1. Reporting Entity:
Danier Leather Inc. and its subsidiaries ("Danier" or the "Company") comprise a vertically integrated designer, manufacturer, distributor and retailer of leather apparel and accessories. Danier Leather Inc. is a corporation existing under the Business Corporations Act (Ontario) and is domiciled in Canada. The Company's subordinate voting shares (the "Subordinate Voting Shares") are listed on the Toronto Stock Exchange (the "TSX") under the symbol "DL". The address of its registered head office is 2650 St. Clair Avenue West, Toronto, Ontario, M6N 1M2, Canada.
Under an accounting practice common in the retail industry, the Company follows a 52-week reporting cycle which periodically necessitates a fiscal year of 53 weeks. Fiscal 2013 is a 52-week fiscal year and fiscal 2012 was a 53-week fiscal year. The 52-week reporting cycle is divided into four quarters of 13 weeks each. The 53-week reporting cycle is divided into four quarters of 13 weeks each with the exception of the fourth quarter, which is 14 weeks in duration.
2. Significant Accounting Policies:
(a) Statement of Compliance
These unaudited interim condensed consolidated financial statements (the "unaudited interim financial statements") have been prepared on a going concern basis in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). The unaudited interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting and using accounting policies and methods consistent with those used for the Company's audited annual consolidated financial statements and notes thereto for the fiscal years ended June 30, 2012 and June 25, 2011 (the "2012 Financial Statements"), except for the following new accounting pronouncements which have been adopted. Certain information, in particular the accompanying notes, normally included in the audited annual consolidated financial statements prepared in accordance with IFRS, has been omitted or condensed. Accordingly, these unaudited interim financial statements do not include all the information required for annual consolidated financial statements and, therefore, should be read in conjunction with the 2012 Financial Statements.
i) On July 1, 2012, the Company adopted IFRS 7, Financial Instruments: Disclosures, Amendment regarding Disclosures on Transfers of Financial Assets. This amendment requires increased disclosure for transactions involving transfers of financial assets to help users of the financial statements evaluate the risk exposures related to such transfers and the effect of those risks on an entity's financial position. There was no impact on the unaudited interim financial statements as a result of adopting this standard. ii) On July 1, 2012, the Company adopted IAS 12, Income Taxes, Amendment regarding Deferred Tax: Recovery of Underlying Assets. This amendment requires an entity to recognize a deferred tax asset or liability depending on the expected manner of recovery or settlement of the asset or liability and for which the tax base is not immediately apparent. There was no impact on the unaudited interim financial statements as a result of adopting this standard.
The unaudited interim financial statements for the 13-week and 26-week periods ended December 29, 2012 (including comparatives) were approved by the Board of Directors on January 30, 2013.