petrowest energy services trust announces $94.2 million of ... - BMIR

The Trust has no financial instruments or activities that give rise to other comprehensive income (loss).The Trust’s cash and cash equivalents are designated as held-for-trading and are measured at carryingvalue, which approximates fair value due to the short-term nature of these instruments. Accountsreceivable are designated as loans and receivables. Accounts payable and accrued liabilities, distributionpayable, and the credit facility are designated as other liabilities and are recorded at cost.CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING POLICIESCritical Accounting EstimatesThe unaudited interim consolidated financial statements for the quarter ended March 31, 2007 have beenprepared in accordance with the accounting policies described in the notes to the annual audited financialstatements posted on SEDAR. As a normal part of the financial statement preparation process,management is required to make estimates and assumptions based on information available as at thefinancial statement date. These estimates and assumptions affect the reported amounts of assets andliabilities, the possible disclosure of contingent assets and liabilities at the date of the financial statementsand the amount of revenue and expense reported for the period.Although estimates and assumptions must be made during the financial statement preparation process, itis management's opinion that none of the estimates or assumptions were highly uncertain at the time theywere made. The most significant estimates in Petrowest’s financial statements are the amortization periodfor property and equipment, valuation of assets in the purchase equation, assumptions used in thebinomial valuation methodology and recoverability of accounts receivable.KEY RISKS AND UNCERTAINTIESRisks are detailed in the Trust’s prospectus dated August 28, 2006 which isavailable in electronic form at www.sedar.com and will be detailed in the Trust’sAnnual Information Form and the Audited Consolidated Financial Statements andManagement Discussion and Analysis for the year ended December 31, 2006which will be available in electronic form at www.sedar.com after March 31, 2007.FINANCIAL DISCLOSURESDuring the period ended March 31, 2007, no change occurred to Petrowest’s internal control overfinancial reporting that has materially affected or is reasonably likely to materially affect Petrowest’sinternal control over financial reporting.The Chief Executive Officer and the Chief Financial Officer continue to evaluate the effectiveness ofPetrowest’s disclosure controls and procedures taking into consideration the functions performed by itsDisclosure Committee, the review and oversight of all executive officers and the board, as well as theprocess and systems in place for filing regulatory and public information. Petrowest’s established reviewprocess and disclosure controls are designed to ensure that all required information, reports and filingsrequired under Canadian securities legislation are properly submitted and recorded in accordance withthose requirements over financial reporting as of March 31, 2007 pursuant to the requirements ofMultilateral Instrument 52-109 of the Canadian Securities Administrators.Petrowest has integrated nine private companies and completed the data conversion of the existingaccounting systems within the Acquired companies to a common accounting system platform. All nineentities were live on the new accounting platform as at January 1, 2007.As part of the Trust’s transition from nine owner managed control environments that existed in theAcquired Companies to an acceptable public company control environment, the Trust engaged third partyconsultants to assist with the design, documentation and testing of original internal control systems, newproposed improvements, interim measures during the conversion and planned implementation oncompletion of the conversion. By their nature certain planned controls, or controls that would exist on- 19 -