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

Note 20 - Financial Instruments

v3.8.0.1
Note 20 - Financial Instruments
12 Months Ended
Mar. 31, 2018
Statement Line Items [Line Items]  
Disclosure of financial instruments [text block]
20.
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 short-term investments, 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, for which
no
financial hedging is required. 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, 2018       March 31, 2017       February 28, 2017
(Unaudited)
 
      US
$
      Euro       US
$
      Euro       US
$
      Euro  
                                                 
Cash and cash equivalents    
7,024
     
     
3,524
     
     
3,691
     
 
Marketable securities    
26
     
     
     
     
     
 
Receivables    
6
     
     
2
     
     
3
     
 
Trade and other payables    
(3,924
)    
(627
)    
(503
)    
(317
)    
(376
)    
(603
)
     
3,132
     
(627
)    
3,023
     
(317
)    
3,318
     
(603
)
 
The following exchange rates are those applicable to the following periods and dates:
 
      March 31, 2018       March 31, 2017       February 28, 2017
(Unaudited)
 
     
Average
     
Reporting
     
Average
     
Reporting
     
Average
     
Reporting
 
                                                 
CA$ per US$    
1.2834
     
1.2900
     
1.3134
     
1.3299
     
1.3113
     
1.3281
 
CA$ per Euro    
1.5008
     
1.5898
     
1.4424
     
1.4251
     
1.4434
     
1.4066
 
 
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 decrease in net loss as follows, assuming that all other variables remain constant:
 
      March 31, 2018       March 31, 2017      
February 29, 2017
(Unaudited)
 
     
$
     
$
     
$
 
                         
Decrease in net loss    
88
     
139
     
151
 
 
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, 2018,
March 31,
2017and
February 28, 2017
is as follows:
 
     
Cash and cash equivalents  
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
22.
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, 2018,
March 31,
2017and
February 28, 2017:
 
                                 
March 31, 2018
 
Required payments per year  
 
   
Total
     
Carrying amount
     
Less than 1 year
     
1 to 3 years
 
   
Notes
   
$
     
$
     
$
     
$
 
                                     
Trade and other payables  
10
   
6,697
     
6,697
     
6,697
     
 
Unsecured convertible debentures  
12
   
2,303
     
1,612
     
160
     
2,143
 
   
 
   
9,000
     
8,309
     
6,857
     
2,143
 
 
                                 
March 31, 2017
 
Required payments per year  
 
   
Total
     
Carrying amount
     
Less than 1 year
     
1 to 3 years
 
   
Notes
   
$
     
$
     
$
     
$
 
                                     
Trade and other payables  
10
   
2,138
     
2,138
     
2,138
     
 
Unsecured convertible debentures  
12
   
2,463
     
1,406
     
160
     
2,303
 
   
 
   
4,601
     
3,544
     
2,298
     
2,303
 
 
                                 
February 28, 2017
(Unaudited)
 
Required payments per year  
 
   
Total
     
Carrying amount
     
Less than 1 year
     
1 to 3 years
 
   
Notes
   
$
     
$
     
$
     
$
 
                                     
Trade and other payables  
10
   
2,405
     
2,405
     
2,405
     
 
Unsecured convertible debentures  
12
   
2,476
     
1,389
     
160
     
2,316
 
   
 
   
4,881
     
3,794
     
2,565
     
2,316
 
 
The Derivative warrant liabilities are excluded from the above tables as they will be settled in shares and
not
by the use of liquidities.