Liquidity

Provide an analysis of your company’s liquidity, including

(a) its ability to generate sufficient amounts of cash and cash equivalents, in the short term and the long term, to maintain your company’s capacity, to meet your company’s planned growth or to fund development activities;

(b) trends or expected fluctuations in your company’s liquidity, taking into account demands, commitments, events or uncertainties;

(c) its working capital requirements;

(d) liquidity risks associated with financial instruments;

(e) if your company has or expects to have a working capital deficiency, discuss its ability to meet obligations as they become due and how you expect it to remedy the deficiency;

(f) statement of financial position conditions or profit or loss attributable to owners of the parent or cash flow items that may affect your company’s liquidity;

(g) legal or practical restrictions on the ability of subsidiaries to transfer funds to your company and the effect these restrictions have had or may have on the ability of your company to meet its obligations; and

(h) defaults or arrears or significant risk of defaults or arrears on

(i) distributions or dividend payments, lease payments, interest or principal payment on debt;

(ii) debt covenants; and

(iii) redemption or retraction or sinking fund payments,

and how your company intends to cure the default or arrears or address the risk.

INSTRUCTIONS

(i) In discussing your company’s ability to generate sufficient amounts of cash and cash equivalents you should describe sources of funding and the circumstances that could affect those sources that are reasonably likely to occur. Examples of circumstances that could affect liquidity are market or commodity price changes, economic downturns, defaults on guarantees and contractions of operations.

(ii) In discussing trends or expected fluctuations in your company’s liquidity and liquidity risks associated with financial instruments you should discuss

(A) provisions in debt, lease or other arrangements that could trigger an additional funding requirement or early payment. Examples of such situations are provisions linked to credit rating, profit or loss, cash flows or share price; and

(B) circumstances that could impair your company’s ability to undertake transaction considered essential to operations. Examples of such circumstances are the inability to maintain investment grade credit rating, earnings per-share, cash flow or share price.

(iii) In discussing your company’s working capital requirements you should discuss situations where your company must maintain significant inventory to meet customers’ delivery requirements or any situations involving extended payment terms.

(iv) In discussing your company’s statement of financial position conditions or profit or loss or cash flow items you should present a summary, in tabular form, of contractual obligations including payments due for each of the next five years and thereafter. The summary and table do not have to be provided if your company is a venture issuer. An example of a table that can be adapted to your company’s particular circumstances follows:

Contractual Obligations	Payments Due by Period
	Total	Less than 1 year	1-3 years	4-5 yers	After 5 years
Debt
Finance Lease Obligations
Operating Leases
Purchase Obligations
Other Obligations
Total Contractual Obligations

_____________

1 “Purchase Obligation” means an agreement to purchase goods or services that is enforceable and legally binding on your company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

2 “Other Obligations” means other financial liabilities reflected on your company’s statement of financial position.

The tabular presentation may be accompanied by footnotes to describe provisions that create, increase or accelerate obligations, or other details to the extent necessary for an understanding of the timing and amount of your company’s specified contractual obligations.