## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

## NOTE 1 Corporate information 

High Liner Foods Incorporated (the “Company” or “High Liner”) is a company incorporated and domiciled in Canada. The address of the Company’s registered office is 100 Battery Point, P.O. Box 910, Lunenburg, Nova Scotia, B0J 2C0. The consolidated financial statements of the Company as at and for the fifty-two weeks ended December 28, 2013 comprise the Parent and its subsidiaries (herein together referred to as the “Company” or “High Liner”). The Company is primarily involved in the processing and marketing of prepared and packaged frozen seafood products. 

These financial statements were authorized for issue in accordance with a resolution of the Company’s Board of Directors on February 19, 2014. 

## NOTE 2 Basis of preparation 

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). 

The Company conducts its business in Canadian dollars (“CAD”) and U.S. dollars (“USD”). Unless otherwise noted, all amounts in these consolidated financial statements are in USD and all values are rounded to the nearest thousand ($000), except when otherwise indicated. 

## Basis of measurement 

The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position: 

• Derivative financial instruments are measured at fair value; 

• Financial instruments at fair value through profit or loss are measured at fair value; 

• Liabilities for cash-settled share-based payment arrangements are measured at fair value; 

• The defined benefit employee future benefit liability is recognized as the net total of the plan assets, plus unrecognized past service costs and the present value of the defined benefit obligation. 

## Basis of consolidation 

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at December 28, 2013. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has: 

• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); 

• Exposure, or rights, to variable returns from its involvement with the investee; and 

• The ability to use its power over the investee to affect its returns. 

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including: 

• The contractual arrangement(s) with the other vote holders of the investee; 

• Rights arising from other contractual arrangement(s); and 

• The Company’s voting rights and potential voting rights. 

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Company gains control until the date the Company ceases to control the subsidiary. 

Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Company and to the non-controlling interests, even if this results in the non-controlling interest having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Company’s accounting policies. All intra-group assets, liabilities, equity, income, expenses and cash flows relating to transactions between members of the Company are eliminated in full on consolidation. 

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it: 

