Notes to Consolidated Financial Statements  Year ended December 31, 2011  4. Financial risk management (continued):  The Corporation’s risk management policies are established to identify and analyse the risks faced by  the Corporation, to set appropriate risk limits and controls, and to monitor risks and adherence to  limits. Risk management policies and systems are reviewed regularly to reflect changes in market  conditions and the Corporation’s activities. The Corporation, through its training and management  standards and procedures, aims to develop a disciplined and constructive control environment in  which all employees understand their roles and obligations.  The Corporation’s Audit Committee oversees how management monitors compliance with the  Corporation’s risk management policies and procedures, and reviews the adequacy of the risk  management framework in relation to the risks faced by the Corporation. The Audit Committee  undertakes both regular and  ad hoc  reviews of risk management controls and procedures.  Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial  instrument fails to meet its contractual obligations, and arises principally from the Corporation’s  investments. Concentrations of credit risk exist when a significant proportion of the Corporation’s  assets are invested in a small number of individually significant investments, and investments with  similar characteristics and/or subject to similar economic, political and other conditions that may  prevail. The Corporation’s exposure to credit risk is influenced mainly by the individual characteristics  of each customer. However, management also considers the demographics of the Corporation’s  customer base, including the default risk of the industry and country in which customers operate, as  these factors may have an influence on credit risk. Approximately 43 percent (year ended December  31, 2010 - 68 percent) of the Corporation’s revenue in the year ended December 31, 2011 is  attributable to one Private Company Partner.  Other price risk is the risk that future cash flows associated with portfolio investments will fluctuate. Cash flow from investments is generally based on a percentage of the investments gross revenue,  same store sales, gross margin or other similar revenue. Accordingly, to the extent that the financial  performance of the investment declines in respect of the relevant performance metric, cash  payments to the Corporation will decline. Portfolio investment agreements allow for the repayment  of investments at the option of the portfolio entity, and such repayment could affect future cash  flows. The Corporation is exposed to credit related losses on current and future amounts receivable  pursuant to investment agreements. In the event of non-performance by Partners, future royalty  and distribution revenue from the investments could be reduced, resulting in impairment of  investment values. The investment agreements provide that payments are receivable monthly no  later than the last day of the month.  Alaris Royalty Corp. 2011 Annual Report  31  Credit Risk and Other Price Risk