2007 annual report aveiro investment corp. - First West Properties

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NOTES TO THE FINANCIAL STATEMENTS June 30, 2007 and 2006 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (i) Recent accounting pronouncements (continued) In December 2006, the CICA issued a new accounting standard: Handbook Section 1535, “Capital Disclosures”, requiring disclosure of information about an entity’s capital and the objectives, policies, and processes for managing capital. The standard is effective for fi scal years beginning on or after October 1, 2007 and the Company is currently considering the additional disclosures, if any, required in future fi nancial statements. 4. PROPERTY HELD FOR DEVELOPMENT Property held for development includes bare land in Airdrie and Lethbridge, Alberta. Property held for development includes $219,752 of interest and $1,282 of other carrying charges capitalized during the year. On January 1, 2007, the Company acquired real property for $7,750,000 from a company (the “Vendor”). Two individuals, independent of the Vendor’s owner, were offi cers of the Vendor during negotiations to purchase the property from the Vendor. The two individuals were directors and offi cers of the Company at the time the Company and the Vendor entered into an agreement of purchase and sale. The two individuals remained as directors and offi cers subsequent to closing. The transaction terms were determined based on, among other things, negotiation between the Company and Vendor and an independent third party valuation. 5. INCOME-PRODUCING PROPERTY 2007 Accumulated 2006 Cost Amortization Net Book Value Net Book Value Building $ 4,350,256 $ 3,629 $ 4,346,627 $ – Land 1,229,153 – 1,229,153 – 6. EQUIPMENT 38 | Aveiro Investment Corp. | 2007 Annual Report $ 5,579,409 $ 3,629 $ 5,575,780 $ – 2007 Accumulated 2006 Cost Amortization Net Book Value Net Book Value Computer hardware $ 22,395 $ 947 $ 21,448 $ – Offi ce equipment 30,873 959 29,914 – Software 875 157 718 – $ 54,143 $ 2,063 $ 52,080 $ –
NOTES TO THE FINANCIAL STATEMENTS June 30, 2007 and 2006 7. RESTRICTED CASH The Company is required to set aside $10,000 in term deposits that are held by the Bank of Montreal as security relating to the use of Corporate Credit Cards. 8. MORTGAGES PAYABLE 2007 2006 First mortgage and demand promissory note (which note can only be demanded on default or if in the opinion of the bank, there has been a change in the business fi nancial condition, operations or conduct of the Company which will adversely affect either the Company’s ability to fulfi ll its obligations or the bank’s security) bearing interest at prime plus 1% per annum (an effective rate of 7%), with interest payable monthly, secured by land having a net book value of $1,350,527 to be repaid on December 13, 2008. $ 665,950 $ – First mortgage and demand promissory note (which note can only be demanded on default or if in the opinion of the bank, there has been a change in the business fi nancial condition, operations or conduct of the Company which will adversely affect either the Company’s ability to fulfi ll its obligations or the bank’s security) bearing interest at prime plus 1% per annum (an effective rate of 7%), with interest only monthly payments from July to October 2007 and blended interest and principal monthly payments thereafter, secured by land and a building having a net book value of $5,575,780 to be repaid on June 13, 2012. 3,625,000 – First mortgage bearing interest at 7.5% per annum secured by land having a net book value of $7,971,034 with interest only quarterly payments, due on May 15, 2009. 735,000 – Second mortgage bearing interest at 7.5% per annum secured by land having a net book value of $7,971,034 to be repaid in two equal installments of $1,026,000 plus interest on October 16, 2007 and April 16, 2008. 2,052,000 – $ 7,077,950 $ – Aveiro Investment Corp. | 2007 Annual Report | 39
Page 1 and 2: AVEIRO INVESTMENT CORP. 2007 ANNUAL
Page 3 and 4: CHAIRMAN’S LETTER DEAR FELLOW SHA
Page 5 and 6: ASSETS SASKATOON TOTAL OF APPROXIMA
Page 7 and 8: ASSETS AIRDRIE 77 ACRES OF UNDEVELO
Page 9 and 10: Harold Kunik, Chief Financial Offic
Page 11 and 12: JULY 2007 Private Placement In July
Page 13 and 14: WHY SASKATCHEWAN? Once solely an ag
Page 15 and 16: OVERVIEW About Aveiro Aveiro is an
Page 17 and 18: OVERALL PERFORMANCE Financial Posit
Page 19 and 20: The Warehouse Mortgage is a fi rst
Page 21 and 22: a company with common management. I
Page 23 and 24: During the 2008 fi scal year, the C
Page 25 and 26: properties. The ability of Aveiro t
Page 27 and 28: OUTSTANDING SHARE DATA Common Share
Page 29 and 30: The rates are determined based on m
Page 31 and 32: AUDITOR’S REPORT To the sharehold
Page 33 and 34: STATEMENTS OF LOSS AND DEFICIT Year
Page 35 and 36: NOTES TO THE FINANCIAL STATEMENTS J
Page 37: NOTES TO THE FINANCIAL STATEMENTS J
Page 47 and 48: AUDITORS Grant Thornton LLP 1000, 1

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