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## Note 3. Financial Risk Management 

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk); credit risk and liquidity risk. The Group’s overall financial risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure the different types of financial risk to which it is exposed. These methods include sensitivity analysis in the case of foreign exchange and interest rates. 

The overall financial risk management strategy of the Group is governed by the Board of Directors and is primarily focused on ensuring that the Group is able to finance its business plans, while minimising potential adverse effects on financial performance. The Board of Directors provides written principles for overall financial risk management, as well as written policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of derivative financial instruments and investment of excess cash. Financial risk management is carried out by the Company’s finance function under policies approved by the Board of Directors. The finance function identifies, evaluates and if necessary hedges financial risks in close cooperation with the Executive Chairman. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Group activities. 

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset and financial liability are disclosed in Note 1. 

The Group’s financial instruments consist of cash and cash equivalents, receivables, security deposits, trade and other payables. 

The Group had no off-statement of financial position financial assets or financial liabilities at either 30 June 2011 or 30 June 2010. 

The totals for each category of financial instruments in the consolidated statement of financial position are as follows: 

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