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Included in current bank loans at December 31, 2011 was a borrowing of US$15 million (January 1, 2011: US$5.0 million; January 3, 2010: US$15.0 million), which has been designated as a hedge of the net investment in the U.S. subsidiary and is being used to hedge the Company’s exposure to foreign exchange risk on this investment. Gains or losses on the retranslation of this borrowing are transferred to equity to offset any gains or losses on translation of the net investments in the subsidiaries. There is no ineffectiveness recognized in the fiscal years ending December 31, 2011 or January 1, 2011. 

## ESTIMATED FAIR VALuE OF FInAnCIAL InSTRuMEnTS 

The estimated fair value of financial instruments as at December 31, 2011 and January 1, 2011 are based on relevant market prices and information at that time. The fair-value estimate is not necessarily indicative of the amounts that we might receive or pay in actual market transactions. The total fair value of all of the foreign exchange future contracts as at December 31, 2011 was an asset of $0.6 million (January 1, 2011: liability of $1.4 million). The fair value of the interest and principal cross-currency swap was a liability of $0.2 million on January 1, 2011. 

The fair value of our long-term debt is estimated to be $254.2 million at December 31, 2011. The fair value of our capital lease obligations is estimated to be $3.7 million. These fair values are calculated by discounting the future cash flows of each loan at the estimated yield to maturity based on publicly available information. Since we do not intend to settle the long-term debt or capital lease obligations prior to maturity, the fair value does not represent an actual liability and, therefore, does not include exchange or settlement costs. 

Our remaining financial instruments consist of cash and cash equivalents, trade and other accounts receivables, sundry investments, and current liabilities. The difference between the carrying values and the fair market values of these financial instruments are not significant given the short-term maturities or the credit terms of those instruments. 

All financial instruments carried at fair value are categorized in three categories defined as follows: 

Level 1: Quoted market prices in active markets for identical assets or liabilities. 

Level 2: Other techniques, which use inputs other than quoted market prices, included within Level 1 that are observable, either directly (as prices) or indirectly (derived from prices). 

Level 3: Valuation techniques, which use inputs not based on observable market data. 

At December 31, 2011, the Company had the following financial instruments measured at fair value categorized into the following levels: 

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## Capital Structure 

Detailed information regarding the designation and number of each class of shares outstanding and of each class of security convertible into shares is disclosed in Note 16 to the annual financial statements. 

## EquITy 

The book value of our equity at the end of 2011 was $10.71 per share compared with $9.72 at the end of 2010. We filed a normal course issuer bid in November 2009 that permitted the purchase of up to 320,000 of our common shares and up to 30,000 non-voting equity shares during the 12-month period ending on November 24, 2010. When the bid expired, we had purchased 9,200 non-voting equity shares through the Company’s defined benefit pension plan at an average price of $10.93. We did not purchase any common or non- voting shares in 2010 under this normal course issuer bid. 

We filed a new normal course issuer bid in December 2010 to purchase up to 663,000 common shares and up to 93,840 non-voting equity shares. When the bid expired, we had purchased 88,758 non-voting equity shares for aggregate consideration of $1.2 million at an average price of $13.70 per share. The shares that were repurchased were cancelled. 

We filed a new normal course issuer bid in January 2012 to purchase up to 100,000 common shares, and up to 100,000 non-voting equity shares. Any shares purchased under the normal course issuer bid will be cancelled. The bid will terminate no later than January 30, 2013. 

In late 2010, we dissolved a subsidiary that held High Liner shares, which had been repurchased primarily through normal course issuer bids. Common and non-voting shares held by this subsidiary were cancelled on the dissolution. Outstanding shares of the Company had been presented on a net basis after deducting these shares. The wind-up of the subsidiary has resulted in a charge of $6.6 million to retained earnings on the fiscal 2010 balance sheet and an increase for the same amount in share capital. Prior to the wind-up of the subsidiary, share capital was reduced for the full cost of the shares we repurchased. After the wind-up, the amount charged to share capital is the average book value of the shares. The difference between the average cost that we incurred to repurchase the shares and the average book value of the shares, being $6.6 million, was charged to retained earnings. 

