SIGA_Annual_Report_2015 - page 72

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2015
72
17. FINANCE COSTS
March 31, 2015 March 31, 2014
Interest on long-term debt
$ 2,816,896
$ 3,163,466
Interest on finance lease obligations
5,133,820
5,293,259
$ 7,950,716
$ 8,456,725
The weighted average capitalization rate on funds borrowed generally is 8.54% per annum (2014 – 7.87% per annum).
18. EMPLOYEE BENEFITS
Effective April 1, 1997, SIGA established a pension plan for employees. The plan is a defined contribution plan administered by .
Great West Life. Substantially all of SIGA’s full-time employees participate in the plan. SIGA’s financial obligation is limited to matching .
the required amounts contributed by employees, 6% of salary, which totalled $3,662,413 in fiscal 2015 (2014 – $3,636,960).
19. CAPITAL DISCLOSURES
SIGA’s objectives when managing capital are to ensure adequate capital to support the operations and growth strategies of the
Corporation.
SIGA funds its capital requirements through the $5,000,000 capital reserve from SLGA, internal operating activities and debt. SIGA also
has an available line of credit of $2,000,000 at a financial institution (Note 11).
SIGA limits the amount of risk in proportion to its capital. The initial financing option of the Dakota Dunes, Living Sky, and Painted Hand
casino projects (“casino projects”) was limited to variable rate loans. SIGA entered into four interest rate swap agreements to exchange .
the variable rate debt instruments to fixed rate loans to mitigate fluctuations in interest rates. SIGA also performs environmental scanning .
to determine if any factors have the potential to change the capital structure of the organization. Risk management reports are presented to
the Audit and Finance Committee and Board of Directors on a quarterly basis.
SIGA entered into a credit agreement with financial institutions in order to obtain financing for the casino projects. There are currently
four financial covenants which are reported on a quarterly basis to the financial institutions. SIGA monitors its capital structure using these
covenants. The financial covenants are as follows:
(a) The senior fund debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio shall be less than or equal to
2.0:1.0 for each fiscal quarter;
(b) The interest coverage ratio shall not be less than 5.0:1.0;
(c) The total debt service coverage ratio shall not be less than 2.0:1.0; and
(d) The earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”) coverage ratio shall not be less than 2.0:1.0.
Ratios at year-end were 0.55, 10.86, 4.69 and 3.37 respectively. In all instances during the year ended March 31, 2015 .
(and March 31, 2014), SIGA was in compliance with the above covenants.
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