2015_LCC Annual Report

PRINCE EDWARD ISLAND LIQUOR CONTROL COMMISSION Notes to Financial Statements March 31, 2015

10.

Financial Instruments (continued...)

2015

2014

$

$

Financial Liabilities

Other tinancial liabilities measured at amortized cost Non current Obligations under finance leases (Note 12)

1,338,820 1.016.977 2,355.797

1,015,201 1,346,356 2,361.557

Debentures payable (Note 9)

Current Due to the Province of Prince Edward Island Accounts payable and accrued liabilities (Note 8)

12,279,437 12,180,649

2,137,858

2,509,055

Current portion of obligations under finance leases (Note 12)

34,576 329,379

32,249

Current portion of debentures payable (Note 9)

352,007 14,781,250 15,073,960 17.137.047 17.435.517

A description of the Commission’s risk management objectives and policies for financial instruments is included in Note 11.

11.

Financial Risk Management

The Commission is exposed to various risks in relation to financial instruments. The Commission’s financial assets and liabilities by category are summarized in Note 10. The main types of risks are market, credit, and liquidity risk.

Market Risk

Market risk consists of three types: currency, interest rate, and price risk. The Commission’s market risk management focuses on the unpredictability of financial and economic markets and seeks to minimize potential effects on the Commission’s financial performance. In common with many organizations that purchase in foreign currencies, the Commission may be exposed to a marginal degree of currency risk. Management has mitigated the exposure to this risk by limiting the number of purchase transactions originating in foreign currency. The Commission’s policy is to minimize interest rate cash flow risk exposures on long-term financing. Long-term borrowing is at fixed rates.

The Commission’s financial instruments are not subject to significant price risk.