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## FRANCHISEES AND AFFILIATES 

Some of our franchisees and af filiates might breach prescribed clauses of franchise or af filiation contracts, such as purchasing policies and marketing plans. Non-compliance with such clauses may have an impact on us. A team of retail operations advisers ensures our operating standards' consistent application in all of these stores. 

## FINANCIAL INSTRUMENTS 

W e make some foreign-denominated purchases of goods and services, exposing ourselves to exchange rate risks. According to our risk management policy, we may use derivative financial instruments, such as foreign exchange forward contracts. The policy's guidelines prohibit us from using derivative financial instruments for speculative purposes, but they do not guarantee that we will not sustain losses as a result of our derivative financial instruments. 

W e hold receivables generated mainly from sales to affiliate customers. To guard against credit losses, we have adopted a credit policy that defines mandatory credit requirements to be maintained and guarantees to be provided. Af filiate customer assets guarantee the majority of our receivables. 

W e are also exposed to liquidity risk mainly through our non-current debt and creditors. We evaluate our cash position regularly and estimate $^{(3)}$ that cash flows generated by our operating activities are suf ficient to provide for all outflows required by our financing activities. 

Montréal, Canada, December 12, 2014 

