DIVERSIFIED ROYALTY CORP .  Notes toConsolidatedFinancial Statements  (Unaudited)  (Expressed in Canadian dollars)  Year ended December 31, 2014  19. Financial risk management (continued):  The performance of the Company is directly dependent upon the royalty received from  Franworks. The amount of the royalty received from Franworks  is dependent on various factors  that may affect the casual dining sec tor of the restaurant industry. The restaurant industry  generally, and in particular the casual dining sector, is intensely competitive with respect to  price, service, location and food quality. If Franworks and Franworks’ franchisees are unable  to successfully compete in the casual dining sector, sales may be adversely affected, the  amount of royalty reduced and the ability of Franworks to pay the royalty may be impacted. Credit risk also arises from cash balances on deposit with financial institutions o f $34,510,514  at December 31, 2014 (December 31, 2013 - $68,999,809). The Company has placed its cash  balances with a Canadian chartered bank of high creditworthiness. (b) Amounts receivable:  The carrying amount ofroyalties and amounts receivable represents the maximum credit  exposure to credit loss.  Substantially all of the amou nts receivable are due fromFranworks for the royalties  and from  the Company’s insurance underwriter with respect to the indemnification of Mr. John Bennett  for legal costs incurred in connection with the U.S. Department of Justice anti -trust  investigation.  The Company evaluates the collectability of amounts receivable and records an allowance for  doubtful accounts which reduces receivables to the amount  management reasonably believes  will be collected.  29 