Quarterly report pursuant to Section 13 or 15(d)

Commitment

v3.20.2
Commitment
6 Months Ended
Sep. 30, 2020
Disclosure Text Block Supplement [Abstract]  
Commitment
18. Commitment

  (a) The Company’s subsidiaries have entered into three long-term operating leases for office premises in London, United Kingdom, Shanghai, China and North Vancouver, Canada. These lease assets are categorized as right of use assets under ASU No. 2016-02.
     
    Effective July 1, 2020, the Company terminated its operating lease in Lysaker, Norway as the company has ceased operations of its Norway subsidiary.
     

Long-term
premises lease
  Lease
commencement
  Lease
expiry
  Term
(years)
  Discount rate*  
London, United Kingdom   April 1, 2019   December 25, 2023   4.75   4.50 %
North Vancouver, Canada   December 1, 2019   August 31, 2022   2.75     4.50 %
Shanghai, China   March 1, 2020   May 31, 2025   5.25     4.75 %

* The Company determined the discount rate with reference to mortgages of similar tenure and terms.

Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As the Company’s operating lease does not provide an implicit rate, the discount rate used to determine the present value of the lease payments is the collateralized incremental borrowing rate based on the remaining lease term. The operating lease asset excludes lease incentives. The operating leases do not contain an option to extend or terminate the lease term at the Company’s discretion, therefore no probable renewal has been added to the expiry date when determining lease term. Operating lease expense is recognized on a straight-line basis over the lease term.


Lease cost for the six months are summarized as follows: 


    Three Months
Ended
September  30,
2020
$
    Three Months
Ended
September 30,
2019
$
    Six Months
Ended
September 30,
2020
$
    Six Months
Ended
September 30
2019
$
 
Operating lease expense *     118,038       103,329       248,167       205,791  

* Including right of use amortization and imputed interest. Lease payments include maintenance, operating expense, and tax.

The Company has entered into premises lease agreements with minimum annual lease payments expected over the next five years of the lease as follows: 


Calendar Year   $  
2020 (remainder of year)     127,511  
2021     510,042  
2022     497,126  
2023     368,935  
2024     61,859  
2025     15,465  
Total future minimum lease payments     1,580,938  
Imputed interest     (123,904 )
         
Operating lease obligations     1,457,034  

  (b) On July 14, 2017, the Company entered into a new memorandum of understanding to establish a new joint venture company in China with a non-related party (the “Supplier”) wherein the Supplier would receive and process orders, manufacture, and install products for the Company’s customers. In return, the Company agreed to design the product, provide strategic pricing, sales and marketing direction, as well as provide technology licenses and technical support (the “Technology”) to the Supplier. During the term of the agreement, the Company will provide the Supplier with a non-transferrable right and license to use the Technology to manufacture and install the product within the Asia and Russia region.

The parties will fund the venture proportionately, 50.1% by the Company and 49.9% by the Supplier, and excess operating cash flows will be distributed on a quarterly basis. Neither party have funded the joint venture to date and there has been no revenue and expense associated with it.