2015-16 SaskEnergy Annual Report

10. Financial risk management (continued)

c. Foreign currency risk The Corporation is exposed to foreign currency risk primarily through the purchase of goods and services that are payable in foreign currency. The Corporation monitors foreign currency requirements and utilizes financial instruments to manage risk when a foreign currency obligation exceeds a predetermined amount. As at March 31, 2016, the Corporation had $2 million (2014 – $7 million) in a United States dollar (USD) bank account to meet expected future USD expenditures. A five cent change in the exchange rate between the USD and the Canadian dollar as at March 31, 2016 would have had an insignificant impact on net income. d. Liquidity risk Liquidity risk is the risk that the Corporation is unable to meet its financial obligations as they become due. The Corporation has credit facilities available to refinance maturities in excess of anticipated operating cash flows. The contractual maturities of the Corporation’s financial obligations, including interest payments and the impact of netting agreements, as at March 31, 2016 were as follows: Contractual Maturities Carrying Less Than 1 - 2 3 - 5 More Than (millions) Amount 1 Year Years Years 5 Years Short-term debt $ 299 $ 299 $ – $ – $ – Trade and other payables 105 105 – – – Dividends payable 21 21 – – – Long-term debt 970 143 98 226 1,150 Derivative instruments 109 131 49 34 – $ 1,504 $ 699 $ 147 $ 260 $ 1,150 As at March 31, 2016, the Corporation’s borrowing capacity, together with relatively stable operating cash flows, provide sufficient liquidity to fund these contractual obligations. In addition to the above, the Corporation has posted a $15 million (2014 – $20 million) letter of credit with NGX Financial Inc. (NGX) as security for natural gas purchases and sales conducted by the Corporation on the NGX natural gas exchange in Alberta. NGX may draw upon the letter of credit if the Corporation fails to make timely payment for, or delivery of, natural gas as per the related contract.


Consolidated Financial Statements

Made with FlippingBook Ebook Creator