SIGA_Annual_Report_2015 - page 73

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2015
73
20. FINANCIAL RISK MANAGEMENT
SIGA, through its financial assets and liabilities, has exposure to a number of risks from its use of financial instruments. The following
analysis provides a measurement of these risks as at March 31, 2015:
RISK MANAGEMENT
The Board has overall responsibility for the establishment and oversight of SIGA’s risk management framework and is responsible for
developing and monitoring SIGA’s risk management policies.
SIGA’s risk management policies are established to identify and analyze the risks faced by SIGA, to set appropriate risk limits and controls,
and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and SIGA’s activities.
SIGA’s Board oversees how management monitors compliance with SIGA’s risk management policies and procedures, and reviews the
adequacy of the risk management framework in relation to the risks faced by SIGA. The Board is assisted in its oversight role by Internal
Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are
reported to the Board. 
CREDIT RISK
SIGA’s principal financial assets are cash and cash equivalents, short-term investments, and accounts receivable, which are subject to
credit risk. The carrying amounts of financial assets on the statement of financial position represent SIGA’s maximum credit exposure at .
the statement of financial position date.
SIGA does not extend credit to its gaming customers. Credit risk is limited to its accounts receivable balance which consists primarily of credit
extended to business entities for business functions held at the various casino locations. The credit risk on cash and cash equivalents and
short-term investments is limited because the counterparties are chartered banks with high credit-ratings assigned by national credit-rating
agencies. Credit risk is not considered significant.
The following reflects an aging summary of SIGA’s trade accounts receivable balances:
March 31, 2015 March 31, 2014
Current
$ 1,497,651
$ 1,409,129
30-59 days
1,304
80,526
60-89 days
696
90 days and greater
36,238
1,499,651
1,525,893
Allowance for doubtful accounts
$ 1,499,651
$ 1,525,893
The allowance for doubtful accounts is reviewed quarterly based on an estimate of outstanding amounts that are considered uncollectible.
Historically, SIGA has not written-off a significant portion of its trade accounts receivable balances.
INTEREST RATE RISK
Interest rate risk is the risk of financial loss resulting from changes in market interest rates. In order to manage its interest rate risk
exposure, SIGA entered into separate interest rate swap arrangements for the Dakota Dunes, Living Sky and Painted Hand construction
projects on December 12, 2007. SIGA entered a separate interest rate swap arrangement for Dakota Dunes on March 22, 2013. .
These arrangements fixed the interest rates for the loan for each construction project at 4.94%, 5.09%, 5.09% and 2.08% respectively
over the term of the loans.
At March 31, 2015, if interest rates at that date had been 100 basis points lower with all other variables held constant, total comprehensive
income for the year before distribution to SLGA would have been $2,221,331 (2014 – $2,661,599) lower, arising mainly as a result of
higher unrealized losses on interest rate swaps, partially offset by lower interest expense on variable borrowings. If interest rates had been
100 basis points higher, with all other variables held constant, total comprehensive income for the year before distribution to SLGA would
have been $2,089,500 (2014 – $2,443,630) higher, arising mainly as a result of lower unrealized losses on interest rate swaps, partially
offset by higher interest expense on variable borrowings.
1...,63,64,65,66,67,68,69,70,71,72 74,75,76,77,78,79,80,81,82,83,...92
Powered by FlippingBook