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Financial Risks

12 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Financial Risks

17 - FINANCIAL RISKS

The Company operates internationally, giving rise to significant exposure to market risks from changes in foreign exchange rates. The Company’s financial assets are in the form of cash and cash equivalents held at institutions with high quality credit ratings, accounts receivable and investments. A hypothetical 10% change in the value of one Brazilian real expressed in U.S. dollars during the year ended March 31, 2020 would have caused an approximate $7,589 change in the Company’s net loss for the fiscal year 2020. The Company is exposed to exchange risk due to the timing of the movement of funds between subsidiaries and the parent company related to the transfer pricing agreement and the pricing of contracts in non-functional currencies. Financial instruments denominated in foreign currencies that lead to foreign exchange risk when funds are moved include:

Cash and cash equivalents includes the following amounts in their source currency:

		March 31, 2020				March 31, 2019

Canadian dollars			266,005				131,463
U.S. dollars			6,638				153,406
Brazilian reals			1,223,708				1,013,757

Accounts receivable include the following amounts receivable in their source currency:

		March 31, 2020				March 31, 2019

Canadian dollars			17,349				44,287
U.S. dollars			—				4,548
Brazilian reals			68,975				85,476

Accounts payable include the following amounts payable in their source currency:

		March 31, 2020				March 31, 2019

Canadian dollars			19,085				44,537
U.S. dollars			—				3,275
Brazilian reals			772				772

Accrued liabilities include the following accruals in their source currency:

		March 31, 2020				March 31, 2019

Canadian dollars			32,012				22,397
Brazilian reals			19,439				18,412

The Company does not use derivative financial instruments to reduce its foreign exchange risk exposure.

CREDIT RISK

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial instruments. Credit exposure is minimized by dealing with only creditworthy counterparties in accordance with established credit approval policies.

Concentration of credit risk in accounts receivable is indicated below by the percentage of the total balance receivable from customers in the specified geographic area:

		March 31, 2020				March 31, 2019

Canada			48	%			55	%
North America, excluding Canada			—	%			8	%
South America			52	%			37	%
			100	%			100	%

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short periods to maturity of the instruments.

Investments are fair valued in their source currency (Canadian dollars) based on objective evidence of fair value. The value is translated to the reporting currency (U.S. dollars) at the exchange rate on March 31, 2020.

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

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