IFRS 1 - “First Time Adoption of International Financial Reporting Standards (“IFRS 1”) requires the Company to apply IFRS effective at the end of its first IFRS reporting period retrospectively, which will be the financial statements as at September 30, 2011, with specific mandatory exemptions and a limited number of optional exemptions. 

IFRS introduces a number of changes to the format and disclosure of financial statements, some of which are mandatory and will have an impact on the presentation of the Company’s financial statements. The underlying principle of IFRS 1 disclosures is that the Company explain how the transition from Canadian GAAP to IFRS has affected its financial position. IFRS 1 will impact the presentation of the Company’s financial statements as at September 30, 2011 , as the following items will be specifically included: 

 a reconciliation of equity previously reported under Canadian GAAP to equity under IFRS at July 1, 2010 and June 30, 2011 for the first IFRS financial statements; 

  a reconciliation of the total compre hensive income and shareholders’ equity previously reported under Canadian GAAP to IFRS at July 1, 2010 and June 30, 2011; 

 more extensive disclosures for transactions that will be considered to be Related Party transactions under IFRS than under Canadian GAAP. These disclosures include: relationships between parent and subsidiary companies; key management personnel compensation in total and for each of the following categories: short term employee benefits; post employment benefits; other long term benefits; termination benefits, and share based payments 

 more extensive disclosure relating to assets per Operating Segments (whereas currently under Canadian GAAP the Company reports on segmental basis). 

Significant first-time adoption optional exemptions chosen by the Company relate to the following: 

$_{1.}$ Business combination : IFRS 1 gives an optional exemption that allows an entity to carry forward its previous Canadian GAAP accounting for business combinations prior to the transition date. The Company will not restate any business combination retroactive and will apply the requirements of IFRS 3 prospectively from July 1, 2010. 

$_{2.}$ Asset retirement obligation (“ARO”), included in the cost of property, plant and equipment: The Company will adjust ARO prospectively from July 1, 2010. 

$_{3.}$ Cumulative translation differences. IFRS 1 permits cumulative translation gain and losses to be reset to zero at the transition date. This provides relief from determining cumulative translation differences in accordance with International Accounting Standard (“IAS”) 21. 

$_{4.}$ Mandatory exception for estimates. IFRS estimates as at July 1, 2010 are consistent with the estimates as at the same date in conformity with Canadian GAAP. 

Other change of accounting standard that has impact on the Company ’s financial results includes: 

Related party transactions : CICA 3840 contains requirements for measuring related party transactions. IAS 24 does not deal with the measurement of related party transactions. The Company will adjust its past related party transactions accordingly from July 1, 2011. 

Change in functional currency : With change of functional currency, the current method applies under both CGAAP and IFRS; however, under IFRS a simple approach is used to translate assets, liabilities, equity and the income statement (and cash flow statement) at the spot rate; under CGAAP, the equity items are translated at the historical rates. 

