| 2. | Basis of preparation of financial statements |
| (a) | Statement of compliance |
These consolidated financial statements of the Company and its subsidiaries were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
The consolidated financial statements were authorized for issue by the Board of Directors on May 1, 2018.
| (b) | Basis of presentation |
The consolidated financial statements have been prepared on the historical cost basis except for the following items:
| · | Derivative financial instruments are measured at fair value. |
| · | Financial instruments at fair value through profit or loss (“FVTPL”) are measured at fair value. |
| · | Assets and liabilities of Apicore’s Indian business which are held for sale at December 31, 2017 are recorded at fair value. |
Certain of the comparative figures have been reclassified to conform with the presentation in the current year including the reclassifications on the consolidated statement of net income and comprehensive income and the consolidated statement of cash flows for the year ended December 31, 2016 to reflect discontinued operations as described in note 5.
| (c) | Functional and presentation currency |
The consolidated financial statements are presented in Canadian dollars, which is the Company's functional currency. All financial information presented has been rounded to the nearest dollar except where indicated otherwise.
| (d) | Use of estimates and judgments |
The preparation of these consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Areas where management has made critical judgments in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements include the determination of the Company’s and its subsidiaries’ functional currencies.
Information about key assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year are included in the following notes to the consolidated financial statements for the year ended December 31, 2017:
| · | Note 3(c)(ii): The valuation of the royalty obligation |
| · | Note 3(e): The provisions for returns, chargebacks and discounts |
| · | Note 3(g): The measurement and valuation of inventories |
| · | Note 3(j): The measurement and period of use of intangible assets |
| · | Note 3(k): The estimation of accruals for research and development costs |
| · | Note 3(n)(ii): The assumptions and model used to estimate the value of share-based payment transactions and warrants |
| · | Note 3(p): The measurement of the amount and assessment of the recoverability of income tax assets |
| · | Note 4: The allocation of purchase consideration to the fair value of assets acquired and liabilities assumed in connection with Business Combinations |
| · | Note 4: The valuation of acquired intangible assets |