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## Economic hedges 

Financial assets and liabilities at fair value through profit and loss are those interest rate swaps that are not designated in hedge relationships. 

On May 3, 2012, the Company entered into an interest rate swap to exchange floating 3-month LIBOR for a fixed rate on its term loan credit facility, with an embedded floor of 1.5% for a fixed rate of 1.997% on a notional amount of $100.0 million for the period of April 4, 2014 until April 4, 2016. On a quarterly basis starting in 2014, the Canadian company will pay the fixed swap rate and receive the floating 3-month LIBOR rate (but no less than 1.5%), effectively fixing the rate at 1.997%. 

## Embedded derivatives 

As described in note 13 , the Company’s long-term debt facility bears interest at LIBOR plus 3.5%, with a LIBOR floor of 1.25%. This interest rate floor represents an embedded interest rate derivative that requires bifurcation, where the bifurcated amount is carried at fair value with changes going through profit or loss. The fair value of the embedded derivative at December 28, 2013, was $4.6 million (December 29, 2012: nominal) with the change in value recorded in finance costs. 

## Classification of financial instruments 

The following table identifies all of the Company’s financial instruments and their carrying values recorded at the balance sheet date and their fair values at that time. The carrying values of the Company’s loans and receivables (which only include trade receivables) approximate fair value due to the short-term to maturity of these financial instruments. Financial liabilities carried at amortized cost are shown using the EIR method. Items accounted as hedges represent fair value of the Company’s foreign exchange contracts as well as the fair value of its interest rate swap on its long-term debt. 

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