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As at the dates indicated below, the Company had the following financial instruments measured at fair value categorized into the following levels: 

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During the fifty-two week periods ended December 31, 2011, January 1, 2011 and January 3, 2010, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements. 

## 23. CAPITAl mANAgEmENT 

The primary objective of the Company’s capital management policy is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. Capital includes funded debt, letters of credit, and common shareholder equity including accumulated other comprehensive income, except for gains and losses on derivatives used to hedge interest and foreign exchange cash flow exposures. 

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, purchase its capital stock under a Normal Course Issuer Bid (“NCIB”) or issue new shares. Capital distributions, including purchases of stock, are subject to a fixed charge coverage ratio under the Company’s working capital debt facilities. This ratio is only operative if the consolidated aggregated availability under the working capital debt facility is less than $20 million. Capital distributions, including dividends and NCIB purchases are also restricted under the new long-term debt agreements. The Company has availability in excess of $40 million as at December 31, 2011. The Company monitors capital (excluding letters of credit) using the ratio of funded debt to capitalization, which is net interest bearing debt divided by total capital plus net interest-bearing debt. The Company’s objective is to keep this ratio between 35% and 50%. Seasonal working capital debt may result in the Company exceeding the ratio at certain times throughout the fiscal year. The Directors of the Company have also decided that this range can be exceeded on a temporary basis to affect the Icelandic USA Acquisition. 

The Company includes in net funded debt, finance lease obligations and interest-bearing loans and borrowings, excluding deferred financing fees, less cash and cash equivalents. 

