Standards Board (IASB) and the IFRS Interpretations Committee (IFPIC) have issued additional standards and interpretations with an effective date applicable for High Liner in reporting periods subsequent to fiscal 2011 as follows: 

• IFRS 7 – Disclosures – Enhanced De-recognition Disclosure Requirements; 

• IFRS 9 – Financial Instruments: Classification and Measurement; 

• IFRS 10 – Consolidated Financial Statements; 

• IFRS 12 – Disclosure of Interests in Other Entities; 

• IFRS 11 – Joint Arrangements; 

• IFRS 13 – Fair Value Measurement; 

• IAS 19 – Post-employment Benefits (Including Pensions); 

• IAS 12 – Income Taxes – Recovery of Underlying Assets; and 

• IAS 1 – Presentation of Financial Statements (IAS 1) and the presentation of Items in Other Comprehensive Income (OCI). 

Additional details relating to the new standards and amendments are included in our consolidated financial statements for fiscal 2011 in note 3(f) New standards and interpretations issued but not effective. Our current evaluation is that the effect, if any, that these new standards and amendments will have on our financial results is minimal as the changes applicable to the Company primarily relate to disclosure requirements, or were previously anticipated and options were chosen on transition to IFRS to minimize their impact on future reporting periods. 

## 4.2 TRANSACTIONS wITh RELATED PARTIES 

The Company’s business is carried on through the parent company, High Liner Foods Incorporated, and wholly owned operating subsidiaries, High Liner Foods (USA) Incorporated, Sjovik, h.f. and Icelandic Northwest Ltd. High Liner Foods (USA) Incorporated’s wholly owned subsidiaries include Viking Seafoods, LLC and ISF (USA) LLC. Sjovik, h.f. has subsidiaries in Thailand and China. These companies purchase and/or sell inventory between them, and do so in the normal course of operations. As well, the parent company provides management and IT services to the subsidiaries. The companies lend and borrow money between them. Periodically, capital assets are transferred between companies. On consolidation, revenue, costs, IT services, gains or losses, and all inter-company balances, are eliminated. 

In addition to transactions between the parent and subsidiaries, High Liner Foods has entered into certain transactions and agreements in the normal course of business with certain other related parties, as disclosed in the notes to the financial statements. Transactions with these parties are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. 

During 2011, we purchased $3.7 million of shellfish from Clearwater Seafood’s Limited Partnership at negotiated market prices. We sell the shellfish to our customers. Clearwater owned a significant, non-controlling interest in the Company during most of 2011. As well, we store products in Crystal Cold Storage & Warehousing Inc. where we pay a market-based storage price, and we lease our Malden production facility from Pier 17 Realty Trust Inc. where we pay a market-based rent. These facilities are owned by the vendors of the Viking Acquisition. 

## 4.3 FINANCINg COSTS 

Interest expense in 2011 increased from 2010 levels as a result of higher average short-term bank loans. We expect 1 our short-term bank loans in 2012 to be higher than those of 2011 due to the working capital acquired as part of the Icelandic USA Acquisition and the additional loans that were used to finance the Acquisition. We also expect 1  higher interest rates on our facility due to higher interest rate spreads in the new long-term debt that was entered into for the Acquisition. Consequently, we expect 1  interest expense in 2012 to be higher than it was in 2011. 

## 4.4 BUSINESS ACqUISITION, INTEgRATIONS AND OThER ExPENSES 

In 2010, we incurred one-time costs of $1.0 million associated with the Viking Acquisition, partially reduced by a reversal of over-accrued reorganization costs from the prior year. These included due diligence, appraisal costs, legal and other professional fees. In 2011, we expensed $10.9 million of acquisition, financing and integration costs related to the Icelandic USA Acquisition. These costs included investment banking, legal, accounting, due diligence, and similar transaction costs. 

## 4.5 AMORTIzATION OF INTANgIBLE ASSETS 

This consists of amortization of intangible assets, brands, and customer relationships over their estimated useful lives. The final purchase price accounting for Viking was completed in 2011 and resulted in slightly higher amortization than originally estimated. As the purchase price accounting for the Icelandic USA Acquisition will not be finalized until after the issue of the 2011 year-end financial statements, amortization has been estimated for the 13 days of operations in 2011. 

As required by accounting pronouncements, we performed goodwill and indefinite life intangible asset impairment tests in both fiscal 2010 and 2011, which showed that goodwill is not impaired. 

