Notes to Consolidated Financial Statements

12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial Instruments
As at March 31, 2007, the Association had outstanding range forward exchange contracts for an amount of U.S.$23,700 that effectively converts U.S.$23,700 of its anticipated U.S. dollar revenue over the next nine months to Canadian dollars at exchange rates ranging from $1.11 to $1.18, thus reducing the impact of exchange rate fluctuations on future U.S. dollar denominated cash inflows. During the year ended March 31, 2007, no part of the hedging instruments were considered ineffective or excluded from the assessment of hedge effectiveness. The fair value of these forward contracts amount to an unrealized loss of $40 as at March 31, 2007.

Credit Risk
The Association is exposed to credit risk from customers in the normal course of business. Management addresses this exposure through the Association's credit policy and makes adequate provision in the allowance for doubtful accounts.

Fair Value
Due to the short period to maturity of current assets and current liabilities, the carrying values as presented in the consolidated statement of financial position are reasonable estimates of their market value. The market value of investments [note 5[b]] is determined using independent third party confirmations.

Foreign Exchange Risk
The Association operates globally with significant revenue and expenses denominated in U.S. dollars. This gives rise to the risk that some of its revenue and cash flows may be impacted by fluctuations in foreign exchange rates between the U.S. and Canadian dollar. As at March 31, 2007, the consolidated statement of financial position includes amounts denominated in U.S. currency, which represent 54% [2006 - 52%] of current assets, 25% [2006 - 28%] of long-term investments and 22% [2006 - 21%] of current liabilities.