INSTRUMENTS AND RISK MANAGEMENT

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

INSTRUMENTS AND RISK MANAGEMENT

8. INSTRUMENTS AND RISK MANAGEMENT

The Company has limited involvement with derivative instruments and does not trade them. The Company does use derivatives to manage certain interest rate and foreign currency exchange rate exposures. 

As at December 31, 2014, 2013 and 2012, the Company had no derivative instruments designated as effective hedges.  

From time to time, to minimize risk associated with foreign currency exposures on receivables for sales denominated in foreign currencies, the Company enters into various foreign currency forward exchange contracts which are intended to minimize the currency exchange rate exposure from expected future cash flows. The forward currency contracts have maturity dates of up to  one year at the date of inception. At December 31, 2014, 2013 and 2012, the notional amount for these foreign currency forward exchange contracts outstanding was $0, $462,477 and $0, respectively.

We also entered into an interest rate swap which has a maturity date of ten years from the date of inception.

In conjunction with the mortgage note payable for the purchase of the headquarters facility completed in 2013, the Company entered into a Swap Transaction Confirmation agreement effective October 1, 2013 incorporating the terms and definitions of the International Swaps and Derivatives Association, Inc. (ISDA) that effectively fixes our effective annual interest rate at  6.27%.

The impact of these instruments on the statement of operations in 2014, 2013 and 2012 is summarized below:

	Location of Gain (Loss)	Amount of Gain (Loss)
	Recognized in Income	Recognized in Income
		2014		2013		2012
Foreign currency forward exchange contracts:	Other  income	$	-	$	2,468	$	-
	Other (expense)		-		(271)		-
Interest rate swap:
	Derivative (expense)		171,880		427,818		-