## (v) Fair value of property, plant and equipment as deemed cost 

In lieu of full retrospective application of IAS 16, property, plant and equipment (“IAS 16”) on transition, IFRS 1 permits that a first-time adopter, at the date of transition, can either record its property, plant and equipment at deemed cost, or IFRS-compliant historical cost. The option can be applied separately to each asset or class of assets. The Company elected to use a combination of both. The approach taken resulted in the Company: 

• Continuing to recognize real estate, software, computers and furniture and fixtures on a historical cost basis with an adjustment to revise the accumulated depreciation in accordance with IFRS-compliant estimated useful lives on a component level basis; and 

• An independent fair value appraisal for production equipment was obtained. The fair value of production equipment was its deemed cost as at the transition date and depreciation for those assets will begin as at that date using the revised remaining estimated useful lives determined in conjunction by the valuation. 

## (vi) Borrowing costs 

IFRS 1 permits a first-time adopter to capitalize borrowing costs relating to all qualifying assets for which the commencement date for capitalization is on or after January 1, 2009 or the date of transition to IFRS, whichever is the later or designate an earlier date as the effective date, which may be part way through an accounting period. Whichever date is determined as the effective date, the first-time adopter capitalizes borrowing costs relating to all qualifying assets for which the commencement date for capitalization is on or after that date. The Company elected to capitalize borrowing costs prospectively effective January 3, 2010, the transition date. The Company has not identified any capitalized borrowing costs before this date requiring a retrospective adjustment. 

## (vii) Leases 

Retrospective application of IFRS would require the Company to reassess the classification of contracts in accordance with IFRIC 4, determining whether an arrangement contains a lease (“IFRIC 4”), when the application of Canadian GAAP in accordance with EIC 150, determining whether an arrangement contains a lease, already produced the same result. IFRS 1 permits that if a first-time adopter made the same determination under previous GAAP as that required by IFRIC 4 but at a date other than that required by IFRIC 4, the first-time adopter need not reassess that determination when it adopts IFRS. The Company elected to not reassess existing contracts effective January 3, 2010, the Company’s transition date, in accordance with IFRIC 4. 

## (viii) Share-based payments 

IFRS 2, Share-Based Payments (“IFRS 2”), encourages but does not require the application of its provisions to equity instruments granted on or before November 7, 2002, and requires the application only to equity instruments granted after November 7, 2002 that had not vested by the Company’s transition date. The Company elected to use the exemption provided under IFRS 1 and apply IFRS 2 for all equity instruments granted after November 7, 2002. 

## (c) noteS to the StatementS of reconciliation and Summary of changeS in Significant accounting policieS 

IFRS employs a conceptual framework that is similar to Canadian GAAP. However, significant differences exist in certain matters of recognition, measurement and disclosure. While adoption of IFRS has not changed the Company’s actual cash flows, it has resulted in changes to the Company’s reported financial position and results of operations. In order to allow the users of the financial statements to better understand these changes, the Company’s Canadian GAAP statement of financial position as at January 3, 2010 and January 1, 2011, and its income statement, statement of comprehensive income and statement of cash flows for the fifty-two weeks ended January 1, 2011 have been reconciled to IFRS, with the resulting differences explained below. 

## (i) Business combinations 

As stated in the section entitled “IFRS 1 Exemptions”, the Company restated its purchase price allocation in accordance with IFRS 3 (2008) for all business combinations subsequent to December 19, 2007, which impacted the Company’s purchase price allocation for the Company’s acquisition of the manufacturing and marketing assets of Fishery Products International Limited (“FPI”) such that we decreased the purchase consideration recognized under Canadian GAAP by $5.6 million. IFRS 3 (2008) required us to expense the transaction costs incurred of $2.9 million in the period in which they occurred and adjust the fair value of the share consideration issued to reflect the market bid price as at the acquisition date of $9.64 per share as compared to the Canadian GAAP value of $10.09 per share, which was based on the volume-weighted average unit closing price determined to be representative of the closing price for the five days before and after the measurement date, resulting in a decrease to the total value of share consideration paid by $2.7 million. 

Under Canadian GAAP, included in the liabilities acquired on acquisition of FPI was an amount payable for costs that resulted from the Company’s restructuring as a result of the purchase of FPI. For a liability to qualify for recognition as part of applying the acquisition method in accordance with IFRS, the identifiable liability assumed must be part of what was exchanged in the business combination transaction rather than the result of separate transactions, such as a Company restructuring. As a result, we derecognized the liability for restructuring in the business combination of $0.6 million and decreased goodwill acquired by the same amount. 

