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58

19. CAPITAL DISCLOSURES (CONTINUED)

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 0.47, 11.88, 6.20 and 3.50 respectively. In all instances during the year ended March 31, 2016 (and

March 31, 2015), SIGA was in compliance with the above covenants.

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, 2016:

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.

NOTES TO THE FINANCIAL STATEMENTS

Year Ended March 31, 2016