Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Note 21 - Financial Instruments

v3.19.2
Note 21 - Financial Instruments
12 Months Ended
Mar. 31, 2019
Statement Line Items [Line Items]  
Disclosure of financial instruments [text block]
21.
Financial instruments:
 
This note provides disclosures relating to the nature and extent of the Corporation’s exposure to risks arising from financial instruments, including credit risk, foreign currency risk, interest rate risk and liquidity risk, and how the Corporation manages those risks.
 
(a) Credit risk:
 
Credit risk is the risk of a loss if a customer or counterparty to a financial asset fails to meet its contractual obligations. The Corporation has credit risk relating to cash and cash equivalents and marketable securities, which it manages by dealing only with highly-rated Canadian institutions. The carrying amount of financial assets, as disclosed in the statements of financial position, represents the Corporation’s credit exposure at the reporting date.
 
(b) Currency risk:
 
The Corporation is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degrees of volatility of those rates. Foreign currency risk is limited to the portion of the Corporation's business transactions denominated in currencies other than the Canadian dollar. Fluctuations related to foreign exchange rates could cause unforeseen fluctuations in the Corporation's operating results.
 
A portion of the expenses, mainly related to research contracts and purchase of production equipment, is incurred in US dollars and in Euros. There is a financial risk related to the fluctuation in the value of the US dollar and the Euro in relation to the Canadian dollar. In order to minimize the financial risk related to the fluctuation in the value of the US dollar in relation to the Canadian dollar, funds continue to be invested as short-term investments in the US dollar.
 
The following table provides an indication of the Corporation’s significant foreign exchange currency exposures as stated in Canadian dollars at the following dates:
 
          March 31, 2019           March 31, 2018  
Denominated in   US
$
    Euro     US
$
    Euro  
                         
Cash and cash equivalents    
3,369
     
-
     
7,024
     
-
 
Marketable securities    
2,696
     
-
     
26
     
-
 
Receivables    
16
     
-
     
6
     
-
 
Trade and other payables    
(13,251
)    
(131
)    
(3,924
)    
(627
)
     
(7,170
)    
(131
)    
3,132
     
(627
)
 
The following exchange rates are those applicable to the following periods and dates:
 
                         
          March 31, 2019           March 31, 2018  
    Average     Reporting     Average     Reporting  
                         
CA$ per US$    
1.3122
     
1.3349
     
1.2834
     
1.2900
 
CA$ per Euro    
1.5192
     
1.4975
     
1.5008
     
1.5898
 
 
Based on the Corporation’s foreign currency exposures noted above, varying the above foreign exchange rates to reflect a
5%
strengthening of the US dollar and Euro would have an increase (decrease) in net loss as follows, assuming that all other variables remain constant:
 
    March 31, 2019     March 31, 2018  
    $     $  
                 
Increase (decrease) in net loss    
364
     
(88
)
 
An assumed
5%
weakening of the foreign currencies would have an equal but opposite effect on the basis that all other variables remained constant.
 
(c) Interest rate risk:
 
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates.
 
The Corporation’s exposure to interest rate risk as at
March 31, 2019
and
March 31, 2018
is as follows:
 
   
Cash and cash equivalents
Short-term fixed interest rate
Marketable Securities
Short-term fixed interest rate
Unsecured convertible debentures
Long-term fixed interest rate
 
The capacity of the Corporation to reinvest the short-term amounts with equivalent return will be impacted by variations in short-term fixed interest rates available on the market. Management believes that the risk the Corporation will realize a loss as a result of the decline in the fair value of its cash equivalents is limited because these investments have short-term maturities and are generally held to maturity.
 
(d) Liquidity risk:
 
Liquidity risk is the risk that the Corporation will
not
be able to meet its financial obligations as they fall due. The Corporation manages liquidity risk through the management of its capital structure and financial leverage, as outlined in Note
24.
It also manages liquidity risk by continuously monitoring actual and projected cash flows. The Board of Directors reviews and approves the Corporation's operating budgets, and reviews material transactions outside the normal course of business. Refer to Note
2
(c).
 
The following are the contractual maturities of financial liabilities as at
March 31, 2019
and
March 31, 2018:
 
                          March 31, 2019  
Required payments per year  
 
 
Total
   
Carrying amount
   
Less than 1 year
   
1 to 3 years
 
   
Notes
 
$
   
$
   
$
   
$
 
                             
Trade and other payables  
11
   
16,429
     
16,429
     
16,429
     
-
 
Unsecured convertible debentures  
13
   
2,143
     
1,817
     
2,143
     
-
 
   
 
   
18,572
     
18,246
     
18,572
     
-
 
 
                          March 31, 2018  
Required payments per year  
 
 
Total
   
Carrying amount
   
Less than 1 year
   
1 to 3 years
 
   
Notes
 
$
   
$
   
$
   
$
 
                             
Trade and other payables  
11
   
6,697
     
6,697
     
6,697
     
-
 
Unsecured convertible debentures  
13
   
2,303
     
1,612
     
160
     
2,143
 
   
 
   
9,000
     
8,309
     
6,857
     
2,143
 
 
The Derivative warrant liabilities are excluded from the above tables as they expected to be settled in shares and
not
by the use of liquidities.