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43

NOTES TO THE FINANCIAL STATEMENTS

Year Ended March 31, 2016

1. GENERAL INFORMATION

Saskatchewan Indian Gaming Authority Inc. (“SIGA”) is incorporated under

The Non-profit Corporations Act, 1995

of

Saskatchewan as a Charitable Corporation. Class A Memberships in SIGA are owned by the Federation of Saskatchewan Indian

Nations (“FSIN”) and 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 completed 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 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

was amended to exclude unrealized gains and losses on interest rate swaps from the calculation of net Casino profits payable

to SLGA.

SIGA was incorporated under

The Non-profit Corporations Act

,

1995

and is not subject to income tax under the provision of

paragraph 149(1)(l) of the

Income Tax Act

(Canada). SIGA pays Goods and Services Tax and Provincial Sales Tax to government

agencies and claims input tax credits on its ancillary operations.

SIGA is a corporation domiciled in Canada. SIGA’s head office is located at 103 Packham Avenue in Saskatoon, Saskatchewan,

Canada, S7N 4K4.