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Financial instruments

12 Months Ended

Dec. 31, 2012

Investments, All Other Investments [Abstract]

Financial Instruments Disclosure [Text Block]

20. Financial instruments

Credit risk:

The Company is not exposed to significant credit risk on its retail customer accounts as its policy is to cease supply of water to customers’ accounts that are more than 45 days overdue. The Company’s exposure to credit risk is concentrated on receivables from its Bulk water customers. Management considers these receivables fully collectible and therefore the Company has not recorded an allowance for these receivables. All other accounts receivable are current or an allowance has been made for collection as of December 31, 2012.

Interest rate risk:

The Company’s outstanding debt consists of fixed rate obligations and therefore the Company is not subject to interest-rate risk arising from fluctuations of LIBOR or prime lending rates.

Foreign exchange risk:

All relevant foreign currencies other than the Mexican peso, Indonesian rupiah and the euro have been fixed to the dollar for over 20 years and the Company does not employ a hedging strategy against exchange rate risk associated with the reporting in dollars. If any of these fixed exchange rates becomes a floating exchange rate or if any of the foreign currencies in which the Company conducts business depreciate significantly against the dollar, the Company’s consolidated results of operations could be adversely affected.

Fair values:

As of December 31, 2012 and 2011, the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other liabilities and dividends payable approximate their fair values due to the short term maturities of these instruments. Management considers that the carrying amounts for loans receivable and long term debt as of December 31, 2012 and 2011 approximate their fair value.

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value as of December 31, 2012 and 2011:

	December 31, 2012
	Level 1		Level 2		Level 3		Total
Assets:
Recurring
Cash equivalents	$	-	$	-	$	-	$	-
Restricted cash		-		-		-		-
Marketable securities		8,570,338		-		-		8,570,338
Total Recurring	$	8,570,338	$	-	$	-	$	8,570,338

Nonrecurring
Investment in affiliate	$	-	$	-	$	6,925,346	$	6,925,346

	December 31, 2011
	Level 1		Level 2		Level 3		Total
Assets:
Recurring
Cash equivalents	$	16,177,462	$	-	$	-	$	16,177,462
Restricted cash		7,500,000		-		-		7,500,000
Marketable securities		8,496,372		-		-		8,496,372
Total Recurring	$	32,173,834	$	-	$	-	$	32,173,834

Nonrecurring
Investment in affiliate	$	-	$	-	$	6,634,598	$	6,634,598

A reconciliation of the beginning and ending balances for Level 3 investments for the year ended December 31, 2012:

Balance as of December 31, 2011	$	6,634,598
Profit sharing and equity from earnings of OC-BVI		2,464,773
Distribution of earnings from OC-BVI		(2,174,025	)
Balance as of December 31, 2012	$	6,925,346