NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) NOTE 25 Financial risk management objectives and policies  Interest rate risk the Company exceeding the ratio at certain times throughout the fiscal year. The Directors of the Company have also decided that this  range can be exceeded on a temporary basis as a result of the recent acquisitions. The Company’s principal financial liabilities, other than derivatives, comprise bank loans and overdrafts, letters of credit, notes payable,  finance leases, and trade payables. The only purpose of these financial liabilities is to finance the Company’s operations. The Company has  various financial assets such as trade receivables, other accounts receivable, and cash, which arise directly from its operations. The Company also enters into derivative transactions, primarily interest rate swaps and forward currency contracts. Their purpose is to  manage the interest rate and currency risks arising from the Company’s operations and its sources of financing. The Company’s policy is  and has been throughout 2013 and 2012 that no speculative trading in derivatives shall be undertaken. The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk. The Audit Committee of the Board of Directors reviews and approves policies for managing each of these risks, which are summarized below. The Company’s exposure to the risk of changes in market interest rates arises out of the Company’s debt obligations with floating interest  rates. For both of fiscal 2013 and 2012 the Company’s policy is to manage interest cost using a mix of fixed and variable rate debts. The  Company’s objective is to keep between 35% and 55% of its borrowings at fixed rates of interest. To manage this, the Company enters into  fixed rate debt facilities or interest rate swaps, in which the Company agrees to exchange, at specified intervals, the difference between fixed  and variable rate interest amounts calculated by reference to an agreed upon notional principal amount. These swaps are designated to  hedge underlying debt obligations. Interest rate options that effectively fix the maximum rate of interest that the Company will pay may also  be used to manage this exposure. At December 28, 2013, 54% of the outstanding long-term debt was hedged (December 29, 2012: 50%) and  53% of the Company’s borrowings, including the asset-based facility, are either hedged or at a fixed rate of interest (December 29, 2012: 57%). HIGH LINER FOODS INCORPORATED 98 December 28,  December 29, (Amounts in $000s) 2013 2012 Current bank loans $ 97,227 $ 59,704 Add-back: deferred charges on current bank loans  672 826 Total current bank debt 97,899 60,530 Long-term debt 226,929 213,359 Current portion of long-term debt  — 34,237 Add-back: deferred charges on long-term debt  935 370 Add-back: bifurcated embedded derivative  4,856 159 Total term loan debt 232,720 248,125 Long-term portion of finance lease obligations  1,647 2,181 Current portion of finance lease obligations 979 1,039 Total finance lease obligation  2,626 3,220 Less: cash (1,206) (65) Net interest-bearing debt 332,039 311,810 Shareholders’ equity 184,649 153,354 Unrealized (gains) losses on derivative financial instruments included in accumulated other comprehensive loss/income  (451) 493 Total capitalization $ 516,237 $ 465,657 Net interest-bearing debt as % of capitalization  64% 67%