Management's Discussion and Analysis (cont’d) As a result of the volatile capital markets and the resulting  widespread drop in public issuer valuations in the latter part  of 2008, our defined benefit pension plans have experienced  losses. However, the capital markets improved in 2010 and  2011, reducing the losses. The actuarial valuation of our  largest defined benefit pension plan was as of September  2008 and showed a going concern surplus and a small  solvency deficit that will be funded over five years. The  next actuarial valuation is due to be effective no later  than September 2011 and in the process of being compiled  for filing no later than September 2012. We anticipate  the required annual contributions after the valuation is  completed will increase by more than $1.0 million. As well,  our move to IFRS for accounting purposes has crystallized  these losses in retained earnings, thereby enabling us to  exclude them from income. Late in 2009, we changed the  asset mix of our defined benefit pension plans with the  objective of reducing the volatility of the plan’s anticipated  funded position. This has resulted in investing part of the  portfolio in fixed income assets with a duration similar to  that of the pension obligations. Senior management accountability:  Henry Demone, President and Chief Executive Officer Our strategy considers growth by acquisition. The Company  may not be able to carry out its strategy of acquisition of  other frozen seafood companies, as that depends in part  on the availability of suitable candidates. In addition, the  Company may face competition for the acquisition of  attractive processors from other consolidators in the frozen  food industry who may be larger or better financed than the  Company. Our ability to successfully integrate acquisitions  into our existing operations could affect our financial results.  We may seek to expand our business through acquisitions  and may divest underperforming or non-core businesses. Our success depends, in part, upon our ability to identify  such acquisition and divestiture opportunities and to  negotiate favourable contractual terms. The failure to obtain  proper regulatory approvals could adversely affect our growth strategy.  Senior management accountability:  Henry Demone, President and Chief Executive Officer Board oversight accountability:  Board of Directors As discussed in Section 1.3 of this document, we have  publicly announced that we will source all of our seafood  from certified sustainable or responsible fisheries and  aquaculture farms by the end of 2013. We will require the  seafood we purchase be certified by the Marine Stewardship  Council (MSC), the Global Aquaculture Alliance’s (GAA) Best  Aquaculture Practices (BAP) program or the Aquaculture  Certification Council or under some other acceptable regime. Major customers in all areas of the Company’s business are  requiring that seafood purchased by them will need to be  certified as coming from a sustainable fish resource or from  aquaculture farms that adhere to acceptable sustainability  practices. In 2011, approximately 55% of our wild-caught  seafood and 68% of our aquaculture purchases came from  certified fisheries, representing substantial increases over 2010.  We made sustainability a strategic goal for 2010 and 2011 and  have added dedicated resources at the senior level to develop  the sustainability plan for the company. In the long term  sustainability will need to include policies on green issues  such as energy consumption, packaging, and the like. It will  also involve our human resources practices and policies.  We monitor risk of a shortage of funds using a detailed  budgeting process that identifies financing needs for the next  12 months as well as models that look out 5 years. Working  capital requirements are monitored daily and a procurement  system provides information on commitments. This process  projects cash flows from operations. Our objective is to  maintain a balance between continuity of funding and  flexibility through the use of bank overdrafts, letters of credit,  bank loans, notes payable, and finance leases. Our objective is  that not more than 50% of borrowings should mature in the  next 12-month period. Less than 11% of our long-term debt  will mature in less than one year at December 31, 2011 based  on the carrying value of borrowings reflected in the financial  statements. Our long-term debt is described in Note 13 of  our financial statements and has annual required minimum  principal payments of US$2.5 million plus, beginning in 2013,  50% of the prior year’s defined free cash flow. At December 31,  2011 and at the date of this document, we are in compliance  with all covenants and terms of our banking facilities. Our primary sources of working capital are cash flows from  operations and borrowings under our credit facilities. We  actively manage our relationships with our lenders and have in place adequate credit facilities until December 2016  when the working capital revolver facilities are scheduled to  be renewed. Board oversight accountability:  Audit Committee Senior management accountability: Kelly Nelson, Executive Vice President, CFO & Secretary 8.10 SUSTAINABILITy, CORPORATE RESPONSIBILITy  AND PUBLIC OPINION 8.9 LIqUIDITy 8.8 ACqUISITIONS 47 ANNUAL REPORT 2011 Board oversight accountability:  Board of Directors