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Saskatchewan Indian Gaming Authority Inc.
Notes to the Financial Statements
Year ended March 31, 2009
1. General Information
Saskatchewan Indian Gaming Authority Inc. (“SIGA”) is incorporated under the Non-profit Corporations Act, 1995
of Saskatchewan as a Charitable Corporation. The Federation of Saskatchewan Indian Nations (“FSIN”) owns the
only issued Class A Membership in SIGA. Class B Memberships in SIGA were issued to each of ten Tribal Councils
in Saskatchewan that are recognized by the Saskatchewan Indian Gaming Commission of the FSIN as well as one
independent member. The Government of Saskatchewan and the FSIN made a Framework Agreement in 2002
that authorizes SIGA to operate casinos. SIGA operates six casinos in accordance with the 2002 Casino Operating
Agreement (“Agreement”) with Saskatchewan Liquor and Gaming Authority (“SLGA”). SLGA is responsible for the
overall conduct and management of the slot machines in those casinos as required under The Criminal Code of Canada.
Under the Agreement, SIGA is entitled to withhold the casinos’ operating expenses, incurred in accordance with the
operating policies and directives approved by SLGA, from slot machine revenues. SIGA is required to deposit the
remainder into a trust account for SLGA in accordance with the procedures and formulas specified in the Agreement
as outlined below. Under the Agreement, SIGA is entitled to recover, in any year, any net loss from the operation
of licensed table games and ancillary operations from the net income earned from the operation of slot machines.
The Agreement provides for SIGA to use any net income from the operation of licensed table games for charitable
or religious objects or purposes. The Agreement expires on June 10, 2027.
The Agreement also provides for SIGA to remit to SLGA the net income from the operation of the slot machines in the
SIGA casinos. More specifically, net income from the operation of slot machines is remitted to SLGA in accordance
with a formula as defined in the Agreement. This formula provides for SIGA to remit to SLGA, on a weekly basis, one-
half of the amount by which actual slot machine gaming revenue exceeds one-fifty-second of SIGA’s annual budget.
Shortfalls in weekly slot machine gaming revenue as compared to budget are recoverable against future remittances.
The remaining one-half of the amount determined above is remitted to SLGA within one hundred and eighty days of the
applicable week. Pursuant to the Agreement, if, at the end of any operating year, SIGA has not been fully reimbursed
for amounts to which it is entitled for the operation of casinos, such amounts may be recovered from future operations.
SIGA is allowed to retain $5,000,000 as a capital reserve for the sole purpose of acquiring capital assets.
Also, under the Agreement, SIGA has granted a first charge security interest on all its present and after acquired assets
to SLGA to secure contractual obligations of SIGA under the Agreement. However, the Agreement requires that upon joint
written request by SIGA and its lenders, SLGA shall postpone such security in favour of the lenders who require a prior
charge relating to funds lent to SIGA for the financing of its operations carried out in accordance with the Agreement.
On June 11, 2002, the Government of Saskatchewan and the FSIN signed a new gaming Framework Agreement
which expires on June 10, 2027. The Government must distribute, in accordance with the provisions of the Framework
Agreement, the income remitted to SLGA. Under the provisions of the 2002 Framework Agreement, the Government
of Saskatchewan, as represented by the Minister responsible for SLGA, is entitled to recover its proportion of expenses
that SLGA determines are not in accordance with the approved operating policies and directives from the future
amounts payable to the First Nations Trust Fund.
Effective for the year ended March 31, 2008 and subsequent years, the Casino Operating Agreement between SLGA
and SIGA has been amended to exclude unrealized gains and losses on interest rate swaps from the calculation of net
casino profits payable to SLGA.