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Note 11 - Derivative financial instruments
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Mar. 31, 2013
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
11.
Derivative
financial instruments
The
Company entered into forward foreign exchange contracts to
reduce its exposure to foreign exchange currency rate
fluctuations related to forecasted Canadian dollar
denominated payroll, rent and utility cash flows in the
fiscal 2013 and the first two months of fiscal 2014, and
Mexican peso denominated payroll, rent and utility cash flows
for fiscal 2013 and the first two months of 2014. These
contracts were effective as hedges from an economic
perspective, but did not meet the requirements for hedge
accounting under ASC 815” Derivatives and
Hedging”. Accordingly, changes in the fair value of
these contracts were recognized into net income in the
consolidated statement of operations and comprehensive
income. The Company does not enter into forward foreign
exchange contracts for trading or speculative
purposes.
The
following table presents a summary of the outstanding foreign
currency forward contracts as at March 31, 2013:
The
unrealized gain recognized in earnings as a result of
revaluing the instruments to fair value on March 31, 2013 was
$1019 (April 1, 2012 – $462) which was included in cost
of sales in the statement of operations and comprehensive
income. The realized gain on these contracts was $280 (April
1, 2012 - $387), and is included as a component of cost of
sales, in the consolidated statement of operations. Fair
value was determined using the market approach with valuation
based on market observables (Level 2 quantitative inputs in
the hierarchy set forth under ASC 820 “Fair Value
Measurements”).
The
following table presents the fair value of the
Company’s derivative instruments located on the
consolidated balance sheet as at March 31, 2013:
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