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## credit riSk 

The Company trades only with recognized, creditworthy third parties. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are managed and monitored at the corporate level on an ongoing basis with the result that the Company’s exposure to bad debts is not significant. The Company’s top ten customers account for 47% (January 1, 2011: 57%; January 3, 2010: 57%) of the trade receivables at year end with the largest customer accounting for 15% (January 1, 2011: 13%; January 3, 2010: 11%). Five out of ten, for the current and the preceding two periods: (January 1, 2011 and January 3, 2010) of the customers are investment grade with two being substantial private enterprises. The Company does not purchase credit insurance on its trade accounts receivable. 

With respect to credit risk arising from the other financial assets of the Company, which comprise cash and cash equivalents and certain derivative instruments, the Company’s exposure to credit risk arises from default of the counterparty. The Company manages this by dealing with financially creditworthy counterparties, such as Chartered Canadian banks and U.S. banks with investment grade ratings. 

The maximum exposure to credit risk is equal to the carrying value of accounts receivable and its derivative instruments. 

## liquidity riSk 

The Company monitors its risk to a shortage of funds using a detailed budgeting process that identifies financing needs for the next 12 months. Working capital and cash balances are monitored daily and a procurement system provides information on commitments. This process projects cash flows from operations. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, letters of credit, bank loans, notes payable, and finance leases. The Company’s objective is that not more than 50% of borrowings should mature in the next 12-month period. Approximately 1.0% (January 1, 2011: 10%; January 3, 2010: 7%) of the Company’s long-term debt will mature in less than one year at December 31, 2011 based on the carrying value of borrowings reflected in the financial statements. At December 31, 2011, the Company was in compliance with all covenants and terms of its debt facilities. 

The table below shows the maturities of the Company’s non-derivative financial liabilities. 

(Amounts in $000s) 

<img src='content_image/234489.jpg'>

