NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015 Exposure and sensitivity to interest rate risk External borrowings of the Group currently bear an average variable interest rate of 4.83 2014 5.11. During the year the Group entered into 320 million of interest rate swap contracts under which it is obliged to receive interest at variable rates and to pay interest at fixed rates at an average fixed rate of 2.5. These interest rate swap contracts will expire in January 2018. Details on how the Group accounts for the interest rate swap contracts as cashflow hedges is disclosed in Note 25. Derivative financial instruments Consolidated 2015 000 2014 000 Interest rate swap contracts current 8946 Interest rate swap contracts non-current 1732 Total derivative financial instruments 1732 8946 Interest rate swap contracts The Group has 320 million in interest rate swap contracts all of which are due to expire on 8 January 2018. In 2014 the Group had 350 million of interest rate swap contracts the last of which expired on 26 March 2015. The contracts require settlement of net interest receivable or payable and are timed to coincide with the approximate dates on which interest is payable on the underlying debt. These interest rate swaps are cash flow hedges as they satisfy the requirements for hedge accounting. Any change in fair value of the interest rate swaps is taken to the hedge reserve in equity. In assessing interest rate risk management has assumed a 25 basis points movement 2014 25 basis points in the relevant interest rates at 30 June 2015 for financial assets and liabilities denominated in Australian Dollars AUD. The following table illustrates the impact on profit or loss with no impact directly on equity for the Group. Consolidated Carrying Value Impact on post-tax profits Increasedecrease Impact on reserves Increasedecrease 25 basis points 25 basis points AUD exposures 000 000 000 000 000 2015 25 25 25 25 Cash at bank 143051 358 358 Interest rate swaps 1732 2156 2168 Borrowings 650000 1625 1625 2014 25 25 25 25 Cash at bank 62090 155 155 Interest rate swaps 8946 439 440 Borrowings 650000 1625 1625 b Liquidity risk Nature of liquidity risk Liquidity risk is the risk of an entity encountering difficulty in meeting obligations associated with financial liabilities. Liquidity risk management Prudent liquidity risk management implies maintaining sufficient cash the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group and Company have a prudent liquidity management policy which manages liquidity risk by monitoring the stability of funding surplus cash or near cash assets anticipated cash in and outflows and exposure to connected parties. 60 SOUTHERN CROSS AUSTEREO ANNUAL REPORT 2015