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## Contractual Obligations 

Contractual obligations relating to our long-term debt, finance lease obligations, operating leases, purchase obligations, and other long-term obligations are disclosed in the table below. 

<img src='content_image/268474.jpg'>

Purchase obligations are for the purchase of seafood and other non-seafood inputs, including flour, paper products, and frying oils, and the purchase of a cold storage facility in Peabody, MA. See Sections 8.2 and 8.5 of this MD&A for more details. 

## Financial Instruments Classification of Financial Instruments 

We utilize derivative financial instruments in accordance with a written policy to manage foreign currency, commodity and interest rate exposures. The policy prohibits the use of derivative financial instruments for trading or speculative purposes. 

We formally document all relationships between hedging instruments and hedged items, as well as risk management objectives and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are effective in offsetting changes in fair values or cash flows of hedged items. Any portion of hedge ineffectiveness has been recognized in the income statement as it has occurred. 

Readers are directed to note 22  to Consolidated Financial Statements for a complete description of the use of derivative financial instruments by the Company. 

## Disclosure of Outstanding Share Data 

On February 19, 2014, 15,290,710 common shares and 556,992 stock options were outstanding. The stock options are exercisable on a one-for-one basis for common shares of the Company. 

## 3.2 Operational Resources 

Our organic growth plans can be achieved without significant operational expansion. 

Our existing operational resources include: 

## Plant Capacity 

Our manufacturing facilities have ample production capacity to meet forecasted demands, once the production challenges encountered in our U.S. facilities in 2013, related to these facilities integrating products formerly produced by the Danvers plant into 

their respective production, are fully resolved. In addition, we have plans that can be implemented with minimal additional capital expenditures to increase the capacity of our plants through shift changes should further production capacity be required. Our ability to source new products is not limited to our own production. We purchase significant quantities of frozen fillets as finished goods, and some of our value-added products are purchased as finished goods. 

## Distribution Centers 

Our Lunenburg, Portsmouth, Newport News and New Bedford facilities include large distribution centers. We lease a U.S. distribution center in Peabody, MA, which we operate ourselves and will be purchasing in 2014. We also utilize third-party cold storage/distribution centers to supplement our facilities when needed. We have Directors of Logistics in Canada and the U.S. to ensure that the warehousing and transportation of our products is handled in a cost-effective and customer-service-oriented manner. 

## Technology 

Technology supports our growth strategy and our centralized computer systems enable us to be agile making timely decisions. Our business is simplified through an enterprise-wide business management system and specifications management system, using Oracle  software. We have also developed a proprietary internet-enabled procurement system that allows us to manage procurement in real time. Business intelligence software allows us to manage our information on a real-time basis to help us make business decisions quickly, manage inventory and accounts receivable and provide more informative financial disclosure. We have ensured that we are equipped to respond to customer demands for electronic transmission of business documents, including invoices, purchase orders, and payment confirmations. In 2012, we implemented Global Specifications Management software and invested in network infrastructure to ensure that our operations will function during business disruptions at our Halifax data center. In 2013, we purchased and installed a document management system to simplify and expedite supplier payments. We continue to budget significant capital dollars to ensure we have state-of-the-art systems to manage our Company and respond to customer requests. 

