Page 62 - SIGA Annual Report 2013

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Saskatchewan Indian Gaming Authority Inc.
Notes to the Financial Statements
year ended March 31, 2013
62
23. COMMITMENTS AND CONTINGENCIES (CONTINUED)
CAPITAL COMMITMENT – SLOT MACHINES
The Casino Operating Agreement requires SLGA to supply slot machines and the slot management system to SIGA for use in its casinos
and for SIGA to reimburse to SLGA the cost of these machines over the estimated useful life of the equipment. Included in expenses is
$8,969,259 (2012 – $12,574,280) for reimbursement of the purchase of slot machines and the slot machine management system. SIGA
estimates total costs over the next five years, based on the machines currently in use, as follows:
2014
$ 3,614,113
2015
1,997,906
2016
1,488,886
2017
964,480
2018
336,857
LETTERS OF CREDIT
SIGA has two letters of credit with First Nations Bank of Canada, $52,500 payable to the City of Swift Current, and $200,000 payable to the
City of Yorkton.
OTHER
The Casino Operating Agreement requires SIGA, upon receiving direction from SLGA, to pay to Indigenous Gaming Regulators Inc. (“IGR”)
the amount of IGR’s annual operating budget. SLGA has directed SIGA to pay IGR $2,900,000 for 2013-2014 (2012-2013 – $3,232,128).
SIGA entered into an agreement with Saskatoon Prairieland Park Corporation (“SPPC”) regarding the maintenance of a certain level of
income when SPPC closed its casino. Under this agreement, SIGA agreed to pay SPPC $216,667 monthly, subject to certain conditions,
effective August 10, 2007 and continuing for 30 years.
CONTINGENCIES
SIGA enters into contractual arrangements with suppliers of services, products and facilities in the normal course of business. Contracts
are subject to legal interpretation from time to time and disputes do arise. Management plans to account for such dispute resolutions in
the year such disputes are settled, as they cannot be reasonably estimated prior to this time.
In addition, various other claims and lawsuits are pending against SIGA in the ordinary course of business. While it is not possible to
determine the ultimate outcome of such actions at this time, and there exist inherent uncertainties in predicting such outcomes, it is
SIGA’s belief that the ultimate resolution of such actions is not reasonably likely to have a material adverse effect on its financial position
or results of operations.