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The following are the contractual maturities of the Company’s financial liabilities and obligations. 

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## C) MARKET RISK 

Market risk is comprised of interest rate risk, foreign currency risk, and other price risk. The Company’s exposure to market risk is as follows: 

## (1) FOREIGN CURRENCY RISK 

Foreign currency risk arises from the fluctuations in foreign exchange rates and the degree of volatility of these rates relative to the Canadian dollar. 

The following table summarizes the impact of a 1% change in the foreign exchange rates of the Canadian dollar against the US dollar (USD) on the financial assets and liabilities of the Company. 

<img src='content_image/161343.jpg'>

The carrying amount of accounts receivable and accounts payable and accrued liabilities in USD represents the Company’s exposure at December 31, 2012. 

## (2) INTEREST RATE RISK 

The Company has minimal interest rate risk because its long-term debt is a fixed rate of 3.71%. 

## 22. CAPITAL DISCLOSURES 

The Company considers its capital to be its equity. The Company’s objective in managing capital is to ensure a sufficient liquidity position to finance its manufacturing operations, research and development activities, administration and marketing expenses, working capital and overall capital expenditures, including those associated with patents and trademarks. The Company makes every effort to manage its liquidity to minimize dilution to its shareholders when possible. 

