notes to the Consolidated Financial Statements (cont’d) (a) ifrS 1 mandatory exceptionS (i) Hedge accounting (b) ifrS 1 exemptionS (ii) Use of estimates (i) Business combinations  (ii) Consolidated and Separate Financial Statements (iii) Currency translation differences  (iv) Employee benefits – recognition of actuarial gains or losses  107 AnnuAl RepoRt 2011 IFRS 1 outlines specific guidelines that a first-time adopter must adhere to under certain circumstances. The Company has applied  the following guidelines to its opening statement of financial position dated January 3, 2010: Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria  in IAS 39 at that date. Hedging relationships cannot be designated retrospectively and the supporting documentation cannot be  created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of its transition date are  reflected as hedges in the Company’s results under IFRS. Each of the Company’s hedging relationships were assessed to conclude that  all hedges recorded under Canadian GAAP qualified for hedge accounting under IFRS at the transition date.  Retrospective adjustments to accounting judgments or estimates are not allowed as part of the transition, unless there is objective  evidence that those estimates were in error. The estimates previously made by the Company under Canadian GAAP were not revised  for application of IFRS except where necessary to reflect any difference in accounting policies.  IFRS 1 sets forth guidance for the initial adoption of IFRS. Under IFRS 1 the standards are applied retrospectively at the transitional  statement of financial position date with all adjustments to assets and liabilities taken to retained earnings unless certain  exemptions are applied. The Company elected to apply the following exemptions from full retrospective application of IFRS in its opening statement of financial position dated January 3, 2010: The Company elected to utilize an option provided by IFRS 1 to retrospectively apply IFRS 3 (2008), Business combinations (“IFRS 3 (2008)”) to business combinations that occurred subsequent to a specific date, which may be on or before the Company’s  transition date. As such we have restated all business combinations that closed on or after December 19, 2007 to reflect the  requirements of IFRS 3 (2008). In accordance with IFRS 1, if a company elects to apply IFRS 3 (2008) retrospectively, the amendments to IAS 27, Consolidated and  separate financial statements (“IAS 27 (2008)”), must also be applied retrospectively. As the Company elected to retroactively restate in accordance with IFRS 3 (2008) effective December 19, 2007, we are also required to early adopt the amendments to IAS 27 (2008)  effective December 19, 2007, which did not have any financial impact on the Company’s statements. Retrospective application of IFRS would require the Company to determine cumulative currency translation differences in accordance  with IAS 21, the effects of changes in foreign exchange rates (“IAS 21”), from the date a subsidiary or equity method investee was  formed or acquired. IFRS 1 permits cumulative translation gains and losses from foreign operations to be reset to zero at a Company’s  transition date. The Company chose to apply this election and has eliminated the cumulative translation difference and adjusted  retained earnings by the same amount at the date of transition to IFRS. If, subsequent to adoption, a foreign operation is disposed of,  the translation differences related to this foreign operation that arose before the date of transition to IFRS will not affect the gain or  loss on disposal of this foreign operation. The Company elected to apply an optional exemption provided by IFRS 1 that allows unrecognized cumulative actuarial gains or  losses and vested past service costs (but not any unrecognized non-vested past service costs), as calculated in conjunction with an  IFRS-compliant actuarial valuation, to be immediately recognized on the Company’s date of transition to IFRS, as part of the transition  adjustment to retained earnings. 