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## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

## NOTE 1. CORPORATE INFORMATION 

Capstone is incorporated and domiciled in Canada and principally located at 155 Wellington Street West, Suite 2930, Toronto, Ontario, M5V 3H1. The mission of Capstone Infrastructure Corporation and its subsidiaries (together the “Corporation” or “Capstone”) is to provide investors with an attractive total return from responsibly managed long-term investments in core infrastructure in Canada and internationally. Capstone’s portfolio comprises investments in Canada’s power infrastructure, including gas cogeneration, wind, hydro, biomass and solar power generating facilities, representing approximately net 439 MW of installed capacity, and contracted wind power development projects totaling an expected net79 MW of capacity. Capstone also invests in utilities, including a 33.3% interest in a district heating business in Sweden, and a 50% interest in a regulated water utility in the United Kingdom. 

All amounts are in Canadian thousands of dollars or thousands of share amounts unless otherwise indicated. 

## NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

The following significant accounting policies are used in the preparation of these consolidated financial statements. 

## Basis of Preparation 

## Statement of compliance 

The consolidated financial statements of Capstone have been prepared in accordance with International Financial Reporting Standards ("IFRS"). 

The consolidated financial statements were authorized for issue by the Board of Directors on March 6, 2014. 

## Basis of measurement 

The consolidated financial statements have been prepared under the historical cost basis, except for the revaluation of certain financial instruments, which are measured at fair value as explained in the accounting policies set out below and on a going concern basis of accounting (see note 9). Historical cost is generally based on the fair value of the consideration given in exchange for assets. 

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